A Research Project

on

―Role of risk and return in investment selection and portfolio management‖

at

Shah investor’s home Ltd

In partial fulfillment of the requirements of Summer Internship Programme in the

Masters of Business Administration Programme at GLS University

Submitted to
Faculty of Management

Under the Guidance of

Dr. Sneha Shukla Ajay J Trivedi

(Professor, FOM) (Branch Manager)

By
Vishwa Patel(201800620012678)
Vishal Sagar(201800620012696)
Batch: 2018-20
Company Certificate

i
Company Certificate

ii
 Institute Certificate

Faculty of Management

This is to certify that Mr/Ms. Vishwa Patel Enrolment No. 201800620012678 and Vishal Sagar
Enrolment No. 201800620012696, student of faculty of management has successfully completed
his/her Summer Project on ―Role of risk and return in investment selection and portfolio
management‖ at ―Shah Investors Home Ltd.‖ in partial fulfillment of the requirements of MBA
Programme of GLS University. This is his original work and has not been submitted elsewhere.

_______________ ____________________
Dr. Hitesh Ruparel Dr. Sneha Shukla
Dean Professor

Date: _________________

Place: Ahmedabad

iii
 DECLARATION

We, Vishwa Patel (Enrollment number 201800620012678) & Vishal Sagar (Enrollment number
201800620012696) student of Faculty of Management hereby declare that the report for
dissertation entitled ―Role of risk and return in investment selection and portfolio management‖
is a result of my own work and my indebtedness to other work publications, references, if any,
have been duly acknowledged.

Place: Ahmedabad
Date:

_____________
Vishwa Patel

_____________
Vishal Sagar

iv
 PREFACE

As a part of the MBA Curriculum and in order to gain practical Knowledge in the field of
management, we are required to make a report on ―Role of risk and return in investment
selection and portfolio management‖. The basic Objective behind doing this project report is to
get knowledge of tools of risk and return.

In this project report we have included various measures of risk and return of stocks and
portfolio.

This project report helped us to enhance our knowledge regarding the role of risk and return in
investment selection and portfolio management. Through this report we come to know about
importance of team work and role of devotion towards the work.

v
 ACKNOWLEDGEMENT

SIP is one of the very good experiences to learn corporate environment and working company
culture. To complete this programme and research on ―Role of risk and return in investment
selection and portfolio management‖, we got big support of many internal as well as external to
complete this programme.

We are extremely thankful and pay our gratitude to our internal guide Dr. Sneha Shukla for her
valuable guidance and support on completion of this project.

We would also like to thank our external guide Mr. Ajay Trivedi (Branch manager of Shah
Investors Home Ltd.), Trupti Shah (Director of Shah Investors Home Ltd.) and Amritha Mashar
(Technical Analyst) who gave us their valuable time and knowledge in our Summer Internship
Programme.

We would also like to thank Dr. Hitesh Ruparel , Dean of FOM and all other Faculty members of
GLS University who helped us to complete this important Programme and Research.

We are thankful to all those people who gave small participation in our research. We have built a
great contact with the corporate world during the Summer Internship Project.

Vishwa Patel & Vishal Sagar

Faculty of Management, GLS University (MBA)
GLS University, Ahmedabad.

vi
 EXECUTIVE SUMMARY

The project studied in shah investor’s home ltd was ―role of risk and return in investment
selection and portfolio management‖. Shah investor’s home ltd is a leading broking firm with an
extensive client base

Stock market investors take their investment calls based on risk and return. Risk and return of
different stocks were calculated. After calculating risk & return and fundamentals 10 portfolios
were suggested.

After making portfolios 5 ratios were calculated and ranks were given to the portfolios. Based on
this analysis top 5 portfolios were suggested for the investment.

vii
 INDEX

Company Certificate ........................................................................................................................ i

