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A MINI PROJECT ON PORTFOLIO MANAGEMENT

By

R.KARTHIC(1011059)

D.MEENAKSHI(1011014)

N. SWETA(1011035)

P.SATHEESHKUMAR(1011076)

S.VIGNESH KHANNA(1011091)

Under the guidance of

Prof. M.Subramanian

Assistant Professor

TSM, Madurai

Thiagarajar School of Management

(An Autonomous college affiliated to Madurai Kamaraj University)

Madurai625 005

AugustSeptember 2011


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Contents

INTRODUCTION .................................................................................................................................. 3

TYPES OF INVESTMENTS ............................................................................................................. 3

Bonds .................................................................................................................................................. 3

Stocks .................................................................................................................................................. 3

OBJECTIVES OF INVESTMENT ........................................................................................................ 4

Growth of Capital ............................................................................................................................... 6

Tax Minimization................................................................................................................................ 6

PORTFOLIOS AND DIVERSIFICATION ........................................................................................... 8

CHAPTER 2 ......................................................................................................................................... 11

INDUSTRY PROFILE ......................................................................................................................... 11

COMMERCIAL VEHICLE INDUSTRY ........................................................................................ 11

BANKING INDUSTRY ................................................................................................................... 11

INDIAN IT INDUSTRY .................................................................................................................. 12

COMPANY PROFILE ..................................................................................................................... 14

ASHOK LEYLAND ......................................................................................................................... 14

FEDERAL BANK LTD ................................................................................................................... 15

TATA CONSULTANCY SERVICES ............................................................................................. 16

BIRLA SUN LIFE INSURANCE .................................................................................................... 17

PIPAVAV SHIPYARD .................................................................................................................... 17

HDFC GOLD ETF............................................................................................................................ 18

CHAPTER 3 ......................................................................................................................................... 19

ASHOK LEYLAND ......................................................................................................................... 19

HDFC GOLD ETF............................................................................................................................ 20

BIRLA SL GOLD ETF..................................................................................................................... 21

TATA CONSUTANCY SERVICES................................................................................................ 22

FEDERAL BANK ............................................................................................................................ 23

PIPIVAV SHIPYARD LTD ............................................................................................................. 24

CHAPTER 4 ......................................................................................................................................... 25

FINDINGS ............................................................................................................................................ 25

CONCLUSION ......................................................................................................................................... 25

APPENDIX .............................................................................................................................................. 26


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INTRODUCTION

Investment is putting aside and employing money in financial instruments in the

present, with the expectation of a positive rate of return in the future. Putting it briefly,

investment is a sacrifice in the present in the expectation of a future gain.

TYPES OF INVESTMENTS

Bonds

Grouped under the general category called fixed-income securities, the term bond is

commonly used to refer to any securities that are founded on debt.

The main attraction of bonds is their relative safety. The safety and stability, however, come

at a cost. Because there is little risk, there is little potential return. As a result, the rate ofreturn on bonds is generally lower than other securities.

Stocks

When you purchase stocks, or equities, you become a part owner of the business. This

entitles you to vote at the shareholders' meeting and allows you to receive any profits that the

company allocates to its owners. These profits are referred to as dividends.

While bonds provide a steady stream of income, stocks are volatile. That is, they fluctuate in

value on a daily basis. When you buy a stock, you aren't guaranteed anything. Many stocks

don't even pay dividends, in which case, the only way that you can make money is if the

stock increases in value - which might not happen.

Compared to bonds, stocks provide relatively high potential returns. Of course, there is a

price for this potential: you must assume the risk of losing some or all of your investment.

Mutual Funds

A mutual fund is a collection of stocks and bonds. When you buy a mutual fund, you

are pooling your money with a number of other investors, which enables you (as part of a

group) to pay a professional manager to select specific securities for you. Mutual funds are all

set up with a specific strategy in mind, and their distinct focus can be nearly anything: large

stocks, small stocks, bonds from governments, bonds from companies, stocks and bonds,

stocks in certain industries, stocks in certain countries, etc.

