SUMMER INTERNSHIP REPORT

ON

“FUNDAMENTAL AND TECHNICAL ANALYSIS OF IT SECTOR

OF INDIAN MARKET”

BY

DEEPALI DEOKAR
21BSP1519

SUMMER INTERNSHIP PROGRAM

AT

HDFC LIFE INSURANCE COMPANY LTD.

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 A REPORT
ON

“FUNDAMENTAL AND TECHNICAL ANALYSIS OF IT

SECTOR OF INDIAN MARKET”

BY
DEEPALI DEOKAR
21BSP1519

HDFC LIFE INSURANCE COMPANY LTD.

A report submitted in partial fulfilment of the requirements of PGPM Program of IBS

Mumbai

FACULTY GUIDE COMPANY GUIDE

DR. Nimisha Mishra Mohammed Yusuf Khan

Date of Submission: 21ST May, 2022

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 AUTHORIZATION

I have successfully completed the Project with HDFC Life Insurance

Company Ltd. at Mumbai. The summer internship program was held for the
period from 21st February, 2022 to 30th May, 2022.
I hereby declare, to the best of my knowledge and ability that my work on the
Summer Project Title “A Study on Fundamental & Technical Analysis IT
Services and Consulting Sector” is a genuine research work undertaken by
me. It has not been published anywhere earlier and is prepared after
completion of Summer Internship Program with “HDFC Life Insurance
Company Ltd.”.

Date: 15th May 2022 Name: Deepali Deokar

Place: Mumbai Enrolment No.: 21BSP1519

Signature: Signature:
Company Guide Faculty Guide
Mr. Mohammed Yusuf Khan Dr. Nimisha Mishra

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 ACKNOWLEDGEMENT

I take this opportunity to express my sincere thanks to “HDFC Life Insurance

Company Ltd.” for providing a platform to gain knowledge in the field of
Shares and Equities. Working with one of the renowned organizations was a
great learning experience.

The Summer Internship Project on “A Study on Fundamental & Technical

Analysis of IT Services and Consulting Sector” offered a great learning
experience. During the tenure of this internship, I was fortunate to have
interacted with people, who in their own capacities have encouraged and
guided me.

My sincere thanks go to Mr. Mohammed Yusuf Khan (Circle Head), my

Company Guide and Miss. Shreya Karia for giving me an opportunity to be
a part of this esteemed organization for three months and providing me with
opportunities and understanding my potential.

Special thanks to Dr. Nimisha Mishra ma’am for her regular guidance
throughout the project which constantly inspired me to think beyond the
obvious. Without her support & critical evaluation, this project could not have
been completed successfully.

And also, I would take this opportunity to thank to all HDFC Life Insurance
Company Ltd. employee and Branch Head for providing us space and helping
us during our training.

I thank my B-school, IBS Mumbai for giving me this opportunity to work with
such a nice organization and develop my understanding about equities and
financial market.

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 Abstract

This report is part of multiple projects undertaken at HDFC Life Insurance Company
LTD. In the internship program students are trained for trading in Indian stock market
which involves detailed study of various methods to study the Equity market, live, short
term, intraday trading.
In training program students get to learn about how to perform Technical and Fundamental
analysis of a security, by analyzing various charts patterns and trends in the market,
Analysis of stock market based on various indicators. Based on the available data and
conclusion made from the chats what is the right call for a trader to buy or sell a security.
In internship program students have to select a particular sector and perform detailed
analysis of it. Program has also covered details of Mutual Funds, Price Actions, Creating
Index of the sector selected on daily basis, Back testing and Forward testing on the
indicators and ranking them on their performance.
As a part of training program candidates needs to study various case studies related to
current affairs as well as important cases related Indian market.
Fundamental analysis included the following things in it: Scoring is done through
fundamental analysis and certain stocks are selected as "value picks" and "growth picks".
Value Picks was selected as an undervalued stock showing year-over-year sales or profit
growth. Overrated strains with a PEG ratio between 0 and 1 were then selected as growth
picks.
In addition, we ranked Value Picks and Growth Picks using several financial indicators
that are important to the IT services and consulting sector. Funds were allocated to these
selected shares, depending on their rank.
Finally, a portfolio is created from the selected stocks of the it sectors and its NAV is
calculated on daily basis. Performance is tested on the daily basis. There is comparison
made between the index and the NAV and according to the performance it is analyzed
that what is performing the best. It will help the investor to plan for their investment in
the IT Services and Consulting Sector.

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 TABLE OF CONTENT

Sr No. Content Page No.

1. Executive Summary 8

2. Company Analysis

2.1 About the Company 11

2.2 SWOT Analysis 12

3. Sectoral Analysis

3.1 IT Services and Consulting Sector

3.1.1 Introduction 13
3.1.2 Market Size 13
3.1.3 Investment 14
3.1.4 Government Initiatives 14
3.1.5 SWOT Analysis 15
3.1.6 Porters Five Forces Analysis 16