Company Certificate ....................................................................................................................... ii
Institute Certificate......................................................................................................................... iii
Declaration ..................................................................................................................................... iv
Preface............................................................................................................................................. v
Acknowledgement ......................................................................................................................... vi
Executive Summary ...................................................................................................................... vii
Chapter 1 Research Methodology................................................................................................... 1
Introduction ................................................................................................................................. 2
Research Objectives .................................................................................................................... 7
Scope Of The Study .................................................................................................................... 7
Need Of The Study ..................................................................................................................... 8
Research Design.......................................................................................................................... 8
Data Collection Sources .............................................................................................................. 8
Limitations .................................................................................................................................. 8
Chapter 2 Introduction To Stock Broking Industry ........................................................................ 9
Pestel Analysis Of Brokerage Industry ..................................................................................... 21
Micheal Porter’s Five Force Of Share Broking Industry .......................................................... 23
Chapter 3 Introduction To Shah Investor’s Home Ltd .................................................................. 25
Sihl's Vision .............................................................................................................................. 26
Sihl's Mission ............................................................................................................................ 27
Core Values ............................................................................................................................... 27
Milestones ................................................................................................................................. 27
Services Provided By Sihl ........................................................................................................ 28
Sihl Group Companies .............................................................................................................. 30
Swot Analysis Of Sihl ............................................................................................................... 31
Chapter 4 Introduction To Role Of Risk & Return In Investment Selection And Portfolio
Management .................................................................................................................................. 32
Role Of Risk And Return .......................................................................................................... 33
Investment Avenues .................................................................................................................. 37
Portfolio Management .............................................................................................................. 41
Fmcg Sector .............................................................................................................................. 44
Banking Sector .......................................................................................................................... 53

viii
 Automobile Sector .................................................................................................................... 62
It Sector ..................................................................................................................................... 72
Consumer Durables ................................................................................................................... 81
Chapter 5 Analysis And Interpretation .......................................................................................... 90
Tools And Techniques Used In The Analysis ........................................................................... 91
Suggested Portfolios ............................................................................................................... 102
Calculation Of Certain Ratios of Suggested Portfolios .......................................................... 105
Chapter 6 Findings .......................................................................................................................114
Chapter 7 Recommendations .......................................................................................................116
Chapter 8 Conclusion ...................................................................................................................119
Bibliography ............................................................................................................................... 121
Annexure ..................................................................................................................................... 123

ix
List of Tables
Table 5. 1 Risk, Return & Beta of FMCG Sector ......................................................................... 92

Table 5.2 Risk, Return & Beta of Auto Sector .............................................................................. 94

Table 5.3 Risk, Return & Beta of IT Sector .................................................................................. 96

Table 5.4 Risk, Return & Beta of Banking Sector ....................................................................... 98

Table 5.5 Risk, Return & Beta of Consumer Durables Sector................................................... 100

Table 5.6 High Risk High return Portfolio.................................................................................. 102

Table 5.7 Moderate Risk Moderate Return Portfolio.................................................................. 102

Table 5.8 Low Risk Low Return Portfolio.................................................................................. 103

Table 5.9 Low Risk High Return Portfolio ................................................................................. 103

Table 5.10 Based on fundamentals Portfolio .............................................................................. 104

Table 5.11 Sector Wise Companies Portfolio ............................................................................. 104

Table 5.12 Treynor ratio .............................................................................................................. 105

Table 5.13 Jensen Ratio .............................................................................................................. 107

Table 5.14 Sharpe Ratio .............................................................................................................. 109

Table 5.15 Fama measure ............................................................................................................111

Table 5 16 Sortino Ratio ..............................................................................................................112

x
List of Figures

Figure 2. 1 Micheal Porter’s Five Force of Share Broking Industry ............................................ 23

Figure 4. 1 Risk/Return Trade off ................................................................................................. 33

Figure 4. 2 Types of risk ............................................................................................................... 36

Figure 4. 3 FMCG Sector.............................................................................................................. 44

Figure 4. 4 Banking Sector ........................................................................................................... 53

Figure 4. 5 Auto Sector ................................................................................................................. 62

Figure 4. 6 IT Sector ..................................................................................................................... 72

Figure 4. 7 Consumer Durables Sector ......................................................................................... 81

Figure 5. 1 Risk and Return of FMCG Sector .............................................................................. 92

Figure 5. 2 Risk and Return of Auto Sector .................................................................................. 94

Figure 5. 3 Risk and Return of IT Sector ..................................................................................... 96

Figure 5. 4 Risk and Return of Banking Sector ........................................................................... 98

Figure 5. 5 Risk and Return of Consumer Durables .................................................................. 100

xi
 Chapter 1

Research Methodology

1
 Research Methodology

Introduction

Risk refers to the fluctuation of potential returns associated with a given investment. Risk, along
with the return, is a noteworthy consideration in investment decisions. The investor must
compare the expected return from a given investment with the risk connected with it. Higher
levels of return are required to compensate for increased levels of risk. In other words, the higher
the risk undertaken, the more ample the return – and conversely, the lower the risk, the more
modest the return.

Risk aversion also plays an important role in determining a firm’s required return on an
investment. Risk averse is the depiction of an investor who, when looked with two investments
with a comparative anticipated return, lean towards the one with the lower risk. For example, a
risk-averse investor may put his or her money into a bank account with a low yet ensured interest
rate, rather than into a stock that may have high anticipated returns, but also includes a chance of
losing value.