The primary advantage of a mutualfund is that you can invest your money without the time

or the experience that are often needed to choose a sound investment. Theoretically, youshould get a better return by giving your money to a professional than you would if you were
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to choose investments yourself. In reality, there are some aspects about mutual funds that you

should be aware of before choosing them, but we won't discuss them here.

Alternative Investments: Options, Futures, FOREX, Gold, Real Estate, Etc.

There are numerous alternative vehicles, which represent the most complicated types

of securities and investingstrategies. They are generally high-risk/high-reward securities that

are much more speculative than plain old stocks and bonds. Yes, there is the opportunity for

big profits, but they require some specialized knowledge. So if you don't know what you are

doing, you could get yourself into a lot of trouble. Experts and professionals generally agree

that new investors should focus on building a financial foundation before speculating.

OBJECTIVES OF INVESTMENT

The options for investing our savings are continually increasing, yet every single

investment vehicle can be easily categorized according to three fundamental characteristics -

safety, income and growth which also correspond to types of investor objectives. While it is

possible for an investor to have more than one of these objectives, the success of one must

come at the expense of others. Let's examine these three types of objectives, the investments

that are used to achieve them and the ways in which investors can incorporate them in

devising a strategy.

Safety

Perhaps there is truth to the axiom that there is no such thing as a completely safe and

secure investment. Yet we can get close to ultimate safety for our investment funds through

the purchase of government-issued securities in stable economic systems, or through the

purchase of the highest quality corporate bonds issued by the economy's top companies. Such

securities are arguably the best means of preserving principal while receiving a specified rate

of return.

The safest investments are usually found in the money market and include such

securities as Treasury bills (T-bills), certificates of deposit (CD), commercial paper or
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bankers' acceptance slips; or in the fixed income (bond) market in the form of municipal and

other government bonds, and in corporate bonds. The securities listed above are ordered

according to the typical spectrum of increasing risk and, in turn, increasing potential yield. To

compensate for their higher risk, corporate bonds return a greater yield than T-bills.

It is important to realize that there's an enormous range of relative risk within the

bond market. At one end are government and high-grade corporate bonds, which are

considered some of the safest investments around; at the other end are junk bonds, which

have a lower investment grade and may have more risk than some of the more speculative

stocks. In other words, it's incorrect to think that corporate bonds are always safe, but most

instruments from the money market can be considered very safe.

Income

The safest investments are also the ones that are likely to have the lowest rate of

income return, or yield. Investors must inevitably sacrifice a degree of safety if they want to

increase their yields. This is the inverse relationship between safety and yield: as yield

increases, safety generally goes down, and vice versa.

In order to increase their rate of investment return and take on risk above that of

money market instruments or government bonds, investors may choose to purchase corporate

bonds or preferred shares with lower investment ratings. Investment grade bonds rated at A

or AA are slightly riskier than AAA bonds, but presumably also offer a higher income return

than AAA bonds. Similarly, BBB rated bonds can be thought to carry medium risk but offer

less potential income than junk bonds, which offer the highest potential bond yields available,

but at the highest possible risk. Junk bonds are the most likely to default. Most investors,

even the most conservative-minded ones, want some level of income generation in their

portfolios, even if it's just to keep up with the economy's rate of inflation. But maximizing

income return can be an overarching principle for a portfolio, especially for individuals who

require a fixed sum from their portfolio every month. A retired person who requires a certain

amount of money every month is well served by holding reasonably safe assets that provide

funds over and above other income-generating assets, such as pension plans.


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Growth of Capital

This discussion has thus far been concerned only with safety and yield as investing

objectives, and has not considered the potential of other assets to provide a rate of return from

an increase in value, often referred to as a capital gain. Capital gains are entirely different

from yield in that they are only realized when the security is sold for a price that is higher

than the price at which it was originally purchased. Selling at a lower price is referred to as a

capital loss. Therefore, investors seeking capital gains are likely not those who need a fixed,

on-going source of investment returns from their portfolio, but rather those who seek the

possibility of longer-term growth.

