COMPARATIVE ANALYSIS OF POWER & INFRASTRUCTURE SECTOR COMPANIES STOCK PRICES FOR THE FY 2007-2008 VIZ A VIZ NIFTY.

APURV GOURAVPGDM[BA]2007-2009MITCON INSTITUTE OF

MANAGEMENT ,PUNE

Company ANANDRATHI SHARES & STOCK

BROKERS LTD, DECCAN GYMKHANA

BRANCH PUNE

COMPANY PROFILEAnandRathi, founded in 1994 by Mr. Anand

Rathi.In year 2007 Citigroup Venture Capital

International joined the group as a financial partner.

In India 450 location, Internationally Dubai & Bangkok.

Products :- Equity & Derivatives , Mutual Funds, Depository Services , Commodities , Insurance & IPO’s

INDUSTRY PROFILEStock market occupies an important position in

the national economy of a country.The BSE and NSE have established themselves

as the two leading exchanges and account for about 80% of the equity volume traded in India.

NSE registered as the market leader with 90.34 % of total turnover (2006-2007).

Top 2 stock exchange accounts for 99.98% turnover.

The turnover of global markets grown from US $ 39.61 trillion in 2004 to US $ 67.91 trillion in 2006.

OBJECTIVEPrimary:To analyze the return and return pattern of selected

securities in the POWER and INFRASTRUCTURE sectors . 

To compare the performance of the stock with that of the Nifty index. 

To analyze the performance of the company securities before and after the announcement of the budget 2008.

 Secondary: To assess the impact of the securities return on Nifty

index performance.

RESEARCH METHEDOLOGY SAMPLE SIZE 2 Sectors Sector No of companies Power 6 Infrastructure 6

BIL Power

JP HydroNTPCReliance Energy ltdSuzlon EnergyTATA Power

Ansal properties & infra

GMR InfraGTL InfraLanco InfratechReliance InfraUnitech

TOOLS USED FOR ANALYSIS:Beta CorrelationRegressionPaired sample t testDescriptive statistics

Mean standard deviation

Return Return was calculated using the formulae:

Return = yesterday’s share price – Today’s share price

Yesterday’s share price

DATA PRESENTATION, ANALYSIS AND INTERPRETATIONPower sector companies RETURN

INFRASTRUCTUREInfrastructure sector companies RETURN

Monthly Return of Power & Infra Viz a Viz NIFTY

BETA YEARLY

CORRELATION:

BEFORE AND AFTER BUDGET 2008

Finding & ConclusionThe Power sector was found to be the most risky

sector to invest in.The announcement of Budget had no immediate

effect on the company securities in all the two sectors.

The beta value is high for most of the companies in Power sector, month of January and it’s also happen in the Infrastructure sector.

The standard deviation of the returns to the company securities in the Power sector was high mostly in the month of January. Two companies had their highest standard deviation in the month of October.

In the Infrastructure sector the standard deviation was high for most of the companies in the month of January.

TATA Power was the company under study which had the highest beta of 1.197.And in Infrastructure sector LITL (Lanco Infratech) had the highest beta of 1.650. This makes both company the most risky company to invest in, among the companies which were taken for the study.

The Nifty index was dependent more on the Power sector compared to Infrastructure sectors .

RECOMONDATIONSRisk adverse investors must not invest in the

Power sectors. These risk adverse investors can safely invest in the Infrastructure sector and also the Power sector is performing well in the market.

Risk willing investors can invest in the Infrastructure sector and as the risk involved is high the returns earned will also be high.

LIMITATIONIn each sector (Power and Infrastructure)

only six good performing companies were selected for the study of which historical data available conveniently in NSE India website.

The performance of the company securities were studied only for a year from 1st April 2007 to 31st March 2008.

Conclusion is based on assuming that financial year 2007-2008 modal years for investment.

Referenceswww.nseindia.com www.bseindia.com www.investmentwatch.comwww.moneycontrol.comwww.investmentcommision.in