4. About the Project 18

5. Index 19

6. Fundamental Analysis 22

6.1 Steps in Fundamental Analysis 22

6.2 Sector Price-Earnings Ratio 23

6.3 Undervalued and Overvalued Companies 24

6.4 Value Pick 26

6.5 Growth Pick 27

6.6 Ratio Analysis 28

6.7 Asset Allocation 29

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7. Fund Factsheet 31

8. Methods Related to Fundamentals 33

9. Technical Analysis

9.1 What is Technical Analysis? 37

9.2 What is Chart? 37

9.3 Types of Technical Analysis 38

10. Long-Term Chart Patterns for Technical Analysis

10.1 Long-Term Technical Chart patterns in IT Sector 40

11. Medium-Term Chart Patterns for Technical Analysis

11.1 Types of Medium-Term Chart Patterns 43

12. Short-Term Chart Patterns for Technical Analysis

12.1 Types of Short-Term Technical Chart patterns 46

13. Options 49

14. Back testing 56

15. Conclusion 57

16. Reference 58

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 1. SIP- EXECUTIVE SUMMARY

Student’s Name: Deepali Vijay Deokar Enrolment No: 21BSP1519

Name of the Company: HDFC Life Insurance Company Ltd. Type of Industry: IT Sector
Title of SIP: Study of Fundamental & Technical Analysis of IT Services and Consulting Sector
Background: Finance

Objectives:
➢ To study the Fundamental and Technical Analysis of the IT Services & Consulting
Sector.
➢ To perform live intraday trading using various strategies and indicators on the Zerodha
Platform.

Briefing of the work done/ Methodology:

This project is about “A Study on Fundamental & Technical Analysis of IT Service and
Consulting Sector. Fundamental and technical analysis are used as methodology to
analyze these sectors. In this project valuation is done as a part of fundamental analysis
and certain stocks are selected as the “Value Picks” and “Growth Picks”.
The Value-Pick stocks have been selected as those stocks which are undervalued and
have shown a growth in revenue or profits on year-on-year basis. On the other hand,
overvalued stocks have been chosen as Growth-Pick stocks which have the P/E Growth
ratio (PEG Ratio) between 0 to 1.

Further, using some financial ratios which are important to the IT Services and
Consulting sector, the value pick and growth pick stocks have been ranked. According
to the ranks, funds have been allocated to these selected stocks.
Finally, a portfolio consisting of the selected IT Services and Consulting sector stocks
is created and the Net Asset Value (NAV) of the portfolio is calculated. The NAV is
calculated on the daily basis. Performance of the entire portfolio is analyzed with respect
to the Index and NAV on daily basis of IT Services and Consulting sector stocks. It will
be helpful for investors who are looking for an investment in IT Services and Consulting
sector companies.
Also, I got to learn about Technical Analysis. In which there are two types of technical
analysis and that is “Short term technical analysis” & “Long term technical analysis”

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and both of the analysis have been performed on selected IT Service and consulting
sector stocks (Growth picks and Value picks).
Various Patterns have been observed as a part of Long-Term Technical Analysis and
points at which the investors can buy and sell the stocks have been spotted. Also, the
current trend of the stocks has been found out.
Various Candlesticks have been used as a part of Short-Term Analysis and also various
Candlesticks positions have also been observed. The Candlesticks give us an idea
regarding trends and trend reversals for the selected Cement sector stocks (Growth Picks
and Value Picks). Also got to learn about various oscillators which can be used for
trading and also done the back testing of this oscillators.

Conclusion:
Fundamental and technical analysis are extremely important in making sound
investment decisions. The individual portfolio can provide systematic returns after
assessing your risk capacity and tolerance, as well as your time horizon and investment
objective.
One such method for value analysis is the relative valuation model. To determine a
confirm trade signal, one can utilize long and short-term technical analysis, as well as
fundamental analysis. By estimating long-term target prices, investors can maximize
profits while also determining how long they should keep the stock.
The NAV of a portfolio of companies gives an overview of how the NAV is calculated
and how the portfolio's performance is compared to market benchmarks.
If NAV outperforms the market, it means the equities chosen for the portfolio are
performing well.

Learnings:

• Working of the industry: Full-fledged equity study has aided in determining and
comprehending the industry's how and what. What impact does a government
action or a board of directors’ announcement have on the company and thus the
industry? (In a broader way).
• Introduction to Trading Technologies: We are provided with our own “Zerodha
Accounts’’ to perform daily intraday trading activities. From the basics of what
equity is to how to short sell, set a stop loss, from a normal daily price chart to a
complex Candle Stick chart, from normal Average Price to Daily VWAP price, we
are trained at everything. As a new learner, it has been an experience full of learning
and developing an understanding of the market. It has been an overview of Front-
end trading systems.

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• Index Making: One of the first tasks included selecting an industry of our choice
and making an index like Nifty50 for them. To learn, how the top companies affect
the index that they relate to, was a new and quintessential experience for us. An
index of large cap Finance companies was prepared and is still updated every day,
to compare it with the daily performance of markets.
• An extensive learning of Ratios: Fundamental analysis has helped in
understanding the ways and the importance of the financial or non-financial ratios
that are used while conducting the research. A broader understanding of PE ratio,
ROE, EPS was established through the research. The practical part of the learning
actually helped in relating with the ratios on a better and higher level, rather than
theoretical.
• Relationship Building: Some of the tasks given to us include a big chunk of
relationship building at our workplace as well as outside of it. To see, how
corporates work and communicate, has been a nourishment to our brains.

