stock market final & new
TRANSCRIPT
INDUSTRY PROFILE
Stock MarketA stock market or equity market is a public entity. Stock market is a loose network of economic
transaction not a physical facility or discrete entity for the trading of company stock and
derivatives at an agreed price. These are securities listed on stock as well as those only traded
privately.
The size of the world stock market was estimated at about $36.6 trillion at the beginning of
October 2008.The total world derivatives market has been estimated at about $791 trillion face
or nominal value, 11 times the size of the entire world economy. The value of the derivatives
market, because it is stated in terms of notional values, cannot be directly compared to a stock or
a fixed income security, which traditionally refers to an actual value. Moreover, the vast majority
of derivatives 'cancel' each other out (i.e., a derivative 'bet' on an event occurring is offset by a
comparable derivative 'bet' on the event not occurring). Many such relatively illiquid securities
are valued as marked to model, rather than an actual market price.
The stocks are listed and traded on stock exchanges which are entities of a corporation or mutual
organization specialized in the business of bringing buyers and sellers of the organizations to a
listing of stocks and securities together.
Market Participants
Market participants include individual retail investors, institutional investors such as mutual
funds, banks, insurance companies and hedge funds, and also publicly traded corporations
trading in their own shares. Some studies have suggested that institutional investors and
corporations trading in their own shares generally receive higher risk-adjusted returns than retail
investors.
The rise of the institutional investor has brought with it some improvements in market
operations. There has been a gradual tendency for "fixed" (and exorbitant) fees being reduced for
all investors, partly from falling administration costs but also assisted by large institutions
challenging brokers' oligopolistic approach to setting standardized fees.
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The Bombay Stock Exchange
History
Established in 1875, the Bombay Stock Exchange is Asia's first stock exchange. In 12th century
France the courtiers de change was concerned with managing and regulating the debts of
agricultural communities on behalf of the banks. Because these men also traded with debts, they
could be called the first brokers. A common misbelief is that in late 13th
century Bruges commodity traders gathered inside the house of a man called Van der Beurze,
and in 1409 they became the "BrugseBeurse", institutionalizing what had been, until then, an
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informal meeting, but actually, the family Van der Beurze had a building in Antwerp where
those gatherings occurred; the Van der Beurze had Antwerp, as most of the merchants of that
period, as their primary place for trading. The idea quickly spread around Flanders and
neighboring counties and "Beurzen" soon opened in Ghent and Rotterdam.
In the middle of the 13th century, Venetian bankers began to trade in government securities. In
1351 the Venetian government outlawed spreading rumors intended to lower the price of
government funds. Bankers in Pisa, Verona, Genoa and Florence also began trading in
government securities during the 14th century. This was only possible because these were
independent city states not ruled by a duke but a council of influential citizens. Italian companies
were also the first to issue shares. Companies in England and the Low Countries followed in the
16th century.
The Dutch East India Company (founded in 1602) was the first joint-stock company to get a
fixed capital stock and as a result, continuous trade in company stock occurred on the
Amsterdam Exchange. Soon thereafter, a lively trade in various derivatives, among which
options and repos, emerged on the Amsterdam market. Dutch traders also pioneered short - a
practice which was banned by the Dutch authorities as early as 1610.
There are now stock markets in virtually every developed and most developing economies, with
the world's largest markets being in the United States, United Kingdom, Japan, India,
China, Canada, Germany (Frankfurt Stock Exchange), France, South Korea and the Netherlands.
Function and purpose of stock market
The main trading room of the Tokyo, where trading is currently completed through computers.
The stock market is one of the most important sources for companies to raise money. This allows
businesses to be publicly traded, or raise additional financial capital for expansion by selling
shares of ownership of the company in a public market. The liquidity that an exchange affords
the investors gives them the ability to quickly and easily sell securities. This is an attractive
feature of investing in stocks, compared to other less liquid investments. Some companies
actively increase liquidity by trading in their own shares. History has shown that the price
of shares and other assets is an important part of the dynamics of economic activity, and can
influence or be an indicator of social mood. An economy where the stock market is on the rise is
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considered to be an up-and-coming economy. In fact, the stock market is often considered the
primary indicator of a country's economic strength and development.
Rising share prices, for instance, tend to be associated with increased business investment and
vice versa. Share prices also affect the wealth of households and their consumption.
Therefore, central banks tend to keep an eye on the control and behavior of the stock market and,
in general, on the smooth operation of financial system functions. Financial stability is the raison
d'être of central banks.
Exchanges also act as the clearinghouse for each transaction, meaning that they collect and
deliver the shares, and guarantee payment to the seller of a security. This eliminates the risk to an
individual buyer or seller that the counterparty could default on the transaction.
The smooth functioning of all these activities facilitates economic growth in that lower costs and
enterprise risks promote the production of goods and services as well as possibly employment. In
this way the financial system is assumed to contribute to increased prosperity.
Relation of the stock market to the modern financial system
The financial system in most western countries has undergone a remarkable transformation. One
feature of this development is disintermediation. A portion of the funds involved in saving and
financing, flows directly to the financial markets instead of being routed via the traditional bank
lending and deposit operations. The general public interest in investing in the stock market,
either directly or through mutual funds, has been an important component of this process.
Statistics show that in recent decades shares have made up an increasingly large proportion of
households' financial assets in many countries. In the 1970s, in Sweden, deposit accounts and
other very liquid assets with little risk made up almost 60 percent of households' financial
wealth, compared to less than 20 percent in the 2000s. The major part of this adjustment is
that financial portfolios have gone directly to shares but a good deal now takes the form of
various kinds of institutional investment for groups of individuals, e.g., pension funds, mutual
funds, hedge funds, insurance investment of premiums, etc.
The trend towards forms of saving with a higher risk has been accentuated by new rules for most
funds and insurance, permitting a higher proportion of shares to bonds. Similar tendencies are to
be found in other industrialized countries. In all developed economic systems, such as the
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European Union, the United States, Japan and other developed nations, the trend has been the
same: saving has moved away from traditional (government insured) bank deposits to more risky
securities of one sort or another.
Behavior of the stock market
From experience it is known that investors may 'temporarily' move financial prices away from
their long term aggregate price 'trends'. (Positive or up trends are referred to as bull markets;
negative or down trends are referred to as bear markets). Over-reactions may occur so that
excessive optimism (euphoria) may drive prices unduly high or excessive pessimism may drive
prices unduly low. Economists continue to debate whether financial markets are 'generally'
efficient.
According to one interpretation of the efficient-market hypothesis (EMH), only changes in
fundamental factors, such as the outlook for margins, profits or dividends, ought to affect share
prices beyond the short term, where random 'noise' in the system may prevail. (But this largely
theoretic academic viewpoint known as 'hard' EMH also predicts that little or no trading should
take place, contrary to fact, since prices are already at or near equilibrium, having priced in all
public knowledge.) The 'hard' efficient-market hypothesis is sorely tested and does not explain
the cause of events such as the stock market crash in 1987, when the Dow Jones
index plummeted 22.6 percent the largest-ever one-day fall in the United States.
This event demonstrated that share prices can fall dramatically even though, to this day, it is
impossible to fix a generally agreed upon definite cause: a thorough search failed to
detect any 'reasonable' development that might have accounted for the crash. (But note that such
events are predicted to occur strictly by chance, although very rarely.) It seems also to be the
case more generally that many price movements (beyond that which are predicted to occur
'randomly') are not occasioned by new information; a study of the fifty largest one-day share
price movements in the United States in the post-war period seems to confirm this.
Another phenomenon also from psychology that works against an objective assessment is group
thinking. As social animals, it is not easy to stick to an opinion that differs markedly from that of
a majority of the group. An example with which one may be familiar is the reluctance to enter a
restaurant that is empty; people generally prefer to have their opinion validated by those of
others in the group.
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COMPANY PROFILE
Introduction
An evolving, emerging & enterprising group with its roots in the financial services sector and
today expanding into newer horizons with great passion.
The vision of the group is to be leaders in businesses driven by customer satisfaction,
commitment to excellence and passion for continued value creation for all stakeholders. This
vision has helped us grow and build the trust of our customers and associates which is at the
cornerstone of everything we do. Trust is also at the heart of our success and the driver for
passion for our success.
Work Philosophy
Driven by passion, we continue to evolve and make the right product accessions and service
innovations in our offerings. Over the years, our passion has seen us grow from strength to
strength and expand rapidly, setting new benchmarks in the process. But to us, what really
matters the most is winning the trust of our customers.
Our Businesses
1) Asset Management
2) Real Estate
3) Insurance Broking
4) Global Wealth Advisory
Asset Management
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Ravi Investor has ventured in asset management business with his advisory services. The
Advisory Services is the idea to provide customers with solutions that give them the freedom
from active management of investments while having an assurance that we would be doing so in
the best possible manner. Our conviction, matched by our passion and expertise, is all about
ensuring the peace of mind of the investor. The PMS products currently offered are aimed at
meeting investor's need for successful long-term wealth creation by following strategies that
control risk and optimize returns in a mutual fund portfolio. The advisory Services leverages
upon with its rich experience in portfolio management with in-depth knowledge & expertise in
mutual funds. The decisions on the mutual fund portfolio also combine results of time tested
proprietary research models, extensive due-diligence of fund houses, interactions with fund
managers & internal risk controls. The defined processes and smart use of technology further
ensures that the investors are offered with quality portfolio management and administrative
services, ensuring a complete peace of mind.
Real Estate
The Ravi Investors offers an integrated service model offering end-to-end services to various
stake-holders in realty program management & execution. The idea is to associate with
stakeholders and engage actively in various stages of program management, viz. market survey,
and legal due diligence, land acquisition, planning & execution of projects and managing sales &
distribution through the company wealth advisory network. Managing realty programs is a
lengthy process replete with many challenges right from program identification to marketing. As
a developer, investor or land owner, one may be keen to execute realty projects, but may not be
equipped with the right skill-sets, contacts, experience and/or know-how for the undertaking.
This is where the company can associate and help in shaping up the realty programs.
Insurance Broking:
The insurance broking seeks to provide customers with comprehensive solutions catering to their
insurance needs. It is a strong vision for continued financial well-being for customers like
individuals & families, regardless of any circumstances. The company key to offer right advice
which is unbiased & customer centric & encompasses the right risk to insure, the right coverage,
the right product & at the right time. The idea to offer clients with comprehensive solutions
extends further to cover quality claim settlement & other services.
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Global Wealth Advisory:
Global wealth seeks to offer a Global Wealth Advisory platform to advisors for offshore funds
across the globe. The vision at Global Wealth Advisory platform is to offer a single window for
investment opportunities across the globe to customers. The idea is to bring to customers a wide
range of offshore fund schemes through advisors on the Global Wealth Advisory platform. The
company seeks to provide an offshore fund distribution platform & offshore Portfolio Advisory
services under a B2B distribution model. It also desires to offer comprehensive order routing and
trade settlement facility with support services of client reporting & fees settlement.
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THEORETICAL ASPECTS OF THE TOPIC
Currency Depreciation
Currency depreciation is the loss of value of a country's currency with respect to one or more
foreign reference currencies, typically in a floating exchange rate system. It is most often used
for the unofficial increase of the exchange rate due to market forces, though sometimes it appears
interchangeably with devaluation. Its opposite, an increase of value of a currency, is currency
appreciation.
The depreciation of a country's currency refers to a decrease in the value of that country's
currency.
For E.g.: when the Indian Rupee depreciates relative to US Dollar, the exchange rate of US
Dollar is rises, which takes more Indian Rupee to purchase 1 dollar
(1 INR = 55 US $ - 57 US $)
When the INR depreciates relative to US dollar, the Indian Rupee becomes more competitive
because the price of Indian goods when exchanged to US dollar will be cheaper leading to a
larger Indian exports. On the other hand, US Countries that denominated in dollars will thus
become more expensive in India.
The appreciation of a country's currency refers to an increase in the value of that country's
currency.
Continuing with the INR & US Dollar example: If the Indian Rupee appreciates relative to US
dollar the exchange rate falls. It takes fever Indian Rupee to purchase 1 dollar (1US dollar = 59
INR- 56 INR). When the Indian rupee appreciates to US dollar, the Indian Rupee will become
less competitive. This will leads to larger import of US products & services & lower export of
Indian goods & services.
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Let us see the depreciation or appreciation of Rupee on Indians living in India.
Here I am assuming that initially the exchange rate of US$ - INR is Rs: 55
Effects on importers If Rupee depreciates
(For e.g.: when US$ - INR moves from Rs: 55 to Rs: 60) If Rupee appreciates
(For e.g.: when US$ - INR moves from Rs: 55 to Rs: 52)
Imports become costly as for each US$ we have to pay Rs: 5 more & the imports of goods &
services will become more & more costly. Imports become cheaper as for each US$ we have
to pay Rs: 3 less & the imports of goods & services will be cheaper.
Exporters will have higher revenue. For export of each dollar the exporter will get Rs: 5 more.
