PUNJAB TECHNICAL UNIVERSITY, JALANDHAR

A DISSERTATION PROJECT REPORT ON

PORTFOLIO ANALYSIS & MANAGEMENT

BY SAILENDRA NARAYAN JENA MBA [2010-2012] Roll No. 10107510038 PTU

Learning Center
NIEST BUSINESS CENTRE MAYUR VIHAR, PHASE-III, DELHI
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ACKNOWLEDGEMENT

A large number of individuals have contributed in creating this report. I am thankful to all of them for their help and encouragement. My writing in this report has also been influenced by a number of textbooks in this field. I have tried to give credit to all the sources from where I have drawn material in this report. Still there may have remained unintended errors. I shall feel obliged if they are brought to my notice.

Last but not the least I would like to thank all my Faculty members of my study centre, friends and family members who have helped me directly or indirectly in the completion of the project.

SAILENDRA NARAYAN JENA

TABLE OF CONTENTS

1.

INTRODUCTION

2.

HOW PMS WORKS

3.

RULES & REGULATIONS OF PMS

4.

SCOPE OF RESEARCH

5.

OBJECTIVES & RESEARCH METHODOLOGY

6.

PICK OF INDUSTRIES

7.

CONCLUSION & RECOMMENDATION

8.

REFERENCES

INTRODUCTION

PORTFOLIO MANAGEMENT SERVICES

Preserving and growing capital is as hard as earning it. Knowing what you want is as important as achieving those goals. Assessing your risk profile and aligning potential returns for the risk assumed from various investment options is the crucial task. In today's fluid environment, that has become a hard task to achieve. As your net worth increases, financial complexity expands exponentially and the investment needs and options multiply. And equities offer one of the best options for investments.

Portfolio management is referred as the art and science of making decisions about investment mix and policy, matching investments to objectives, asset allocation for individuals and institutions, and balancing risk against performance. Portfolio management is all about strengths, weaknesses, opportunities and threats in the choice of debt vs. equity, domestic vs. international, growth vs. safety, and many other tradeoffs encountered in the attempt to maximize return at a given appetite for risk. In the case of mutual and exchange-traded funds (ETFs), there are two forms of portfolio management: passive and active. Passive management simply tracks a market index, commonly referred to as indexing or index investing. Active management involves a single manager, co-managers, or a team of managers who attempt to beat the market return by actively managing a fund's portfolio through investment decisions based on research and decisions on individual holdings. Closed-end funds are generally actively managed.

Portfolio Management is used to select a portfolio of new product development projects to achieve the following goals: Maximize the profitability or value of the portfolio Provide balance Support the strategy of the enterprise

Portfolio Management is the responsibility of the senior management team of an organization or business unit. This team, which might be called the Product Committee, meets regularly to manage the product pipeline and make decisions about the product portfolio. Often, this is the same group that conducts the stage-gate reviews in the organization.

Objective
PMS consists of five objective clearly articulate what the portfolio is expected to achieve. Understanding, accepting, and making tradeoffs Identifying, eliminating, minimizing, and diversifying risk Monitoring portfolio performance Achieving a desired objective

The weighting of the goals in making decisions about products varies from company. But organizations must balance these goals: risk vs. profitability, new products vs. improvements, strategy fit vs. reward, market vs. product line, long-term vs. short-term. Several types of techniques have been used to support the portfolio management process: Heuristic models Scoring techniques Visual or mapping techniques

The earliest Portfolio Management techniques optimized projects' profitability or financial returns using heuristic or mathematical models. However, this approach paid little attention to balance or aligning the portfolio to the organization's strategy. Scoring techniques weight and score criteria to take into account investment requirements, profitability, risk and strategic alignment. The shortcoming with this approach can be an over emphasis on financial measures and an inability to optimize the mix 5

of projects. Mapping techniques use graphical presentation to visualize a portfolio's balance. These are typically presented in the form of a two-dimensional graph that shows the trade-off's or balance between two factors such as risks vs. profitability, marketplace fit vs. product line coverage, financial return vs. probability of success, etc.

The chart shown above provides a graphical view of the project portfolio risk-reward balance. It is used to assure balance in the portfolio of projects - neither too risky or conservative and appropriate levels of reward for the risk involved. The horizontal axis is Net Present Value, the vertical axis is Probability of Success. The size of the bubble is proportional to the total revenue generated over the lifetime sales of the product. Our recommended approach is to start with the overall business plan that should define the planned level of R&:D investment, resources (e.g., headcount, etc.), and related sales expected from new products. With multiple business units, product lines or types of development, we recommend a strategic allocation process based on the business plan. This strategic allocation should apportion the planned R&D investment into business units, product lines, markets, geographic areas, etc. It may also

breakdown the R&D investment into types of development, e.g., technology development, platform development, new products, and upgrades/enhancements/line extensions, etc

How PMS works?

While the portfolio methods vary greatly from company to company, the common denominator across firms are the goals management is trying to achieve. According to 'best-practice' research by Dr. Cooper and Dr. Edgett, three main goals dominate the thinking of successful firms:
Value Maximization

Allocate resources to maximize the value of the portfolio via a number of key objectives (such as profitability, ROI, acceptable risk). A variety of methods are used to achieve this maximization goal, ranging from financial methods to scoring models.
Balance

Achieve a desired balance of projects via a number of specific parameters (i.e. risk versus return; short-term versus long-term; across various markets, business arenas and technologies). Typical methods used to reveal balance include bubble diagrams, histograms and pie charts.
Align with Business Strategy

Ensure that the portfolio of projects reflects the business strategy and that the breakdown of spending aligns with the companys strategic priorities. The three main approaches are: top-down (strategic buckets); bottom-up (effective gating and criteria) and top-down and bottom-up (strategic check).

PROCESS OF PMS
Kayne Anderson Rudnick believes that superior risk-adjusted returns can be achieved through investment in high-quality companies purchased at reasonable prices. We use a disciplined fundamental research approach to identify companies with global dominance, excellent management, financial strength, and consistent growth. We add

value through our extensive internal research process whereby we gain a thorough understanding of the companies in which we invest. Key Elements of our Investment Philosophy and Approach: Bottom-up stock selection In-depth, independent fundamental research High-quality companies with sustainable competitive advantages. Disciplined valuation approach applying multiple valuation measures Long-term vision, resulting in low portfolio turnover

Investment process involves three distinct steps: Screening, Research, and Portfolio Construction.
Step 1 : Screening

The investment decision-making process begins by utilizing a screening system to derive our various equity universes. To be considered for investment, companies must pass the following set of growth and quality criteria:

Strong, consistent growth Low-debt balance sheet High profitability Rising free cash flow

The result of the initial screening process is a more focused list of securities. This list contains companies which have above-average growth and profitability characteristics, low earnings volatility, and low financial/default risk. These companies are then subjected to intensive internal research.

Step 2 : Research

Our research philosophy is founded on the principle that first-hand fundamental research is essential in order to make sound, long-term investment decisions. We place great emphasis on this component of our investment process by committing extensive resources to achieve our results. Our portfolio management team has developed an internal research process that carefully looks at a company from a three-dimensional perspective involving qualitative, financial, and valuation analyses. Qualitative Analysis Qualitative analysis assesses the companys long-term market positioning in terms of market structure and prospects, business model, and competitive advantages. The sustainability of the business model is continuously evaluated in light of changing business conditions. In addition, we evaluate managements strategies, financial goals, track record, and shareholder value orientation. Financial Analysis We rely on our own internal research of each company to understand the near-term drivers and longterm potential of the enterprise, the structure and drivers of profitability and growth, and the capital demands of the business. Financial analysis involves an historical examination of the income statement, cash flow statement, balance sheet, and associated ratios on an absolute and peer relative basis.

Valuation Analysis The final component of our research process is determining the current and potential value of each company in our universe. We employ a variety of proprietary models to establish the value of a business under base, best, and worst-case scenarios. We have found that it is most effective to look at a company's valuation from many different viewpoints, recognizing the differences in valuation metrics across industries.

The output of the research process is a target price and expected rate of return projection for each company. This helps provide us with a framework for purchasing and selling our stocks.
Step 3 : Portfolio Construction

Our portfolio management and construction process is driven by identifying Quality at a Reasonable Price. The portfolio construction process involves stock selection and application of diversification guidelines. The process is driven principally by individual stock selection and secondarily by sector exposures. Key elements in the portfolio construction process involve: Applying a diversified sector allocation discipline to avoid over concentration in any single sector. Eliminating market timing risk by generally remaining fully invested at all times. Maintaining a long-term investment horizon with an average holding period of 3-4 years resulting in low portfolio turnover

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BENEFITS & IMPORTANCE OF PMS

When implemented properly and conducted on a regular basis, Portfolio Management is a high impact, high value activity. Maximizes the return on your product innovation investments Maintains your competitive position Achieves efficient and effective allocation of scarce resources Forges a link between project selection and business strategy Achieves focus Communicates priorities Achieves balance Enables objective project selection The objective of the equity selection process is to create a portfolio of individual equity issues having the common theme among them of Growth At a Reasonable Price, with the focus on the long term. Growth is measured as superior, sustainable growth in future earnings, cash flow and dividends in relation to the stock market, in general, as well as the sector within which the company competes.

Companies without effective new product portfolio management and project selection face a slippery road downhill. Many of the problems that plague product innovation initiatives can be directly traced to ineffective portfolio management. According to benchmarking studies done by Dr. Cooper and Dr. Edgett, some of the problems that arise when portfolio management is lacking are: 1. A Strong Reluctance to Kill Projects no consistent criteria for Go/Kill decisions the result, projects are simply added to the 'active list' of projects with no clear directional focus resources are thinly spread; long times to market; poor quality of execution; and higher-thanacceptable failure rates 2. Poor Go/Kill & Project Selection Decisions many mediocre projects in the pipeline (i.e. extensions, enhancements) and a lack of high reward projects few good projects that do exist are starved of resources, take too long to get to market and fail to achieve full potential 3. The Wrong Projects are selected decisions are not based on facts & objective criteria, but on politics, opinion & emotions Many of these 'ill-selected' projects fail to bring reward to the company 4. Strategic Criteria are Missing no strategic direction for project selection and therefore, projects are not aligned with the business's strategy

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projects are typically a poor fit with strategy and overall spending does not reflect the strategic priorities of the business Portfolio Management is about doing the right projects. If you pick the right projects, the result is an enviable portfolio of high value projects: a portfolio that is properly balanced and most importantly, supports your business strategy.

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RULES & REGULATION FOR PMS

An applicant for registration or renewal of registration as a portfolio manager is required to pay a nonrefundable application fee of Rs.1,00,000/- (Rupees one lac only) by way of demand draft drawn in favour of Securities and Exchange Board of India, payable at Mumbai The application in Form A along with additional information and copy of the receipt of the application fee is to be submitted to the Investment Management Department. SEBI considers the following things into consideration while granting

The certificate of registration: The applicant has to be a body corporate and must have necessary infrastructure like adequate office space, equipments and the manpower to effectively discharge the activities of a portfolio manager. The principal officer of the applicant should have either a professional qualification in finance, law, accountancy or business management from a university or an institution recognised by the Central Government or any State Government or a foreign university; or an experience of at least ten years in related activities in the securities market including in a portfolio manager, stock broker or as a fund manager.

The applicant should have in its employment minimum of two persons who, between them, have atleast five years experience as portfolio manager or stock broker or investment manager or in the areas related to fund management. The applicant also has to fulfill the capital adequacy requirements, etc.

Every portfolio manager is required to pay a sum of ten lac rupees as registration fees at the time of grant of certificate of registration by SEBI. The certificate of registration remains valid for three years 13

PORTFOLIO CONSIST OF In asset allocation planning, the decision on the amount of stocks versus bonds in one's portfolio is a very important decision. Simply buying stocks without regard of a possible bear market can result in panic selling later. One's true risk tolerance can be hard to gauge until having experienced a real bear market with money invested in the market. Finding the proper balance is key. Asset allocation and Return

80% stock / 20% bond -34.35%

70% stock / 30% bond -25.81%

60% stock / 40% bond -19.99%

50% stock / 50% bond -13.87%

40% stock / 60% bond -7.46%

30% stock / 70% bond -0.74%

20% stock / 80% bond +6.29%

Projected 10 year Cumulative return after inflation (stock return 8% yearly, bond return 4.5% yearly, inflation 3% yearly[14]

80% stock / 20% bond

52%

70% stock / 30% bond

47%

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60% stock / 40% bond

42%

50% stock / 50% bond

38%

40% stock / 60% bond

33%

30% stock / 70% bond

29%

20% stock / 80% bond

24%

The tables show why asset allocation is important. It determines an investor's future return, as well as the bear market burden that he or she will have to carry successfully to realize the returns.