Faculty Guide: Dr. Nimisha Mishra

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 2. COMPANY ANALYSIS

2.1 About the Company

Life Insurance Plans:

HDFC Life Insurance Company Limited (‘HDFC Life’ / ‘Company’) is a joint venture
between HDFC Ltd., India’s leading housing finance institution and Standard Life
Aberdeen, a global investment Company.
Established in 2000, HDFC Life is one of the leading life insurance solutions providers in
India, offering innovative savings and investment, pension and annuity, protection and
health solutions to customers.
The Company has a robust distribution system comprising of 300+ traditional partners,
including more than 50 emerging ecosystem partners, bolstered by its pan India presence
through a network of 390 branches.
It has headquarters in Mumbai, India. It was the first private company to get a license from
IRDAI in 2001. The company completed its initial public offer (IPO) in 2017.
In September 2021, HDFC Life Insurance Co. Ltd. announced the acquisition of Exide Life
Insurance Co. Ltd. for Rs. 6,687 crores (US$ 896.85 million) to strengthen its position as
one of the leading private insurers in India.
In August 2021, HDFC Life introduced HDFC Life Saral Pension, a, non-linked single
premium, to provide life-long guaranteed annuity rates at the time of purchase.
Currently the company has the largest share in new business among private life insurers.
They have honored 98.01% Individual claims. Sold 982.0 thousand policies in FY21 421
branches and more than 11,200 partner branches.
HDFC Life distributes its products through a multi-channel network consisting of
Insurance agents, Bancassurance partners (HDFC Bank, Saraswat Bank, RBL Bank), a
Direct channel, Insurance Brokers, MFIs (Micro Finance Institutions), SFBs (Small
Finance Banks), etc. and 39 partnerships within non-traditional ecosystems and an Online
Insurance Platform and currently one of the leading financial service providers in India
offering finance in varied sectors like housing, banking, life insurance and general
insurance, asset management and education loans and many other products.
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 2.2 SWOT Analysis

Strength
Weakness
1. Customize Packages
1. High cost of Operation
2. Brand Image
2. Retention of the network is poor
3. Well Established Networks
4. Strong Base
5. Best Customer Service in Market

SWOT

Opportunities Threats
1. Population 1. Instability in Economy
2. Liberalization in Laws 2. NBFC's Entry in Industry
3. Movement of Employees

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 3. SECTORAL ANALYSIS

3.1 IT Services & Consulting Sector

3.1.1 Introduction:
India ranked at 46th place in 2021 by climbing 2 spots up. The global sourcing market in
India continues to grow at a higher pace compared to the IT-BPM industry. India is the
leading sourcing destination across the world, accounting for approximately 55% market
share of the US$ 200-250 billion global services sourcing business in 2019-20.

India's rankings improved four places to 46th position in the 2021 edition of the Global
Innovation Index (GII).

The IT industry accounted for 8% of India's GDP in 2020. According to STPI (Software
Technology Park of India), software exports by the IT companies connected to it, stood at
Rs. 1.20 lakh crore (US$ 16.29 billion) in the first quarter of FY22.

3.1.2 Market Size:

According to the National Association of Software and Service Companies (NASSCOM),
the Indian IT industry's revenue is expected to touch US$ 227 billion in FY22 from US$
196 billion in FY21. Indian software product industry is expected to reach US$ 100 billion
by 2025. Indian companies are focusing to invest internationally to expand global footprint
and enhance their global delivery centers.

The data annotation market in India stood at US$ 250 million in FY20, of which the US
market contributed 60% to the overall value. The market is expected to reach US$ 7 billion
by 2030 due to accelerated domestic demand for AI. The IT industry added 4.5 lakh new
employees in FY22 (as of February), the highest addition in a single year. Women
accounted for 44% of the total new employees

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 .

3.1.3 Investment:
Indian IT's core competencies and strengths have attracted significant investment from
major countries and companies. In the recent times the India’s IT sector has been able to
attract many foreign as well domestic investors. The IT sector is growing continuously and
after the pandemic the sector has got a boost. Various IT sector companies are coming up
with their IPOs to attract majority of the crowd.

Some Investments done in the IT services and consulting sector comprises of the following:

• The computer software and hardware sector in India attracted cumulative foreign direct
investment (FDI) inflows worth US$ 81.31 billion between April 2000-December 2021.
• In 2021, PE investments in the IT sector stood at US$ 23.4 billion.
• India's IT startup ecosystem has received record investments of nearly US$ 36 billion in
privately held companies in 2021, up from US$ 11 billion in 2020.
• In March 2022, Byju's raised US$ 800 million in funding as part of a pre-IPO round,
which values the Bengaluru-based company at about US$ 22 billion.

3.1.4 Government Initiatives:

Government has played an important role in the development of the sector. Here are some
of the initiatives taken by the government for the development of the IT Sector:

• In Union Budget 2022-23, the allocation for IT and telecom sector stood at Rs. 88,567.57
crore (US$ 11.58 billion).
• The government introduced the STP Scheme, which is a 100% export-oriented scheme
for the development and export of computer software, including export of professional
services using communication links or physical media.
• In November 2021, the government launched the Internet Exchange in Uttarakhand to
enhance the quality of internet services in the state.

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• The Karnataka government has signed three MoUs worth US$ 13.4 million (Rs. 100.52
crore) to help the state's emerging technology sector.
• In September 2021, the Indian government announced a plan to build a cyber-lab for the
'Online Capacity Building Program on Crime Investigation, Cyber Law and Digital
Forensics' to strengthen cyber security capabilities.