Growth of capital is most closely associated with the purchase of common stock,

particularly growth securities, which offer low yields but considerable opportunity for

increase in value. For this reason, common stock generally ranks among the most speculative

of investments as their return depends on what will happen in an unpredictable future. Blue-

chip stocks, by contrast, can potentially offer the best of all worlds by possessing reasonable

safety, modest income and potential for growth in capital generated by long-term increases in

corporate revenues and earnings as the company matures. Yet rarely is any common stock

able to provide the near-absolute safety and income-generation of government bonds.

It is also important to note that capital gains offer potential tax advantages by virtue of

their lower tax rate in most jurisdictions. Funds that are garnered through common stock

offerings, for example, are often geared toward the growth plans of small companies, a

process that is extremely important for the growth of the overall economy. In order to

encourage investments in these areas, governments choose to tax capital gains at a lower rate

than income. Such systems serve to encourage entrepreneurship and the founding of new

businesses that help the economy grow.

Secondary Objectives

Tax Minimization

An investor may pursue certain investments in order to adopt tax minimization as part

of his or her investment strategy. A highly-paid executive, for example, may want to seek

investments with favourable tax treatment in order to lessen his or her overall income tax


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burden. Making contributions to an IRA or other tax-sheltered retirement plan, such as a

401(k), can be an effective tax minimization strategy.

Marketability / Liquidity

Many of the investments we have discussed are reasonably liquid, which means they

cannot be immediately sold and easily converted into cash. Achieving a degree of liquidity,

however, requires the sacrifice of a certain level of income or potential for capital gains.

Common stock is often considered the most liquid of investments, since it can usually

be sold within a day or two of the decision to sell. Bonds can also be fairly marketable, but

some bonds are highly illiquid, or non-tradable, possessing a fixed term. Similarly, money

market instruments may only be redeemable at the precise date at which the fixed term ends.

If an investor seeks liquidity, money market assets and non-tradable bonds aren't likely to be

held in his or her portfolio.

As we have seen from each of the five objectives discussed above, the advantages of

one often come at the expense of the benefits of another. If an investor desires growth, for

instance, he or she must often sacrifice some income and safety. Therefore, most portfolioswill be guided by one pre-eminent objective, with all other potential objectives occupying

less significant weight in the overall scheme.

Choosing a single strategic objective and assigning weightings to all other possible

objectives is a process that depends on such factors as the investor's temperament, his or her

stage of life, marital status, family situation, and so forth. Out of the multitude of possibilities

out there, each investor is sure to find an appropriate mix of investment opportunities. You

need only be concerned with spending the appropriate amount of time and effort in finding,

studying and deciding on the opportunities that match your objectives.


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PORTFOLIOS AND DIVERSIFICATION

A portfolio is a combination of different investment assets mixed and matched for the

purpose of achieving an investor's goal(s). Items that are considered a part of your portfolio

can include any asset you own - from real items such as art and real estate, to equities, fixed-

income instruments and their cash and equivalents. For the purpose of this section, we will

focus on the most liquid asset types: equities, fixed-income securities and cash and

equivalents.

Basic Types of Portfolios

In general, aggressive investment strategies - those that shoot for the highest possible

return - are most appropriate for investors who, for the sake of this potential high return, have

a high risk tolerance (can stomach wide fluctuations in value) and a longer time horizon.

Aggressive portfolios generally have a higher investment in equities.

The conservative investment strategies, which put safety at a high priority, are most

appropriate for investors who are risk averse and have a shorter time horizon. Conservative

portfolios will generally consist mainly of cash and cash equivalents, or high-quality fixed-

income instruments.

To demonstrate the types of allocations that are suitable for these strategies, we'll look at

samples of both a conservative and a moderately aggressive portfolio.