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SCOPE OF RESEARCH

The stock markets by their very nature are volatile, and in cases it is not the lack of opportunities that cost the investor, but the abundance of choices that result in confusion and mistakes. This research report combines excellent research insights with market experience to help investors own a portfolio to suit their needs.

Distinct Products: Depending on investors risk appetite, investor may choose a Value Based Theme or a Momentum Based Theme. The former lays emphasis on capital preservation and capital growth while the latter focuses on healthy returns over a medium term.

Focused Investment Approach: This report adopt a unique investment approach to meet specific requirements of customer. In Value Theme, the idea is to invest in fundamentally strong companies where the intrinsic value is more than the current market price. In the case of Momentum Theme, the key lies in identifying momentum stocks that could deliver healthy returns in the medium term. Rational Stock Selection Process: In Value Theme the stock selection centres around investment ideas with a sufficient margin of safety so that even a mediocre sale fetches good returns. The Momentum Theme adopts a two-pronged selection strategy of identifying large and mid cap stocks that fit our predefined criteria.

Maximum Transparency / Convenience: This report provides investors with monthly transaction statements and portfolio statements detailing the gain/loss made. Furthermore, they also provide a CA certified statement of yearly gains/losses and dividend income to ease your Income tax work.

Different Fee structures: Investor may either opt for a fixed management fee or a combination of a lower fixed fee and sharing a percentage of the profits.

To be specific in my report, the aim is to provide indepth analysis of selecting few scrips among thousand of listed securities. While there are many investment avenues such as fixed deposits, income 16

funds, bonds, equities etc. It is a proven fact that Equities as an asset class typically tend to outperform all other asset classes over the long run.

Investing in equities, require knowledge, time and a right mind-set. Equity as an asset class also requires constant monitoring may not be possible for you to give the necessary time, given your other commitments.

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OBJECTIVE:-

The stock markets by their very nature are volatile, and in cases it is not the lack of opportunities that cost the investor, but the abundance of choices that result in confusion and mistakes. This research report combines excellent research insights with market experience to help investors own a portfolio to suit their needs.

RESEARCH METHDOLOGY

Investment philosophy taken during this project report consists of following steps: Collecting the major financial data of all the sectors Ranking out the best performing sector on the basis of fundamentals Collecting all the fundamentals of the major players of each sectors Short listing one company from each sector on the basis of fundamental as well as technical analysis of the company Undertaking the detailed analysis of the selected companies Making the portfolio with the selected companies by ranking them in order of their risk reward ratio.

SECTORAL PERFORMANCE

Company Name
BSE Auto Index BSE Bankex BSE FMCG Index BSE IT Index

30 Days Index 365 Days Daily Returns(%) Returns(%)

-12.19 -21.03 -4.3 1.85 -18.23 -14.03 23.51 -16.58

P/E
14.11 13.01 28.88 20.62

Market Capitalization
115606.57 348483.07 201943.96 372696.33

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BSE Metal Index BSE Oil & Gas Index BSE Realty Index BSE Power Index

-2.92 -14.02 0 0

34.74 24.14 -38.62 24.43

12.79 49.4 23 28.88

334691.77 749547.14 189459.13 492020.83

Indian Automobile Industry

In India there are 100 people per vehicle, while this figure is 82 in China. It is expected that Indian automobile industry will achieve mass motorization status by 2014 .
Since the first car rolled out on the streets of Mumbai (then Bombay) in 1898, the Automobile Industry of India has come a long way. During its early stages the auto industry was overlooked by the then Government and the policies were also not favorable. The liberalization policy and various tax reliefs by the Govt. of India in recent years has made remarkable impacts on Indian Automobile Industry. Indian auto industry, which is currently growing at the pace of around 18 % per annum, has become a hot destination for global auto players like Volvo, General Motors and Ford.

A well developed transportation system plays a key role in the development of an economy, and India is no exception to it. With the growth of transportation system the Automotive Industry of India is also growing at rapid speed, occupying an important place on the 'canvas' of Indian economy.

Today Indian automotive industry is fully capable of producing various kinds of vehicles and can be divided into 03 broad categories: Cars, two-wheelers and heavy vehicles Segment Knowhow Among the two-wheeler segment, motorcycles have major share in the market. Hero Honda contributes 50% motorcycles to the market. In it Honda holds 46% share in scooter and TVS makes 82% of the mopeds in the country.

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40% of the three-wheelers are used as goods transport purpose. Piaggio holds 40% of the market share. Among the passenger transport, Bajaj is the leader by making 68% of the three-wheelers. Cars dominate the passenger vehicle market by 79%. Maruti Suzuki has 52% share in passenger cars and is a complete monopoly in multi purpose vehicles. In utility vehicles Mahindra holds 42% share.

In commercial vehicle, Tata Motors dominates the market with more than 60% share. Tata Motors is also the world's fifth largest medium & heavy commercial vehicle manufacturer.

Hyderabad, the Hi-Tech City, is going to come up with the first automobile mall of the country by the end of 2008. It would be set up by city-based Prajay Engineers Syndicate in area of more than 35 acres. This 'Autopolis' would have facilities for automobile financing institutions and insurance services to create a complete range of services required for both auto companies and customers. It will also have a multi-purpose convention centre for auto fairs and product launches

nippets
The first automobile in India rolled in 1897 in Bombay. India is being recognized as potential emerging auto market. Foreign players are adding to their investments in Indian auto industry. Within two-wheelers, motorcycles contribute 80% of the segment size. Unlike the USA, the Indian passenger vehicle market is dominated by cars (79%). Tata Motors dominates over 60% of the Indian commercial vehicle market. 2/3rd of auto component production is consumed directly by OEMs. India is the largest three-wheeler market in the world. India is the largest two-wheeler manufacturer in the world. India is the second largest tractor manufacturer in the world. India is the fifth largest commercial vehicle manufacturer in the world. The number one global motorcycle manufacturer is in India. India is the fourth largest car market in Asia - recently crossed the 1 million mark.

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Indian Automobile Companies

India is the 11th largest Passenger Cars producing countries in the world and 4th largest in Heavy Trucks.

Current Scenario
Hero Honda is the largest manufacturer of motorcycles. Hyundai Motors India is the second largest player in passenger car market. Sundram Fasteners, Sundaram Clayton, Bharat Forge and Rico Auto supplies components to global majors like Ford, General Motors and Land Rover.

Tata Motors is the fifth largest medium & heavy commercial vehicle manufacturer in the world.

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Global Players in India:

Segments Companies

Cars/ SUVs

Suzuki Honda Toyota Mitsubishi TVS GM Hero Honda Ford Tata Bajaj Auto Ashok Leyland Tatra Escorts Eicher-Mitsubishi M&M L&T Punjab Tractors

Daimler-Chrysler Skoda Fiat Hyundai Yamaha Tata Kinetic M & MMazda Swaraj LML Mahindra & Mahindra Volvo New Holland ITL-Renault John-Deere Steyr

Two-wheelers

CVs

Tractors

Comparative Analysis of Major Players of Automobile Industry Company

Amtek Auto Ltd. Apollo Tyres Ltd. Ashok Leyland Ltd. Bharat Forge Ltd. Bosch Ltd. Cummins India Ltd. Escorts Ltd.

P/E Ratio
15.73 8.91 9.41 20.17 23.23 20.76 -103.68

EPS
17.82 4.35 3.53 12.29 172.79 14.18 -0.82

Returns
-32.19 8.73 -13.32 -22.66 -12.28 -5.32 -30.34

Beta
0.59 1 1.02 1 0.72 0.8 1.41

Market Cap
4948.73 1976.63 5259.58 6703.29 13681.33 7129.39 920.96

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Exide Industries Ltd. Hero Honda Motors Ltd. MRF Ltd. Mahindra & Mahindra Ltd. Maruti Suzuki India Ltd. TVS Motor Co. Ltd. Tata Motors Ltd.

23.58 16.03 7.48

3.13 48.47 529.22

61.8 11.22 -2.95

0.7 0.73 0.86

5169.98 14188.6 2058.23

14.88 12.4 182.89 10.31

38.18 60.22 0.19 52.63

-24.16 -6.1 -50.54 -23.69

1.02 1.14 1.08 1.07

17456.91 25329.27 1303.94 27040.34

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PICK OF THE INDUSTRY TATA MOTORS LTD.

TATA MOTORS: IMPROVING THE QUALITY OF LIFE

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Market Data

Sector CMP Action 52 week High/Low Face Value Market Cap

Automobile 430 Buy 842/373 Tata Motors Limited is India's largest automobile company, with revenues of Rs. 32,426 crores (USD 7.2 billion) in 2006-07. It is the leader by far in commercial vehicles in each segment, and the second largest in the passenger vehicles market with winning products in the Rs 10 Rs 96587 cr* compact, midsize car and utility vehicle segments. The company is the world's fifth largest medium and heavy commercial vehicle manufacturer, and the world's second largest medium and heavy bus manufacturer.

Shareholding Pattern

Established in 1945, Tata Motors' presence indeed cuts across the length and breadth of India. Over 4 million Tata vehicles

Promoters Foreign Institution Non Promoters Public & Others

33.4%
38.2% 16.3% 1.1% 10.9%

ply on Indian roads, since the first rolled out in 1954. The company's manufacturing base is spread across India - Jamshedpur (Jharkhand) in the east, Pune (Maharashtra) in the west, and in the north in Lucknow (Uttar Pradesh) and Pantnagar (Uttarakhand). Tata Motors, the first company from India's engineering sector to be listed in the New York Stock Exchange (September 2004), has also emerged as an international automobile company. In 2004, it acquired the Daewoo Commercial Vehicles Company, Korea's second largest truck maker. In 2006, Tata Motors and Fiat Auto formed an industrial joint venture at Ranjangaon (near Pune in Maharashtra, India) to produce both Fiat and Tata cars and Fiat power trains for the Indian and overseas markets; Tata Motors already distributes and markets Fiat branded cars in India.

Through its subsidiaries, the company is engaged in engineering and automotive solutions, construction equipment manufacturing, automotive vehicle components manufacturing and supply chain activities, machine tools and factory automation solutions, high-precision tooling and plastic and electronic components for automotive and computer applications, and automotive retailing and service operations.

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STRENGTHS
TATA & JLR MERGER

Tata Motors acquired the Jaguar Land Rover businesses from Ford Motor Company for a net consideration of US $2.3 billion, as announced on March 26, in an all-cash transaction. Ford has contributed about US $600 million to the Jaguar Land Rover pension plans.

Jaguar Visibility exists, at least for CY08

With advance booking of 18,000 XFs, representing 30% of CY07 sales, we believe there exists adequate visibility for Jaguar in CY08. It should be noted that in CY07, the largest Contributor to sales volume has been X Type, with approximately 40% of total volume Sales. However, XF (USD 57K to 109K) is priced much higher than X Type (USD 43K to 61K). This makes us believe that despite volumes remaining flat or in the negative territory, the average realizations and profitability is likely to remain better than CY07

INTRODUCING NANO
Mr. Ratan N. Tata, Chairman of the Tata Group and Tata Motors, today unveiled the Tata NANO, the Peoples Car from Tata Motors that India and the world have been looking forward to. A development, which signifies a first for the global automobile industry, the Peoples Car brings the comfort and safety of a car within the reach of thousands of families. The Peoples Car will be launched in India later in 2008.