3.1.5 SWOT Analysis:

Strength:

1. Cost Advantage
2. Breadth of service offering
3. It has easy scalability
4. Its quality and maturity are its biggest advantage
5. Its global and provides services to its customers 24/7

Weakness:

1. India’s IT sector has high attrition

2. Lack of systems integration
3. Limited infrastructure automation
4. Failure to meet performance benchmarks
Opportunities:

1. Improved resolution time for outages

2. Better data visibility and reporting
3. Cross-team collaboration
Threats:

1. High staff turnover

2. Poor funding for new technology
3. Infrastructure scalability issues

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3.1.6 Porters Five Force Analysis:

Availability
of
Substitutes:
LOW

Competitive Buyer
Supplier
Power: LOW Rivarly: Power:
HIGH
HIGH

Threat of
New Entries:
LOW

Threat of New Entries:

▪ As it is highly commoditized IT services, there is very low threat of new entries in

the Market.
▪ There is high dependence on people in the industry and so we can see veterans
detach from existing companies to invest in new ventures. An example of this is
Happiest Minds, which was started by a co-founder of an existing IT provider.

Bargaining Power of Suppliers:

▪ As the bargaining power for suppliers is very low and since high-standardization
exists, there is little scope of suppliers having any clout.
▪ The suppliers consist of IT Infrastructure providers (Servers, computers etc.),
Recruitment firms, Office Space Suppliers etc.

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Competitive Rivalry:

▪ The IT Industry landscape is characterized by intense completion for conventional

IT services: Application Development & Maintenance, IT Infrastructure
Management Services, Network Management Services, Data-center Services etc.
leading therefore to commoditization.
▪ The existing competition comes from both domestic players (Infosys, TCS, Wipro,
HCL technologies, Tech Mahindra, Mindtree and so forth) and international ones
(IBM, Accenture, Capgemini, Cognizant and so forth).

Bargaining Power of Buyers:

▪ For conventional IT services, bargaining power of the buyer is large and the
possibility of pressure on rates exists.
▪ As the buyer, having worked with both the international IT providers as well as
domestic providers they are largely the price setter and has to a large extent the
offshore advantages through mature procurement and global delivery.

Availability of Substitutes:

▪ As there are no substitutes available expect from the internal ones, there is low
availability of the substitutes.
▪ Over the time the internal IT department have been outsourced and the staff is
settled into supervisory role.

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 4. ABOUT THE COMPANY

 The Project includes all large cap companies of the “IT Services & Consulting
Sector” for the purpose of fundamental analysis & technical analysis of the
industry.
 The project deals with a brief introduction to stock market & Fundamental as
well as Technical analysis on how to invest in stock market as the investors are
more concerned of return and they want to be far from risk, technical analysis is
very helpful in deciding as when to buy & sell a particular stock
 This Project contains secondary data & calculations with charts which help in
drawing inferences.
 The scope of my work comprises of tasks like:

 Preparation of Index.
 Fundamental Analysis.
 Technical Analysis.
 Recommendation

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 5. INDEX

A stock market index is a basket of stocks reflective of an industry, sector or the entire
market itself. It is a selection of stocks put together in a basket with a weighted average
of their aggregate prices being tracked as one. This cumulative price reflects the state
of the underlying class of stocks. So, for example the S&P BSE Sensex (or the 30 stock
Sensex) is tracked widely by institutions and FIIs and is often called the true reflection
of the Indian stock markets. It is the weighted average of 30 well established and
financially sound stocks drawn from different industrial sectors of the Indian economy.
In the same way I have calculated the index for my respective sector of IT Services and
consulting. The base Price for the same was considered to be 1000 and the calculation
is done. The calculation for the Index s be done on daily basis.
For the index calculation in the IT Services and Consulting sector the companies that
are taken into consideration consist of large cap stocks i.e., stocks with Market
Capitalization of more than INR 7500 crores.
Method of Calculation of Index:
1. Selected the stocks which had market capitalization of more than Rs. 7500
crores.
2. Weightage- which means understanding the stock weightage in index this is
calculated in percentage (Mar Cap of a stock/Total Mar Cap).
3. Percentage change in price is calculated (Previous Day Price- Same Day
Price/Previous Day Price).
4. Index change (Weightage * % Change in price).
5. Also, Index calculation has been started with base index 1000.
6. So, every day we need to update market cap, price and maintain record of change
in index.

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Index Calculation:

Index Values from 13th April 2022 to 13th May 2022:

DATES AMOUNT
DATES AMOUNT
13-04-2022 ₹ 1088.26
29-04-2022 ₹ 1018.45

18-04-2022 ₹ 1041.76 02-05-2022 ₹ 1006.80

19-04-2022 ₹ 1015.66 04-05-2022 ₹ 993.98

20-04-2022 ₹ 1030.79 05-05-2022 ₹ 1011.61

21-04-2022 ₹ 1046.34 06-05-2022 ₹ 988.62

22-04-2022 ₹ 1040.56 09-05-2022 ₹ 992.22

25-04-2022 ₹ 1021.76 10-05-2022 ₹ 984.23

26-04-2022 ₹ 1024.55 11-05-2022 ₹ 972.33

27-04-2022 ₹ 1020.18
12-05-2022 ₹ 966.77
28-02-2022 ₹ 1029.76
13-05-2022 ₹ 963.86

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 6. FUNDAMENTAL ANALYSIS
For conducting fundamental analysis of the stocks in Pharmaceutical sector, we have
taken into consideration large cap stocks i.e., stocks with market capitalization of more
than 7,500 crore rupees.