Note that the terms cash and the money market refer to any short-term, fixed-income

investment. Money in a savings account and a certificate of deposit (CD), which pays a bit

higher interest, are examples.

The main goal of a conservative portfolio strategy is to maintain the real value of the

portfolio, or to protect the value of the portfolio against inflation. The portfolio you see here

would yield a high amount of current income from the bonds and would also yield long-term

capital growth potential from the investment in high quality equities.
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A moderately aggressive portfolio is meant for individuals with a longer time horizon and an

average risk tolerance. Investors who find these types of portfolios attractive are seeking to

balance the amount of risk and return contained within the fund.

The portfolio would consist of approximately 50-55% equities, 35-40% bonds, 5-10% cash

and equivalents.

You can further break down the above asset classes into subclasses, which also have different

risks and potential returns. For example, an investor might divide the equity portion between

large companies, small companies and international firms. The bond portion might be

allocated between those that are short-term and long-term, government versus corporate debt,

and so forth. More advanced investors might also have some of the alternative assets such as

options and futures in the mix. As you can see, the number of possible asset allocations is

practically unlimited.
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Why Portfolios?

It all centres around diversification. Different securities perform differently at any point in

time, so with a mix of asset types, your entire portfolio does not suffer the impact of a decline

of any one security. When your stocks go down, you may still have the stability of the bonds

in your portfolio.

There have been all sorts of academic studies and formulas that demonstrate why

diversification is important, but it's really just the simple practice of "not putting all your eggs

in one basket." If you spread your investments across various types of assets and markets,

you'll reduce the risk of catastrophic financial losses.
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CHAPTER 2

INDUSTRY PROFILE

COMMERCIAL VEHICLE INDUSTRY

One wonders how well founded is the correlation that one is tempted to draw between India's

post-independence history and the evolution of commercial vehicles industry in the country.

The rapid growth that marked the commercial automobiles' sector after independence can be,

to a great degree, seen as a fruition of Nehru's pregnant visions of an industrialized nation

and the subsequent exodus of masses to the cities. Today, India's commercial vehicles sector

is one of the rapidly growing industries in the country. The output of commercial vehicles inIndia has shot up to 2.8 times between the years 1998 to 2004; the figure is significant in the

light of the fact that the growth in passenger cars has been only 2.2 times between the same

period. One can choose between new and used commercial vehicle, if planning to buy with a

number of commercial vehicle insurance options flooding the markets.

BANKING INDUSTRY

The Banking Industry was once a simple and reliable business that took deposits from

investors at a lower interest rate and loaned it out to borrowers at a higher rate.

However deregulation and technology led to a revolution in the Banking Industry that saw it

transformed. Banks have become global industrial powerhouses that have created ever more

complex products that use risk and securitisation in models that only PhD students can

understand. Through technology development, banking services have become available 24

hours a day, 365 days a week, through ATMs, at online bankings, and in electronically

enabled exchanges where everything from stocks to currency futures contracts can be traded .

The Banking Industry at its core provides access to credit. In the lenders case, this includes

access to their own savings and investments, and interest payments on those amounts. In the

case ofborrowers, it includes access to loans for the creditworthy, at a competitive interest

rate.

Banking services include transactional services, such as verification of account details,

account balance details and the transfer of funds, as well as advisory services, that help
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individuals and institutions to properly plan and manage their finances. Online banking

channels have become key in the last 10 years.

The collapse of the Banking Industry in the Financial Crisis, however, means that some of the

more extreme risk-taking and complex securitisation activities that banks increasingly

engaged in since 2000 will be limited and carefully watched, to ensure that there is not

another banking system meltdown in the future.