FEATURES :

Meets all safety requirements Environment-friendly

Stylish, comfortable Fuel-efficient engine

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Type Founded Founder(s)

Public BSE: 500570 (NYSE: TTM) 1945 JRD Tata

Headquarters Mumbai, India Ratan Tata, Chairman Ravi Kant, Vice Chairman Carl Peter Foster,Group Chief Executive Prakash Telang, MD (India Operations) Ravi Pisharody, President (CVBU) Automotive

Key people

Industry Products Services Revenue

Automobiles Engines

Financial Services

INR Rs. 74,151 Crores (2009)

(USD $15.5 Billion)

Net income Parent

INR Rs. 2,505 Crores (2009)

(USD $544.1 Million)

Tata Group

Subsidiaries

Jaguar Land Rover TDCV Hispano Carrocera

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Flash Figures for February, 2010

PRODUCTION Category M& HCV LCV UTILITY CARS TOTAL FEB'10 14577 23757 3986 18523 60843 FEB'09 8683 11548 3835 12820 36886 FEB'08 18144 15121 5382 13662 52309 SALES A. For the month Domestic Category M& HCV LCV UTILITY CARS TOTAL FEB'10 17441 21764 4005 22980 66190 FEB'09 8810 14644 3515 15524 42493 FEB'08 16894 14424 5315 13451 50084 FEB'10 972 1595 43 627 3237 Exports FEB'09 695 345 14 264 1318 FEB'08 920 2202 84 891 4097 FEB'10 18413 23359 4048 23607 69427 Total FEB'09 9505 14989 3529 15788 43811 FEB'08 17814 16626 5399 14342 54181 2009-10 123902 202456 29474 135687 491519 2008-09 104593 153056 33924 133553 425126 2007-08 155071 153360 43798 161188 513417

B. For the year Domestic Category M& HCV LCV UTILITY CARS TOTAL 2009-10 134290 196040 29635 177534 537499 2008-09 101341 134665 34265 142189 412460 2007-08 145398 131980 41140 148881 467399 2009-10 11206 12970 551 5309 30036 Exports 2008-09 8405 16496 622 6088 31611 2007-08 11726 23024 2542 11215 48507 2009-10 145496 209010 30187 182843 567535 Total 2008-09 109746 151161 34887 148277 444071 2007-08 157124 155004 43682 160096 515906

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TATA MOTORS
Live BSE Quotes Price (Rs) 786.45 % Change 2.34

(TELCO)
Mar 16, 2010 (Close)

Open (Rs) 770.00 Volume 699,322

High (Rs) 788.30

Low (Rs) 768.00

Value (Rs) 52545,523,328 Week H/L 842.00 / 161.00 Mar 16, 2010 (Close)

Live NSE Quotes Price (Rs) 786.05 % Change 2.20 Open (Rs) 773.00 Volume 2,849,700

High (Rs) 788.35

Low (Rs) 772.10

Value (Rs) 522,222,945,024 Week H/L 844.70 / 161.00

Valuation EPS (Rs)* 34.05 P/E Ratio (x) 23.10 Market Cap (Rs m) 377,291.52 P/BV (x) 7.23

*Trailing 12 months earnings, excluding extraordinary / exceptional items.

PEER GROUP: QUOTE & GRAPH ASHOK LEYLAND BAJAJ AUTO EICHER MOTOR ESCORTS FORCE MOTORS HERO HONDA M&M MARUTI SUZUKI TATA MOTORS TUBE INVESTMENTS TVS MOTOR

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STOCK PERFORMANCE OF TATA MOTORS

Data as of 03-16-10 Last Close 52-Week Range 5 Year Range

$18.50

$3.81 - $18.79

$3.05 - $22.11

1 Month Range

% Below 52-Week High

% Below 5 Year High

$14.50 - $18.79
Total Returns %

1.54

16.33
Data through 03-16-10

2005

2006

2007

2008

2009

YTD

Stock +/- Industry +/- S&P 500

Trailing Total Returns 1 Month

23.0 --20.0
3 Month

44.1 --30.5
1 Year

-5.9 ---9.4
3 Yr Avg

-74.5 ---36.0

281.2 --257.7

9.7 --5.7
YTD

5 Yr Avg 10 Yr Avg*

Stock +/- Industry +/- S&P 500

19.0 --13.1

19.2 --14.7

388.2 --334.4

4.4 --10.2

13.6 --14.1

-------

9.7 --5.7

*data through 02-28-10 Price/Dividends/Splits

Daily Price History

2006

2007

2008

2009

2010

Dividend History

12-05

12-06

12-07

12-08

12-09

Dividend $ Year-end Yield % S&P 500 Yield %

1.59

0.28 1.39

0.37 1.97

0.35 7.91

0.10 0.60

5 Year History

Splits and Dividends

Amount Per Share

07-31-09 06-16-08 06-04-07 06-22-06

Cash Dividend Cash Dividend Cash Dividend Cash Dividend

0.101188 0.352692 0.371112

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RISK ANALYSIS
A comparison with valuation of global players indicates that contrary to the perception, the deal is not expensive. As can be seen from the table below, when compared to companies that are similar/smaller in size in terms of revenues or similar in product profile, the acquisition at 5.9 times EV/EBIDTA is reasonably priced. However, considering the performance in CY07 and 1QCY08, there is likely hood improvement in EBIDTA margins going ahead. It should be noted that despite a 24% YoY increase In HR prices in Western Europe during 1QCY08, JLR has been able to hold on to its margins (details in the later part of the report).

31

INDIAN BANKING SECTOR

Banking business has a history of over 200 years. From the times of the Bank of Bengal(1806) the sector has been witnessing qualitative and quantitative changes. Main players during the preindependence period were Credit Lyonnais, Allahabad Bank, Punjab National Bank and Bank of India. With 1935 regulation the Reserve Bank of India was proclaimed the Central Bank of India and was vested with controlling powers over the commercial banks. The drastic development taken place during the first 25 years since independence was Nationalization of many private banks. With this, the central government became major policy maker for these nationalized banks.

Scope
With economic liberalization measures many private and foreign banking companies were allowed to operate in the country. Favourable economic climate and a variety of other factors such as demand for wide range of financial products from various sections of the society led to mutually beneficial growth to the banking sector and economic growth process. This was coincided by technology development in the banking operations. Today most of the Indian cities have networked banking facility as well as Internet banking facility. A customer is empowered to operate his account from any part of the country. UTI Bank, ICICI, HDFC Bank and Bank of Punjab are the main winners of the race. The financial sector in India has become stronger in terms of capital and the number of customers. It has become globally competitive and diverse aiming, at higher productivity and efficiency. Exposure to worldwide competition and deregulation in Indian financial sector has led to the emergence of better quality products and services. Reforms have changed the face of Indian banking and finance. The banking sector has improved manifolds in terms of capital adequacy, asset classification, profitability, income recognition, provisioning, exposure limits, investment fluctuation reserve, risk management, etc. Diversifying into investment banking, insurance, credit cards, depository services, mortgage financing, securitisation has increased revenues. As large number of players in various fields enter the market, competition would be intensified by mutual funds, Non Banking Finance Corporations (NBFCs), post offices, etc. from both domestic and foreign players. All this would lead to increased sophistication and technology in the sector. Corporate governance would come into the picture and other financial institutions would have to reach global standards. Also the limit for FDI in private banks is increased to 74% and the limit for FII is 49%. There are many challenges ahead for the banking sector such as technology, consumer satisfaction, corporate governance, risk management, etc. and they are redefining their priorities, which are now focused on cost reduction, product differentiation and customer centric services. Some of the major players in this sector are HDFC, ICICI, HSBC, State Bank of India, Punjab National Bank, Ing Vysya, ABN Amro Bank, Centurion Bank, City Bank, etc.

32

The economic reforms undertaken in the last 15 years have brought about a considerable improvement in the health of banks and financial institutions in India. The banking sector is a very important sector of the Indian economy. The sector has made a marked improvement in the liberalization period. There has been extraordinary progress in the financial health of the commercial banks with respect to capital adequacy, profitability, asset quality and risk management. Deregulation has opened new doors for banks to increase revenues by entering into investment banking, insurance, credit cards, depository services, mortgage, securitization, etc. The limit for foreign direct investment in private banks has been increased from 49% to 74%. In addition, the limit for foreign institutional investment in private banks is 49%. Liberalization and globalization have created a more challenging environment in the banking sector as well as in the other segments of the financial sector such as mutual funds, Non Banking Finance Companies, post offices, capital markets, venture capitalists, etc. Now the challenges faced by the sector would be gaining profitability, reinforcing technology, maintaining global standards, corporate governance, sharpening skills, risk management and, the most important of all, to establish 'Customer Intimacy' Company P/E Ratio EPS Returns Beta Market Cap

Allahabad Bank Andhra Bank Axis Bank Ltd. Bank of Baroda Bank of India Canara Bank Centurion Bank OF Punjab Federal Bank Ltd. HDFC Bank Ltd. ICICI Bank ltd. Indian Overseas Bank Karnataka Bank Ltd. Kotak Mahindra Bank Ltd. Oriental Bank of Commerce Punjab National Bank State Bank of India Union Bank of India Yes Bank Ltd.

3.4 6.07 24.74 6.13 7.09 5.27 56.55 9.83 27.11 20.29 5.1 9.3 74.94 5.23 7.18 12.56 4.64 21.3

21.82 11.87 29.88 39.41 38.26 38.17 0.72 21.49 44.86 37.36 22.07 19.92 8.52 31.85 64.98 105.99 27.46 6.76

-8.27 -13.79 28.87 -12.92 27.02 -19.21 2.25 -25.18 5.44 -18.44 -1.85 9.06 5.38 -30.87 -9.89 0.79 2.34 -15.63

1.03 1.25 1.04 1.39 1.46 1.21 1.01 1.1 0.61 0.83 1.27 1.09 1.01 1.17 1.2 1.02 1.31 1.02

4361.04 4343.7 28666.63 11972.33 15181.86 10973.89 8367.96 3975.27 49278.78 112183.71 7861.95 2573.92 29017.64 5820.13 17368.33 104780.36 8259.56 5727.21

33

PICK OF THE INDUSTRY STATE BANK OF INDIA

SBI: THE NATION BANKS ON US.

34

Market Data Sector CMP Action 52 week High/Low Face Value Market Cap BANKING 1523 Buy 2574/965 Rs 10 Rs 96587 cr*

The State Bank of India, the countrys oldest Bank and a premier in terms of balance sheet size, number of branches, market capitalization and profits is today going through a momentous phase of Change and Transformation the two hundred year old Public sector behemoth is today stirring out of its Public Sector legacy and moving with an agility to give the Private and Foreign Banks a run for their money. The bank is entering into many new businesses with strategic tie ups Pension Funds, General Insurance, Custodial Services, Private Equity, Mobile Banking, Point of Sale Merchant Acquisition, Advisory Services, structured products etc each one of these initiatives having a huge potential for growth. The Bank is forging ahead with cutting edge technology and innovative new banking models, to expand its Rural Banking base, looking at the vast untapped potential in the hinterland and proposes to cover 100,000 villages in the next two years. The bank is also looking at opportunities to grow in size in India as well as Internationally. It presently has 82 foreign offices in 32 countries across the globe. It has also 7 Subsidiaries in India SBI Capital Markets, SBICAP Securities, SBI DFHI, SBI Factors, SBI Life and SBI Cards forming a formidable group in the Indian Banking scenario. It is in the process of raising capital for its growth and also consolidating its various holdings.

Shareholding Pattern Promoters Public FIIS Others 59.41 6.52 12.67 21.40

Throughout all this change, the Bank is also attempting to change old mindsets, attitudes and take all employees together on this exciting road to Transformation. In a recently concluded mass internal communication programme termed Parivartan the Bank rolled out over 3300 two day workshops across the country and covered over 130,000 employees in a period of 100 days using about 400 Trainers, to drive home the message of Change and inclusiveness. The workshops fired the imagination of the employees with some other banks in India as well as other Public Sector Organizations seeking to emulate the programme.

35

STATE BANK OF INDIA

Type Founded Public (BSE, NSE:SBI) & (LSE: SBID) Kolkata, 1806 (as Bank of Calcutta)

Corporate Centre, Headquarters Madam Cama Road, Mumbai 400 021 India Key people Industry Om Prakash Bhatt, Chairman Banking Insurance Capital Markets

Revenue Net income Total assets Total equity Employees Website

Rs. 1,135.36 billion (2009) (US$ 24.57

billion)[1]

Rs. 109.98 billion (2009) (US$ 2.38

billion)[1]

Rs. 11,880.60 billion (2009)

(US$ 257.18 billion)[1]

Rs. 659.12 billion (2009) (US$ 14.26

billion)[1] 205,896 Official

Growth
State Bank of India has often acted as guarantor to the Indian Government, most notably during Chandra Shekhar's tenure as Prime Minister of India. With 11,448 branches and a further 6500+ associate bank branches, the SBI has extensive coverage. State Bank of India has electronically networked all of its branches under Core Banking System (CBS). The bank has one of the largest ATM networks in the region, with more than 9000 ATMs across India. The State Bank of India has had steady growth over its history, though it was marred by the Harshad Mehta scam in 1992. In recent years, the bank has sought to expand its overseas operations by buying foreign banks. It is the only Indian bank to feature in the top 100 world banks in the Fortune Global 500 rating and various other rankings. STOCK PERFORMANCE OF INDIAN BANKS SBI: Owned by Government of India and is the largest bank in India. It has a wide range of products and boasts of one of the highest number of ATMs in the country. SBI has the highest stock value among all the other Indian banks. In the last one year the quote for SBI went as low as 894 and was highest at 1935. The stock values of SBI kept going down from July 08 to March 09 where it reached its least value in the past one year and kept coming up till mid of June. it hasnt fluctuated much since then. 36

ICICI Bank Second largest bank in India with a wide range of financial products and an excellent cutomer service. The movement for ICICI has been quite eratic in the last one year and it went to as low as 252.75 in the last one year. ICICI grew steadily from mid March to mid May and remained above 600 then on.