6.1 Steps in Fundamental Analysis

The process of Fundamental Analysis involves multiple steps which have been elucidated
in the subsequent sections;

SECTOR PRICE- OVERVALUED AND

EARNING RATIO UNDERVALUES
COMPANIES

GROWTH-PICK VALUE-PICK

RANKING THE
COMPANIES ON
RATIO-ANALYSIS THE BASIS OF THE
RANKINGS

ASSET-ALLOCATION

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 6.2 Sector Price-Earnings Ratio

The price-earnings ratio, also known as P/E ratio, P/E, or PER, is the ratio of a company's
share price to the company's earnings per share. This ratio is used for valuing companies
and to find out whether they are overvalued or undervalued.
P/E Ratio= Share Price/ Earnings per Share

IT Services & Consulting Sector

*Note: Sector P/E ratio is Average P/E ratio of all companies.

Here, the sector P/E ratio of IT Service and Consulting sector is 51.20.

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 6.3 Undervalued and Overvalued Companies

Valuation of companies are done on basis of sector P/E ratio. The P/E ratio of each stock
is then compared with the sectorial P/E ratio to determine whether the stock is Undervalued
or Overvalued. For instance, if P/E ratio of a stock is lesser than the sector P/E ratio then
that stock is considered as an Undervalued stock on the other hand if the P/E ratio of a
stock is greater than the sector P/E ratio then that stock is considered as an Overvalued
stock.
Company P/E Ratio > Sector PE => Overvalued
Company P/E Ratio < Sector PE => Undervalued

Stock Name P/E Ratio

L&T Infotech 54.77

Mindtree 60.8

Persistent 73.43

Affle India 120.08

KPIT Tech 105.89

Happiest Minds 95.18

Route 64.58

Latent View 107.27

Sector PE 51.20045455

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UNDERVALUED

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 6.4 Value-Pick

After the valuation process, the growth of the “Undervalued” stocks is checked by Top line
and Bottom line for each Undervalued stock. The Undervalued stocks with positive
percentage change in Revenue or Profits or which show growth year on year are selected
as the “Value picks” and the ones with negative percentage change in revenue and profit
are rejected. Following are four criteria for selecting an undervalue company;
1. When both values are increasing then select.
2. When one value is increasing and other is decreasing, then also select it.
3. When one value is decreasing and other is increasing, then also select it.
4. When both values are decreasing then reject it.

IT Services & Consulting Sector

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 6.5 Growth-Pick

After the selection of Value Picks, the next step is to analyze the Overvalued stocks and
determine the Growth Picks. For determining the Growth Picks, P/E Growth value (PEG
value) is calculated for each Overvalued stock by dividing P/E ratio of each of these stocks
by the percentage change in earnings per share. The stocks with PEG values between 0 to
1 are selected as Growth Picks. The Overvalued stocks with negative PEG values or with
PEG values greater than 1 are rejected.

IT Services & Consulting Sector

Stock Name P/E Ratio Peg Ratio

L&T Infotech 54.77 2.63

Mindtree 60.8 0.59

Persistent 73.43 2.84

Affle India 120.08 0.71

KPIT Tech 105.89 0

Happiest Minds 95.18 N/A

Route 64.58 N/A

Latent View 107.27 0

Sector PE 51.20045455

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 6.6 Ratio Analysis

The stocks which are selected from overvalued & undervalued companies are then rated on
the basis of few common ratios. The ratio selected from the IT Services and Consulting
sector are as follows:

 Current Ratio
 Retention Ratio
 Dividend Payout Ratio
 Return on Capital Employed
 Asset Turnover Ratio

Ratios Related to IT Services & Consulting Sector

Total Rankings:

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 6.7 Asset Allocation

Steps for calculating Net Asset Value for the portfolio of IT Service and Consulting
Sector:

1. Total amount of 10 crore is assigned IT Service and Consulting sector companies.

This implies that AUM (Asset under Management) for IT Service and Consulting
sector companies is 10 crores.
2. Different amount has been assigned to the stocks based on their rankings.
3. Then number of shares is calculated by dividing the amount allotted to the stocks
by respective market prices of those stocks as on date 13th April, 2022 as shown
below in table below:

Net Asset Value (NAV) of the portfolio of IT Service and Consulting Sector is determined
by dividing the AUM of the IT Service and Consulting Sector by number of units under
consideration. We have taken the units under as 1 crore. Hence, base NAV of the portfolio
of IT Service and Consulting Sector = 10 crore/ 1 crore = 10. NAV of IT Service and
Consulting Sector on 15th May, 2022 is as follows:

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 Allocation of 100,000,000

10,000,000 DATE: 13th May 2022

No of Shares= asset
Company Name allocation/price Price (Friday) Allocation Friday
₹ 2,406.90 ₹ 5,080,568.95
Mastek 2111
Oracle Fin Serv 1541 ₹ 3,230.70 ₹ 4,979,849.50
Latent View 11089 ₹ 388.50 ₹ 4,307,963.71
₹ 789.35 ₹ 5,001,929.83
Cyient 6337
₹ 1,202.85 ₹ 4,690,471.13
Tech Mahindra 3899
₹ 2,443.70 ₹ 4,405,516.59
Mphasis 1803
₹ 302.20 ₹ 4,641,440.94
Zensar Tech 15359
₹ 357.95 ₹ 4,351,735.19
Birlasoft 12157
₹ 496.65 ₹ 4,775,063.37
KPIT Tech 9615
₹ 1,052.15 ₹ 5,143,387.25
HCL Tech 4888
₹ 1,504.40 ₹ 4,732,035.11
Infosys 3145
₹ 571.70 ₹ 3,443,598.73
Intellect Desig 6023
₹ 3,414.90 ₹ 5,128,947.69
TCS 1502
₹ 3,743.25 ₹ 4,948,056.86
COFORGE LTD. 1322
₹ 654.75 ₹ 4,503,658.08
Sonata 6878
₹ 2,938.95 ₹ 3,943,503.82
Mindtree 1342
Wipro 9835 ₹ 468.65 ₹ 4,609,397.35
₹ 1,034.30 ₹ 4,478,899.30
Affle India 4330
₹ 83,166,023.42