Mortgage banking has been encompassing for the publicity or promotion of the various

mortgage loans to investors as well as individuals in the mortgage business. Online banking

services has developed the banking practices easier worldwide. Banking in the small businesssector plays an important role

INDIAN IT INDUSTRY

The Indian Information Technology industry accounts for a 5.19% of the country's GDP and

export earnings as of 2009, while providing employment to a significant number of its

tertiary sector workforce. More than 2.5 million people are employed in the sector either

directly or indirectly, making it one of the biggest job creators in India and a mainstay of the

national economy. In 2010-11, annual revenues from IT-BPO sector is estimated to have

grown over US$76 billion compared to China with $35.76 billion and Philippines with $8.85

billion. India's outsourcing industry is expected to increase to US$225 billion by 2020. The

most prominent IT hub is Bangalore. Technically proficient immigrants from India sought

jobs in the western world from the 1950s onwards as India's education system produced more

engineers than its industry could absorb. India's growing stature in the Information Age

enabled it to form close ties with both the United States of America and the European Union.However, the recent global financial crisis has deeply impacted the Indian IT companies as

well as global companies. As a result hiring has dropped sharply, and employees are looking

at different sectors like the financial service, telecommunications, and manufacturing

industries, which have been growing phenomenally over the last few years.

India's IT Services industry was born in Mumbai in 1967 with the establishment of Tata

Group in partnership with Burroughs. The first software export zone SEEPZ was set up here
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way back in 1973, the old avatar of the modern day IT Park. More than 80 percent of the

country's software exports happened out of SEEPZ, Mumbai in 80s.

Each year India produces roughly 500,000 engineers in the country, out of them only 25% to

30% possessed both technical competency and English language skills, although 12% of

India's population can speak in English. India developed a number of outsourcing companies

specializing in customer support via Internet or telephone connections. By 2009, India also

has a total of 37,160,000 telephone lines in use, a total of 506,040,000 mobile phone

connections, a total of 81,000,000 Internet userscomprising 7.0% of the country's

population, and 7,570,000 people in the country have access to broadband Internetmaking

it the 12th largest country in the world in terms of broadband Internet users. Total fixed-line

and wireless subscribers reached 543.20 million as of November, 2009

INDIAN IT INDUSTRY 2011

The Indian information technology industry is cautiously optimistic for 2011 after a

tumultuous 2010 due to the continued economic uncertainty in Europe and the US.

The resilient industry, which is still on the path of recovery from a global tech meltdown,

earns 80 percent to 85 percent of its export income from software services and back office

operations in the uncertain markets of Europe and the US.

The industry has witnessed a turnaround in current fiscal 2010-11 by posting a double-digit

growth largely due to renewed investments by

global companies across verticals such as IT infrastructure, software and back office services.

The industrys annual growth had plunged to6 percent in 2009-10 after recording a scorching 25 percent to 30 percent growth during the

previous four years.


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COMPANY PROFILE

ASHOK LEYLAND

Ashok Leyland is a commercial vehicle manufacturing company based in Chennai, India.

Founded in 1948, the company is one of India's leading manufacturers of commercial

Vehicles, such as trucks and buses, as well as emergency and military vehicles. Operating six

plants, Ashok Leyland also makes spare parts and engines for industrial and marine

applications. It sells about 60,000 vehicles and about 7,000 engines annually. It is the second

largest commercial vehicle company in India in the medium and heavy commercial vehicle

(M&HCV) segment with a market share of 28% (200708). With passenger transportation

options ranging from 19 seaters to 80 seaters, Ashok Leyland is a market leader in the bus

segment. The company claims to carry over 60 million passengers a day, more people than

the entire Indian rail network. In the trucks segment Ashok Leyland primarily concentrates on

the 16 ton to 25 ton range of trucks. However Ashok Leyland has presence in the entire truck

range starting from 7.5 tons to 49 tons. The joint venture announced with Nissan Motors of

Japan would improve its presence in the Light Commercial Vehicle (LCV) segment (


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discussed in detail in the Management Discussion and Analysis Report attached as Annexure-

D to this Report. R&D, technology absorption, energy conservation etc.