The exporters will buy more goods & service & also he will earn more. Exporter will earn
lower revenue. For export of each dollar he will get Rs: 3 less. The exporters will buy fewer
goods & service & he will also earn less.
Indians who wish to go on Holidays Abroad For each dollar taken abroad for spending, the
traveller has to pay Rs: 5 more & thus his trip become costlier. For each dollar he intends to
take abroad for spending, the traveller has to pay Rs: 3 less & thus his trip will become cheaper
Reasons for Depreciation
1. Political Environment of the country
2. Retrospective taxation
3. Inability to pass any policy reforms & others clouds surrounding the Indian Economy.
4. Loss of confidence of investors
5. Money flowing out of Indian equities.
The major causes of depreciation are:
Withdrawals of FII’s
strengthening of dollar
weaker capital markets
Other capital flows
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Political uncertainty & corruption
Demand supply rule
Fiscal deficit
Oil Prices
Eurozone crises
Rise in gold prices
Impact of Rupee depreciation on Indians
Exporters are the biggest beneficiaries
NRIs become richer
Tourism industry will flourish as the holidays in India will get cheaper
Imports will become expensive
Oil prices will rises
Rise in inflation
Poor returns on FII’s
Difficulty in repayment of loans
Foreign education will become expensive
Foreign holidays will become expensive
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LITERATURE REVIEW
1) A study of influence of FII flows on Indian stock Market
BY: Anubha Shrivastav on GYANPRATHA – ACCMAN Journal of Management,
VOLUME 5, and Issue 1
Since Indian stock market is vast and attract investors as a hotspot of investment .The
Indian market is steadily growing and had allured domestic investor’s community and
foreign investors group in the past .the major part of investment in Indian market is
attributed to institutional investors among whom foreign investors are of primary
importance. One eminent concern in the matter is whether these foreign investors (FII)
direct the Indian stock market .This paper examines whether market movement can be
explained by these investors and their impact on the stock markets. FII, because of its
short-term nature, can have bidirectional causation with the returns of other domestic
financial markets such as money markets, stock markets, and foreign exchange markets.
Hence, understanding the determinants of FII is very important for any emerging
economy as FII exerts a larger impact on the domestic financial markets in the short run
and a real impact in the long run. The present paper is an attempt to find out determinants
of foreign institutional investment in India, a country that opened its economy to foreign
capital following a foreign exchange crisis. The objective of the study is to find out
whether there exist relationship between FII and Indian stock market.
2) Determinants of Exchange rate in India
BY: Mita H. Suthar, H.L. Institute of Commerce April 21, 2008
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Appreciation or depreciation of the domestic currency depends on the supply of foreign
exchange reserves, liquidity conditions in the economy as determined by money supply,
central bank's policy intentions and differences in the interest yield on dated securities of
the concerned economies. The present research tests validity of this hypothesis in
association with the exchange rate between the Indian rupee and the US dollar. In
particular, an attempt is made to investigate the impact of bank rate policy of the Reserve
Bank of India (RBI) and interest yield differentials between the India and the US
securities. Impact of broad money supply and foreign exchange reserves is also analyzed.
A monthly time series from April 1996 to June 2007 is used for the purpose. It is
observed that the monetary policy intentions depicted by the bank rate of the RBI, the
short-term and long-term domestic interest differentials and interest yield differentials,
and the rate of change of foreign exchange reserves have a significant impact on the
monthly average of the exchange rate between Indian rupee and the US dollar and quite
in line with the economic theory.
3) Determinants of Foreign Institutional Investors Investment in India
By: Manjinder KAUR, Sharanjit S. DHILLON
The present study aims at exploring the determinants of Foreign Institutional Investors’
(FIIs) investment in India. Returns on Indian stock market have positive Impact whereas
US stock market returns have no significant influence on FIIs Investment to India. Stock
market risk has negative influence on FIIs inflows to India. Market capitalization and
stock market turnover of India have significant Positive influence only in short-run.
Among macroeconomic determinants, economic Growth of India has positive impact on
FIIs investment both in long-run and short run. But all other macroeconomic factors have
significant influence only in long-run like inflation in US has positive influence whereas
inflation in India has negative Influence on FIIs investment. Further, US interest rate has
adverse impact on FIIs Investment while liberalization policies of India exhibited
significant contribution to FIIs inflows. Study concludes that FIIs inflows in India are
determined by both stock Market characteristics and macroeconomic factors.
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RESEARCH METHODOLOGY
About the Topic:
My topic of SIP is Impact of Rupee Depreciation on Indian Stock Market.
Objective of Study:
The topic of my study was to find out the impact what happens to Indian stock market when the
rupee depreciates. This will help me to identify what is the real effect happens to Indian Stock
market when the rupee falls. Use of the correlation & Regression technique to find out what is
the impact on the stock market when rupee depreciates.
Importance of Study:
1. The importance of the study will help me to find out what problems will create to the
working of the Indian Companies when the Rupee depreciates.
2. The study will help to know the current position of the companies working.
3. It will help to know how the company will operate in the future as due to continuously
decreasing of rupee & how the company will carry on their business in the future, so that
the company can overcome from the effect of Rupee depreciation.
Benefit of the study:
1. The benefit from the study will be identifying what effect creates on the working of the
company when the rupee depreciates.
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2. It helps me to see & identify the performance of the company of last 4 & 5 years as the
rupee depreciates.
3. It will give a better idea that whether the company efficiency or performance is decreased
or gone up as the rupee depreciates.
4. It will also help me to identify the impact it creates to the stock market when the rupee
depreciates.
5. It will also help me to find out whether there is a positive relation or negative relation to
the Sensex when the rupee depreciates.
6. It will also help me to find out how the rupee depreciates effect on the top 30 companies
in terms of market capital will affect who are doing business nationally or internationally.
7. The data is taken on daily basis which will give more accurate performance of the
exchange rate correlation & the companies.
Research Design
My research design use for this project is “Exploratory Research Design”. The reason for
choosing the exploratory research design is that my topic is “impact of rupee depreciation on
Indian stock market. Here on this topic I am already explaining the problem that when the rupee
depreciates there is problem which occurs to the Indian stock market.
Data Collection Technique:
The data which will be used to do my study will be secondary data. Secondary data will be used
in the sense that it will see the last 5 years price of exchange rate of INR v/s US Dollar, British
Pound, Japanese Yen, and European Euro. To know the impact of rupee depreciation the Karl
Pearson coefficient correlation & Regression analysis have been used. It would show that
whether the impact is positive or negative and how much the Indian Stock market would vary
with respect to FII. For the Purpose of Calculation MS –Excel software have been utilized. Here
also the company financials report will be seen to know that the impact on the performance of
the companies in the stock market when rupee depreciates
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Sample Design:
The sample design will be of 30 companies who are listed on the Sensex. And also the exchange
rate price of G5 countries to identify & know the impact on the Indian stock market.
Data Collection Tools:
1. Exchange Rate Data of last 4-5 years
2. BSE Sensex data of last 4-5 years
3. Correlation Analysis of the companies with the exchange rate
4. Regression analysis to find the impact of Exchange rate with BSE Sensex
Limitations of the study:
The project has been prepared in two months, so due to time limitation depth analysis of
such a wide concept may contain some lacuna. In this report impact of rupee depreciation
on the stock market has been analyzed considering only BSE Sensex. But only this
cannot depict exact picture or impact of the stock market.
The secondary data that I have used in this study may not give true picture of the concern.
Adequate data is not available for study.
Only Correlation and Regression analysis of Exchange rate & BSE Sensex has been
taken which might not give the real impact on it.
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ANALYSIS OF DATA
Rupee Depreciation effect on Indian Stock Market
Now let see the effect of the G5 countries in the Indian Stock Market. The G5 countries which I
have taken are:
Name of the Country Currency
United States of America US Dollar
Germany European Euro
Japan Japanese Yen
France European Euro
United Kingdom British Pound
Of the currency exchange rate for 5 years and along with the daily price of Sensex.
The correlation & Regression Analysis of Exchange rate of 5 countries with the BSE Sensex
is given below:
Correlation With SensexUS Dollar -0.034539978British Pound -0.05294473European Euro -0.122415562Japanese Yen 0.307330171
The above table shows that there is a negative correlation of the BSE Sensex with the US Dollar,
British Pound & European Euro and there is a positive correlation of BSE Sensex with Japanese
Yen of 30%.
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Regression Analysis of Exchange rate with BSE Sensex
US Dollar regression analysis with BSE Sensex
H0: there is a significant correlation between the US Dollar exchange rate & BSE Sensex
H1: There is no significant correlation between the US Dollar exchange rate & BSE
Sensex
ANOVAdf SS MS F Significance F
Regression 1 12784095.92 12784096 1.576965 0.209442455Residual 1202 9744340520 8106772Total 1203 9757124616
CoefficientsStandard
Error t Stat P-value Lower 95% Upper 95%Lower 95.0%
Upper 95.0%
Intercept 17509.9379 951.194 18.41 7E-67 15643.75 19376.1 15643.75 1937654.7773 -25.03898913 19.9391 -1.256 0.209 -64.15832 14.0803 -64.15832 14.08
The adjusted R- square comes to 0.04% which shows that there is no significant correlation
between the exchange rate & the BSE Sensex.
British Pound regression analysis with BSE Sensex
H0: There is a significant correlation between the British Pound exchange rate & the BSE
Sensex
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Regression StatisticsMultiple R 0.036197126R Square 0.001310232Adjusted R Square 0.000479375Standard Error 2847.239449Observations 1204
H1: there is no significant correlation between the British Pound exchange rate & the
BSE Sensex
Regression StatisticsMultiple R 0.054796R Square 0.003003Adjusted R Square 0.002173Standard Error 2844.826Observations 1204
ANOVAdf SS MS F Significance F
Regression 1 29297097 29297097 3.620039 0.0573263Residual 1202 9727827519 8093035Total 1203 9757124616
CoefficientsStandard
Error t Stat P-value Lower 95% Upper 95%Lower 95.0%
Upper 95.0%
Intercept 18374 1082.52915 16.9729 4.38E-58 16249.799 20497.51 16249.8 20497.5188.5092 -26.597 13.9792593 -1.90264 0.057326 -54.02396 0.828965 -54.024 0.828965
The Adjusted R- square comes to 0.21% which shows that there is no significant correlation
between the British Pound exchange rate & BSE Sensex.
Regression Analysis of European Euro V/S BSE Sensex
H0: There is a significant correlation between the European Euro exchange rate and the
BSE Sensex
H1: There is not a significant correlation between the European Euro exchange rate & the
BSE Sensex
Regression Statistics
Multiple R 0.124375718R Square 0.015469319Adjusted R Square 0.014650242Standard Error 2826.983797Observations 1204
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ANOVAdf SS MS F Significance F
Regression 1 150936074.5 150936075 18.88628 1.5E-05Residual 1202 9606188542 7991837.4Total 1203 9757124616
CoefficientsStandard
Error t Stat P-value Lower 95% Upper 95%Lower 95.0%
Upper 95.0%
Intercept 22362 1392.81 16.0556 1.05E-52 19629.85958 25095.08 19629.86 25095.0872.2605 -92.912 21.3795 -4.34583 1.5E-05 -134.8570202 -50.9665 -134.857 -50.9665
The Adjusted R – Square find out is 1.465% which proves that there is no significant correlation
with the exchange rate of European Euro & BSE Sensex.
Regression Analysis with the Japanese Yen & BSE Sensex
H0: There is a significant relation with the Japanese Yen exchange rate & BSE Sensex
H1: There is no significant relation with the Japanese Yen exchange rate & BSE Sensex
Regression StatisticsMultiple R 0.30669R Square 0.09406Adjusted R Square 0.09331Standard Error 2711.81Observations 1204
ANOVAdf SS MS F Significance F
Regression 1 917745009.6 9.18E+08 124.7972 1.23E-27Residual 1202 8839379607 7353893Total 1203 9757124616
Coefficients Standard Error t Stat P-value Lower Upper 95% Lower Upper
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95% 95.0% 95.0%Intercept 11085.9 475.0018283 23.339 1E-99 10153.93 12017.78 10153.93 12017.78
63.66 96.2204 8.613202598 11.171 1.2E-27 79.32179 113.119 79.32179 113.119
The Adjusted R-Square comes to 9.33% which shows that there is little correlation between the
exchange rate of Japanese Yen & the BSE Sensex of
The Factors which leads to moving of the Sensex price is:
1) The inflow and outflow of the Foreign Institutional Investor on Equity and Debt
2) The working of the top 30 companies on the Sensex
1) The inflow & outflow of FII:
Foreign Institutional Investor means an investor or investment fund that is from or
registered in a country outside of the one in which it is currently investing. Institutional
investors include hedge funds, insurance companies, pension funds and mutual funds.