HDFC Bank One of the largest bank in India which became commercial in Aug 1994 after RBI allowed the establishment of private sector banks. HDFC Bank has been quite stable in its performance and has not really got affected a lot by the market conditions. The stock value went the lowest in March and started growing steadily rising close to 1600 points.

37

Punjab National Bank Happens to be the first bank to be started with indian Capital in 1894 in Lahore. It has grown to be one of the finest mainstream Indian Banks. Punjab National Bank has actaully seen quite a growth despite the recession. Their stock value has grown in the last year. They stayed stable till December and went lowest in March to come up strong.

Bank of India This nationalized bank was founded in 1906 by a businessman in Mumbai. The bank has grown to be one of the most saught after nationalized banks with a huge indian and international operations. Bank of India has also been stable for the last year compared to its peers. Their lowest in March wasnt as steep a drop as most of the other bank experienced.

38

Canara Bank The bank holds the stature of being one of the premier banks with a combination of commercial and social banking. Canara bank has been trading in the bracket 120 to 300 and havent really fluctuated much in the last one year. Their movement though eratic has been within close limits.

39

STRENGHTS

Balanced growth in business:

State Bank of India (SBI) has registered decent growth in business of 23.4% as on Mar 08. Net advances grew by 23.6% YoY to reach Rs4,168 bn. International advance grew at a brisk rate of 50% to Rs 581 bn and now constitutes ~14% of total advances. It targets international business to touch 20% of total credit. SME grew at a healthy pace of 26% to constitute ~19% of total credit. Retail advances just constitutes 21% of total and housing loan contributes 51% of retail advances. Agriculture advance displayed healthy growth of 25%. Total deposit grew by 23.4% to reach Rs 5,374 bn. CASA remains flat at 43%. Credit-Deposit ratio remains flat at 77.6% as on Mar 08. It held a market share of 15.5% in total deposits and 15.3% in total advances.

Fee income remains healthy:

Fee income grew efficiently by 31% to Rs 30.6 bn. Fee income is mainly driven by sharp jump in corporate fees in large and midcorporate segment and distribution of third party products. Mutual Fund and Insurance cross sell income has increased by 79%, making SBI one of the largest bank assurance players. However total noninterest income grew by only 5.6% to Rs 28.2 bn mainly on account of flat treasury income, negative forex income and Lower dividend from subsidiaries compared to Q4FY07, when subsidiaries had paid higher dividends to escape dividend distribution tax.

Satisfactory growth in PAT:

SBI has registered a growth of 26% yoy in PAT to Rs 18.8 bn. On an annual basis, PAT has grown incredibly by 48% to Rs 67.2 bn. It is on account of higher than industry growth in balance sheet, Stable NIM, lower provision on investments; lower operating expenses and higher fee income. Even after accounting for loss in SBI cards of Rs 1.5 bn, its consolidated profits has grown by 40% on the back of superb growth in SBI life insurance and SBI caps.

Strong growth in subsidiaries:

The banking associates have grown profits by 12% Y-o-Y to Rs 22.8 bn. SBI Life Insurances total premium grew by 92% yoy to Rs 56.2 bn for FY08. SBI Life is one of the few private sector companies to make profits. It made profit of Rs 343 mn in FY08 as against Rs 38 mn in FY07. SBI AMC, which ranks 6th have an AUM of Rs 269 bn which grew by 58% over March 2007. SBI Cap recorded 100% growth in PAT to Rs 1,422 mn for FY08.

Consolidation of its associates:

SBI has already completed all the procedural aspects of merging State Bank of Saurashtra from its side. The proposal is pending with Ministry of Finance. Management is hopeful of getting a quick approval. It would asses the effectiveness of the merger and then move towards merging its other associates.

40

Indian FMCG Sector

The Indian FMCG sector with a market size of US$13.1 billion is the fourth largest sector in the economy. A well-established distribution network, intense competition between the organized and unorganized segments characterize the sector. FMCG Sector is expected to grow by over 60% by 2010. That will translate into an annual growth of 10% over a 5-year period. It has been estimated that FMCG sector will rise from around Rs 56,500 crores in 2005 to Rs 92,100 crores in 2010. Hair care, household care, male grooming, female hygiene, and the chocolates and confectionery categories are estimated to be the fastest growing segments, says an HSBC report. Though the sector witnessed a slower growth in 2002-2004, it has been able to make a fine recovery since then.

Growth Prospects
With the presence of 12.2% of the world population in the villages of India, the Indian rural FMCG market is something no one can overlook. Increased focus on farm sector will boost rural incomes, hence providing better growth prospects to the FMCG companies. Better infrastructure facilities will improve their supply chain. FMCG sector is also likely to benefit from growing demand in the market. Because of the low per capita consumption for almost all the products in the country, FMCG companies have immense possibilities for growth. And if the companies are able to change the mindset of the consumers, i.e. if they are able to take the consumers to branded products and offer new generation products, they would be able to generate higher growth in the near future. It is expected that the rural income will rise in 2007, boosting purchasing power in the countryside. However, the demand in urban areas would be the key growth driver over the long term. Also, increase in the urban population, along with increase in income levels and the availability of new categories, would help the urban areas maintain their position in terms of consumption. At present, urban India accounts for 66% of total FMCG consumption, with rural India accounting for the remaining 34%. However, rural India accounts for more than 40% consumption in major FMCG categories such as personal care, fabric care, and hot beverages. In urban areas, home and personal care category, including skin care, household care and feminine hygiene, will keep growing at relatively attractive rates. Within the foods segment, it is estimated that processed foods, bakery, and dairy are long-term growth categories in both rural and urban areas. Indian Competitiveness and Comparison with the World Markets The following factors make India a competitive player in FMCG sector: Availability of raw materials Because of the diverse agro-climatic conditions in India, there is a large raw material base suitable for food processing industries. India is the largest producer of livestock, milk, sugarcane, coconut, spices and cashew and is the second largest producer of rice, wheat and fruits &vegetables. India also produces caustic soda and soda ash, which are required for the production of soaps and detergents. The availability of these raw materials gives India the location advantage. 41

Labor cost comparison Low cost labor gives India a competitive advantage. India's labor cost is amongst the lowest in the world, after China & Indonesia. Low labor costs give the advantage of low cost of production. Many MNC's have established their plants in India to outsource for domestic and export markets.

Presence across value chain Indian companies have their presence across the value chain of FMCG sector, right from the supply of raw materials to packaged goods in the food-processing sector. This brings India a more cost competitive advantage. For example, Amul supplies milk as well as dairy products like cheese, butter, etc.

FMCG Products and Categories Personal Care, Oral Care Hair Care, Skin Care, Personal Wash (soaps) Cosmetics and toiletries, deodorants, perfumes, feminine hygiene, paper products; Household care fabric wash including laundry soaps and synthetic detergents; household cleaners, such as dish/utensil cleaners, floor cleaners, toilet cleaners, air fresheners, insecticides and mosquito repellents, metal polish and furniture polish.

Major Players Of FMCG Sector

42

Company
Britannia Industries Ltd. Dabur India Ltd. Glaxosmithkline Cons& Health Ltd. Godrej Consumer Products Ltd. Hindustan Unilever Ltd. I T C Ltd. Marico Ltd. Nestle India Ltd. Rei Agro Ltd. Tata Tea Ltd. United Breweries Ltd. United Spirits Ltd.

P/E Ratio

EPS

Returns

Beta

Market Cap

18.17 26.21

79.03 3.67

-6.28 -5.46

0.4 0.88

3534.54 9034.53

17.79

42.06

36.71

0.54

2625.41

23 27.78 26.1 29.69 35.09 64.45 30.68 117.03 47.21

5.74 8.29 8.28 2.13 49.44 24.04 25.33 1.44 32.05

-0.89 21.2 36.24 13.64 52.24 695.05 -11.31 -44 30.47

0.61 0.82 0.59 0.71 0.36 1.16 0.96 0.9 1.1

3051.19 47003.53 70839.84 3841.89 13285.82 3995.31 5063.22 6207.79 16118.78

43

PICK OF THE INDUSTRY MARICO LIMITED Marico Limited

Marico Limited

Logo Type Headquarters Industry Products Revenue Employees Website Public Bandra, Mumbai, India FMCG Edible Oil, Hair Oils, Shampoos etc. US$478 million (2009) 1000 (2005) www.maricoindia.com

Strong traction, attractive valuations

Marico is one of the leading players in the Indian hair care market. Over the medium term, we expect the company to follow a fast growth trajectory, and we believe that the stock is attractively valued. We initiate coverage with a 1-Overweight on the shares and a price target of INR86, representing potential upside of 27%. During 2008-9, the company generated a Turnover of about Rs.23.9 billion (USD 478 Million)[citation needed] , in respect of its food, hair care and skin care related activities. Marico's own manufacturing facilities are located at Goa, Kanjikode, Jalgaon, Saswad, Pondicherry, Dehradun and Daman. Production is supported by subcontracting units. In Bangladesh, Marico operates through Marico Bangladesh Limited, a wholly owned subsidiary Manufacturing facility at Mouchak, near Gazipur.

44

 We anticipate a strong growth path for Maricos domestic business, driven by momentum in the hair care and edible oil businesses. Kaya is now profitable and likely to add substantially at the operating level in a couple of years. Marico has time and again demonstrated its ability to successfully counter competition, especially in the coconut hair oil business. Among its peers, Marico is among the highest spenders on brand building for new products. We believe this investment is likely pay off over the longer term, leading to better-than-consensus earnings. FY Mar (INR) 2007A 2008E 18817.0 1638.0 2.70 45.00 25.1 16.4 2009E 21974.0 2050.0 3.40 25.20 19.9 13.3

Revenue (m) 15570.0 Net Profit (m) 1129.0 EPS 1.90 EPS growth (%) 9.60 P/E 35.7 EV/EBITDA 20.1

Brands
The organisation holds a number of brands: Brands held by the organisation include: Parachute (brand), Saffola (brand), Sweekar (brand), Hair & Care (brand), Nihar (brand), Shanti (brand), Mediker (brand), Revive (brand), Kaya, Sundari (brand) (exported to the US and other overseas markets), Aromatic Fiancee, Oil of Malabar, Mealmaker, Sil, Revive, Silknshineand and HairCode. Maricos brands and their extensions occupy leadership positions[citation needed] with significant market shares[citation needed] in a number of health and beauty areas. As well as being a producer of consumer products the organisation also operates Kaya Skin Clinic (of which (as of 2009) 97 exist in India and the UAE). They have also extended the Kaya brand to weight loss clinics under the "Kaya Life" brand. CEO of the organisation isHarsh Mariwala. STOCK PERFORMANCE OF MARICO
THE STOCK EXCHANGE MUMBAI (BSE)
Quarter High * Low * Closing * Market Avg.

45

ended Jun. 30 2003 Sep. 30 2003 Dec. 31 2003 Mar. 31 2004 Jun. 30 2004 Sep. 30 2004 Dec. 31 2004 Mar. 31 2005 Jun. 30 2005 Sep. 30 2005 Dec. 30 2005 Mar. 31 2006 Jun.30 2006 Sep.30 2006 Dec.31 2006 Mar.31 2007 Jun.30 2007 Sep.30 2007 Dec.31 2007 Mar.31 2008 Jun. 30 2008 Sep. 30 2008 Dec. 31

Capitalisation**

Volumes per day *** 16 29 104 199 105 128 148 424 510 94 161 255 437 75 228 2057 2991 1814 2040 3015 2407 5361 2454

175 219 231 301 141# 147 189 259 275 300 370 578 586 534 580 68# 66 63 78 83 75 67 60

147 166 171 210 100# 119 133 161 232 249 263 366 330 432 494 52# 54 54 57 47 51 49 47

171 195 236 260 122# 136 169 243 248 290 361 540 450 520 538 61# 55 61 69 67 53 58 56

4944 5655 6851 7540 7076 7859 9808 14094 14393 16875 20918 31306 26100 30160 32764 37332 33617 37027 41808 40803 32277 35444 33800

46

2008 Mar. 31 2009 Jun. 30 2009 Sep. 30 2009 Dec. 31 2009 63 79 95 113 53 58 70 87 61 73 89 103 32277 44427 54475 62727 3688 4445 2891 1089

* In Rupees per share ** In INR Million *** Number of shares ('00) # The price adjusted for dividends and splits.