During the financial year 2010-11, your Company issued Secured Non-convertible

Debentures Series AL 13 to AL 15 to the tune of Rs.21000 lakhs repayable at the end of 3rd,

4th and 5th year and fully redeemed Secured Non-convertible Debentures Series AL 11 of

Rs.5000 lakhs (final instalment of Rs.1666.67 lakh paid during FY 2010-11).

In line with the Companys strategy, your Company acquired 26% in the equity share capital

of Optare plc, U.K., a leading bus manufacturer in U.K., which will benefit the Company in

its endeavour to address new markets, and to accelerate technology development.

In order to continue to participate in the defence business of the Company and to exploit

opportunities available in the defence industry, your Company has made a strategic

investment of 26% of the equity shares capital in Ashok Leyland Defence Systems Limited.

FEDERAL BANK LTD

In the year 1931, Travancore Federal Bank was inaugurated at Vengal Varuttisseril at

Nedumpuram, near Tiruvalla, Kerala. The 14 founders included Sri Vengal Varuttisseril

Oommen Varghese, his brothers Oommen Chacko, Oommen Kurian, Oommen George and

also another person from Tiiruvalla, Kavumbhagam Mundapallil Lukose, and others.

Oommen Varghese was the Chairman and Oommen Chacko the Manager. After it had

functioned for nearly 10 years, the bank's day to day transaction had to be stopped due to the

ill-health of the Manager.

Understanding this situation, a lawyer from Perumbavoor named Sri K.P.Hormis and his

acquaintances joined together, bought the bank and took over the management. In 1945, they

moved the bank's registered office to Aluva and Hormis became the Managing Director. In

1947, the bank's name was shortened from Travancore Federal Bank to Federal Bank.

In 1970, the bank became a Scheduled Commercial Bank. Recently, it opened a

representative office in Dubai.


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Federal Bank Limited is a major Indian commercial bank in the private sector, headquartered

at Aluva, Kochi, and Kerala. As of March 31 2011 it has 743 branches spread across 24 states

in India and 803 ATMs around the country (across 108 metro centres, 224 urban centres, 384

semi-urban locations and 87 rural areas).

TATA CONSULTANCY SERVICES

Tata Consultancy Services Limited (TCS) is an Indian IT services, business solutions and

outsourcing company headquartered in Mumbai, India. It is the largest provider of

information technology in Asia and second largest provider of business process outsourcing

services in India. TCS has offices in over 42 countries with more than 142 branches across

the globe and is a subsidiary of textiles and manufacturing conglomerate Tata Group.

TCS PERFORMANCE 2011

Financial Year 2010-11 marked a strong resurgence in volume and demand growth post the

financial crisis. This growth was led by developed markets of the United States and Europe

with strong contributions from Asia Pacific, Middle East and Africa and was secular across

all

industries and markets. The second half of the year also witnessed an uptick in pricing for the

first time since September 2008. The Company has registered a strong broad based sequential

growth across all key markets and customer segments.

On consolidated basis for the year 2010-11, revenues at Rs. 37,324.51 crores were higher by

24.30% over the previous years revenues of Rs. 30,028.92 crores. Operating profit (profit

before taxes excluding other income) at Rs. 10,416.62 crores was higher by 29.92% over the

previous years operating profit of Rs. 8,017.56 crores. Net profit for the year at Rs. 9,068.04

crores was higher by 29.53% over the previous years net profit of Rs. 7,000.64 crores.

On unconsolidated basis, revenues at Rs. 29,275.41 crores for the year2010-11 were

higher by 27.04% over the previous years revenues of Rs. 23,044.45 crores. Operating profit

(profit before taxes excluding other income) at Rs. 8,205.70 crores was up 32.50% from the

previous years operating profit of Rs. 6,192.78 crores. Net profit for the year at Rs.

7,569.99 crores were higher by 34.73% than the previous years net profit of Rs. 5,618.51

crores.


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BIRLA SUN LIFE INSURANCE

Birla Sun Life Mutual Fund has launched a new fund as Birla Sun Life Gold ETF, an open

ended gold exchange traded fund. The investment objective is to generate returns that are in

line with the performance of gold, subject to tracking error.