Year FII Equity (Rs: in Crore) FII Outflow (Rs: in Crore)
2008-09 -47706.2 -1895.2
2009-10 11021.88 32437.7
2010-11 700759.5 36317.3
2011-12 54570.9 49987.9
2012-13 139408.1 21745.8
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2008-09 2009-10 2010-11 2011-12 2012-13-100000
0
100000
200000
300000
400000
500000
600000
700000
800000
11021.88
700759.5
54570.9
139408.1
-1895.2
32437.7 36317.3 49987.9 21745.8
FII EquityFII Debt
From the diagram it is clear that in year 2008-09 the outflow was very high and the
inflow is very low as comparing to the others year’s data of inflow and outflow of FII.
The year 2008-09 was a year where the biggest recession came on January 21, 2008
where the America’s biggest bank of Lehman Brothers was felt bankrupt which a major
panic is broke out on the interbank loan market. Due to this recession in the USA which
leads to Investors to withdraw their money which they have invested in the Indian Stock
market to fight & survive on this panic recession of year 2008. After wards in the later
years the US economy was come on the path of stabilizing then the again in the later
years the FII again started on investing in the Indian Stock Market. This can be see that in
the above chart that in the year in FII equity there is a huge inflow & less outflow. This
trend is continuously we can see that inflow is increases in the Indian stock market &
outflow is decreases from the Indian stock market.
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Thus the above diagram tells us that there is a huge inflow of FII & less outflow of FII
which leads to increase the daily price of Sensex index.
2. The top 30 companies working in the Sensex
A) Bajaj Auto
Let us see the Bajaj Company working performance, so that whether there is a positive
impact or negative impact in the working of the company.
EPS: EPS stand for Earning per Share it is a portion of a company’s profit which
is allocated to each outstanding share of common stock.
Year Earnings Per Share
2008-09 37
2009-10 55.2
2010-11 119.4
2011-12 105.2
2008-09 2009-10 2010-11 2011-120
20
40
60
80
100
120
37
55.2
119.4
105.2
23
It explains that the company faster its earnings & it grows very fast, & it also
helps to faster its stock price increases & it can go higher on its working. As from
the graph we can easily see that in the year 2008-09 the company EPS was Rs: 37
but afterwards its gone on increase only till 2010-11 where its reached to 119.4
but again in the year 2011-12 it falls to 105.2 but again the companies earning per
share is gone increasing only.
Company Performance with the Exchange rate:
Correlation with Bajaj AutoUS $ 0.53785441Pound 0.196639423Euro 0.252496986Yen 0.832873594
From the graph it is found that there is positive correlation or the impact on the
exchange rate performance with the company share price. It is found that with
US$ there is a 53% impact on the performance of the company. While there is a
19% impact of pound into company performance & 25% performance of impact
in Euro & maximum impact of 83% of Yen to the working of the company.
ROCE: Return on Capital Employed is used to prove the value the business gains
from its assets & liabilities.
24
2008-09 2009-10 2010-11 2011-12ROCE 31.06 61.15 68.39 67.2
2008-09 2009-10 2010-11 2011-120
10
20
30
40
50
60
70
80
31.06
61.15
68.39 67.2
ROCE
ROCE
ROCE explained that how much return company gets on its capital employed.
While we see the graph the ROCE of the company is continuously going on
increase only. This shows that company is getting higher return on the capital
employed.
FII Inflow & Outflow: The FII inflow will be seen from the share holding
pattern of the company of the last 5 years.
From the
chart we
come to
know that
the FII
investment on the company capital is continuously going increasing only. This chart will help us
to know that the company inflow on FII is high & there is a less outflow of the FII.
B). Tata Consultancy Service: Let us see the TCS working performance
EPS:TCS last 4 years EPS
25
Bajaj Auto LTD 2008-09 2009-10 2010-11 2011-12
Promoters 60.89% 60.89% 60.33% 60.61%
GDRS 0.13% 0.13% 0.08% 0.06%
FII 13.81% 13.81% 15.99% 16.42%
Public Financial institutions 5.75% 5.75% 2.76% 3.21%
Mutual funds 3.41% 3.41% 2.61% 2.52%
Nationalized & other banks 0.08% 0.08% 0.18% 0.04%
NRI & OCBs 0.45% 0.45% 0.46% 0.41%
others 15.48% 15.48% 17.59% 16.73%
2008-09 2009-10 2010-11 2011-12
EP
S 26.81 35.67 46.27 53.07
2008-092009-10
2010-112011-12
0
10
20
30
40
50
60
26.8135.67
46.2753.07
EPS
EPS
By looking to the chart we can find out that company is continuously is going up which means
company earnings per share is high.
Company Performance with the exchange rate
This shows that there is a positive correlation of the exchange rate with the working of the
company. Maximum effect of the company is seen with the exchange rate is of Yen which tells
that there is an 89% of impact of Yen on the performance of the company.
26
Correlation with TCSUS $ 0.687277272Pound 0.014125214Euro 0.273329375Yen 0.89578951
FII inflow & outflow on the company share holding pattern
Tata Consultancy Service 2008-09 2009-10 2010-11 2011-12
Promoters Holding 76.21% 74.13% 74.05% 73.98%
Insurance companies 5.28% 5.51% 5.68% 5.41%
Indian Public & others 5.04% 4.77% 4.50% 4.23%
Mutual Fund & UTI 2.47% 2.32% 2.39% 1.77%
Corporate bodies 0.77% 0.71% 0.60% 0.47%
Banks. FI, STATE & CENTRAL
GOVT. 0.11% 0.02% 0.04% 0.02%
FII 10% 12.43% 12.64% 14.02%
NRI/OCB/Foreign Nationals 0.12% 0.11% 0.10% 0.10%
Promoter
s Holding
Insuranc
e compan
ies
Indian P
ublic &
others
Mutual Fund
& UTI
Corporate
bodies
Banks. F
I, STATE & CENTRAL GOVT.
FII
NRI/OCB/Foreign N
ationals
0.00%
20.00%
40.00%
60.00%
80.00%
2008-092009-102010-112011-12
27
From the above chart it’s clear that the company is getting more & more FII & there
percentage of FII is increasing in each year.
ROCE:
2008-09 2009-10 2010-11 2011-120
10
20
30
40
50
60
43.27 42.46 44.38
55.31
ROCE
ROCE
Now from the chart we can see that company ROCE is continuously ups & down but its
giving a good return to the company.
C) Tata Steel
EPS:
From the graph it is clearly seen that the EPS in year 2009-10 is reduced as compared to
2008-09 but in the year 2010-11 which found to be the good year for the company where
the EPS gone up to 99.03 from 60-26 but in the next two years 2011-12 & 2012-13 the
EPS was gone down it comes to 52.13 in 2012-13.
ROCE:
28
2008-09 2009-10 2010-11 2011-12
ROCE 43.27 42.46 44.38 55.31
EP
S 2008-09 2009-10 2010-11 2011-12
69.45 60.26 99.03 54.28
2008-09 2009-10 2010-11 2011-12
ROCE 15.01 13.06 13.48 15.03
2008-09 2009-10 2010-11 2011-1212
12.5
13
13.5
14
14.5
15
15.5 15.01
13.06
13.48
15.03
ROCE
From the chart we can see that the company ROCE was 15.01 which remarkably reduced
for the next two year comes to 13.48 & then in 2011-12 it goes up to 15.03 & again in
2012-13 it comes down to 12.8 which is very less as compared to all the 4 years. This is
due to company has to produced steel for which they required more or more units of raw
material to import which makes the company to pay more because of depreciating Rupee.
FII inflow & outflow from share holding pattern
2008-09 2009-10 2010-11 2011-12
Promoters 40.86% 36.12% 30.60% 31.25%
FII 13.19% 18.80% 17.36% 14.36%
MF/UTI 11.69% 8.01% 10.89% 10.02%
29
Individuals 15.02% 18.37% 20.51% 21.06%
state & central govt. 0.09% 0.09% 0.08% 0.08%
Bodies corporate 2.20% 2.10% 2.90% 2.49%
CDRs 2.15% 1.90% 2.15% 1.24%
insurance companies 14.00% 14% 15% 19.00%
FI/ Banks 0.80% 0.61% 0.51% 0.50%
Promoters FII
MF/UTI
Individuals
state &
centra
l govt.
Bodies co
rporate CDRs
insurance c
ompaniesFI/
Banks0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
2008-092009-102010-112011-122012-13
By looking to the diagram we can found out that the FII investment in Tata Steel is continuously
reducing & the foreign investment is continuously reduced in Tata Steel Company.
Company Share Performance with the Exchange rate:
Correlation with Tata SteelUS $ 0.143057003Pound -0.605291252Euro -0.203007961Yen 0.146838668
30
Here while finding the correlation with the exchange rate & company it is found that there is a
positive correlation with the US $ & Japanese Yen at 14%. This shows that there is not much
heavy effect on the performance of the company when rupee depreciates. But when we see the
correlation of the company with the Pound & Euro there is a negative correlation, it tells that
when the rupee depreciates the performance of the company goes up.
D) Wipro
EPS
2008-09 2009-10 2010-11 2011-120
5
10
15
20
25
30
35
26.81
31.78
21.72 22.88
EPS
EPS
We can see from the chart that EPD in 2009-10 increased but in the year 2010-11 it is reduced &
come down to 22.88 from 31.78 in year 2011-12.
FII inflow or outflow from share holding pattern
Wipro LTD 2008-09 2009-10 2010-11 2011-12
Promoters 79.32% 79.52% 79.28% 78.41%
mutual funds/ UTI 0.68% 0.63% 1.04% 2.03%
31
2008-09 2009-10 2010-11 2011-12
EPS 26.81 31.78 21.72 22.88
FI/Banks 0.07% 0.10% 1.62% 0.02%
insurance companies 1.26% 1.04% 1.05% 1.36%
FII 5.91% 7.23% 5.38% 6.67%
corporate bodies 3.41% 2.88% 2.99% 2.82%
Individual 6.20% 5.49% 5.44% 5.33%
NRI 1.02% 0.95% 0.94% 0.95%
trust Wipro 0.51% 0.60% 0.58% 0.70%
DR Issued 1.62% 1.56% 1.68% 1.71%
Promoters
mutual funds/
UTI
FI/Ban
ks
insurance
companies FII
corporate b
odies
Individual NRI
trust w
ipro
share hold by c
ustodian
& again
st DR iss
ued
0.00%10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%
2008-092009-102010-112011-12
We can see from the chart that in Wipro LTD, the FII investment is continuously going on
increase only. There is no continues increase which means that FII inflow in the Wipro LTD is
high rather than FII outflow.
ROCE:
2008-09 2009-10 2010-11 2011-12
ROCE 26.77 23.06 22.34 21.41
32
2008-09 2009-10 2010-11 2011-120
5
10
15
20
25
30
26.7723.06 22.34 21.41
ROCE
ROCE
We can see from the chart that the company performance on ROCE is continuously
reducing from 2008-09 till 2011-12. The company performance is going downward only.
Company Performance with the Exchange rate
There is a positive correlation of the company performance with the exchange rate of US$, Euro
& Yen, this tells that when the rupee depreciates the company performance on the stock market
also depreciates. While there is a negative correlation of the company with the British Pound,
this tells that when the rupee depreciates the company performance on stock exchange also
increases.
E) Reliance Industries:
EPS
2008-09 2009-10 2010-11 2011-12
EPS 54.11 82.29 64.75 66.15
33
Correlation with WiproUS $ 0.420607289Pound -0.272352899Euro 0.040477673Yen 0.688006745
2008-09 2009-10 2010-11 2011-120
10
20
30
40
50
60
70
80
90
54.11
82.29
64.75 66.15
EPS
EPS
You can see that the EPS is gone up to 82.29 Rs in 2009-10 as compared to 2008-09.
While in the next 3 years the company EPS is increasing but in a downward trend.
ROCE:
2008-09 2009-10 2010-11 2011-12
ROCE 10.93 10.75 11.14 10.83
2008-092009-10
2010-112011-12
10.5
10.6
10.7
10.8
10.9
11
11.1
11.2
10.93
10.75
11.14
10.83
ROCE
We can see from the diagram that the ROCE is going upwards & downwards. There is no
stable pattern on its ROCE.
FII inflow & outflow pattern
2008-09 2009-10 2010-11 2011-12 2012-13
Promoter 44.73% 44.74% 44.72% 44.75% 45.34%
MF/UTI 2.28% 2.02% 2.59% 2.60% 2%
34
FI/Banks 0.26% 0.30% 0.23% 0.13% 0.13%
Central govt.& state govt. 0.10% 0.15% 0.10% 0.10% 0.10%
Insurance companies 7.81% 7.86% 7.87% 7.88% 8.77%
FII 17.62% 16.78% 17.70% 17.55% 17.76%
Corporate bodies 4.69% 4.97% 4.33% 5.25% 4.65%
Individuals 12.58% 13.01% 12.47% 12.01% 11.41%
NRI/OCB 0.74% 0.76% 0.73% 0.70% 0.67%
Any others 6.07% 6.07% 6.07% 5.93% 5.54%
clearing members 0.07% 0.14% 0.09% 0.10% 0.10%
CADR 3.05% 3.20% 3.10% 3.00% 3.53%
Promoter
MF/UTI
FI/Ban
ks
Centra
l govt &
state
govt
Insurance
companies FII
Corporate b
odies
Individuals
NRI/OCB
Any others
cleari
ng mem
bers CADR0.00%5.00%
10.00%15.00%20.00%25.00%30.00%35.00%40.00%45.00%50.00%
2008-092009-102010-112011-122012-13
We can see that in Reliance Industries FII inflow is continuously in a stable position. The FII is
stuck with a same position in each year.