PERFORMANCE AT GLANCE
Sales & Services Net Cash Profits Profits Return on Average Net Worth (%) Dividend per share* Distribution Payout EVA Share of International Business in Group (%)

(Rs Crore) 200304 200405 200506 200607 200708 200809 CAGR 888 1007 1144 1557 1907 2388 21%

Rs Crore) 59 70 87 113 169 189 30%

(Rs Crore) 72 83 137 187 220 258 32%

(Rs)

(%)

(Rs Crore) 38 46 51 79 132 144 33%

31 35 36 50 67 49

0.43 0.54 0.62 0.7 0.7 0.7

52 51 47 39 28 25

9 10 11 14 18 21

* Previous Year figures recomputed on the nominal value of share of Re. 1

47

48

Investment arguments
Parachute: The strong brand franchise
Parachute, the premium edible grade oil and the flagship brand of Marico, has registered a steady CAGR of 10% over the past four years. Parachute has outperformed the broader category largely owing to the strong brand equity enjoyed by it and the superior quality perception. Going forward, we expect the brand to maintain a steady growth of 12% over the medium term. Sustained growth is expected to be maintained largely on account of (1) strong brand value, and (2) lack of credible competition. Over the medium term, we expect no major threat to the brand from the competition.

Kaya: The beauty and wellness platform

Marico entered the high-end skin care business through Kaya Skin Clinics in FY04. Over the course of last three years, the company has managed to ramp up from 13 to 47 outlets and revenue has increased at a CAGR of 147% from INR50 mn in FY04 to INR750 mn in FY07. The company has taken the Kaya franchise international, with its launch in the Middle-East markets, where it now has five clinics. It plans to open its first outlet in Saudi Arabia shortly. We expect revenue from Kaya to register a 24% CAGR and the number of stores to ramp up from 47 to 78 over the FY07-FY10E period. Going forward, the company intends to ramp up the products part of Kaya, by retailing from malls.

International business: Going strong

Over the years Marico has been rapidly expanding its international footprint through a judicious mix of organic and inorganic initiatives. This has resulted in a significant ramp up in the international business divisions revenue in the last three years. International business division revenue is expected to increase at a CAGR of 24% on the back of the Egypt acquisitions. However, we have not factored in the recent acquisition of Enaleni into our estimates.

Investment risks
One of the key risks that the company faces over the longer term is that consumers, particularly in India, may move away from the usage of hair oil. Marico is highly dependent on the hair oil segment which accounts for around 55% of its revenue. Among the other major concerns, Marico is to a large extent dependent on its Parachute Coconut Hair Oil franchise. Marico has however been making conscious efforts to reduce dependence on this product.

Investment risks
Consumer preference may shift away from hair oil
One of the key risks that the company faces over the longer term is that consumers, particularly in India, may move away from the usage of hair oil. Marico is highly dependent on the hair oil segment 49

and it accounts for around 55% of the revenue (brands include Parachute, Nihar and other valueadded hair oils like Shanti Badam Amla, Hair & Care etc). The concerns of discontinued usage of hair oils stems from the fact that globally, South-Asia is the only region where hair oil is extensively used both pre- and post-wash. Usage of oils for hair care is virtually non-existent in the developed regions like USA and Europe. Lately, India too has witnessed emergence of post-wash hair cream as an alternative. While brands like Brylcreem have been present in India for a long time, the category has seen a lot of action lately with players like Marico entering the fray. Over the longer term, the consumers may shift away from the usage of traditional products like hair oils to hair creams which are perceived to be more youthful and trendy. Marico has been preparing itself for this over the last couple of years with the successful introduction of its hair cream (where the company has cashed its Parachute franchise) and a slew of launches in the value-added hair oil segment (with higher perceived value proposition).

50

Overdependence on a single product

For long Marico has been projected as a one-trick pony due to its perceived overdependence on the Parachute Coconut Hair Oil franchise. While this still holds true to some extent, Marico has been making conscious efforts to reduce its dependence on the product. Over the last 3-4 years, the company has been making a conscious effort to diversify into other segments and brands. Safolla has emerged as a strong umbrella brand in the healthy foods segment and Marico now has two products under this brand name Safolla Edible Oil and Safolla Atta Mix. According to management, all future launches in the foods segments would be under this brand. Another key brand that has emerged over the last couple of years is Kaya. The brand now has presence across two regions, India and Middle-East and accounts for around 5% of the firms revenue. The company is now taking an initiative to make Kaya an umbrella brand by launching the Kaya Life Center (a weight-loss clinic) in Mumbai, India.

Intense competition in the edible oil segment

The company has been looking to establish itself in the healthy foods segment and is looking at Saffol34a as the key umbrella brand. However, in the edible oil space (which accounts for around 20% of the revenue), Marico has been facing stiff competition from the likes of Sundrop and Gemini.Marico Limited 6 November 21, 2007 The edible oil segment in India is still evolving and a large part of that is still controlled by the unorganised players who sell loose unbranded edible oil which is popular in the rural and semi-urban regions and to some extent in the urban markets as well. Making the consumers shift away from loose oil would be very difficult, largely due to high-cost differential.

Indian IT Sector
The last 20 years of the 20th century was most significant period for Indian economy. During this period the nation has identified its economic destiny with great clarity. The most precious achievements of this period was the development of Information Technology. Indian Software industry has made significant contributions to the world of IT by gifting some of the leaders of the industry from Indian soil. Infosys and Wipro are already within the top ten leaders of the list, and many others The industry has been performing at a staggering rate of growth of about 50 per cent every year and has sustained global competition. The government of India has been helping the development of domestic IT industry with a view to tap the maximum potential of the sector. It has created a ministry for the purpose, and the other steps include removing license rule, creating industry friendly government departments, offering tax holidays, allowing foreign investment in the sector, and promoting NRIs to set up business in India and by creating special economic zones. The Indian IT sector is growing rapidly and it has already made its presence felt in all parts of the world. IT has a major role in strengthening the economic and technical foundations of India. Indian professionals are setting up examples of their proficiency in IT, in India as well as abroad. 51

The sector can be classified into 4 broad categories - IT Services, Engineering Services, ITES-BPO Services,E-Business. IT Services can further be categorized into Information Services (IS) outsourcing, packaged software support and installation, systems integration, processing services, hardware support and installation and IT training and education. Engineering Services include Industrial Design, Mechanical Design, Electronic System Design (including Chip/Board and Embedded Software Design), Design Validation Testing , Industrialization and Prototyping. IT Enabled Services are services that use telecom networks or the Internet. For example, Remote Maintenance, Back Office Operations, Data Processing, Call Centers, Business Process Outsourcing, etc. E Business (electronic business) is carrying out business on the Internet; it includes buying and selling, serving customers and collaborating with business partners. Major Trends Trends in Hiring

The bar chart shows that the recruitment of engineers and IT professionals in the industry is growing at the Compound Annual Rate of 14.5% approximately. In the FY06, the direct employment in the IT-ITES sector was 1.3 million people and the indirect employment was 3 million approximately.

52

Along with abundant growth opportunities, IT sector is one of the highest paying sectors. The average increase in salary in IT sector across the levels was around 16% and the average increase in the ITeS BPO sector across the levels was in between 16%-18% Requisites for balanced salaries -

-house

IT: Success Factors

15-65. More than half of the population of India is below the age of 25. So in the future, the number of working people is going to be more than the number of dependants. 9.3 million and India produced 441,000 Technical graduates. as the second largest English-speaking workforce in the world.

53

Swot Analysis
Strengths

Weaknesses Absence of practical knowledge Dearth of suitable candidates Less Research and Development Contribution of IT sector to India 's GDP is still rather small. Employee salaries in IT sector are increasing tremendously. Low wages benefit will soon come to an end.

Highly skilled human resource Low wage structure Quality of work Initiatives taken by the Government (setting up Hi-Tech Parks and implementation of e-governance projects) Many global players have set-up operations in India like Microsoft, Oracle, Adobe, etc. Following Quality Standards such as ISO 9000, SEI CMM etc. English-speaking professionals Cost competitiveness Quality telecommunications infrastructure Indian time zone (24 x 7 services to the global customers). Time difference between India and America is approximately 12 hours, which is beneficial for outsourcing of work.

Opportunities

Threats

High quality IT education market Increasing number of working age people India 's well developed soft infrastructure Upcoming International Players in the market

Lack of data security systems Countries like China and Philippines with qualified workforce making efforts to overcome the English language barrier IT development concentrated in a few cities only

54

Major Players In IT Sector

Company

P/E Ratio

EPS

Returns

Beta

Market Cap

Aptech Ltd. Financial Tech. (India) Ltd. H C L Technologies Ltd. I-Flex Solutions Ltd. Infosys Technologies Ltd. Moser Baer India Ltd. Mphasis Ltd. N I I T Ltd. N I I T Technologies Ltd. Patni Computer Systems Ltd. Rolta India Ltd. Satyam Computer Services Ltd. Tata Consultancy Services Ltd. Tech Mahindra Ltd. Teledata Informatics Ltd. Wipro Ltd.

-33332.71 7.88 16.25 24.65 24.6 -28.03 21.89 154.46 6.42

-0.01 209.56 17.81 50.5 76.03 -5.9 10.59 0.67 20.14

-30.78 -32.94 -13.12 -48.69 -1.66 -41.68 -23.81 -21.04 -65.24

1.32 1.44 0.95 0.91 0.7 0.78 0.91 0.85 0.88

1339.19 10328.43 19612.41 13501.08 99663.33 4225.8 5336.01 2078.43 1404.05

11.24 18.24 19.02 20.8 12.51

23.71 16.21 25.53 46.07 63.02

-50.44 28.42 5.43 -19.7 -47.76

0.57 1.31 0.91 0.73 0.79

4995.13 4630.93 29790.65 98448.57 13082.96

1.07 23.72

14.95 20.97

-75.02 -6.52

1.48 0.9

760.16 68646.66

PICK OF THE INDUSTRY

55

ROLTA INDIA LIMITED

Market Data Sector CMP Action Target 52 week High/Low Face Value Market Cap P/E Organizations around the world rely on Rolta for intelligent, cutting-edge IT-based solutions to meet their mission-critical and strategic business challenges. Rolta's diverse business initiatives and unique combination of offerings have made it a market leader in the Geospatial, Engineering Design and Defence and Homeland Security segments.

Rolta provides a full complement of specialized services in the following areas: Geospatial/GIS Engineering Design Ship Design Software Engineering & Development eSecurity & Enterprise IT Management ERP Consulting & Deployment Interactive Media & Games Development

Shareholding Pattern Promoters Foreign Institution Non Promoters Public & Others

Rolta's Geospatial-based operations and intelligence solutions have been adopted as the standard by Indian Armed Forces, resulting in a 95% market share. Rolta's joint venture with Thales, France, expands our capability to provide state-of-the-art Command, Control, Computers, Communications, Intelligence, Surveillance Target Acquisition and Reconnaissance (C4ISTAR) solutions and also enlarges the markets we serve, in the defence, aerospace and security segments globally.

Rolta has a strategic joint venture with Stone & Webster, Inc. to provide cost-effective engineering, design and procurement management (EPCM) services to power, refinery and petrochemical projects worldwide. Stone & Webster is a leader in these sectors and a dominant player in the nuclear energy sector. 56

In partnership with CA (Computer Associates), Rolta provides high-end consulting, application development and testing services for IT infrastructure and network security projects worldwide. In addition, Rolta provides cutting edge software engineering and development services in CAD/CAM/GIS, ERP consulting and deployment and interactive media and games development. Rolta is a global market leader and solution provider of insightful impact based upon innovative information technology solutions, services and software. We have a heritage of providing unique solutions for the Geospatial, Defense, Homeland Security, Government, Utilities & Communications, Transportation, Process and Power and Enterprise IT sectors. Rolta serves these markets by providing Enterprise Geospatial Information Solutions (EGIS), Enterprise Design and Operation Solutions (EDOS) and Enterprise IT Solutions (EITS). Over the years, Rolta has successfully executed multi-million dollar contracts across a broad spectrum of industries in over 40 countries. At Rolta, everything we do begins with a drive to solve tough technological challenges through INNOVATION, INSIGHTS and IMPACT. INNOVATION driven by our passion for developing new uses for technology through creative problem solving, INSIGHTS based on our expertise of the industry, and the IMPACT our solutions will have on our customers lives, on the community, and on the world. INNOVATION to INSIGHTS to IMPACT. In many ways, we are reinventing the I in IT. Rolta, through its joint venture with The Shaw Group Inc. USA - Shaw Rolta Ltd., provides comprehensive Engineering, Procurement and Construction Management (EPCm) services to meet turnkey project requirements of power, oil, gas and petrochemical sectors. Rolta's joint venture with Thales, France - Rolta Thales Ltd., develops and provides state-of-the-art C4ISTAR information systems, Military Communications, Digital Soldier & Vehicle System solutions, covering the entire sensor to shooter chain, under transfer of technology from Thales. Rolta, headquartered in Mumbai, employs about 5000 professionals with a countrywide infrastructure and international subsidiaries across the globe. Forbes Global has ranked Rolta amongst the "Best 200 under a Billion" for four times in six years. Rolta has been included in the S&P Global Challengers List 2008, by Standard & Poors. This List identifies 300 mid-size companies worldwide that have a total market capitalization between US$ 1 & 5 Billion and have shown the highest growth characteristics along dimensions encompassing intrinsic and extrinsic growth. We have benchmarked our quality processes with the world's best standards. Rolta is accredited with the prestigious ISO 9001:2000 Quality Management System certification; BSI ISO/IEC 27001:2005 certification, the ultimate benchmark for information security; and the BSI ISO/IEC 20000-1:2005 IT Service Management Standard. Our software development business group has been assessed at the highest level of SEI-CMMI Level 5. Rolta is listed on the National Stock Exchange (NSE) in the cash and F&O segments and forms part of CNX IT, NIFTY Midcap 50 and CNX 500 indices. The company is also listed on the Bombay Stock Exchange (BSE) 'A' group and forms part of the BSE Midcap, BSE 200, BSE 500, BSE IT and BSE TECk indices. Rolta's GDRs are listed on the Main Board of the London Stock Exchange and its FCCBs are listed on the Singapore Stock Exchange. Organization 57