Portfolio management is the art and science of making choices about investment mix and policy,
matching investments to objectives, resource assignment for individuals and institutions, and
adjusting risk against performance. Portfolio management is all about discovering strengths,
weaknesses, opportunities and threats in the choice of debt vs. equity, domestic vs. international,
growth vs. safety, and numerous trade-offs encountered in the attempt to boost return at a given
appetite for risk.

Portfolio management can by either passive or active, in the case of mutual and exchange-traded
funds (ETFs). Passive management simply tracks a market index, usually referred to as indexing
or index investing. Dynamic management involves a team of managers who attempt to beat the
market return by effectively managing a fund's portfolio through investment decisions based on
research and decisions on individual holdings. Closed-end funds are generally effectively
managed.

2
The way to compelling portfolio management is the long-term mix of assets. Asset allocation
depends on the understanding that various types of assets do not move in concert, and some are
more unpredictable than others. Asset allocation seeks to optimize the risk/return profile of an
investor by investing in a mix of assets that have low relationship to one another. Investors with a
more dynamic profile can weight their portfolio toward more volatile investments. Investors with
a moderate profile can weight their portfolio toward more stable investments.

The only certainty in investing is it is difficult to reliably foresee the winners and losers, so the
prudent approach is to make a basket of investments that give broad exposure within an asset
class. Diversification is the spreading of risk and return within an asset class. Because it is
difficult to know which particular subset of an asset class or sector is likely to outperform
another, diversification seeks to capture the returns of all of the sectors over time but with less
volatility at any one time. Proper diversification takes place across different classes of securities,
sectors of the economy and geographical regions.

Literature reviews

 (Gautami & Kalyan, 2018) Examined that in primary market companies float shares to the
general public in an initial public offering (IPO) to raise capital. When new securities have
been sold in the primary market, they are traded in the secondary market. In India, the
secondary and primary markets are governed by the Security and Exchange Board of India
(SEBI).If a stock is listed on an exchange then only it can be bought or sold. Bombay Stock
Exchange and National Stock Exchange are india's premier stock exchanges. The Stock
exchange provides not only free transferability of shares but also makes continuous
evaluation of securities traded in the market. Risk may be characterized as the chance of
variations in actual return. Return is characterized as the gain in the value of investment.

 (Subramanyam & Kalyan, 2018) Described analysis of tradable financial instruments is

called security analysis. It can be classified into Debt securities, Equities, or some hybrid of
the two. Investing is concerned with the return of investment and it also involves risk of loss
of principal. Risk can be divided in two parts: Unsystematic Risk and Systematic Risk.
Unsystematic risk can be diversified while systematic risk cannot be diversified. Investors
3
 have different motives for investing like regular income, capital gain, hedge against
inflation, safety of funds and regularity of returns, liquidity and marketability. The extent of
risk varies from investor to investor but the return depends on the extent of risk that the
investors take.

 (Soni, 2017) Found every investor wants to maximize return with minimum risk. The target
is to optimize the risk and return. A resource which has potential to provide benefits in
future is an asset. An asset class is a group of financial instruments with similar
characteristics. Different asset classes perform differently at different points of time and it is
affected by micro as well as macroeconomic parameters. Equity, bonds, fixed deposits, real
estate, gold, cash equivalents are some of the asset classes available to investors in India.
Equity represents ownership in a company and is also known as stock. Investors categorize
equities into growth stock and value stock. Real estate provides stable income returns
besides it also provides partial protection against inflation. It is diversifier in portfolio. Gold
is another asset class which has moderately low correlation with investments in other asset
classes. Gold Exchange Traded Funds (ETF) is a professionally managed fund allowing
investors to gain exposure to gold without holding physical gold. Before making an
investment investor considers risk and return attached to asset class. Return measures the
gain or loss on any investment over a specified time period. The amount of return is
anticipated based on historical data. There is possibility of difference between actual return
and expected return which is known as risks. The risk which is inherent to the market as a
whole is known as the systematic risk or market. Such risks contribute to the market
volatility and are un-diversifiable, mostly unpredictable and not completely avoidable. If the
risk is specific to an issuer or security, it is known as unsystematic risk or business risk and
can be diversified with the help of a well balanced portfolio.