Company Performance with exchange rate:
Correlation with RelianceUS $ 0.431359698Pound -0.288133249
35
Euro 0.198812553Yen 0.449861411
There is a positive correlation with the exchange rate of Dollar, Euro & Yen at 43%, 19% &
44%. This means that when the rupee depreciates on this exchange rate the performance of the
company on the Sensex also decreases while there is negative of relation of the company with
the British Pound of 28% which shows that when rupee depreciates the company performance on
Sensex goes up.
E) HDFC Bank:
EPS:
2008-092009-10
2010-112011-12
0102030405060708090
52.95
68.82
86.45
22.45
EPS
EPS
We can see from the chart that the EPS is in one year going up & another year going down.
HDFC Bank Performance with the exchange rate:
36
2008-09 2009-10 2010-11 2011-12
EPS 52.95 68.82 86.45 22.45
Correlation with HDFC BankUS $ 0.667758363Pound 0.005367191Euro 0.248634287Yen 0.832923412
There is a positive correlation of HDFC Bank with the exchange rate. But when the correlation
found of HDFC Bank with the Pound there is almost a 0.5% correlation which shows that there
is a no correlation between the HDFC Bank performances with the pound exchange rate.
FII inflow & outflow in HDFC Bank shares
Promoter
& Pro
moter G
roup
MF/
UTI
FI/Ban
ks
Insura
nce co
mpanies
FII
corp
orate
bodies
Individual
CADRs
NRI/OCB
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
2008-092009-102010-112011-12
We can see from the chart that in HDFC the FII data is continuously increasing in all the years.
This shows though there is rupee depreciation is more but the FII investor will have confidence
that the share will work positively & due to this the FII investment is continuously going up.
37
share holding pattern 2008-09 2009-10 2010-11 2011-12
Promoter & Promoter Group 24.65% 23.25% 23.06% 22.83%
MF/UTI 4.50% 4.68% 4.44% 3.86%
FI/Banks 0.06% 0.07% 0.01% 0.03%
Insurance companies 6.36% 6.36% 6.22% 4.70%
FII 28.14% 29.14% 31.13% 34.07%
corporate bodies 7.80% 8.72% 8.60% 8.19%
Individual 10.30% 9.13% 8.72% 8.69%
CADRs 17.30% 17.44% 17.23% 17.08%
NRI/OCB 0.93% 1.21% 0.61% 0.55%
F) Tata Power
FII inflow & outflow pattern
Share Holding Pattern 2008-09 2009-10 2010-11 2011-12
Promoters Group 33.26% 31.22% 31.81% 31.81%
Mutual Fund / UTI 6.88% 7.40% 4.36% 3.33%
Financial institutions/ banks 0.17% 0.29% 0.24% 0.40%
Central & state govt. 0.06% 0.05% 0.04% 0.03%
insurance companies 22.23% 22.06% 24.04% 22.80%
FII 18.53% 17.92% 19.83% 21.87%
Individuals 17.78% 15.97% 15.34% 15.41%
Bodies corporate 0.87% 0.68% 0.61% 0.95%
trust 0.02% 0.05% 0.11% 0.15%
foreign bodies 0.10% 0.47% 0.11% 0.02%
CADRs 0.10% 3.89% 3.51% 3.23%
Promoters G
roup
Mutual Fund / U
TI
Finan
cial in
stitutions/ banks
Centra
l & sta
te go
vt
insurance
companies FII
Individuls
Bodeis co
rporate
trust
foreign
bodiesCADRs
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
2008-092009-102010-112011-12
We can see from the graph that the FII inflow is continuously going to increase only, due to the
rupee depreciation still the Investor are keen to more & more on this share.
EPS:
38
EPS 2008-09 2009-10 2010-11 2011-12
57.09 85.01 8.79 -4.98
2008-09 2009-10 2010-11 2011-12-10
0
10
20
30
40
50
60
70
80
90
57.09
85.01
8.79
Well the Company EPS has been drastically reduced in the year 2010-11 & 2011-12 from the
year 2009-10. It shows the company performance on earnings per share is reducing. The reason
for the EPS going down because in year 2011-12 the company PAT was (968.29 Cr.) Due to this
reason the company EPS was gone down.
ROCE:
2008-09 2009-10 2010-11 2011-12ROCE 15% 13% 10% 9.29%
39
2008-09 2009-10 2010-11 2011-120%
2%
4%
6%
8%
10%
12%
14%
16% 15%13%
10%9%
Return on Capital Employed
Return on Capital Employed
We can see from the chart that the company ROCE is continuously going on decreasing
only. In every year the company ROCE is getting down which shows that company
return on capital is very less.
Tata Power performance with the exchange rate:
Correlation with Tata PowerUS $ 0.556982947Pound 0.355583949Euro 0.425423958Yen 0.781092659
There is a positive correlation of the company performance with the stock exchange. This shows
that when the company rupee depreciates on this exchange the company performance on the
stock exchange goes up.
G) Sterlite Industries
EPS
40
2008-09 2009-10 2010-11 2011-12
EPS 49.96 46.79 15 14.36
\
2008-092009-10
2010-112011-12
05
101520253035404550
49.9646.79
1514.36
EPS
EPS
We can see from the chart the company performance in terms of EPS is continuously growing
down. The company has a downward trend in the EPS.
ROCE
2008-09 2009-10 2010-11 2011-12ROCE 28% 22% 16% 16%
2008-09 2009-10 2010-11 2011-120%
5%
10%
15%
20%
25%
30% 28%
22%
16% 16%
ROCE
ROCE
We can see from the chart that the company ROCE is going downward in the year 2009-10 as
compared to 2008-09. And in the year 2010-11 & 2011-12 company able to maintain the ROCE
at 16%.
41
FII Pattern
Sterlite Industries 2008-09 2009-10 2010-11 2011-12
Promoters 61.19% 52.07% 57.72% 53.31%
Bank & Financial Institutions 4.82% 4.21% 5.14% 5.65%
FII 8.60% 14.29% 13.23% 11.92%
Mutual Fund 3.53% 3.75% 3.50% 3.82%
Private corporate bodies 3.80% 5.04% 5.72% 5.63%
Indian Public 4.08% 3.15% 3.91% 4.36%
NRI/OCBs 0.29% 0.11% 0.16% 0.18%
Share hold by custodian with DR issued 10.68% 14.87% 8.08% 12.45%
clearing members 0.50% 0.11% 0.08% 0.29%
trust 2.51% 2.12% 2.14% 2.15%
Foreign Bodies - DR _____ 0.28% 0.33% 0.24%
Promoters
Bank &
Finan
cial In
stitutions FII
Mutual Fund
Private
corporat
e bodies
Indian Public
NRI/OCBs
Share
hold by custo
dian with
DR issued
cleari
ng mem
bers trust
Foreign
Bodies - D
R
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
2008-092009-102010-112011-12
Now we can see from the chart that the company investment in FII is continuously going
downward because the FII pattern is completely going down on every year.
42
Company Performance with the exchange rate:
Correlation with Sterlite IndustriesUS $ -0.644326353Pound -0.426720217Euro 0.675836038Yen -0.495469074
There is a negative relation of the company performance with the US Dollar, Pound & Yen. This
shows that when the rupee depreciates the company performance on the stock exchange goes up.
But when we see the correlation of company performance with the European Euro there is a
positive correlation it shows that when rupee depreciates again Euro the company performance
also depreciates.
H) Infosys:
FII Inflow & Outflow
Infosys 2008-09 2009-10 2010-11 2011-12
Promoters 16.49% 16.04% 16.04% 16.04%
Mutual funds 3.58% 4.02% 4.60% 4.69%
Banks, FI & Insurance Co. 4.16% 3.91% 4.40% 11.87%
FII 34.86% 36.36% 36.12% 39.02%
Private corporate bodies 3.51% 5.40% 6.70% 0.54%
Indian Public 16.89% 14.33% 13.18% 12.97%
NRIs/OCB/Foreign nationals 0.89% 0.81% 0.86% 0.88%
trusts 0.49% 0.50% 0.50% 0.52%
equity share underlying ADS 19.13% 18.63% 17.60% 13.47%
43
Promoter
s
Mutu
al fu
nds
Banks
, FI &
Insu
rance
Co.FII
Private
corp
orate
bodies
Indian Public
NRIs/OCB/F
oreign
nationals
trusts
equity
shar
e under
lying A
DS0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
2008-092009-102010-112011-12
We can see from the chart that the company FII invest is continuously going up which
means that in a company FII inflow is very high & the company outflow is very low.
EPS
2008-092009-10
2010-112011-12
0
20
40
60
80
100
120
140
160
104.6 108.99 119.66
145.83
EPS
EPS
Here also we can see that the company has being continuously is gone on increasing on
its Earnings per Share. As there is a rupee depreciates the company is continuously grow
up on its Earnings per share.
ROCE
We can see from the chart that
the company ROCE is continuously decreasing in spite of its performance on EPS, the
company is come down.
Infosys share performance with the exchange rate:
Correlation with Infosys
44
2008-09 2009-10 2010-11 2011-12
ROCE 40.25 34.1 35.74 37.18
US $ 0.197762266Pound -0.314602934Euro -0.088218995Yen 0.536437126
There is a positive correlation of company performance with the US $ & Japanese Yen Exchange
rate at 19% & 53%. This shows that when the rupee depreciates the company performance on
stock exchange also depreciates. But when we look at the performance with the Pound & Euro
there is a negative correlation at 31% & 8%, this shows that when the rupee depreciates against
pound & Euro the company performance on stock exchange appreciate.
I) Cipla
FII Inflow & Outflow
Share Holding pattern 2008-09 2009-10 2010-11 2011-12
Promoters 39.38% 36.80% 36.80% 36.80%
Mutual funds & UTI 4.54% 5% 6% 6.85%
Banks, FI & Insurance 13.87% 11.67% 12.59% 10.35%
FII 13.40% 16.81% 15.26% 16.07%
private corporate bodies 2.14% 3.94% 4.41% 6.23%
NRI/foreign corporate bodies 3.46% 3.33% 3.37% 3.32%
Bank of New York 1.06% 0.82% 0.48% 0.09%
45
Indian Public 22.07% 21.61% 20.97% 20.18%
shares in transit 0.08% 0.05% 0.12% 0.11%
Promoters
Mutual funds &
UTI
Banks,
FI & In
surance FII
private
corporat
e bodies
NRI/forei
gn co
rporate b
odies
Bank o
f New
york
Indian Public
shares in
transit
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
2008-092009-102010-112011-12
We can see from the diagram there is a continuous inflow of FII in the company shares,
which means that company is getting every year high percentage of FII as a investment in
the company.
EPS
2008-09 2009-10 2010-11 2011-12EPS 9.92 13.7 12.32 14.25
2008-09 2009-10 2010-11 2011-120
2
4
6
8
10
12
14
16
9.92
13.712.32
14.25
EPS
EPS
We can see from the chart that the company EPS is having both upward & downward trend. As
in year 2009-10 its increase compared to 2008-09 but in year 2011-11 it came down & again in
year 2011-12 it goes up which means company is performing good on EPS.
ROCE:
46
2008-09 2009-10 2010-11 2011-12
ROCE 22.39 22.16 16.22 18.74
2008-09 2009-10 2010-11 2011-120
5
10
15
20
2522.39 22.16
16.22
18.74
ROCE
ROCE
Company ROCE is going down in all the year as company from the year 2008-09 which
means that the company returns has been gone down. So the company has to work on it
to improve its ROCE.
Cipla share performance with Exchange rate:
Correlation with Cipladollar 0.504600579pound 0.020059129euro 0.246386406yen 0.714209055
There is a positive correlation of company performance with all the exchange rate. This shows
that when the rupee depreciates the performance of the company also depreciates. The
correlation with dollar is 50%, with pound is 2%, with euro 24% and yen 71%.
J) Coal India
EPS
2008-09 2009-10 2010-11 2011-12EPS 5.22 5.98 7.48 12.77
47
There is an increase in EPS when it goes up. It shows that company earnings are being
increasing as year progresses.
ROCE:
2008-09 2009-10 2010-11 2011-12ROCE 36.51 57.35 45.49 50.81
While we can see from the chart that the company ROCE has being increasing in year 2009-10
as compared to year 2008-09 which is a good sign for the sign. But when we see the performance
of year 2010-11 & 2011-12 the company ROCE has being reduced to 2009-10. The company has
to focus on the ROCE.