Enterprise Geospatial Information Solutions (EGIS) - Geospatial Innovations for Business Insights and Impact EGIS enables customers to extract insights through a spatial view of business and operational data. These insights strengthen strategic and operational decision-making and generate a significant impact on operational performance. Our spatial business intelligence solutions, based upon Geospatial Fusion, transform our customers ability to manage operations and achieve previously unattainable levels of performance. Our team has countless years of experience in providing Geospatial, Photogrammetry and Imaging services for commercial and defense customers. Through innovative fusion of business and spatial information, Rolta provides new insights that strengthen strategic and operational decision-making and deliver great impact to a diverse range of governmental, utility, communications, economic development, transportation and defense agencies. The excellence of our geospatial solutions and data service offerings is rooted in our deep knowledge of the industry, excellence in global sourcing, knowledge of engineering IT applications, our disciplined project execution and Rolta intellectual property that is used for enterprise integration, visualization, data conversion and quality assurance.

Enterprise Design and Operation Solutions (EDOS) - World-class Solutions for EPCs and Owner-Operators, enabled through ROLTAs Unique Combination of Engineering and IT Expertise Rolta has an exceptional combination of Engineering and IT expertise with 1,100-person strong team of Engineers, developers and consultants. This combination uniquely enables us to provide comprehensive solutions for EPCs and Owner-Operators (O/O), from concept to completion of new plants and then for ongoing operations. EDOS provides Asset Design solutions (including FEED and Detail Design, Data Validation and Handover, Model and Data Migration, Software & Technology Tools and Asset Information Management) as well as Asset Performance Solutions (including Structure Plant Data Model, Visual Views of Asset and Operational Data, Engineering Fusion, Industry-Specific BI solutions based on Roltas OneView software and GIS Asset Finder and GIS Planning). Our EDOS solutions enable O/Os within the process and power industry to view plant operations as a single, fully integrated ecosystem. Enterprise IT Solutions (EITS) - The Value of Experience Rolta EITS has some of the worlds most knowledgeable technology and business experts and the depth of experience that can only be gained through many years of successful projects. EITS has advanced to a world class organization through the merger of Roltas IT Consulting Division with the acquisitions of TUSC, Whittmanhart Consulting and Piocon Technologies. Each organization brings significant credentials to Rolta EITS. TUSC, known as the Oracle experts, has a stellar track record of successful projects and very technically innovative solutions. Whittmanhart Consulting is widely known for Hyperion expertise and EPM solutions for the Financial Services Industry. Piocon has deep roots in Oracle and Business Intelligence projects. Rolta for many years has been a leading provider of IT infrastructure management solutions based on CA products. This broad range of complementary, cutting edge technical expertise is the foundation for EITS solutions; solutions which provide lasting value. EITS has the breadth and depth to implement, build, manage and support the IT 58

applications, databases, systems and infrastructures that are at the core of successful business operations.

Indian Metal & Mining Sector

The metals industry is a key sector in the Indian economy as it meets the requirements of a wide range of important industries such as engineering, electrical and electronics, infrastructure, automobile and automobile components, packaging etc. The metal industry consists of two major groups: ferrous metals and non-ferrous metals. Non-ferrous metals, which include aluminium, copper, zinc, lead, nickel and tin, are used to make alloys, castings, forgings, extrusions, wires, cables, pipes, etc., and find their application in a number of sectors such as agriculture, infrastructure facilities like power plants, automobiles, railways, telecommunications, building and construction and in engineering and chemical plants. Ferrous metals primarily consist of iron and different varieties of steel. Indian steel industry has shown strong performance in the recent past in terms of production, capacity utilisation, exports and consumption. India is now a major comnpetitor among steel producers in the world. The steel industry contributes 1.3 per cent to Indias GDP and accounts for 10 per cent in Excise Duty collections. The industry provides employment to 0.4 million people directly and 0.6 million people indirectly. While this sector covers a large domain consisting of a variety of metals, this report focuses on four key metals namely, aluminium, copper, zinc and iron (steel). India's key advantages in the sector include a liberalised overall policy regime and reduced customs duty on primary and secondary metals, growing market demand, favourable conditions for production, presence of related and supporting industries and state support for helping companies improve performance and stimulating industry environment.

Market Overview
The metal industry is a key sector in the Indian economy as it meets the requirements of a wide range of important industries such as engineering, electrical and electronics, infrastructure, automobile and automobile components, packaging etc. The metal industry consists of two major groups: ferrous metals and non-ferrous metals. Non-ferrous metals, which include aluminium, copper, zinc, lead, nickel and tin, are used to make alloys, castings, forgings, extrusions, wires, cables, pipes, etc., and find their application in a number of sectors such as agriculture, infrastructure facilities like power plants, automobiles, railways, telecommunications, building and construction and in engineering and chemical plants. There are significant reserves of non-ferrous metal ores in India. India is rich in bauxite (aluminium ore) and has grades of zinc, lead and copper reserves. Copper, lead and zinc are also imported as scrap 59

or concentrates to be processed by secondary/custom smelters. Nickel and tin are also imported by India. Ferrous metals primarily consist of iron and different varieties of steel. Indian steel industry has shown strong performance in the recent past in terms of production, capacity utilisation, exports and consumption. India is now a major competitor among steel producers in the world. The Steel industry contributes 1.3 per cent to Indias GDP and accounts for 10 per cent in Excise Duty collections. The industry provides employment to 0.4 million people directly and 0.6 million people indirectly.

While this sector covers a large domain consisting of a variety of metals, this report focuses on four key metals namely, aluminium, copper, zinc and iron (steel). The industry is highly fragmented, especially in downstream segments. The industry is highly fragmented, with a large number of players in both organised and unorganised segments across ferrous and non-ferrous metal groups.

Non-Ferrous industry
The Nonferrous metals industry comprises primary and secondary segments. Primary producers are those players who process the mined ore into primary metal, which is commercially available in the form of rods, ingots, cathodes, wires etc. Secondary producers are those players who manufacture value added products like foils, extrusions, dry batteries, castings etc. either by procuring the metal from the primary producers or from scrap. The primary segment has only a few players; for example, the zinc industry is duopolistic (only two players), the lead industry is a monopoly and in the case of tin and nickel, there are virtually no players in the primary segment. However, in the secondary and downstream segments there are many players both in the organised and in the unorganised sectors.

Ferrous industry
In Indian ferrous industry, steel manufacturers are segmented into ore miners and producers. Ore miners are engaged in mining activities to extract the ore. Iron ore mines in India are mostly located in Jharkhand, Orissa, West Bengal and Chattisgarh. Recently Indian steel manufacturing companies have invested in steel and coal mines outside India especially in Australia. Producers are further classified into main producers or integrated producers and other producers. Out of the three major Integrated steel producers, two are in the public sector - Steel Authority of India Ltd (SAIL) and Rashtriya Ispat Nigam Limited (RINL) - and one in the private sector - TISCO. Integrated producers account for 67 per cent of total crude steel production in India. The other producers or secondary producers category include r rollers and stand alone producers. These producers account for about 33 per cent of Indias steel production. There are a large number of secondary producers in India in both the organised and unorganised segments. Stand alone producers mainly operate as SSI units.

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The highly fragmented nature of the downstream sector makes the industry highly competitive in these areas.

Current Status
Well-established, growing domestic market Steel Indias steel industry is significant, even by global standards. With an installed capacity of 36.12 million tonnes, India is the eighth largest steel producer in the world. The industry has a wellestablished presence across all sectors ore miners, integrated producers and other producers.

Ore miners
Ore miners include companies, which are engaged in mining iron ore for the use of integrated producers. Key players include National Mineral Development Corporation (NMDC), Kudremukh Iron Ore Co (KIOCL) Essel Mining & Industries Ltd, and Sesa Goa(Sesa). Apart from these, some of the integrated steel companies like Steel Authority of India and Tata Iron and Steel Companies (TISCO) have their own captive mines. The production of iron ore in India has grown from 80.5 million tonnes in 2001 to 120.6 million tonnes in 2003-04, at a compounded annual growth rate of around 14.4 per cent.

Exports potential for growth

India is a net exporter of steel - the total exports of steel from India were around US$ 2.6 billion against imports worth around US$ 1.8 billion in 2004. Exports increased further to 3.45 million tonness during the11 months ending Feb 2005. Indias exports mainly consists of carbon steel, which accounts for 95 per cent of total steel exports, the balance being pig iron. The main consuming market for steel exported from India is China, which accounted for 24 per cent of the total steel exports in 2004. The other key markets include USA (8 per cent), UAE and Thailand (5 per cent each). The major steel import destinations for India include Russia, Germany, Japan, UK and Korea. In case of non-ferrous metals, India is a net exporter of copper and net importer of zinc. 40 per cent of copper production in India is exported. Given the surplus in production of various metals in India and deficit in other markets, there is ample opportunity for growth in exports for the Indian Metals industry.

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Foreign Direct Investments (FDI)

In India, 100 per cent FDI has been approved in metallurgical industries since 1991. During the period 1991-2004, the industry received 407 approvals for FDI worth US$ 4.27 billions. Actual inflow of FDI has been US$ 0.31 billion. The metallurgical sector accounts for 5.31 per cent of total FDI approved in

Competitive Advantages
Indias competitiveness in metal industry can be analysed by using the framework given below. The key advantages can be categorised under: Growing market demand. Favourable factor conditions for production. Presence of related and supporting industries. Government support for helping companies improve performance and stimulating industry environment

Future outlook
The outlook for the metals sector in India is bright. Sustained growth is expected across all key segments, aided by several factors, such as growing domestic demand, investment in capacity addition, increasing supply deficit in other countries and favourable government regulations. Governments initiatives such as power and infrastructure development, reduction in import duties and facilitation of FDI, along with overall economic growth, will provide a boost for the Indian metal industry. With economy projected to grow at 8 per cent in the coming years, there is expected to be a surge in per capita steel consumption and doubling of its capacity to 60 million tonens by 2010. Growth in the steel sector will have an immediate positive rub-off on the zinc sector, as 70 per cent of zinc production is used for galvanising. Current shortages in worldwide copper supplies are expected to continue following production cuts by leading producers in Mexico and Chile. This would further shore up demand for Indian copper. For aluminium, exports would be a major demand source. The positive outlook in the Indian metals sector has attracted multinationals like BHP Billiton and Rio Tinto to enter India for prspecting. At the same time, successful Indian players are looking at acquiring mining rights abroad for example, the AV Birla group has acquired mining rights in two copper mines in Australia. The metal sector in India is clearly an attractive sector for investment and offers significant growth potential both in the domestic as well as exports markets.

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Major Players In Metal Sector

Company

P/E Ratio

EPS

Returns

Beta

Market Cap

Ajmera Realty & Infra India Bhushan Steel Ltd. Gujarat N R E Coke Ltd. Hindalco Industries Ltd. Hindustan Zinc Ltd. Ispat Industries Ltd. Jindal Saw Ltd. Jindal Stainless Ltd. Jindal Steel & Power Ltd. Maharashtra Seamless Ltd. National Aluminium Co. Ltd. Sesa Goa Ltd. Steel Authority Of India Ltd. Sterlite Industries (India) Ltd. Tata Steel Ltd. Welspun-Gujarat Stahl.