 (Aliu, Pavelkova, & Dehning, 2017) Found that investors attempt to keep in their portfolio
those securities that are less correlated or negatively correlated. Less correlated assets
reduce portfolio exposure to risk. Constructing a portfolio, which gains superior returns in
the market, is every day aim of portfolio managers. Risk in portfolio management is mainly
measured through the uncertainties of returns, which in itself involves: correlation

4
 coefficients, weights of each security in the portfolio, and the variance of returns. Each of
these factors are influential in increasing or reducing portfolio risk. Some studies concluded
that portfolio more than 50 uncorrelated stocks fully completes risk reduction. Investments
in the same sector cannot diversify risk completely.
 Satyanarayana, Sidhu, & Maruthi, 2015) Discovered Portfolio Management is the total
holdings of a person in financial markets. Security analysis is a tool for efficient and
effective portfolio management. The portfolio analysis is thus an analysis of risk return
characteristics of individual securities in the portfolio and changes that may occur in blend
of individual securities in the portfolio and changes that may take place in combination with
other securities due cooperation among them and impact of each on others. It is a dynamic
and adaptable concept and involves regular and systematic analysis, judgment and action.
The objective of this service is to help the unknown and investors with ability of expert in
investment portfolio management. Investment in TCS and ANDHRA bank are
recommended on the basis of standard deviation.

 (Abdeldayem, 2015) Concluded that behavioral finance is an integral part of the decision
making process as it greatly affects investors’ behavior regarding decision making. Risk
perception can be managed if the investors are aware of their level of risk perception.
Portfolio management concerns the constructions and maintenance of a collection of
investment. It is investment of funds in various securities in which the total risk of the
portfolio is minimized, while expecting maximum return from it. It mainly involves
reducing risk rather than increasing return.

 (Kapoor, 2014) Described that portfolio is combination of security such as Stocks Bonds
and Money market Instruments. The process of blending together the wide Asset classes so
as to obtain optimum return with least risk is called portfolio management. Diversification
of investments helps to spread risk over numerous assets. The objective of portfolio
management is to invest in securities is securities in such a way that one maximizes one’s
returns and minimizes risks in order to achieve one’s investment objective.

5
 (Brindha, 2013) Found that making an investment on shares, debenture, and bonds is
profitable. It requires analytical skills as it involves high amount of risk. To make profit
securities, investor must have considerable financial acumen as well as capable of facing
risk. Portfolio management refers to diversification of investment to minimize the risk and
maximize the return. Portfolio management is all about strengths, weaknesses, opportunities
and threats in the decision of debt vs. equity, domestic vs. international, growth vs. safety.

 (Malik & Saini, 2013) Discovered portfolio management helps in reducing risk without
sacrificing returns. There are two approaches in the construction of the portfolio of
securities :- Traditional approach, Markowitz efficient frontier approach. Traditional
Approach involves following steps in selection of portfolio analysis of constraints,
determination of objectives, selection of portfolio, risk and return analysis, diversification.
Markowitz approach includes stocks are selected on the basis of risk and return analysis not
on the basis of need of income or appreciation. In this approach, the last advance is the
distribution of benefits process that is to pick the portfolio that meets the prerequisite of the
financial specialist. Portfolio presently incorporate household securities as well as outside.
The basic objectives of portfolio are current income, constant income, preservation of
capital, capital appreciation. As per the objective of portfolio whether it is a stock portfolio
or bond portfolio or combination of both is to be decided.

 (Vaidehi & Pandian, 2013) Encountered the security has comprehensive of shares, scripts,
bonds, debenture stock or some other marketable securities of like nature in or of any
debentures of an organization or body corporate, the government and semi government body
etc. Portfolio is a blend of assets or it consists of collection of securities. Modern security
analysis depends on the fundamental analysis of the security. Fundamental analysis is a
logical and systematic approach to estimating the future dividends & share price as these
two constitutes the return from investing in shares. Technical analysis includes a study of
market-created data like prices and volumes to choose the future direction of price
movement.

 (Fathi, Zarei, & Esfahani, 2012) Concluded that risk causes actual and direct loss to the
6
 organization through decreasing income flow and capital loss. Financial institutions can
have an important effect on economy-wide crisis as it plays an important role of financial
markets in the architecture of an economy. Crisis on macro level increases the cost of socio-
economic development and in micro level leads to business management uncertainty and
bankruptcy. The risk of loss arising from the default of the counter–party is credit risk, that
is the failure to meet its legal obligations in credit quality that affect the value of financial
instruments. Operating risk is a risk related to direct or indirect losses that rise from
incorrect processes inside the organizations, individuals, systems or events outside the
organization. Based on changes and fluctuations of market factors such as foreign exchange
rate, interest rate, stock price and etc is known as market risk.

 (Sulaiman, 2012) Discovered that over the years a positive pattern between income of
individual investors and their financial risk tolerance has been observed. Financial risk
tolerance of an individual investors decreases with their age. The study agrees that higher
levels of formal education increases one’s ability to assess risk and therefore gives a higher
financial risk tolerance. The study found positive relationship between income of individual
investors and their financial risk tolerance.