NAV=13-05-2022
8.32

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 7. FUND FACT SHEET

About the Fund Date of Inception: 21st April 2022

OBJECTIVES:
To provide long term wealth maximization by managing equity portfolio comprising of IT
Sector companies’ stocks with good price to earning drive.
STRATEGY:
To develop and manage equity portfolio of IT Sector company stocks by applying fundamental
factors. The given strategy has over performed throughout the index of the IT Sector. The fund
would help identify the companies with strong fundamentals and the future growth. This fund
would help to maintain liquidity.

NAV as on 19th April 2022 Benchmark Index: 1015.66

Asset held on 19th April 2022: ₹ 93,811,186.81 Fund Manager: Deepali Vijay Deokar

ASSET ALLOCATION:

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 Fund Performance

6/5/2022 9/5/2022 10/5/2022 11/5/2022 12/5/2022 13/05/2022

% CHANGE IN NAV -2.31% -1.24% -2.39% -1.64% -0.48% -0.72%

% CHANGE IN INDEX -2.27% -0.36% -0.81% -1.21% -0.57% -0.30%

BENCHMARKING NAV AND INDEX

% CHANGE IN NAV % CHANGE IN INDEX

0.00%
6/5/2022 9/5/2022 10/5/2022 11/5/2022 12/5/2022 13/05/2022

-0.30%
-0.50% -0.36%
-0.48%
-0.57%
-0.72%
-0.81%
-1.00%

-1.24% -1.21%
-1.50%

-1.64%

-2.00%

-2.31-%
2.27%
-2.50% -2.39%

-3.00%

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 8. METHODS RELATED TO FUNDAMENTAL

In the particular project Large Cap Companies were selected on the basis of certain
methods. This project was regarding the fundamental where in queries were added to find
out the companies best fitting to that particular query. Various financial analyst had written
their own queries from which we had performed the Top 5 queries to shortlist the
companies.

The companies selected were the Large Cap Companies with the Market Capitalization of
more than Rs. 7500 crores. After running the query, the Returns received are recorded on
the daily basis to find out which query is the suitable one. The methods were as follows:

1. Method 1 Query

▪ Return on Equity>17% AND

▪ Sales growth>17% AND
▪ EPS Growth>17% AND
▪ Change in FII holdings 1%

Returns as on 13-05-2022:

2. Growth Stock Query

▪ Market Cap> 1000 crore AND

▪ G- factor>= 7

Returns as on 13-05-2022:

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3. Warren Buffet Query

▪ Sales> 250Cr AND

▪ Debt to Equity< 0.3 AND
▪ Interest Coverage Ratio>5 AND
▪ PE Ratio< Industry PE AND
▪ Return on Equity> 15% AND
▪ Dividend Yield> 1 AND
▪ PE Ratio< 20

Returns as on 13-05-2022:

4. Promoter Holding Query

▪ Promoter Holding percentage change Q to Q> 1% AND

▪ Debt to Equity< 0.2 AND
▪ Market Capitalization> 1000Cr

Returns as on 13-05-2022:

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5. Peter Lynch Query

▪ PEG Ratio<1 AND

▪ Sales> 500 AND
▪ Debt to Equity< 0.2 AND
▪ PE Ratio< 40 AND
▪ Profit Growth Q on Q> 20 AND
▪ Price to Cash Flow> 5

Returns as on 13-05-2022:

6. High ROCE Low PE Companies Query

▪ PE TTM Price to Earnings < 15 AND

▪ ROCE Annual 3yr Average % >= 15 AND
▪ Net Profit 2 years growth % >= 20
▪ Net Profit growth YOY % > 0
▪ PE TTM Price to Earnings> 0

Returns as on 13-05-2022:

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7. Multi Bagger Stocks Query

▪ Piotroski score > 6 AND

▪ ROCE > 15 AND
▪ ROE > 15 AND
▪ Current Ratio > 1 AND
▪ Price to Book Value < 3 AND
▪ Y on Y Quarterly Profit Growth > 7% AND
▪ Dividend Yield < 4% AND
▪ Market Cap < 20000

Returns as on 13-05-2022:

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 9. TECHNICAL ANALYSIS

9.1 What is Technical Analysis?

Technical analysis is the examination of past price movements to forecast future price
movements. Technical analysts are sometimes referred to as chartists because they rely
almost exclusively on charts for their analysis.
Technical analysis is applicable to stocks, indices, commodities, futures or any tradable
instrument where the price is influenced by the forces of supply and demand. Price refers
to any combination of the open, high, low or close for a given security over a specific
timeframe. The time frame can be based on intraday (tick, 5-minute, 15-minute or hourly),
daily, weekly or monthly price data and last a few hours or many years. In addition, some
technical analysts include volume or open interest figures with their study of price action.
Technical analysis studies supply and demand in a market in an attempt to determine what
direction, or trend, will continue in the future. In other words, technical analysis attempts
to understand the emotions in the market by studying the market itself, as opposed to its
components. If you understand the benefits and limitations of technical analysis, it can give
you a new set of tools or skills that will enable you to be a better trader or investor.