9.97 8.76 26.43 9.45 5.77 51.75 8.06 8.61 26.27 9.8 18.97 9.42 8.79 59.35 12.24 19.18

14.59 96.8 5.03 18.91 104.04 0.56 70.53 15.35 80.34 31.4 25.22 379.05 17.48 14.18 66.62 19.8

-61.64 29.05 128.87 22.33 -11.48 84.03 -1.04 -13.18 195.42 -48.93 89.7 117.51 12.63 51.28 30.58 119.08

1.74 0.96 1.27 1.12 1.38 1.42 1.15 1.2 1.35 0.71 1.27 1.3 1.45 1.33 1.14 1.12

3327.81 4036.65 3475.22 21883.36 29857.51 4187.32 3676.65 2430.17 27552.01 3443.07 23675.6 11477.57 82100.96 55740.59 52145.64 5834.19

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PICK OF THE INDUSTRY STEEL AUTHORITY OF INDIA

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SAIL: STEEL AUTHORITY OF INDIA

Share holding pattern Steel Authority of India Limited (SAIL) is the leading steel-making company in India. It is a fully integrated iron and steel maker, producing both basic and special steels for domestic construction, engineering, power, railway, automotive and defence industries and for sale in export markets. Ranked amongst the top ten public sector companies in India in terms of turnover, SAIL manufactures and sells a broad range of steel products, including hot and cold rolled sheets and coils, galvanised sheets, electrical sheets, structurals, railway products, plates, bars and rods, stainless steel and other alloy steels. SAIL produces iron and steel at five integrated plants and three special steel plants, located principally in the eastern and central regions of India and situated close to domestic sources of raw materials, including the Company's iron ore, limestone and dolomite mines. The company has the distinction of being Indias largest producer of iron ore and of having the countrys second largest mines network. This gives SAIL a competitive edge in terms of captive availability of iron ore, limestone, and dolomite which are inputs for steel making. With technical and managerial expertise and know-how in steel making gained over four decades, SAIL's Consultancy Division (SAILCON) at New Delhi offers services and consultancy to clients world-wide. SAIL has a well-equipped Research and Development Centre for Iron and Steel (RDCIS) at Ranchi which helps to produce quality steel and develop new technologies for the steel industry. Besides, SAIL has its own in-house Centre for Engineering and Technology (CET), Management Training Institute (MTI) and Safety Organisation at Ranchi. Our captive mines are under the control of the Raw Materials Division in Kolkata. The Environment Management Division and Growth Division of SAIL operate from their headquarters in Kolkata. Almost all our plants and major units are ISO Certified Steel Authority of India Limited (SAIL) is one of the largest steel makers in India. With a turnover of Rs. 48,681 crore, the company is among the top five highest profit earning corporates of the country. It is a public sector undertaking which trades publicly in the market is wholly owned by Government of India and acts like an operating company. Incorporated on January 24, 1973, SAIL has 65

Promoters Foreign Institution Non Promoters Public & Others

% % % %

more than 131,910 employees. The company's current chairman is S.K. Roongta. With an annual production of 13.5 million metric tons, SAIL is the 16th largest steel producer in the world. Major plants owned by SAIL are located at Bhilai, Bokaro, Durgapur, Rourkela, Burnpur (near Asansol) and Salem. SAIL is a public sector company, owned and operated by the Government of India. According to a recent survey, SAIL is one of India's fastest growing Public Sector Units.

Steel Authority of India Limited

Type Founded Headquarters Key people Industry Revenue Total assets Employees Website PSU (BSE: SAIL) 1954 India S. K. Roongta (Chairman) Steel

US$9.82 billion (2008)[1] US$10.54 billion (2008)

131,910 (2006) www.sail.co.

Major Units
Integrated Steel Plants Bhilai Steel Plant (BSP) in Chhattisgarh Durgapur Steel Plant (DSP) in West Bengal Rourkela Steel Plant (RSP) in Orissa Bokaro Steel Plant (BSL) in Jharkhand IISCO Steel Plant (ISP) in West Bengal

Special Steel Plants Alloy Steels Plants (ASP) in West Bengal Salem Steel Plant (SSP) in Tamil Nadu Visvesvaraya Iron and Steel Plant (VISL) in Karnataka

Subsidiary Maharashtra Elektrosmelt Limited (MEL) in Maharashtra

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Joint Ventures
NTPC SAIL Power Company Pvt. Ltd (NSPCL)
A 50:50 joint venture between Steel Authority of India Ltd. (SAIL) and National Thermal Power Corporation Ltd. (NTPC Ltd.); manages the captive power plants at Rourkela, Durgapur and Bhilai with a combined capacity of 314 megawatts (MW). It has installed additional capacity by implementation of 500 MW (2 x 250 MW Units) power plant at Bhilai. The commercial generation of 1st Unit has commenced in April2009 and the 2nd Unit in October 2009

Bokaro Power Supply Company Pvt. Limited (BPSCL)

This 50:50 joint venture between SAIL and the Damodar Valley Corporation formed in January 2002 is managing the 302-MW power generating station and 660 tonnes per hour steam generation facilities at Bokaro Steel Plant. BPSCL has proposed to expand its capacity by installing 2x250 MW coal based thermal unit at Bokaro. In addition, construction activities are underway for installation of 9th Boiler (300T/Hr) & 36 MW Back Pressure Turbo Generator (BPTG) project at Bokaro.

Mjunction Services Limited

A 50:50 joint venture between SAIL and Tata Steel formed in 2001. This company promotes ecommerce activities in steel and related areas. Newly added services include e-Assets sales, Events & Conferences, Coal Sales & Logistics, Publications etc..

SAIL-Bansal Service Center Ltd

SAIL has formed a joint venture with BMW industries Ltd. on 40:60 basis to promote a service centre at Bokaro with the objective of adding value to steel.

Bhilai JP Cement Ltd

SAIL has incorporated a joint venture company with M/s Jaiprakash Associates Ltd to set up a 2.2 MT slag based cement plant at Bhilai. The company shall commence cement production at Bhilai by March'2010, whereas clinker production at Satna shall start within 2009.

Bokaro JP Cement Ltd

SAIL has incorporated another joint venture company with M/s Jaiprakash Associates Ltd to set up a 2.1 MT cement plant at Bokaro utilizing slag from BSL. The project implementation is under progress with commencement of cement production likely by July2011.

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SAIL&MOIL Ferro Alloys (Pvt.) Limited

SAIL has incorporated a joint venture company with M/s Manganese Ore (India) Ltd on 50:50 basis to produce ferro-manganese and silico-manganese required for production of steel..

S&T Mining Company Pvt. Ltd

SAIL has incorporated a joint venture company with TATA Steel for joint acquisition & development of coal blocks/mines. New indigenous opportunities for coking coal development are being explored by the Joint Venture company for securing coking coal supplies.

International Coal Ventures Private Limited

Towards achieving the target of making steel PSUs self reliant in the area of coking coal, a joint venture company has been incorporated comprising of five central PSU companies i.e. SAIL, Rashtriya Ispat Nigam Limited (RINL), Coal India Limited (CIL), NTPC Limited and National Mineral Development Corporation (NMDC). The company is scouting for coal properties in Australia, Mozambique and other target countries.

Ownership and Management

The Government of India owns about 86% of SAIL's equity and retains voting control of the Company. However, SAIL, by virtue of its `Maharatna status, enjoys significant operational and financial autonomy

SAIL - Into the Future

Modernisation and Expansion Plan of SAIL Corporate Plan, 2012 Corporate Plan, 2012 (CP12) was formulated in 2004 for 4 integrated steel plants for increase in Hot Metal production to 20 Mt by 2012. After merger of in IISCO feb06, the Hot Metal production Plan was revised to 22.5 Mt by 2012. Expansion of Special Steel Plants was also included. Besides capacity enhancement, the plan also addresses the need of SAIL Plants towards eliminating technological obsolescence, energy savings, enriching product mix, pollution control, developing mines & collieries to meet higher requirement of key raw materials, introduce customer centric processes and have matching infrastructure facilities in the Plant to support higher production volumes. Investment to the tune of Rs 34,982 crore was envisaged under the Corporate Plan. It was envisaged to take up the Projects in segregated manner based on the Techno-economic viability of each project.

Objective of CP12

100% production of steel through Basic Oxygen Furnace (BOF) route 68

100% processing of steel through continuous casting Value addition by reduction of semi finished steel Auxiliary fuel injection system in all the Blast Furnaces State-of-art process control computerisation/ automation State-of-art online testing and quality control Energy saving schemes Secondary refining Adherence to environment norms

Expansion Plan, 2010 The Corporate Plan, 2012 was reviewed by Honble Minister of Steel in Jul06, wherein it was decided to take up the Expansion of Integrated Steel Plants and Special Steel Plant in one go based on Composite Project Feasibility Report (CPFR). By that time Expansion of IISCO Steel Plant and Salem Steel Plant was already approved in-principle based on the Techno-Economic Feasibility Report (TEFR) of MECON. For the Expansion of other four integrated Steel Plants, MECON was assigned the job of Preparation of CPFR in Aug06. The CPFR for the four integrated steel plants was prepared by MECON. In principle approval has been accorded by SAIL Board for the expansion plans of IISCO Steel Plant (Jul06), Salem Steel Plant (Jun06), Bokaro Steel Plant (Dec06), Bhilai Steel Plant (Apr07), Rourkela Steel Plant (May07) and Durgapur Steel Plant (Jul07). SAIL - Into the Future Modernisation & Expansion SAIL, is in the process of modernizing and expanding its production units, raw material resources and other facilities to maintain its dominant position in the Indian steel market. The objective is to achieve a production capacity of 26.2 MTPA of Hot Metal from the base level production of 14.6 MTPA (2006-07 Actual). A new unit coming up at ISP Orders for all major packages of ISP & SSP and part packages of BSL, BSP, RSP & DSP Expansion have been placed and these packages are in various stages of implementation Objective of Expansion Plan 100% production of steel through Basic Oxygen Furnace (BOF) route 100% processing of steel through continuous casting Value addition by reduction of semi-finished steel Auxiliary fuel injection system in all the Blast Furnaces 69

State-of-art process control computerization / automation State-of-art online testing and quality control Energy saving schemes Secondary refining Adherence to environment norms

Production Target
The production target of hot metal, crude steel and saleable steel after Expansion is indicated below: (Million tonne per annum) Base Case Item (2006-07) Actual Hot Metal Crude Steel Saleable Steel 14.6 13.5 12.6 26.2 (23.5) 24.6 (21.4) 23.1 (20.2) After Expansion

Figures in bracket indicate capacity after implementation of ongoing phase of modernisation and expansion to be completed by 2012

Construction activity at ISP

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Capital Expenditure Amount spent on Expansion Plan and other Capital Schemes of SAIL (incl. subsidiary) during last 2 years are as follows:

Year 2007-08 2008-09

Total (Rs./Crore) 2181 5233

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INDIAN OIL & GAS SECTOR

The oil and gas industry has been instrumental in fuelling the rapid growth of the Indian economy. It contributes about 45 per cent of the total energy consumption of the country, which is the fifth largest energy consumer in the world. Petroleum exports have also emerged as the single largest foreign exchange earner, accounting for 11 per cent and 15 per cent of the total exports in 2005-06 and 2006-07, and growing at the rate of 67 per cent and 58 per cent, respectively. The growth continues in the new fiscal with the export of petroleum products touching US$ 19.7 billion during April-December 2007. Simultaneously, domestic production of crude oil has been increasing steadily. While production grew by 5.6 per cent in 2006-07 to 33.98 million tonne (mt) from 32.19 mt in 2005-06, it has increased to 34.11 mt during 2007-08.

Global Refining Hub

Strategically located en route of Middle East crude for East Asian and Pacific-rim markets, India is emerging as the global hub for oil refining. It also enjoys competitive cost advantage, with capital costs lower by as much as 25 to 50 per cent over other Asian countries. Already, the fifth largest country in the world in terms of refining capacity (up from 19thin 1995), with a share of 3 per cent of the global capacity, India is well placed to take advantage of the expected global refining capacity deficit of around 112 mtpa by 2010 with its planned expansion plans. Indian companies plan to increase their refining capacity to 242 mtpa by 2011-12 from about 149 mtpa in 2007. This is well above the projected domestic demand of 196 million tones, leaving the rest to be exported.

Indian Oil Corp (IOC) plans to increase its refining capacity from 60.2 mtpa to 76.7 mtpa. ONGC plans to scale up its refining capacity up to 45.5 million tonnes by 2009-10 from about 12 mtpa. Bharat Petroleum Corporation is setting up a 6 mtpa at Bina in Madhya Pradesh. Reliance Industries Ltd is constructing a new refinery in the Jamnagar SEZ with a capacity of 29 mtpa. Nagarjuna Oil Corp is planning a new refinery at Cuddalore with a capacity of 6 mtpa. Hindustan Petroleum is setting up a 9 mtpa refinery along with the LN Mittal group at Bhatinda in Punjab. Essar plans to more than triple capacity at its refinery to 34 mtpa from the current 10.5 mtpa. Hindustan Petroleum Corporation plans to invest US$ 2.5 billion in expanding its Visakhapatnam refinery capacity to 16 million tones.