Research Objectives

 To analyze 8 selected companies each in 5 sectors.

 To study the risk-return relationship.

 To recommend the best company from each sector by using appropriate statistical tools.

 To suggest a portfolio considering risk-return relationship.

Scope of the study

 The study is limited to a time period of five years starting from 2013 to 2018.

 The study attempts to analyze investment strategies taking into account parameters of
7
 risk and return.

 The study covers 8 stocks each from FMCG, Auto, IT, Banking and Consumer durables.

Need of the study

 The research will help the investors to understand the risk-return relationship involved in
investment selection and portfolio management.

 The study will help Shah Investor’s home Ltd. to suggest portfolio to its clients.

Research design
 Our research design is Analytical.

Data collection sources

 Secondary data: - Books, Articles, Journals, websites,

Limitations
 The research is conducted on 5 sectors and hence similar study can also be conducted on
other sectors.

 The analysis is conducted on predefined parameters and hence similar analysis can be
done using different parameters.

 The research is limited to a period of last 5 years.

8
 Chapter 2

Introduction to Stock
Broking Industry

9
 Stock Broking Industry

2.1 Stock Market Evolution and Growth in India

Stock market in India has a long history. Bombay Stock Exchange, the country's first stock
exchange, was set up as early as 1875, three years before the Tokyo Stock Exchange. Indian
stock market has gone through various fortunes over these years. This section describes the
historical evolution of the Indian stock market through four separate phases.

2.1.1 Early Begining

India's stock market dates back to the 18th century when East India Company's securities were
traded in Mumbai and Kolkata. Stock broking was not very popular at the time and only half a
dozen brokers were recognized by the banks and merchants in Mumbai during 1840 and
1860.The securities traded were primarily shares, debentures and bonds representing property
titles or promises to pay issued under the transfer condition from one person to another.
The real start of corporate securities trading came in 1850 when the Companies Act passed,
introducing limited liability joint stock companies. The following period saw the rapid
development of business enterprises, popularizing investments in stocks and shares. Shares of
banks, cotton mills and East India Company loan securities were transacted in large volume in
Mumbai and Kolkata. The 1860's cotton boom has added further impetus to securities trading.
The American Civil War (1860-61), which caused the United States ' supply of cotton to Europe
to cease, was a boon to India's cotton industry. There was an unlimited demand for cotton from
India and cotton exporters gained substantially. The export proceeds in gold and silver served as
fresh capital for a number of new ventures. Many new companies have been launched in a
variety of fields such as banking, land reclamation, trading, cotton cleaning, pressing, shipping
and construction. During this period, banks followed a reckless lending policy. The excessive
speculation coupled with the reckless lending policy resulted in a stock-market boom. Any script
that floated in the 1860s commanded a very high premium. The steep rise in share prices
attracted a lot of people to the stock exchange.
This boom, however, was short-lived. As the Civil War came to an end, a disastrous slump
followed in India, and the Indian capital market witnessed the first shock in 1865. Although the

10
depression was severe and long, the 1860s share mania created some positive effects.It led to the
establishment of a regular and liquid securities market, developed an equity cult among
investors, and helped make Mumbai the chief center of India's money and capital market and
financial capital.
The boom and burst also had an impact on share brokers. During the share mania period, the
number of brokers increased significantly and stood at 250 in 1865. The downturn also brought
many failures to the brokers. This brought together brokers in Mumbai to form the first formally
organized stock exchange in the country The Bombay Stock Exchange. It was formed in 1875 as
a society called the Native Share and Stock Brokers Association. Subsequently, stock exchanges
were established in 1894, 1905 and 1908 respectively at Ahemedabad, Kolkata and Madras.

2.1.2 Period of Repression (1947-1980)

While India inherited a poor economy at the time of Independence, it had one of the best formal
financial markets in the developing world. There were four functioning stock exchanges with
clearly defined rules governing listing, trading and settlement, 1119 listed companies with capital
market value Rs.971 crores, a developed equity culture, if only among the urban rich ; and a
banking system with well-developed lending standards and recovery procedures. India was better
endowed than many of the former colonies in terms of corporate laws and financial system. On
this foundation was built the Companies Act, 1956, as well as other laws governing joint stock
companies and investor protection (Allen, et al, 2007).
However, in this period, the role assigned to the financial system was limited, with primary role
assigned to the state and its savings mobilization and allocation agencies. Accordingly, the role
of the financial system was essentially limited in the process of capital accumulation. To a large
extent, financial system also played a limited role in providing incentives for savings and capital
accumulation as interest rates were controlled and household savings were pre-empted through
high levels of statutory reserve and liquidity ratio. The industry depended less on resource
mobilization through shares and debentures due to the administered interest rate structure, and
banks and financial institutions ' credit deployment was at relatively low interest rates (Jalan,
2002).As far as external finance was concerned, the country relied primarily on official bilateral
and multilateral development and did not encourage private external capital inflows as a way to
complement domestic savings. Therefore, there was no noticeable development regarding the