Birla Sun Life Gold ETF is a passively managed fund tracking the price of Gold and reflects

the performance of the Gold price. The Fund would invest in physical gold of prescribed

quantity and quality (fineness) and endeavour to track the spot price of gold. The scheme

invests in gold regardless of investment merit. (View - New Fund Offers open NOW)

The Fund would invest up to 100% in Physical Gold and/or up to 5% in debt and money

market instruments to meet the liquidity requirements, subject to tracking error. The scheme

may buy or sell gold at different points of time during the trading session at the then

prevailing prices which may or may not correspond to its closing price, due to disinvestments

to meet redemptions, transactions cost and recurring expenses, execution of large buy/sell

orders etc.

PIPAVAV SHIPYARD

Pipavav Shipyard project was originally conceived and implemented by SKIL Infrastructure

Limited (SKIL). A shipbuilding, ship repair and offshore fabrication complex is constructed

by the Company at Pipavav in the State of Gujarat, India. The complex is spread over an

aggregate area of 198.92 hectares (approximately 491.53 acres), comprising an SEZ unit

spread over 95 hectares (approximately 234.75 acres) and an EOU spread over 103.92

hectares (approximately 256.79 acres). The EOU site adjoins approx 720 meters of dedicated

waterfront. The two sites are connected by a dedicated corridor road of approximately 4.5 km

length built by the Company. The Company, then a wholly owned subsidiary of SKIL, wasincorporated as Pipavav Ship Dismantling and Engineering Limited on October 17, 1997

under the Companies Act. In April 2005, IL&FS, one of the leading infrastructure finance

companies in India, became a shareholder, and the name of the Company was changed to

Pipavav Shipyard Limited. Government of India controlled banking institutions EXIM Bank

and IDBI also took stakes in PSL as well as mutual fund UTI. In 2007, several other major

financial players became shareholders in the form of foreign equity investors. PSLs long-

term strategy is to have four pillars to stand on, each capable of supporting the Shipyard on

its own.
http://www.skilgroup.co.in/http://www.skilgroup.co.in/http://www.skilgroup.co.in/http://www.skilgroup.co.in/


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The Company has engaged in activities in the following business sectors:

Commercial shipbuilding Offshore fabrication and servicing Naval war-ship building Ship repair

HDFC GOLD ETF

The investment objective of the Scheme is to generate returns that are in line with the

performance of gold, subject to tracking errors. The scheme would invest in gold in domestic

market and intends to track the spot price of gold in domestic market. The scheme may also

engage in gold lending and/or deposit gold with banks in return for fees as and whenpermitted by SEBI. The scheme will also invest in debt and money market securities in order

to meet the liquidity requirements. Though every endeavour will be made to achieve the

objectives of the scheme, the AMC do not guarantee the investment objectives of the scheme

will be achieved. No guaranteed returns are being offered under this scheme.


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CHAPTER 3

ASHOK LEYLAND

Financial analysis:

Parameters Key ratio

Return on Net-worth 23.8

Net profit margin 5.51

PE ratio 11.65

Earnings per share 2.24

Price/Book ratio 2.61

Fixed Asset turnover ratio 1.73

INFERENCE:

The company is diversifying its marketing presence by increasing the number of touch points

in Northern and Eastern regions. Engine business sales were also increased in Q1FY11. PE

ratio of the company is 11.65 compared to the Industry PE ratio of 24.38. EBITA margin is

expected to maintain 10%. Therefore, the companys growth will be increase on YOY. Ashok

Leylands share price has risen from Rs.25.85 per share to Rs.27 per share during 1 August to

15 September. Ashok Leyland has offered bonus shares in the ratio of 1:1 on 2 August 2011.


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HDFC GOLD ETF

INFERENCE:

S&P downgrades the US ratings from AAA to AA+, This result in plunge in global market

would affects the Indian market also. Hence the investor moves into safety investment i.e.