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In fact, Reliance's new refinery (which will be the world's only full-export-oriented refinery) will be the world's sixth-largest. And with the existing refinery of RIL, the combined capacity (RPL along with RIL) will turn the Jamnagar complex into the world's largest single-location refinery.

Overseas Investments
Indian companies have been making investments in oil and gas fields to meet the spiraling energy demand of both domestic and foreign markets. Investments have been made in as diverse countries as Russia, Sudan, Iraq, Libya, Egypt, Qatar, Ivory Coast, Australia, Vietnam and Myanmar among others.

ONGC Videsh Limited (OVL) has presence in 15 countries including. Russia, Sudan, Vietnam, Iran and Brazil among others. GAIL India, the country's largest transporter and marketer of gas, has acquired stake in an offshore block in Myanmar and plans to set up a mega US$ 2.3 billion petrochemical plant in Iran. A consortium of BPCL and Videocon Industries has acquired a stake in Brazilian oil exploration company EnCan Brasil Petroleo Limitada for US$ 165 million. OIL-IOC consortia have acquired blocks in Libya and have signed farm-in agreements for share in blocks in Gabon, Yemen and Nigeria. Reliance has acquired majority stake and management control of Gulf Africa Petroleum Corporation (GAPCO), which has significant presence in East Africa's downstream sector. Indian Oil Corporation (IOC), plans to set up a refinery of about 12-15 mtpa with an integrated petrochemical complex in Egypt Essar Oil is keen on buying a 50 per cent stake in a 4 mtpa refinery in Kenya. Retail The surge in automobile sales has led to significant investments being made to develop and expand the petroleum retail market. According to US-based consultancy Keystone, automobile sales which number about a million vehicles is likely to grow to about 20 million a year by 2030, making India, the third largest automobile market in the world. Consequently, many companies have stepped up investments to expand their retail network. For example, Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) together are planning to open over 3,000 retail outlets this financial year as against 2,000 outlets opened last year. Similarly, Reliance plans to build 6000 services stations.

Gas
India is one among the four countries which have the world's richest gas hydrate reserves. But, the per capita consumption of natural gas is amongst the lowest in the world at 29 cubic meters as against the world average of 538 cubic meters, leaving huge potential in this sector. Consequently, huge investments are being made into this sector, reflected in the growth of cumulative natural gas production to 32274 million cubic meters (MCM) during 2007-08, compared to 31747 MCM of production in the same period in 2006-07.

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And with increasing usage of natural gas as a fuel in India, the country is likely to rival both China and Japan in having the largest natural gas demand in Asia by 2025, whose individual demand is estimated to be in the range of 350 million standard cubic meter per day (MMSCMD). Significantly, the share of natural gas in the overall fuel mix is expected to increase from 8.8 per cent in 2007 to 22 per cent in 2031-32. Encouraged by this scenario, a number of players have evinced a keen interest in laying pipelines in the domestic market to supply gas to the consumers. For example, Gujarat State Petronet Ltd plans to connect all 25 districts of the state with 2,200-kilometre high pressure gas pipeline laid down across the state. Reliance plans to invest US$ 4 billion to lay a 1,386-kilometer pipeline from Andhra Pradesh to Gujarat.

Government Initiatives
The government has been taking many progressive measures to create conducive policy and regulatory framework to attract investments into this industry. The passage of the Petroleum and Natural Gas Regulatory Board (PNGRB) Bill to set up an independent regulatory for midstream and downstream activities and to promote competition. Allowing 100 per cent FDI in private refineries through automatic route and 26 per cent in government-owned refineries. Implementation of the National Exploration Licensing Policy (NELP). Abolition of the administered pricing policy. Creation of strategic crude oil storage of 5 million tones. 100 per cent FDI is also allowed in petroleum products, exploration, gas pipelines and marketing/retail through the automatic route.

Significantly, a cabinet secretary-chaired panel has cleared the first mega oil , chemical and petrochemical investment hub, slated to come up at Andhra Pradesh, and which is expected to attract a whopping investment of US$ 80.36 billion. Mittal Energy Investments, Total SA of France and oil refining and marketing major Hindustan Petroleum Corp (HPCL) would make a combined investment US$ 7.49 billion in the proposed petroleum, chemical and petrochemical investment region (PCPIR).

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Road Ahead
An expanding economy with its concomitant increase in energy demand is likely to throw open huge investment opportunities in the oil and gas industry. According to a report by CII and KPMG, India's energy sector would provide investment avenues worth US$ 120-150 billion over the next five years. India's energy demand is estimated to increase five fold over the next twenty five years. Another report by KPMG estimates India's oil demand to grow at an average annual rate of 3.6 per cent from 119 metric million tonne (mmt) in 2004 to 196 mmt in 2011-12 and 250 mmt in 2024-25.The Government also plans to expand the exploration licensing area from 44 per cent of the Indian sedimentary basin in 2007 to 80 per cent by 2011-12 and 100 per cent by 2015.

Major Players In GAS Sector

Company

P/E Ratio
80.31 -1.53 -524.93 4.32 -620.42 12.06 11.26 -4.14 10.59 11.94 22.78 224.02 NA

EPS

Returns

Beta

Market Cap

Aban Offshore Ltd. Bharat Petroleum Corpn. Ltd. Cairn India Ltd. Chennai Petroleum Corpn. Ltd. Essar Oil Ltd. G A I L (India) Ltd. Hindustan Petroleum Corp. Indian Oil Corpn. Ltd. Mangalore Refinery & Petrochemicals Ltd. Oil & Natural Gas Corpn. Ltd. Reliance Industries Ltd. Reliance Natural Res. Ltd. Reliance Petroleum Ltd.

43.62 -212.06 -0.5 75.41 -0.37 30.76 21.45 -100.93 7.04 74.31 101.3 0.42 NA

30.43 -4.38 82.78 40.85 317.33 24.09 -8.23 -5 81.38 2.27 32.86 162.12 64.45

0.96 1.06 0.72 1.25 1.4 1.18 1.19 1.25 1.48 1.16 0.92 1.02 0.67

13902.8 13642.72 36285.22 4695.78 18398.92 33526.26 9108.88 57688.76 13770.06 217547.59 339993.78 16876.98 74544.48

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PICK OF THE INDUSTRY GAS AUTHORITY OF INDIA LIMITED

GAIL:GAS AUTHORITY OF INDIA LTD

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Market Data
Sector CMP Action Target 52 week High/Low Face Value Market Cap P/E

GAIL (India) Limited, is India's flagship Natural Gas company, integrating all aspects of the Natural Gas value chain (including Exploration & Production, Processing, Transmission, Distribution and Marketing) and its related services. In a rapidly changing scenario, we are spearheading the move to a new era of clean fuel industrialization, creating a quadrilateral of green energy corridors that connect major consumption centres in India with major gas fields, LNG terminals and other cross border gas sourcing points. GAIL is also expanding its business to become a player in the International Market.

Today, GAIL's Business Portfolio includes: Shareholding Pattern

Promoters Foreign Institution Non Promoters Public & Others

6,700 km of Natural Gas high pressure trunk pipeline with a capacity to carry 148 MMSCMD of natural gas across the country 7 LPG Gas Processing Units to produce 1.2 MMTPA of LPG and other liquid hydrocarbons. 1,922 km of LPG Transmission pipeline network with a capacity to transport 3.8 MMTPA of LPG. 27 oil and gas Exploration blocks and 3 Coal Bed Methane Blocks Joint venture companies in Delhi, Mumbai, Hyderabad, Kanpur, Agra, Lucknow, Bhopal, Agartala and Pune, for supplying Piped Natural Gas (PNG) to households and commercial users, and Compressed Natural Gas (CNG) to the transport sector Participating stake in the Dahej LNG Terminal and the upcoming Kochi LNG Terminal in Kerala

GAIL (India) Limited or Gas Authority of India Ltd, is India's largest natural gas transportation company, integrating all aspects of the natural gas value chain. GAIL is listed by Forbes as one of the world's 2,000 largest public companies in 2007.

GAILTEL
GAILTEL is the telecom arm of GAIL India Limited, which mainly caters to GAIL's internal Telecom requirements apart from commercially offering the Telecom services to private players. GAILTEL operates and maintains around 13000 route KM of OFC Network spread across India. The USP of GAILTEL is - it's secured OFC Network along the Gas Pipeline and high QoS. Currently, GAILTEL operates under three telecom licenses - which are - IP-I, IP-II and ISP-A.

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GAILTEL serves almost all the leading Telecom operators of India, such as Vodafone, IDEA Cellular, Tata Tele, Airtel. It also serves ISP's like TULIP, France Telecom etc. GAILTEL owns and operates around 14000KM of OFC network spread across India, barring North East states, JNK, orissa , Bihar, Jharkand, HP and Uttranchal. The telecom head office is based out of Noida, with zonal offices in major cities to support. Telecom business is a synergy well exposed by GAIL. For its internal communications and SCADA requirements GAIL needs to lay OFC network, so using the same infrastruture GAIL has added one more revenue stream to its business. With more than 100 city gas (CNG) projects in pipe-line, through which, GAILTEL can explore the synergy of reaching individual homes on fiber. Piped Gas will roll-out in major cities and OFC (micro OFC) can be laid along with gas pipelines. This also throws a great potential to cross sell the city OFC network to other Telecom operators. This is the next big potential to all the city gas ventures and to GAILTEL if utilised and expolited properly 1 as

GAIL GAS LTD

GAIL GAS is a wholly owned subsidiary of GAIL(I)Ltd. was incorporated on 27.05.2008. Distribution and Marketing, in India and abroad, of CNG & Auto LPG as fuel for vehicles. PNG for domestic/ commercial/ industrial purposes. Laying of OFC/ Duct to leverage for potential business. Investing in & setting up required infrastructure in various cities of India and along the highways for building CNG corridors. Allied business relating to distribution & marketing of natural gas, CNG, Auto LPG etc. GAIL has nine JV companies also in area of City Gas Distribution

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CONCLUSION AND RECOMMENDATION:-

Therefore it can be concluded that portfolio management helps to achieve the following:i. Keep the security, safety of Principal sum intact both in terms of money as well as its purchasing power. Stability of the flow of income so as to facilitate planning more accurately and systematically the re-investment or consumption of income. To attain capital growth by re-investing in growth securities or through purchase of growth securities. Marketability of the security which is essential for providing flexibility to investment portfolio. Liquidity i.e. nearness to money which is desirable for the investor so as to take advantage of attractive opportunities upcoming in the market. Diversification: The basic objective of building a portfolio is to reduce the risk of loss of capital and income by investing in various types of securities and over a wide range of industries. Favorable tax status : The effective yield an investor gets from his investment depends on tax to which it is subject. By minimizing the tax burden, yield can be effectively improved.

ii.

iii.

iv.

v.

vi.

There are two basic principles for effective portfolio management which are given below:1. Effective investment planning for the investment in securities by considering the following factorsa. Fiscal, financial and monetary policies of the Govt.Of India and the Reserve Bank of India. b. Industrial and economic environment and its impact on industry Prospect in terms of prospective technological changes, competition in the market,
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capacity utilization with industry and demand prospects etc. II. Constant review of investment: It require to review the investment in securities and to continue the selling and purchasing of investment in more profitable manner. For this purpose they have to carry the following analysis: To assess the quality of the management of the companies in which investment has been made or proposed to be made To assess the financial and trend analysis of companies balance sheet and profit &loss Accounts to identify the optimum capital structure and better performance for the purpose of withholding the investment from poor companies.

To analysis the security market and its trend in continuous basis to arrive at a conclusion as to whether the securities already in possession should be disinvested and new securities be purchased. If so the timing for investment or disinvestment is also revealed.

From the above discussion it is clear that portfolio functioning is based on market risk, so one can get the help from the professional portfolio manager or the Merchant banker if required before investment. Because applicability of practical knowledge through technical analysis can help an investor to reduce risk. In other words Security prices are determined by money manager and home managers, students and strikers, doctors and dog catchers, lawyers and landscapers, the wealthy and the wanting. This breadth of market participants guarantees an element of unpredictability and excitement. If we were all totally logical and could separate our emotions from our investment decisions then, the determination of price based on future earnings would work magnificently. And since we would all have the same completely logical expectations, price would only change when quarterly reports or relevant news was released.

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References

www.myiris.com www.icicidirect.com www.bseindia.com www.nseindia.com www.indiainfoline.com

www.mutualfunds.com Economic Times Financial Management-Theory and Practice, 6th Edition by Prasanna Chandra. Financial Management, 3rd Edition, by Khan & Jain. Financial Management by I.M.Pandey PMS monthly: Prowess, a FT Exclusive.

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