9.2 What is Chart?

A price chart is a sequence of prices plotted over a specific timeframe. In statistical terms,
charts are referred to as time series plots.

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On the chart, the y-axis (vertical axis) represents the price scale and the x-axis (horizontal
axis) represents the time scale. Prices are plotted from left to right across the x-axis with
the most recent plot being the furthest right. The price plot for Havells India extends from
2017 to 2021. Technicians, technical analysts and chartists use charts to analyze a wide
array of securities and forecast future price movements.
The word "securities" refers to any tradable financial instrument or quantifiable index such
as stocks, bonds, commodities, futures or market indices. Any security with price data over
a period of time can be used to form a chart for analysis. While technical analysts use charts
almost exclusively, the use of charts is not limited to just technical analysis. Because charts
provide an easy-to-read graphical representation of a security's price movement over a
specific period of time, they can also be of great benefit to fundamental analysts.
A graphical historical record makes it easy to spot the effect of key events on a security's
price, its performance over a period of time and whether it's trading near its highs, near its
lows, or in between.

9.4 Types of Technical Analysis

1. Long Term: In long term analysis we try to find out different trend patterns and also to
find the current trend in that stock. It is done because an investor doesn’t conceive any loss
while trading. Long term analysis is up to 5 years.

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2. Short Term: In short term analysis we try to different neutral candlestick. It is done
because to find if a neutral candlestick is useful or it is not useful. When there is reversal
in neutral candle stick then it useful and if not, it is useless. Short term analysis is less than
one year.

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 10. LONG TERM CHART PATTERNS FOR TECHNICAL ANALYSIS

10.1 Long Term Technical Analysis in IT Services and Consulting Sector

1. Bump and Run Reversal:

2. Double Top (Reversal):

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3. Double Bottom (Reversal):

4. Head and Shoulder:

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5. Reverse Head and Shoulder:

6. Rounding Bottom:

7. Cup with Handle:

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 11. MEDIUM TERM CHART PATTERNS FOR TECHNICAL ANALYSIS

11.1 Types of Medium-Term Chart Patterns

1. Flag and Pennant:

2. Symmetrical Triangle:

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3. Ascending Triangle:

4. Descending Triangle:

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5. Price Channel:

6. Rectangle:

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 12. SHORT TERM CHART PATTERNS FOR TECHNICAL ANALYSIS

12.1 Types of Short-Term Chart Patterns

Candle Sticks:

▪ Candlestick charts are used by traders to determine possible price movement based
on past patterns.
▪ Candlesticks are useful when trading as they show four price points (open, close,
high, and low) throughout the period of time the trader specifies.
▪ Many algorithms are based on the same price information shown in candlestick
charts.
▪ Trading is often dictated by emotion, which can be read in candlestick charts.

1. Doji Candle:

2. Hammer Candle:

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3. Inverted Hammer:

4. Hanging Man Candle:

5. Shooting Star Candle:

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6. Bullish Engulfing (Bull-180):

7. Bearish Engulfing (Bear-180):

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 13. OPTIONS

Introduction to Options: An Option is a contract that gives the right, but not an obligation,
to buy or sell the underlying asset on or before a stated date/day, at a stated price, for a
price. The party taking a long position i.e. buying the option is called buyer/ holder of the
option and the party taking a short position i.e. selling the option is called the seller/ writer
of the option.
The option buyer has the right but no obligation with regards to buying or selling the
underlying asset, while the option writer has the obligation in the contract. Therefore,
option buyer/ holder will exercise his option only when the situation is favorable to him,
but, when he decides to exercise, option writer would be legally bound to honor the
contract. Options may be categorized into two main types: ‐

▪ Call Options & Put Options

Option, which gives buyer a right to buy the underlying asset, is called Call option and the
option which gives buyer a right to sell the underlying asset, is called Put option.
Expiration Day: The day on which a derivative contract ceases to exist. It is the last trading
date/day of the contract. Like in case of futures, option contracts also expire on the last
Thursday of the expiry month (or, on the previous trading day, if the last Thursday is a
trading holiday). (Please note that Weekly Options expire on Thursday of each week.
Weekly Options are the Exchange Traded Options based on a Stock or an Index with shorter
maturity of one or more weeks. If the expiry day of the Weekly Options falls on a trading
Holiday, then the expiry will be on the previous trading day.)
Spot price (S): It is the price at which the underlying asset trades in the spot market. In
our examples, it is the value of underlying viz. 10154.20.
Strike price or Exercise price (X): Strike price is the price per share for which the
underlying security may be purchased or sold by the option holder. In our examples, strike
price for both call and put options is 10000.
In the money (ITM) option: This option would give holder a positive cash flow, if it were
exercised immediately. A call option is said to be ITM, when spot price is higher than strike
price. And, a put option is said to be ITM when spot price is lower than strike price. In our
examples, call option is in the money.
At the money (ATM) option: At the money option would lead to zero cash flow if it were
exercised immediately. Therefore, for both call and put ATM options, strike price is equal
to spot price.
Out of the money (OTM) option: Out of the money option is one with strike price worse
than the spot price for the holder of option. In other words, this option would give the holder
a negative cash flow if it were exercised immediately. A call option is said to be OTM,
when spot price is lower than strike price. And a put option is said to be OTM when spot
price is higher than strike price. In our examples, put option is out of the money.