11
structure and functioning of the country's capital market, and it remained more or less repressed
during this period.
The demand for long-term funds was not significant during the 1950s and 1960s, partly due to
the weak industrial base and partly due to the low saving rate. Also, this period did not witness
substantial progress in terms of investor participation. However, this period was characterized by
the enactment of a number of basic legislation covering various aspects of the securities market,
i.e. the Capital Issues (Control) Act, 1947 ; the Securities Contracts (Regulation) Act, 1956 ; the
Companies Act, 1956 ; and the Foreign Exchange Regulation Act (FERA), 1975.The FERA
legislation restricting the shareholding of foreign firms in joint ventures to 40% made many well-
managed multinational firms offer their equity to the public at the regulated low prices during the
1970s.Encouraged by the good response to such issues, a large number of domestic limited
public companies offered new capital issues for public subscription. Accordingly, the stock
market showed an upward trend with high floatation share prices (Misra, 1997).By the end of
1980, the number of exchanges increased to nine with 2265 companies listed on them and the
market value of the listed capital was aggregated at Rs.6,750 crore. For the first time, common
investors were made aware of the potential of equity investments as a hedge against inflation and
a source of higher earnings compared to other forms of investment. The number of shareholders
as a proportion of the total population registered a nominal increase from 0.12 per cent in 1955 to
0.36 per cent in 1980.

2.2 Regulatory Framework of Indian Stock Market

Due to its special characteristics, the financial market requires close monitoring and supervision.
The most important of these is the large volume of transactions and the speed at which financial
resources can move from one market to another. In addition, financial markets are often
associated with negative externalities. A failure in any segment of these markets may affect all
other market segments, including non-financial markets. In view of externalities, volatility and
certain other special characteristics, financial markets require an efficient and separate regulatory
and supervisory framework (Jalan, 2002).The Indian securities market regulatory framework
consists of four fundamental laws governing the securities market viz. The SEBI Act of 1992, the

12
Securities Contracts Act of 1996 and the Depository Act of 1996.The Government and the
Securities and Exchange Board of India (SEBI) have framed rules and regulations under these
laws for the registration and regulation of market intermediaries and for the prevention of unfair
trade practices (ISMR, 2005).

2.2.1 The Companies Act, 1956

It deals with the issue, allocation and transfer of securities and various aspects related to
company management. It provides standards of public disclosure, particularly in the fields of
company management and projects, information about other listed companies under the same
management and management perception of risk factors. It also regulates underwriting, use of
premiums and discounts on issues, rights and bonus issues, payment of interest and dividends,
provision of annual reports and other information.

2.2.2 The Securities Contracts (Regulation) Act, 1965 (SCRA)

The 1965 Securities Contracts (Regulation) Act provides the Central Government with virtually
all aspects of securities trading, including the operation of stock exchanges, with the aim of
preventing undesirable securities transactions. It gives the government regulatory jurisdiction
over (a) stock exchanges through a process of recognition and continued supervision, (b)
securities contracts, and (c) stock exchange listing of securities. A stock exchange should comply
with the Central Government's requirements for trading recognition.

2.2.3. The SEBI Act, 1992

The SEBI Act, enacted in 1992, empowered SEBI with statutory powers to (a) protect investor
interests in securities, (b) promote securities market development and (c) regulate the securities
market. Its regulatory jurisdiction extends to corporations in the issuance of capital and to all
intermediaries and persons associated with the securities market. SEBI may conduct inquiries,
audits and inspections of all concerned participants and adjudicate offenses under this Act. It has
the power to register and regulate all market intermediaries. Furthermore, in the event of
breaches of the provisions of the Act, Rules and Regulations made therein, it may also penalize
them. SEBI has full autonomy and authority for regulating and developing an orderly securities
market.

13
2.2.4 The Depositories Act, 1996
It provides for the establishment of securities depositories to ensure the transferability of
securities with speed, accuracy and security. For this purpose, three provisions have been made:
(a) the free transfer of securities of public limited companies subject to certain exceptions ; (b)
the maintenance of ownership records in book entry form; and (c) the dematerialization of
securities in depository mode, In order to streamline the settlement process, the act envisages
transferring ownership of securities electronically through book entry with out moving the
securities physically.