Coal India Performance with the exchange rate
Correlation with coal Indiadollar 0.172334809pound 0.100421155euro 0.217975178
48
yen 0.331054001There is a positive correlation of company performance with the exchange rate at 17%, 10%,
21% and 33%. This shows that when rupee depreciates the company performance also
depreciates on stock exchange
FII inflow
Coal India 2008-09 2009-10 2010-11 2011-12GOI 90% 90% 90% 90%FII 4.33% 6.37% 6.09% 5.44%Indian Public 3.96% 1.54% 1.63% 1.47%Banks & FI 0.64% 0.45% 0.50% 0.80%Private corporate bodies 0.96% 0.49% 0.51% 1.22%Mutual Funds 0.42% 1.10% 1.20% 0.96%NRI/OCBs 0.03% 0.03% 0.03% 0.03%others 0.13% 0.06% 0.04% 0.08%
We can see from the chart that as it’s a Government a company 90% shares are held by
the Government & rest of 10% are being distributed to others. While we see about the FII
investment there is inflow is there more as compared to the outflow.
K) DLF
EPS
49
2008-09 2009-10 2010-11 2011-12EPS 26.24 10.13 9.66 7.07
2008-092009-10
2010-112011-12
0
5
10
15
20
25
30 26.24
10.139.66
7.07
EPS
EPS
We can see from the diagram that the company EPS is going down in every year from 2008-09.
In 2008-09 the company EPS was 26.24 but it comes down to Rs: 7.07 in year 2011-12. So there
is a big flow down of EPS in the performance of the company.
ROCE
2008-09 2009-10 2010-11 2011-12
ROCE 14.01 6.71 6.86 8.02
2008-092009-10
2010-112011-12
0
2
4
6
8
10
12
14
1614.01
6.716.86 8.02
ROCE
ROCE
Here again we can see that the company ROCE is getting down wards. It shows that the
company returns capital employed is going down year on year.
FII inflow
50
Promoter & Promoter
group
directo
rs & th
eir re
latives
FII
NRI & fo
reign
nationals
MF & UTI
Banks.
FI & In
surance
Co.
Bodies co
rporate
Public0.00%
10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%90.00%
100.00%
2008-092009-102010-112011-12
We can see from the chart that the FII inflow continuously high as compared to the FII
outflow. It means that the FII investment is going more on more as due to depreciation of
rupee.
DLF Performance with the Exchange rate
Correlation with DLFUS $ -0.614007616Pound 0.013490514Euro -0.346180045Yen -0.705070372
51
DLF 2008-09 2009-10 2010-11 2011-12
Promoter & Promoter group 88.55% 78.64% 78.50% 78.59%
directors & their relatives 0.03% 0.04% 0.04% 0.05%
FII 6.24% 14.77% 15.74% 15.47%
NRI & foreign nationals 0.12% 0.15% 0.10% 0.14%
MF & UTI 0.10% 0.28% 0.07% 0.11%
Banks. FI & Insurance Co. 0.25% 0.37% 0.20% 0.22%
Bodies corporate 1.02% 1.60% 1.20% 1.34%
Public 3.69% 4.15% 4.15% 4.08%
There is a negative correlation of company share with the exchange rate of US $, Euro & Yen at
61%, 34% & 70%. This shows that when rupee depreciates the performance of the company
goes on the stock exchange. While we see the performance of stock exchange with the Pound
there is a positive correlation at 1.3%, this shows when rupee depreciates against pound the
company performance on stock exchange also goes down.
L) ONGC
FII inflow & outflow
Share Holding Pattern 2008-09 2009-10 2010-11 2011-12President of India 69.23% 74.14% 74.14% 74.14%Banks & FI & Insurance Co. 10.05% 5.52% 5.74% 4.91%
FII 5.35% 4.45% 4.17% 5.43%MF & UTI 1.56% 2.11% 2.21% 1.72%NRIs 0.05% 0.05% 0.04% 0.04%Government Companies 10.09% 10.09% 10.09% 10.09%Others 1.77% 1.65% 1.91% 1.90%Employees 0.07% 0.08% 0.10% 0.10%Public 1.83% 1.91% 1.61% 1.67%
52
President o
f India
Banks
& FI & In
surance
Co. FII
MF & UTI NRIs
Government C
ompanies
Others
Employee
sPublic
0.00%10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%
2008-092009-102010-112011-12
We can see from the chart that company FII trend was going upward in one year & in the next
year it’s coming down. So the investors are investing or withdrawing their money by keeping the
market performance
EPS
2008-09 2009-10 2010-11 2011-12
EPS 26 22.68 26.25 32.9
2008-092009-10
2010-112011-12
0
5
10
15
20
25
30
35
26
22.6826.25
32.9
EPS
EPS
We can see that in the starting company has being reduced but in the later years the
company EPS has been gone to increase in the year 2010-11 & 2011-12.
53
ROCE
2008-09 2009-10 2010-11 2011-12
ROCE 34.29 34.54 33.97 28.54
2008-09 2009-10 2010-11 2011-120
5
10
15
20
25
30
3534.29 34.54 33.97
28.54
ROCE
ROCE
We can see from the chart that the company Return on capital employed is continuously
going down ward. Due to this the company return on capital is down & the company has
to well, so that in the later years the company performance goes up.
Company Performance with the stock exchange:
Correlation with ONGCUS $ 0.531380047Pound 0.217821228Euro 0.316328497Yen 0.817843729
There is a positive correlation of the performance of the company with the exchange rate. This
shows that when the rupee depreciates the company performance also on stock exchange also
goes down. The maximum effect of company performance on downward stream is 81% which
means the effect of rupee depreciation against Yen is heavy.
M) ICICI Bank
FII inflow & outflow
54
Promoter
s
FII &
Forei
gn Ban
ks
Insuran
ce co
mpanies
Bodies co
rporat
e
Banks
& Finan
cial in
stitutions
Mutual funds
Individual
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
2008-092009-102010-112011-12
We can see from the graph that the FII inflow is going upwards which shows that there is
a huge inflow of FII in the company shares, but in the year 2011-12 the FII was reduce to
3% which shows outflow is more than inflow.
EPS
2008-09 2009-10 2010-11 2011-12
55
ICICI Report 2008-09 2009-10 2010-11 2011-12
Promoters 27.12% 28.28% 26.00% 26.85%
FII & Foreign Banks 36.64% 38.06% 39.58% 36.31%
Insurance companies 15.29% 17.44% 17.00% 17.68%
Bodies corporate 5.80% 2.69% 4.50% 4.49%
Banks & Financial institutions 0.85% 0.70% 0.08% 0.12%
Mutual funds 6.35% 6.86% 7.37% 8.84%
Individual 7.95% 5.97% 5.47% 5.71%
EP
S 32.13 41.93 53.54 66.63
2008-092009-10
2010-112011-12
0
10
20
30
40
50
60
70
32.13
41.93
53.54
66.63
EPS
We can see that from the chart the company EPS is continuously going upwards which means
that company is giving more earnings per share as the year goes on.
ICICI share performance with the Exchange rate:
Correlation with ICICI BankUS $ 0.175734186Pound -0.117495791Euro -0.081843359Yen 0.452874629
There is a positive correlation of company performance with the Dollar & Yen at 17% & 45%.
This means that when the rupee depreciates the company performance on stock exchange also
depreciates. But when we see against the Pound & Euro there is a negative correlation at 11% &
8%, this shows that the company performance is well as against the depreciation of rupee.
N) Tata Motor
FII inflow & outflow pattern
56
Promoter
& Pro
moters g
roup
Mutual
Fund / U
TI
Centra
l & St
ate Govt
Insura
nce Compan
ies FII
Individuals NRI
Clearin
g Mem
berTru
stCADR
Finan
cial In
stitutions /
Banks
0.00%5.00%
10.00%15.00%20.00%25.00%30.00%35.00%40.00%45.00%
2008-092009-102010-112011-12
We can see that from the chart though the company performance is going downward but there is
a continuous increase in the investment made by FII, so the inflow is more in these years on
company performance.
EPS
2008-09 2009-10 2010-11 2011-12
EPS basic -56.88 48.64 31.05 42.58
57
2008-09 2009-10 2010-11 2011-12
Promoters group 38.78% 37% 34.83% 34.99%
Mutual Fund / UTI 2.74% 3.60% 1.40% 1.65%
Central & State Govt. 0.09% 0.08% 0.09% 0.09%
Insurance Companies 13.45% 13.80% 11.81% 10.98%
FII 22.65% 23.59% 23.60% 27.75%
Individuals 7.39% 8% 7.24% 7.21%
NRI 0.50% 0.48% 0.45% 0.45%
Clearing Member 0.25% 0.22% 0.11% 0.21%
Trust 0.03% 0.03% 0.03% 0.08%
CADR 14.00% 12.82% 20.28% 16.59%
FI / Banks 0.12% 0.14% 0.16% 0.12%
2008-09 2009-10 2010-11 2011-12
-80
-60
-40
-20
0
20
40
60
-56.88
48.64
31.05
42.58
EPS basic
EPS basic
We can see that in year 2008-09 was very heavy for the businesses to continue their business
because of the major recession come on the USA & which stops the company to perform well &
due to this the company has to import raw material by paying more money than the previous year
which makes the company to perform downwards.
ROCE
2008-09 2009-10 2010-11 2011-12
ROCE 6.41 10.37 10.19 10.36
2008-09 2009-10 2010-11 2011-120
2
4
6
8
10
12
6.41
10.37 10.19 10.36
ROCE
ROCE
We can see that company ROCE is increasing in every year, which means that company
is giving good return on the capital employed.
58
Tata Motor Performance with the Exchange rate:
Correlation with Tata MotorUS $ 0.732403602Pound 0.574088683Euro 0.505540906Yen 0.819040597
There is a positive correlation of company performance with the exchange rate which means
that when the rupee depreciates against foreign currencies the performance of the company also
goes down in the stock exchange at 73% with dollar, at 57% with Pound, at 50% with Euro & at
81% with Yen.
P) Sun Pharma Ceutical
EPS
2008-092009-10
2010-112011-12
0102030405060708090
87.8
65.2
17.5 25
EPS
We can see from the chart that the company Earnings per share is being in every year. In 2008-
09 the company earnings per share was 87.8 which is decreased to 17.5 in year 2010-11, but in
2011-12 year company has shown the trend of moving upward as the company earnings per
share goes up to 25 Rs.
ROCE
59
2008-09 2009-10 2010-11 2011-12
EP
S 87.8 65.2 17.5 25
2008-09 2009-10 2010-11 2011-12
ROCE 26.69 17.3 20.3 27.22
2008-092009-10
2010-112011-12
0
5
10
15
20
25
30 26.69
17.3 20.3
27.22
ROCE
IN ROCE also in year 2009-10 & 2010-11 the ROCE was down & from 26.69% to 20.3%. But
in year 2011-12 company has moved upward its performance & due to this the company returns
was gone high of almost 7% at 27.22%.
FII inflow & Outflow pattern:
Share Holding Pattern 2008-09 2009-10 2010-11 2011-12
Indian Promoter & Person acting in concert 63.71% 63.72% 63.72% 66.19%
Mutual Funds / UTI 4.08% 2.57% 2.85% 4.63%
Bank/ FI & Insurance Co. 3.29% 2.91% 4.20% 0.31%
FII & Foreign Mutual Funds 17.10% 20.22% 18.39% 3.98%
Private corporate bodies 5.84% 4.96% 5.11% 5.27%
Indian Public 5.65% 5.37% 5.51% 18.69%
NRIs / OCBS 0.09% 0.06% 0.07% 0.44%
Clearing Member 0.06% 0.04% 0.05% 0.49%
Foreign Companies 0.18% 0.12% 0.06% 0.00%
Trust 0.00% 0.03% 0.04% 0.00%
60
Indian
Prom
oter &
Perso
n actin
g in co
ncert
Mutual F
unds /
UTI
Bank, F
inanci
al Com
panies
& insura
nce co
mpanies
FII & Fo
reign
Mutial Fu
nds
Private
corpo
rate b
odies
Indian
Public
NRIs / O
CBS
Clearin
g Mem
ber
Foreig
n Com
panies Tru
st0.00%
10.00%20.00%30.00%40.00%50.00%60.00%70.00%
2008-092009-102010-112011-12
Till year 2010-11 the company FII has high inflow less outflow but in the year 2011-12 company
has huge outflow & less inflow, which means the company is reducing the FII capital from the
foreign due to depreciation of rupee.
Sun Pharma share performance with the exchange rate:
correlation with Sun PharmaUS $ 0.586230911Pound 0.3846725Euro 0.383886113Yen 0.820440598
There is a positive correlation of the company share performance with the exchange rate. This shows that
company stock price continue to decrease with the depreciation of rupee. The maximum effect of
decrease of company seen with the Yen because as against Yen 82% of the company share price
decreases.