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Options Trading Strategies:
1. Straddle:
This strategy involves two options of same strike prices and same maturity. A long straddle
position is created by buying a call and a put option of same strike and same expiry whereas
a short straddle is created by shorting a call and a put option of same strike and same expiry.
Let us say a stock is trading at Rs 6,000 and premiums for ATM call and put options are
257 and 136 respectively.
Long Straddle:
If a person buys both a call and a put at these prices, then his maximum loss will be equal
to the sum of these two premiums paid, which is equal to 393. And, price movement from
here in either direction would first result in that person recovering his premium and then
making profit. This position is undertaken when trader’s view on price of the underlying is
uncertain but he thinks that in whatever direction the market moves, it would move
significantly in that direction.
As the stock price keeps moving up, loss on long put position is limited to premium paid,
whereas profit on long call position keeps increasing.

Short Straddle:
Short Straddle This would be the exact opposite of long straddle. Here, trader’s view is that
the price of underlying would not move much or remain stable. So, he sells a call and a put
so that he can profit from the premiums. As position of short straddle is just opposite of
long straddle, the pay- off chart would be just inverted.
Example of Straddle:

The profit that was booked in this strategy was Rs. 1600/-

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2. Strangle:
Strangle This strategy is similar to straddle in outlook but different in implementation,
aggression and cost.
Long Strangle:
As in case of straddle, the outlook here (for the long strangle position) is that the market
will move substantially in either direction, but while in straddle, both options have same
strike price, in case of a strangle, the strikes are different.
Also, both the options (call and put) in this case are out‐of‐the‐money and hence the
premium paid is low.
Short Strangle

This is exactly opposite to the long strangle with two out‐of‐the‐money options (call and
put) shorted. Outlook, like short straddle, is that market will remain stable over the life of
options. Pay offs for this position will be exactly opposite to that of a long strangle position.

The profit booked was Rs. 1793.75/-

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3. Covered Call:
This strategy is used to generate extra income from existing holdings in the cash market.
If an investor has bought shares and intends to hold them for some time, then he would like
to earn some income on that asset, without selling it, thereby reducing his cost of
acquisition. So how does an investor continue to hold on to the stock, earn income and
reduce acquisition cost?
The most important factor in this strategy is the strike of the sold call option. If strike is
close to the prevailing price of underlying stock, it would fetch higher premium upfront
but would lock the potential gain from the stock early. And, if strike is too far from the
current price of underlying, while it would fetch low upfront premium, would provide for
longer ride of money on underlying stock. One has to decide on this subject based on one’s
view on the stock and choice between upfront premium from the option and potential gain
from underlying.
The stock on which it was performed was ITC:

A position in the Stock of ITC was hold for Covered Call which gave a profit of Rs. 2400/-

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4. Iron Condor Strategy:
This strategy consists of two Puts one long and other short and two call options one long
other short with four strike prices and all having same expiry date. This strategy has a
probability of 91%.
Example of the Strategy Performed:

There was a profit earned in this strategy which was of Rs. 710/-

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5. Calendar Spread:
This strategy consist wherein simultaneously we have to enter into the long and the short
position in the underlying asset with different delivery dates.
Example of Calendar Spread Strategy Performed:

The position is ongoing with a profit of Rs. 2611.25/-

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6. Vertical Spread
A vertical spread is an options strategy that involves buying a call and selling a put and
simultaneously selling another call and buying a put at a different strike price, but with the
same expiration.

Breakout Carried out in the stock of Hero Motor Corp:

This is ongoing with a profit of Rs. 180/-

Breakdown Carried out in the stock of Voltas:

This gave a Profit of Rs. 900/-

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 14. BACKTESTING

Back testing assesses the viability of a trading strategy or pricing model by discovering how it
would have played out retrospectively using historical data.

The underlying theory is that any strategy that worked well in the past is likely to work well in the
future, and conversely, any strategy that performed poorly in the past is likely to perform poorly
in the future.

When testing an idea on historical data, it is beneficial to reserve a time period of historical data
for testing purposes. If it is successful, testing it on alternate time periods or out-of-sample data
can help confirm its potential viability.

INFOSYS

From the above results the best Indicator was Fibonacci Indicator.

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 15. CONCLUSION

Fundamental and technical analysis are extremely important in making sound investment
decisions. The individual portfolio can provide systematic returns after assessing your risk
capacity and tolerance, as well as your time horizon and investment objective.
One such method for value analysis is the relative valuation model. Long and short-term options
are available. To determine a confirm trade signal, use technical and fundamental analysis.
Calculating the long-term target price investors can make the most money while also determining
how long they should invest and continue to own the stock.
The NAV of various companies gives an insight of how the NAV is computed and how the NAV
is calculated. The performance of the portfolio should be compared to the market benchmark. If
NAV is outperforming in the market it shows that the selected portfolio is fruitful.

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 16. REFERENCE

 https://www.moneycontrol.com/stocks/marketinfo/marketcap/nse/it-servicesconsulting.html
 https://www.ibef.org/industry/information-technology-india
 https://www.ibef.org/industry/insurance-sector-india
 What is Technical Analysis? PDF
 https://www.hdfclife.com/about-us
 https://in.tradingview.com/chart/dtlTGkty/
 https://opstra.definedge.com/strategy-builder
 https://papertrade.sensibull.com/home

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