2.2.5 High Level Committee on Capital Markets

Department of Economic Affairs (DEA), Department of Company Affairs (DCA), Reserve Bank
of India (RBI) and SEBI share responsibility for regulating the securities market. The activities
of all these agencies are coordinated by a Capital Markets High Level Committee. Most of the
powers under the SCRA are exercisable by DEA, while some by SEBI and others are exercisable
by DEA at the same time. Regulating contracts for the sale and purchase of securities, gold-
related securities, money market securities and securities derived from these securities and
ready-forward contracts in debt securities are exercised at the same time as the RBI. The SEBI
Act and the Depository Act are mostly administered by SEBI. While the rules are framed by
government under the securities laws, regulations are framed by SEBI.SEBI administers the
powers under the Companies Act relating to the issue and transfer of securities and the non-
payment of dividends in the case of listed public companies and public companies proposing to
list their securities.

2.3 Structure and Working of Stock Exchanges in India

Stock exchanges remain India's most important service institutions on the securities market.
Since the country's regulatory framework virtually prohibits trading outside the stock exchanges,
they, along with a host of intermediaries, provide the necessary platform for equity trading and

14
trade clearance and settlement. There are currently 24 stock exchanges in the country, 21 of
which are regional exchanges and others are national exchanges (OTCEI, NSE and ICSE). The
latest in the list-The Capital Stock Exchange, Thiruvananthapuram, has yet to begin its
operations.

2.3.1 Organisation of Stock Exchanges

Stock exchanges in India must be registered under the Securities Contracts (Regulation) Act,
1956.Under the SCR Act, an exchange is defined as any body of individuals, whether
incorporated or not, constituted for the purpose of assisting, regulating or controlling the
business of purchasing, selling or dealing in securities. Of the 24 registered stock exchanges, all
are organized as limited companies, while the three (Bombay, Ahamedabad and Madya
Pradesh)which are organized in the form of Association of Persons. Except for NSE, all
exchanges are non-profit organizations. Traditionally, stock exchanges in India were organized in
the form of clubs, with the brokers being in charge of ownership and control. Of the country's 24
stock exchanges, only two stock exchanges, i.e. OTCEI and NSE are de-mutualized. Under the
chairmanship of Chief Justice M.H. Kania, the government has appointed a committee to review
the current stock exchange structure and examine legal, financial and fiscal issues related to
stock exchange demutualization. The Committee recommended a uniform model of
demutualization and corporatization, and advised stock exchanges to initiate the process of
demutualization (NSEISMR, 2004).

2.3.2 National and Regional Stock Exchanges

Until recently, the area of operation of an exchange was specified at the time of its recognition,
which effectively precluded competition between exchanges. Stock exchanges that have a
monopoly in the respective cities where they are established are called regional exchanges.
Where nationwide trading is mandated as national exchanges. The first exchange to provide
nationwide trading was the 1990 Over the Counter Exchange of India (OTCEI). It was set to
meet the long felt need for a second-tier stock market where companies with small paid-up
capital can have the advantage of listing. Companies listed on the OTCEI enjoy the same status
as companies listed on the country and other stock exchanges with regard to taxes and interest on
borrowings. NSE, incorporated in 1992, was the second national exchange providing nationwide

15
stock trading. Regional exchanges have been established across the country to enable investors to
access the stock market. Until recently, a company was obliged to list the local stock exchange
closest to its registered office. However, this restriction has been removed and today's companies
have an option to choose from any of India's existing stock exchanges to list their securities.
Regional exchanges are now free to expand their operations to any other geographical location of
their choice. Accordingly, many of them have already expanded trade terminals to different parts
of the country. With the increased use of information technology, all stock exchanges trading
platforms are accessible from anywhere in the country through their trading terminals. This has
greatly expanded the exchange reach for investors.
However, the advent of the NSE and BSE nationwide trading networks and their enormous
liquidity and order depth of large exchanges have affected the fortunes of many regional
exchanges and reduced their relevance (Misra, 1999).Very few regional stock exchanges have the
depth or breadth necessary to give investors the kind of choice that the NSE or BSE can provide.
The turnover on many exchanges is too low to raise long-term doubts about the viability of
operating separate exchanges in different cities.Only five viz. exchanges. NSE, BSE, CSE
(Calcutta Stock Exchange), ASE (Ahemedabad Stock Exchange) and UPSE (Utter Pradesh Stock
Exchange) registered sufficient returns in 2003-04.Of which NSE and BSE account for 68
percent and 31 percent of the country's total return, respectively. With the fall in turn, the
financial health of regional exchanges is also deteriorating. While regional exchange income is
decreasing, their expenditure is increasing due to higher administrative and maintenance costs.
Internationally, most small exchanges have either merged with larger ones, worked out alliances,
or developed niche markets that they can profitably serve. The Committee for Studying the
Future of Regional Stock Exchanges chaired by G. Anantharaman has made a number of
recommendations, including consolidating regional exchanges.
In 1998, the Inter-connected Stock Exchange of India Limited (ICSE) was promoted with the
aim of expanding the market for securities listed on their exchanges by fourteen regional stock
exchanges. It is a national stock exchange and provides support to its traders and dealers for
trading, clearing, settlement, risk management and surveillance. ICSE strives to create a single
integrated national-level solution with access to multiple markets to deliver cost-effective service
to millions of investors across the country.
In another attempt to consolidate regional stock exchanges, BSE Indonext is set up as a separate