61
Q) L & T
FII inflow & outflow
Share holding Pattern 2008-09 2009-10 2010-11 2011-12
Financial Institution 32.03% 32.99% 32.98% 32.09%
FII 11.90% 15.18% 14.44% 15.62%
GDRs 2.94% 3.55% 2.39% 3.12%
Mutual Fund 5.86% 4.31% 5.69% 4.32%
bodies corporate 5.77% 6.59% 6.27% 7.01%
directors & relatives 1.14% 0.84% 1.07% 0.46%
L & T employee welfare foundation 12.70% 12.22% 12.36% 12.15%
general public 27.66% 24.32% 24.80% 25.23%
Finan
acial
Insti
tution
FIIGDRs
Mutu
al Fu
nd
bodies co
rpora
te
directo
rs &
relati
ves
L & T
emplo
yee w
elfar
e foundati
on
gener
al public
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
2008-092009-102010-112011-12
From the chart we can see that the company FII inflow was high in every year, after year 2008-
09 the company is having huge Foreign Institutional Investor which means that the company has
a good FII inflow & less FII outflow.
EPS
2008-09 2009-10 2010-11 2011-12EPS 64.76 91.9 73.56 76.81
62
2008-092009-10
2010-112011-12
0102030405060708090
100
64.76
91.9
73.56 76.81
EPS
EPS
We can see from the chart company EPS is increased in the year 2009-10 as compared to 2008-
09 but in the year 2010-11 & 2011-12 company EPS was come down to 76.81 from 91.9 which
means that company earnings is being down.
ROCE:
2008-09 2009-10 2010-11 2011-12
ROCE 14.47% 13.48% 12.19% 10.68%
2008-092009-10
2010-112011-12
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00% 14.47%13.48%
12.19%
10.68%
ROCE
ROCE
The company ROCE has being continuously reducing, it means that company return on capital
employed is having a downward trend. The company has to take measure to stop the downward
trend.
63
L & T share performance with the Exchange rate:
Correlation with L & TUS $ 0.250710849Pound -0.343022884Euro -0.018647537Yen 0.44780456
There is a positive correlation of company performance with the US $ & Yen at 25% with dollar
& 44% with Yen. This shows that when rupee against Dollar & Yen depreciates there is also a
decrease in the performance of the company in the stock exchange. But there is negative
performance of the company against the Pound at 34% & Euro at 1%. This shows that when
rupee depreciates against Pound & Euro the company performance on stock exchange goes up.
R) Jindal Steel
FII inflow & outflow
Share Holders Pattern 2008-09 2009-10 2010-11 2011-12Promoters 58.75% 58.59% 58.41% 58.91%FI/BANKS/MF/UTI 5.29% 2.83% 6.13% 6.89%corporate bodies 6.79% 4.72% 2.62% 3.13%FII 18.70% 23.57% 23.47% 22.31%Public 9.32% 9.19% 8.31% 7.90%NRI & Trust 1.15% 1.09% 1.06% 0.86%
Promoters FI/BANKS/MF/UTI
corporate bodies
FII Public NRI & Trust0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
2008-092009-102010-112011-12
64
We can see that the FII inflow in year 2009-10 & 2010-11 is continuously going upward as
compared to year 2008-09 but in the year to 2011-12 there is a 1% of decrease of FII which
means there is FII outflow is more as compared to the inflow.
EPS
2008-09 2009-10 2010-11 2011-120
20
40
60
80
100
120
140
160
180
200
194.45
39.05 40.22 42.42
EPS
EPS
We can see from the chart that the company EPS has being drastically come down from year
2008-09 till 2011-12. It goes down to Rs: 42.42 in year 2011-12. This means that the company
Earnings per share has been reduced at a very high rate.
ROCE:
2008-09 2009-10 2010-11 2011-12ROCE 29.7 26.62 19.33 16.38
2008-09
2009-10
2010-11
2011-12
0
5
10
15
20
25
30
29.7
26.62
19.33
16.38
ROCE
ROCE
65
2008-09 2009-10 2010-11 2011-12EPS 194.45 39.05 40.22 42.42
We can from the chart that the company ROCE was again reduced year on year. In 2008-
09 the ROCE was 29.7 but till 2011-12 it comes to 16.38. This means company return on
capital employed is being reduced. Due to this the company has to work hard to increase
the ROCE.
Jindal Steel & Power share performance v/s BSE Sensex:
Correlation with JSPUS $ 0.149951812Pound -0.343138152Euro -0.032476925Yen 0.4499598
There is a positive correlation with the company performance with the exchange rate of US$ &
Japanese Yen currencies. While there is a negative correlation with the company performance
with the pound & euro currencies
S) NTPC
FII inflow & Outflow
Share holding Pattern 2008-09 2009-10 2010-11 2011-12GOI 89.50% 84.50% 84.50% 84.50%FII 3.60% 2.55% 3.53% 4.02%Indian Public 2.18% 2.29% 2.04% 1.95%Banks & FI 2.81% 7.35% 6.92% 6.63%Private corp. bodies 1.21% 1.51% 1.48% 1.77%Mutual fund 0.61% 1.70% 1.40% 1.03%NRI/OCBs 0.05% 0.06% 0.05% 0.04%others 0.04% 0.04% 0.08% 0.06%
66
GOI FII Indian Public
Banks & FI
Private corp.
bodies
Mutual fund
NRI/OCBs
others0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
2008-092009-102010-112011-12
As it’s a Government company, so the Government has maximum percentage of shares of
NTPC. So due to this the percentage of NTPC FII will be less. But then also the FII has
having inflow high as compared to outflow, which means that company is getting FII
inflow from foreign.
EPS
2008-09 2009-10 2010-11 2011-120
2
4
6
8
10
129.81
10.7211.34
11.9
EPS
EPS
We can see from the chart that company EPS has been continuously increasing which
means that the company is being performing well & giving good return on EPS.
67
2008-09 2009-10 2010-11 2011-12EPS 9.81 10.72 11.34 11.9
ROCE
2008-09 2009-10 2010-11 2011-12ROCE 11.77 13.64 12.86 11.43
2008-09 2009-10 2010-11 2011-1210
10.5
11
11.5
12
12.5
13
13.5
14
11.77
13.64
12.86
11.43
ROCE
ROCE
We can see that ROCE of a company in year 2009-10 increase to around 2% but in the
later year in year 2010-11 & 2011-12 the company ROCE was reduced again 1% & 2%
which means the com.
NTPC share price performance v/s Exchange rate
correlation with NTPCUS $ -0.090287982Pound -0.512703602Euro -0.180002337Yen -0.115431823
There is a negative correlation of the company with the exchange rate. This shows there is no
effect of the rupee depreciation against the performance of the company. The company
performance is positive as against the weakness of the rupee. The company maintains its
performance well in the stock exchange.
68
T) Hero Moto Corp:
EPS
2008-092009-10
2010-112011-12
0
20
40
60
80
100
120
64.2
111.8
96.5
119.1
EPS
EPS
We can see from the chart in year 2009-10 the EPS was drastically increase as compared to
2008-09 but in the year 2010-11 it is reduced to 96.5 as compared to 2009-10 while in year
2011-12 it again gone up to 119.1 as compared to 2010-11. It shows company is having upward
& downward trend of earnings per share.
ROCE:
2008-09 2009-10 2010-11 2011-12ROCE 51% 76% 62.30% 58.90%
2008-092009-10
2010-112011-12
0%
10%
20%
30%
40%
50%
60%
70%
80%
51%
76%
62%59%
ROCE
ROCE
69
2008-09 2009-10 2010-11 2010-12EPS 64.2 111.8 96.5 119.1
ROCE of the company has been reducing only as compared to year 2009-10. Due to this the
company has to work hard to stop the downward trend of ROCE.
FII inflow & outflow
Hero Moto Corp 2008-09 2009-10 2010-11 2011-12Promoters 52.21% 54.96% 52.21% 52.21%MF/UTI 2.06% 2.11% 1.15% 1.49%FII 31.75% 29.96% 32.79% 33.38%insurance companies 4.00% 4.61% 3.89% 2.62%FI/Banks 0.16% 0.02% 0.12% 1.53%Corporate bodies 1.38% 0.47% 1.91% 1.47%Indian Public 7.64% 7.04% 7.16% 7%Trust 0.61% 0.60% 0.60% 0.00%clearing members 0.09% 0.13% 0.06% 0.19% NRI 0.10% 0.10% 0.11% 0.11%
We can from the chart in Hero Moto Corp FII inflow is high. There is a continuous increase of
FII in every year.
Hero Moto Corp performance VS Exchange rate:
Correlation with Hero Moto CorpUS $ -0.602408507Pound 0.252078863Euro -0.245927467Yen -0.628916131There is a negative correlation of the company performance with the exchange rate with Dollar,
Euro & Yen. This shows as the rupee depreciates against these currencies the company
70
Promoter
s
MF/UTI FII
insuran
ce co
mpanies
FI/Ban
ks
Corporat
e boldies
Indian Public
Trust
cleari
ng mem
bers NRI0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
2008-092009-102010-112011-12
performance is going increasing only. The other reason could be the company exports their
products on these countries which help to gain good foreign exchange. But when we see the
company performance with the British Pound there is a positive correlation which shows that
when rupee depreciates the company performance also depreciates.
U) Mahindra & Mahindra
EPS
2008-09 2009-10 2010-11 2011-12EPS 51.57 45.08 53.46 53.18
2008-092009-10
2010-112011-12
40
42
44
46
48
50
52
5451.57
45.08
53.4653.18
EPS
EPS
The company EPS has being reduced in the year 2009-10 as compared to year 208-09. But again
in the year 2010-11 & 2011-12 company EPS has being increased compared to 2008-09.
ROCE
71
2008-09 2009-10 2010-11 2011-12ROCE 13.99 27.7 26.96 23.58
2008-092009-10
2010-112011-12
0
5
10
15
20
25
30
13.99
27.726.96
23.58
ROCE
ROCE
We can see from the chart the company ROCE has being increased in the year 2009-10 as compared to year 2008-09 but it is continue to fall in the year 2010-11 & 2011-12 almost 4%.
FII inflow & Outflow Pattern:
M & M 2008-09 2009-10 2010-11 2011-12Promoter & Promoter group 29.20% 26.34% 24.90% 25.18%MF/UTI 2.40% 4.16% 4.96% 3.31%Banks, FI,Insurance Co. & State Govt 23.10% 20.76% 16.25% 14.23%FIIs/Foreign Bodies 24.13% 26.65% 30.56% 35.01%Private corporate bodies 4.29% 7.65% 6.24% 7.45%Indian Public 9.55% 8.69% 10.17% 8.00%NRI/OCB/Foreign National 0.68% 0.58% 0.98% 0.88%Bank of New York 6.65% 5.17% 5.94% 5.94%
Promoter & Promoter
griup
MF/UTI
Banks,
FI,Insuran
ce Co. &
State
Govt
FIIs/Fo
reign
Bodies
Private
corporat
e bodies
Indian Public
NRI/OCB/Fo
reign
National
Bank o
f New
york
0.00%5.00%
10.00%15.00%20.00%25.00%30.00%35.00%40.00%
2008-092009-102010-112011-12
72
We can see that there is a continuous inflow of FII in Mahindra & Mahindra Company is very
high. This means that company is getting more & more foreign investment.
Mahindra & Mahindra Company Performance with the Exchange rate:
Correlation with M & MUS $ 0.495920867Pound 0.437753347Euro 0.2966549Yen 0.715228241There is a positive correlation of the company performance on stock exchange with the exchange
rate of the G5 countries. This shows when the rupee depreciates against the G5 countries, the
company performance also decreases.
V) Hindalco Co.
EPS
2008-09 2009-10 2010-11 2011-12EPS 3.21 22.17 12.84 17.74
2008-09 2009-10 2010-11 2011-120
5
10
15
20
25
3.21
22.17
12.84
17.74
EPS
EPS
In year 2008-09 the company EPS was Rs: 3.21 but in the next years company performed well &
its help to raise the EPS of the company more & more till 17.74 EPS in year 2011-12.
73
ROCE
2008-09 2009-10 2010-11 2011-12ROCE 9 7.46 8.9 6.15
2008-09 2009-10 2010-11 2011-120
1
2
3
4
5
6
7
8
9
9
7.46
8.9
6.15
ROCE
ROCE
We can see that from year 2008-09 the company ROCE is being continuously reduced in the
next 3 years. Till 2011-12 the company ROCE was come down to 6.15% from 9%. This means
that company return on capital is being reduced.
FII inflow
Hindalco 2008-09 2009-10 2010-11 2011-12Promoters 36.09% 32.08% 32.87% 32.06%MF/UTI 2.62% 2.93% 2.48% 2.89%Banks/FI/Govt. 16% 12.73% 10.49% 12.05%FII 10.33% 28.94% 30.91% 26.85%corporates 9.17% 4.11% 4.90% 6.62%individual 13.11% 8.42% 7.68% 8.86%NRI/OCBs 2.53% 2.16% 2.32% 2.27%GDRs 10.15% 8.63% 8.35% 8.40%
74
Promoter
s
MF/
UTI
Banks
/FI/G
ovt FII
corp
orates
individual
NRI/OCBs
GDRs0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
2008-092009-102010-112011-12
In year 2009-10 & 2010-11 the company FII has being increased from 2008-09. This shows that
company has high FII inflow while in year 2011-12 the company has reduced the investment of
FII i.e. in year 2011-12 FII inflow was less & FII outflow was more.