Gold. So the Gold market will keep increasing and also investors consider it as safety. As

from the chart, 14 DMA clearly indicates the investors to buy this stock.


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TATA CONSUTANCY SERVICES

Financial Analysis:


Return on Net-worth 25.44


PE ratio 25.64



Fixed Asset turnover ratio 4.91

INFERENCE:

US downgrading affects IT companies in a huge range. As we seen in the above chart, Price

of the stock will decreases after the downgrading. Hence the 14 DMA has shown the positive

look to buy the share. TCS revenues grew 31.4% Y-o-Y and 6.3% Q-o-Q. And also

companys PE ratio traded at 25.64. so the companys growth will be optimistic. Due to

uncertainty in the global market the price of the stock will fluctuate.


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FEDERAL BANK

Financial Analysis


Return on Net-worth (%) 11.5


PE ratio 10.73



INFERENCE:

The Federal Bank Limited (FBL) is a Kerala based old generation private bank with a branch

network of 746 branches & a business size of Rs.749 bn. Currently, FBL is the 4th largest

private bank in India. FBL has had high slippages in the recent times mainly on account of

the NRI housing portfolio and poor asset quality in the SME segment. However, with the new

team being set up for recovery and centralization of loans, we expect asset quality to improve

going ahead. Due to high interest rate for lending loans, there is a slowdown of the growth.


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RBIs 12th time increasing in repo and reverse repo rate will boost up the Banking sector and

make investor to choose banking sector as safety.

PIPIVAV SHIPYARD LTD

Technical charts:

INFERENCE:

Pipavav shipyard had recently signed a JV with Mazgaon dock Ltd(MDL), MDL is the

manufacturer of warship and submarine for Indian Navy. This is the first Public private tie-

up. This is the reason that the share prices of this company will increases. From the chart

clearly shows that there is high volume traded after the JV with MDL.


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CHAPTER 4

FINDINGS

Due to the downgrade of US ratings by S&P, global markets have plunged Euro zone crisis has also affected the global markets These factors have reflected in slump of Indian market. Many traders started selling their shares to salvage their money. Instead, gold was seen as safer investment option which leads to increase in its value. IT industry which was largely dependent on US saw major hit As for the Banking Industry, RBI has changed the Repo and reverse repo rate to

control the Inflation.

Fundamental analysis i.e. financial and technical analysis is only the tools to pick thestock.

CONCLUSION

We have invested in diversified portfolio consisting of companies like TCS, Federal bank,

Ashok Leyland, Pipavav shipyard and Gold Exchange traded fund. This has reduced the risk

during fall in global share prices. Our Net Asset value stood at the end of the specified periodis 11.38. we were able to generate profit of INR.345,200.


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APPENDIX

Particular QTY

Price

per unit

Total amt

Invested

Price per

unit

Total amt at

present

Profit/

Loss ROR

Hdfc mutual

fund-GETF(BSE) 250 2,278.00 569,500 2,772.95 693,238

123,73

8 21.73

Birla gold

ETF(BSE) 250 2,345.00 586,250 2,762.17 690,543

104,29

3 17.79

Ashok

leyland(BSE) 1,000 25.85 25,850 27.00 27,000 1,150 4.45

Bonus share

@Aug 2,2011 1,000 27.00 27,000

Federal Bank 2,000 357.00 714,000 386.15 772,300 58,300 8.17

Dividend @ 85%

10 rs

face

value 17,000

TCS 1,000 929.00 929,000 1,044.00 1,044,000

115,00

0 12.38

PIPAVAV

SHIPYARD 5,000 65.65 328,250 91.00 455,000

Total 5,000 1,997,100 2,342,300

Cash inHand 502,900 502,900

total 2,500,000 2,845,200

NOTE:ASHOK LEYLAND HAS ISSUED BONUS SHARES IN RATIO 1:1 ON 2/8/11

NOTE: Federal Bank has issued dividend of 85% on face value Rs. 10

team f sapm

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