Hindalco Performance with exchange rate:
Correlation with Hindaalcodollar -0.292942688pound -0.428499384euro -0.440256886yen 0.052166759There is a negative correlation of company performance with the exchange rate of dollar, pound
& euro. When we find the correlation with the Yen there is a positive correlation
W) BHEL
EPS
2008-09 2009-10 2010-11 2011-12EPS 63.64 88.39 123.66 28.96
2008-092009-10
2010-112011-12
0
20
40
60
80
100
120
140
63.64
88.39
123.66
28.96
EPS
75
The company Earnings per Share is being continuously increasing in year 2010-11 & 2009-10 as
compared to 2008-09 which shows that company Earnings has being increasing in both the year.
While in year 2011-12 the company EPS was drastically reduced to almost 100 Rs. This is not
the good sign in the earnings per share for the company.
ROCE
2008-092009-10
2010-112011-12
32
34
36
38
40
42
44
46
36.92
41.6
44.27
40.5
ROCE
The company ROCE has being increase in year 2009-10 & 2010-11 which shows the company
return on capital is high while in year 2011-12 the company ROCE has being reduced as
compared to 2010-11 but as compared to year 2008-09 the return on capital is being increased.
FII Inflow
BHEL 2008-09 2009-10 2010-11 2011-12President of India 67.72% 67.72% 67.72% 67.72%MF & UTI 6.81% 6.71% 7.03% 1.44%Banks, FI, Insurance Co. 4.40% 6.03% 5.68% 11.40%FII 14.72% 13.07% 12.91% 13.49%corporate bodies 4.51% 4.18% 4.49% 2.83%Individuals 1.62% 1.99% 1.87% 2.69%NRIs 0.10% 0.14% 0.13% 0.19%trust 0.03% 0.03% 0.03% 0.05%clearing members 0.09% 0.13% 0.14% 0.19%
76
2008-09 2009-10 2010-11 2011-12ROCE 36.92 41.6 44.27 40.5
The pattern of FII is
almost nearer to each &
every year it moves on. This means that the company is getting FII investment at almost decrease
of 1% or 2%.
BHEL share performance VS Exchange rate:
Correlation with BHELdollar 0.697944713pound 0.464844176euro 0.478429386yen 0.80481033
There is a positive correlation of the company performance with the depreciation of the rupee.
This shows that when rupee depreciates against the foreign currency the company share
performance on stock exchange also decreases.
X) Hindustan Unilever Ltd
EPS
2008-09 2009-10 2010-11 2011-12EPS 11.51 9.92 10.68 12.95
77
President of In
idaMF &
UTI
Banks, FI,
Insurance C
o.FII
corporate b
odies
Individuals NRIs
trust
clearin
g mem
bers
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
2008-092009-102010-112011-12
2008-09 2009-10 2010-11 2011-120
2
4
6
8
10
12
1411.51
9.9210.68
12.95
EPS
EPS
In year 2009-10 & 20110-11 the company EPS has being continuously reducing while
comparing to year 2008-09 which means the company earnings has been decreasing. But in the
year 2011-12 the company earnings per share is being gone up.
ROCE:
2008-09 2009-10 2010-11 2011-12ROCE 118.59 106.78 102.47 93.08
2008-092009-10
2010-112011-12
0
20
40
60
80
100
120118.59
106.78102.47
93.08
ROCE
ROCE
The company ROCE has been continuously reducing. This means company returns on the capital employed is being reduced. So the company has to work hard to increase the return which they getting write now.
78
HUL FII inflow
Promoter
s
MF & UTI
FI/ban
ks
Insuran
ce co
. FII
bodies co
rporat
e
NRI/Forei
gn bodies
directo
rs rel
ative
s
individuals
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
2008-092009-102010-112011-12
The company has every year increasing the FII investment from foreign countries. This means that the company having huge inflow of FII & less outflow of FII.
HUL share performance with the exchange rate:
Correlation with BHELdollar 0.76391169pound 0.57389771euro 0.53105159yen 0.85259502There is a positive correlation with the company performance & the exchange rate. The maximum of rupee depreciation against foreign currencies with respect to company performance is seen with Yen, because when rupee depreciates against Yen the company performance decreases at 85% which there a huge effect on the performance of the company.
79
2008-09 2009-10 2010-11 2011-12Promoters 52.06% 52.02% 52.55% 52.50%MF & UTI 4.58% 3.24% 3.01% 1.90%FI/banks 0.13% 0.40% 0.39% 0.41%Insurance co. 10.40% 10.46% 8.94% 8%FII 14.35% 14.48% 17.27% 19.43%bodies corporate 2.68% 3.47% 2.58% 3.14%NRI/Foreign bodies 0.30% 0.38% 0.33% 0.34%directors relatives 0.01% 0.14% 0.01% 0.01%individuals 15.49% 15.41% 14.92% 14.27%
Y) ITC
EPS
2008-092009-10
2010-112011-12
0
2
4
6
8
10
12
8.82
11.01
6.538.05
EPS
EPS
In the year 2009-10 the EPS was increased to 3 Rs but in the year 2010-11 & 2011-12 was reduced to almost 3 to 5 EPS. This means that the EPS of the company has being reduced.
ROCE
2008-09 2009-10 2010-11 2011-12ROCE 34.09 43 43.51 47.33
2008-09 2009-10 2010-11 2011-120
5
10
15
20
25
30
35
40
45
50
34.0943 43.51 47.33
ROCE
ROCE
80
2008-09 2009-10 2010-11 2011-12EPS 8.82 11.01 6.53 8.05
The company ROCE is being continuously increasing which means that the return on capital has been grown up, which shows that company is getting better return on the capital employed.
FII inflow & outflow
Bank, FI, Insurance Co. & MF
FII Foreign Corporate
Bodies
NRIs & Foreign
Nationals
Bodies corporate
Public & other
GDR0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
2008-092009-102010-112011-12
The company FII inflow in year 2009-10 & 2010-11 has being reduced as compared to year 2008-09 which shows that the FII outflow was more than the FII inflow but when we see the year 2011-12 the FII inflow was more as compared to the preceding year, which shows that the company more investment from foreign bodies.
ITC Share Performance with the Exchange rate:
Correlation with ITCdollar 0.608875315pound 0.313008421euro 0.301259758yen 0.850068294
81
ITC 2008-09 2009-10 2010-11 2011-12Bank, FI, Insurance Co. & MF 36.21% 37.14% 35.84% 34.25%FII 14.15% 13.40% 14.04% 17.40%Foreign Corporate Bodies 31.45% 31.62% 31.37% 30.87%NRIs & Foreign Nationals 0.55% 0.55% 0.57% 0.54%Bodies corporate 5.66% 5.21% 6.44% 5.76%Public & other 11.59% 11.69% 11.41% 10.87%GDR 0.39% 0.39% 0.33% 0.31%
There is a positive correlation between the company performance & the exchange rate. This shows that the rupee depreciates its effects on the performance of the company
Z) SBI
FII inflow & outflow
2008-09 2009-10 2010-11 2011-12Central & state govt. 59.40% 59.40% 59.40% 61.58%MF/UTI 4.08% 4.22% 4.22% 4.81%FI 0.03% 0.11% 0.15% 0.21%Insurance Companies 11.42% 12.22% 12.52% 12.09%FII 13.99% 12.80% 10.90% 8.70%Corporate bodies 2.45% 2.42% 3.45% 3.60%Individual 5.24% 5.66% 6.02% 6.06%NRI 0.08% 0.14% 0.16% 0.20%trust 0.05% 0.06% 0.09% 0.06%clearing members 0.11% 0.12% 0.14% 0.16%DRs 3.15% 2.85% 2.95% 2.53%
Centra
l & sta
te go
vtMF/U
TI FI
Insurance
Companies FII
Corporate b
odies
Indivudual NRI
trust
cleari
ng mem
bers DRs0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
2008-092009-102010-112011-12
We can clearly see that the investment from foreign companies in SBI is continuously has being reducing. There is trend of FII outflow is more but less FII inflow.
EPS
2008-09 2009-10 2010-11 2011-12EPS 267.87 238.23 176.35 189.33
82
2008-09 2009-10 2010-11 2011-120
50
100
150
200
250
300 267.87
238.23
176.35189.33
EPS
EPS
We can here also see that the bank Earnings per share is being also reducing also in each consecutive year which means that the company’s earnings has been drastically reducing in each
SBI share performance with the exchange rate:
correlation with SBIdollar 0.152709pound -0.31009euro -0.16336yen 0.407941
There is a positive correlation between the SBI share price & exchange rate of dollar & euro at 15% & 40%. This shows that when rupee depreciates company share price also depreciates to 15% against dollar & 40% against yen. But when we see against pound & euro the company share price increases to 31% & 16% which shows that there is a negative correlation between rupee depreciation on pound & euro with compared to company performance on stock exchange& every year.
AA) Maruti Suzuki India LTD
EPS
2008-09 2009-10 2010-11 2011-12EPS 42.63 88.09 79.86 56.54
83
2008-092009-10
2010-112011-12
0102030405060708090
42.63
88.09
79.86
56.54
EPS
We can see the company EPS has being increasing in year 2009-10, 2010-11 & 2011-12 as compared to year 2008-09. But when we compared with the year 2009-10 the company earnings per share has being reducing for year 2010-11 & 2011-12.
ROCE
2008-09 2009-10 2010-11 2011-12ROCE 17.26 27.94 21.19 13.02
2008-092009-10
2010-112011-12
0
5
10
15
20
25
30
17.26
27.94
21.19
13.02
ROCE
ROCE
Again company has been not performing well accept in year 2009-10 the company has being giving downward trend to the earnings of the ROCE.
84
FII inflow & Outflow
Maruti Suzuki 2008-09 2009-10 2010-11 2011-12Promoter group 54.21% 54.21% 54.21% 54.21%mutual fund/ UTI 3.09% 2.68% 3.09% 2.85%financial institutions/ bank 18.40% 13.93% 14.84% 12.95%FII 19.36% 21.12% 19.23% 21.45%corporate bodies 2.28% 6% 5.85% 5.83%Individuals 2.44% 2.25% 2.43% 2.35%clearing member, NRI & OCB 0.22% 0.17% 0.35% 0.36%
Promoter gr
oup
mutual fund/uti
financiia
l institutuins/
bank FII
corporate b
odies
Individuals
cleari
ng mem
ber, NRI &
OCB
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
2008-092009-102010-112011-12
We can see from the chart the company FII inflow is more than the FII outflow which means that the company has more foreign investment as a FII.
Maruti Suzuki India V/S Exchnage rate
Correlation with MSI
dollar0.345558
5pound -0.164336euro 0.174993yen 0.478257
There is a positive correlation of MSI with the exchange rate of Dollar, Euro & Yen which shows that when rupee depreciates against these currencies company performance also decreases. But the company performance is increased by 16% against the pound
85
AB) Bharti Airtel
ROCE
2008-09 2009-10 2010-11 2011-12ROCE 28.4 23.86 15.97 12.67
2008-092009-10
2010-112011-12
0
5
10
15
20
25
30 28.4
23.86
15.97
12.67
ROCE
Company ROCE has been continuously decreasing in each consecutive year. This shows that the company returns on capital employed has being reduced which is a not a good sign for the company performance.
EPS
2008-09 2009-10 2010-11 2011-12EPS 42.38 24.66 18.89 5.84
2008-092009-10
2010-112011-12
05
1015202530354045 42.38
24.66
18.89
5.84
EPS
86
Company performance on EPS has been also decreasing, which shows that company earnings per share being reduced on each & every year. This means the company earnings is reduced & the company has to work hard on to increase its earnings per share.
FII inflow
Share holding pattern 2008-09 2009-10 2010-11 2011-12Promoters 68.20% 68.12% 68.29% 68.50%Mutual Fund / UTI 3.69% 3.57% 3.57% 3.83%Financial institutions/ Banks 0.11% 0.12% 0.09% 0.06%Insurance Companies 5.05% 4.06% 5.05% 4.49%FII 17.30% 17.50% 17.36% 16.93%Corporate bodies 3.62% 4.60% 3.71% 4.56%Individuals 1.80% 1.19% 1.69% 1.45%NCR/Trust/ Clearing Members 0.23% 0.84% 0.24% 0.18%
Promoters
Mutual Fund / U
TI
Finan
cial in
stitutions/ Banks
Insurance
Companies FII
Corporate b
odies
Individuals
NCR/Trust/
Clearin
g Mem
bers
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
2008-092009-102010-112011-12
We can see that the FII performance is stable as on each & every year pass on. There is equal inflow & outflow of investment from foreign countries. So we can say there is a equal & outflow in the Bharti Airtel Company.
Bharti Airtel share Performance with the exchange rate:
correlation with Airteldollar 0.188031pound -0.16616euro 0.126415yen 0.492484
87
There is a positive correlation of the company performance against the dollar, euro & yen which shows company performance goes downward when rupee depreciates but the company performance goes up against the pound as there is a negative correlation between rupee depreciation against pound & company performance goes up.
AC) HDFC Corporation:
EPS
2008-09 2009-10 2010-11 2011-12EPS 63.11 91.57 25.26 30.4
2008-092009-10
2010-112011-12
0102030405060708090
100
63.11
91.57
25.26 30.4
EPS
The company EPS was increase in year 2009-10 but it was reduced in the year 2010-11 & 2011-12. There is an almost reduction of EPS on net profit of Rs: 65 per share in year 2010-11 & Rs 60 per share in year 2011-12 as compared to year 2009-10.
ROCE
88
2008-09 2009-10 2010-11 2011-12ROCE 10.54 9.58 9.04 14.35
2008-09 2009-10 2010-11 2011-120
2
4
6
8
10
12
14
16
10.549.58 9.04
14.35
ROCE
The company ROCE is being reduced in year 2009-10 & 2010-11 as compared to year 2008-09 which means that company return on capital employed is being reduced. But when we see about in the year 2011-12 the company ROCE was increased to almost 4% - 5% which means that in year 2011-12 company returns has being increased as compared to all other preceding year.
FII Inflow & Outflow pattern
Share Holding pattern 2008-09 2009-10 2011-12 2011-12MF/UTI 3.65% 3.75% 2.81% 3.28%FI/Banks 0.57% 1.34% 1.74% 2.66%Insurance Companies 8.03% 9.87% 9.13% 9.41%FII 59.92% 57.78% 58.71% 65.81%FDI- Foreign institutions 15.03% 15% 15.06% 4.77%corporate bodies 1.48% 1.51% 1.77% 2.93%individual 10.23% 9.93% 10.02% 9.75%NRI/CL/TRUST 0.58% 0.31% 0.32% 0.93%Director & their relatives 0.51% 0.51% 0.44% 0.46%
89
MF/UTI
FI/Ban
ks
Isuran
ce Compan
ies FII
FDI- F
oreign
institutions
corparate
bodies
individual
NRI/CL/T
RUST
Directo
r & th
eir re
latives
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
2008-092009-102011-122011-12
We can see from the chart that in HDFC Corporation the company major investment is through the FII & FDI from foreign institutions. This shows they have total 60% - 70% share of HDFC Corporation. This means that company has huge inflow of FII investment & less outflow of FII investment.
HDFC Corporation share performance with the exchange rate:
Correlation with HDFC Corpus$ 0.463556034Pound 0.180082533Euro 0.188751729yen 0.770797201
There is a positive correlation of the company performance with the exchange rate. This shows that when rupee depreciates against the currencies the company performance also depreciates due to this there is a positive correlation
AD) Dr. Reddy’s Laboratory
FII inflow & Outflow
Share holding Pattern 2008-09 2009-10 2010-11 2011-12promoters 26.40% 25.77% 25.65% 25.61%IFI 13.41% 11.53% 8.19% 6.86%
90
Banks 0.19% 0.03% 0.24% 0.04%MF 6.57% 6.47% 5.58% 6.52%FII 22.16% 27.27% 25.90% 27.42%NRI 1.86% 1.73% 1.63% 1.48%ADRs/ Foreign Nationals 15.74% 14.54% 18.74% 16.82%Indian Public & Corporates 13.67% 12.66% 14.07% 15.25%
promoters
Indian Fin
ancia
l institutions
Banks MF FII NRI
ADRs/ Forei
gn Nati
onals
Indian Public
& Corporates
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
2008-092009-102010-112011-12
While seeing the chart we can see that the company is getting more & more FII inflow & it shows that company FII investment is high.
EPS
2008-09 2009-10 2010-11 2011-12EPS -54.48 20.83 59.06 76.76
91
2008-092009-10
2010-112011-12
-60
-40
-20
0
20
40
60
80
-54.48
20.83
59.0676.76
EPS
We can see from the chart that in the year 2008-09 the company EPS was drastically showing negative results of earnings per share. But in the later years the company performance has been good to make & gives positive earnings per share & in the each year it goes on increasing only.
Dr. Reddy’s Lab Share performance with the exchange rate
Correlation with Dr. ReddyUS $ 0.463556034Pound 0.180082533Yen 0.770797201Euro 0.188751729
There is a positive correlation between the Dr. Reddy’s Lab & Exchange rate which rupee depreciate company performance on stock exchange also decreases.
FINDINGS When the Rupee Depreciates against the US$, Pound Sterling & Euro there is a negative
correlation with these exchange rate with BSE Sensex index, while there is a positive
correlation between the Japanese Yen & BSE Sensex.
In this project work I found that the companies who are exporting their products are gain
from the depreciation of the rupee. They are mostly IT-Sector Companies because when the
92
rupee depreciates they are in a position to sell more products at the rate which is prevailing
on that day exchange rate.
There is a low performance for the power generation company because the rupee is
depreciating as against the foreign currencies due to which the companies has to pay more &
more money for the purchase of raw material like crude oil & also the latest technology for
which the company has to imports theses raw material from the foreign countries.
The FII investment in the companies is good but accepts for the year 2008-09 where the
companies FII investment is being at a negative stage because of the great depreciation
comes in America in January 21st, 2008.
While we see the working of the oil marketing companies they also have to suffer loss or
downward return because of rupee depreciates they have to import crude oil in more quantity
and due to this the oil marketing companies has to pay amount in dollar, and thus the rupee
depreciates each & every day, the company has to buy pay more amount in terms of dollar
for the less quantity.
The Pharmaceutical companies are performing well because they are selling more generics
in the foreign countries & maximum revenue they are getting from selling the generics in the
foreign countries. The rupee depreciates shows good signs for these companies as they have
lots of international generics which help them to generate lots of revenue from the foreign
countries.
The Auto sector companies perform well because the companies are exporting more & more
two wheelers & four wheelers vehicle in the foreign countries.
For the Telecom sector company they are also benefitted because Telecom sector companies
business are being carried out globally, so they get lots of customer base and because of their
good service it helps the companies to perform well in the country.
While banking sector also perform well because as the rupee depreciation, there is more &
more exchange of foreign currency which helps the company to make more & more profit.
There is a positive correlation between the exchange rate and the Sensex.
93
The R-square statistics shows that BSE Sensex is dependent on US Dollar at 9.44% which
shows that the rupee depreciation has only this much effect on Sensex.
The R-square statistics shows that BSE Sensex is dependent on British Pound at 0.3% effect
on the Sensex.
The R-square statistics shows that BSE Sensex is dependent on European Euro at 1.55%
effect on the Sensex when rupee depreciates against the Euro.
The R-square statistics shows that BSE Sensex is dependent on Japanese Yen at 9% effect on
Sensex which shows only 9% effect is seen on the Sensex.
SUGGESTIONS
The Ravi Investor should give their investor the idea about to invest in IT-Sector
companies & Banking sector. The reason is that when the rupee depreciates the IT
companies are more beneficiaries of this. As the rupee depreciates they will import more
94
& more quantity which will give them a better chance to earn more in foreign exchange
& to increase their profit margin.
They can also give the idea to invest the investor money on Pharmaceutical companies.
Because Pharmaceutical companies are earnings more & more revenue by selling
generics in the foreign countries.
The banking sector shares for companies are also good as this will provide more gain to
the investor who invests their money on the banking sector.
The Ravi investor can also guide his investor to invest their money on the companies
where there is a high percentage of FII inflow for example HDFC Corporation, Dr.
Reddy Lab, TCS, Infosys, Wipro etc. because they are the companies who are performing
well in the stock market.
The Ravi investor should not give the suggestion of investing in the Power sector & steel
manufacturing companies.
The investor to invest in the bike; auto rickshaw & car segment because they are also
exporting the final product to the foreign countries in the foreign currencies which helps
them to generate more revenue in terms of foreign currency.
CONCLUSION
The main objective of the study is to find the impact of rupee depreciation on the Indian
stock market. To test this we have employed methodology of Karl Pearson coefficient
correlation & regression analysis. Correlation was used d to know there was positive
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impact or negative impact & regression analysis was find the extent of impact of rupee
depreciation on BSE Sensex.
According to data analysis & findings we can conclude that there is no significant impact
on the Sensex when rupee depreciates. But there is a strongly positive & negative impact
of rupee depreciation on the companies listed on Sensex.
After doing this research work we found that when the rupee depreciates it benefits to the
companies which are of IT sector, Pharmaceutical Companies & also to the banking
sector. This leads to the companies to perform in a good way and to earn more & more
revenue from its operations carried out day to day nationally or internationally.
The companies those who are in power sector & oil sector they are not performing well
there returns & earnings are being decreasing due to depreciation of rupee. Because of
depreciation of rupee they have to pay more dollars for purchase of crude oil which
makes their income from operation less.
The companies those who are in bike & car segment they are also performing well
because they are importing technology from foreign and make use of that technology on
making bike or car, after that the company sell the finals products in foreign countries &
in a foreign currency which helps the company to earn more revenue as rupee
depreciates.
While we talk about banking sector, they are the biggest gainers of the rupee depreciation
because the individual who are travelling foreign countries, so they required foreign
money which they will get by exchanging of foreign currency with banks which helps the
bank to earn more money as rupee depreciates & foreign currency is becoming stronger,
they have to pay more money when the individual goes for trip in foreign countries.
The pharmaceutical companies are also performing well because whatever generics they
are making almost 70% - 80% are selling that generics on the foreign countries which
makes the company to earn more from the operation carried out by the companies.
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BIBLIOGRAPHY
Website:
www.moneycontrol.com / ITC
www.moneycontrl.com/ Dr. Reddy’s LAB
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www.moneycontrol.com /Bajaj Auto
www.moneycontrol.com./ L& T
www.rbi.org.in/ Exchange rate study
www.sebi.com/ FII investment
www.in.finance.yahoo.com/ BSE share price
www.in.finance.yahoo.com/ ITC share price
www.in.finance.yahoo.com/ HUL share price
www.in.finance.yahoo.com/ Hindalco share price
www.in.finance.yahoo.com / Bajaj Auto share price
www.in.financeyahoo.com / coal India share price
www.in.finance.yahoo.com / GAIL share price
wwww.in.finance.yahoo.com / TCS share price
www.in.fiannce.yahooo.com / Tata Motor share price
www.in.finance.yahoo.com/ Tata Power share price
www.in.finance.yahoo.com /Tata steel share price
www.in.finance.yahoo.com /Infosys share price
www.in.finance.yahoo.com / Wipro share price
www.in.finance.yahoo.com / Sun Pharma share price
www.in.finance.yahoo.com / Dr. Reddy’s share price
www.in.finance.yahoo.com / Bharti Airtel share price
www.in.finance.yahoo.com / ONGC share price
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www.infinance.yahoo.com / BHEL share price
www.in.finance.yahoo.com / CIPLA share price
www.in.finance.yahoo.com / Reliance share price
www.in.finance.yahoo.com/ JSPL share price
www.in.finance.yahoo.com / Sterlite industries share price
www.in.finance.yahoo.com / HDFC bank share price
www.in.finance.yahoo.com / ICICI Bank share price
www.in.finance.yahoo.com /SBI share price
www.in.finance.yahoo.com / HDFC Corporation share price
www.in.finance.yahoo.com / NTPC share price
www.in.finance.yahoo.com / Hero Moto Corp share price
www.in.finance.yahoo.com/ M & M share price
www.in.finance.yahoo.com /ITC share price
www.in.finance.yahoo.com /Maruti Suzuki share price
Journals
1) Manjinder Kaur, Sharanjit S. DHILLON – year 2010 – on Determinants of Foreign Institutional Investors Investment in India on Eurasian Journal of Business & Economics 2010, 3 (6), 57-70
2) By Anubhav Shrivastavav – year 2013- influence of FII flows on Indian Stock Market on GYANPRATHA-ACCMAN Journal of Management, Volume 5, sand Issue 1.
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3) Determinants of Exchange rate in India
BY: Mita H. Suthar, H.L. Institute of Commerce April 21, 2008
GLOSSARY
FII: An investor or investment fund that is from or registered in a country outside of the one in which it is currently investing. Institutional investors include hedge funds, insurance companies, pension funds and mutual funds.
Sensex: An abbreviation of the Bombay Exchange Sensitive Index (Sensex) - the benchmark index of the Bombay Stock Exchange (BSE). It is composed of 30 of the largest and most actively-traded stocks on the BSE. The index is calculated based on a
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free-float capitalization method when weighting the effect of a company on the index. This is a variation of the market cap method, but instead of using a company's outstanding shares it uses its float, or shares that are readily available for trading. The free-float method, therefore, does not include restricted stocks, such as those held by company insiders that can't be readily sold. To find the free-float capitalization of a company, first find its market cap (number of outstanding shares x share price) then multiply its free-float factor. The free-float factor is determined by the percentage of floated shares to outstanding. For example, if a company has a float of 10 million shares and outstanding shares of 12 million, the percent of float to outstanding is 83%. A company with an 83% free float falls in the 80-85% free-float factor, or 0.85, which is then multiplied by its market cap (e.g., $120 million (12 million shares x .$10/share) x 0.85 = $102 million free-float capitalization).
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