16
trading platform under the BSE BOLT system. It is a joint venture between BSE and the
Federation of Indian Stock Exchanges (FISE), of which eighteen regional stock exchanges are
members. It introduced a single order book for a security. BSE Indo next is intended as a specific
market for small and medium-sized enterprises (SMEs). New SMEs that may not be eligible for
BSE or NSE listing may be eligible for BSE Indo next listing.

2.3.3 Listing of Securities

Only securities listed with the stock exchange can be traded on an exchange. Listing provides
securities with liquidity and free negotiability and ensures proper supervision and control of the
transactions contained therein. The listing of securities on the domestic stock exchange shall be
governed by the provisions of the Companies Act, 1956, the Securities Contracts (Regulation)
Act, 1956, the Securities Contracts (Regulation) Rules, 1957 and the guidelines issued by the
Central Government and the SEBI. Furthermore, they are also governed by the rules, by-laws
and regulations of the stock exchange concerned and by the listing agreement entered into by the
issuer and the stock exchange. The exchange is required to monitor the company's compliance
with the listing requirements. However, many country exchanges are too weakly organized to
monitor compliance with the listing obligation.

2.3.4 Trading of Securities

Trading of securities in a stock exchange is only accessible to its members (brokers).An
exchange may admit a broker as a member only on the basis of the terms of the SC(R) A Act
1956, the SEBI Act 1992, the rules, circulars, notifications, guidelines and by-laws of the stock
exchange concerned. However, stock exchanges are free to stipulate more stringent requirements
than those stipulated by the SEBI. There were 9,368 brokers registered with SEBI at the end of
March 2004. Over the past few years, authorities have been encouraging broking industry
corporatization. As a result, a large number of brokers and partnership firms have become
corporates. By the end of March 2004, 3787 brokers had become corporates, accounting for
almost 40 percent of the total brokers.
Trading on stock exchanges in India used to take place through an open outcry system based on

17
the floor. This has changed since the introduction of the NSE (National Exchange for Automated
Trading, NEAT) screen-based trading system in 1995.BSE and a number of other regional stock
exchanges later introduced their own online trading mechanisms. The BSE and most other
regional exchanges followed suit and created the Inter Connected Stock Exchange (ICSE) to
facilitate online trading. This has resulted in a considerable reduction in the time spent, costs and
risk of error, resulting in improved operational efficiency. The new environment of screen-based
trading has greatly enhanced the country's price formation process and market prices today more
closely reflect fundamental values than before (Jha and Nagarajan, 1999).

2.3.5 Clearing and Settlement of Trades

The stock exchange clearing and settlement system has also undergone many changes. The
fortnightly settlement system was abolished and stock exchanges moved to T+2-based rolling
settlement system. With the enactment of the Depositories Act in 1996, stock exchanges moved
to demat trading. Trading in derivatives began on BSE and NSE to help market participants
better manage risks through hedging, speculation and arbitration. In addition, the SEBI has
banned many unfair trade practices such as insider trading in order to promote fair trade in stock
exchanges.
Securities market reforms such as the establishment and empowerment of SEBI, screen-based
nationwide trading, market-determined resource allocation, rolling settlement and deferral
products ban, dematerialization and electronic securities transfer, sophisticated risk management
and derivative trading, the regulatory framework and the operational efficiency of the stock
market in the country have been greatly improved. Despite these structural and operational
transformations, some fundamental issues related to investor protection, stock market integration
with other financial market segments, remain unaddressed. In addition, excessive reliance on
savers ' debt instruments to meet their long-term income flow requirements has affected the
availability of long-term equity capital in the country. It has also led to the participation of
narrow investors in the equity market. A judicious mix of interest and capital gains income is
needed to balance savers and investors ' needs. Therefore, an expansion and deepening of the
capital market, including equity and long-term debt with adequate regulatory oversight, is central
to the process of sustained growth in the country's savings and investment over time.
Another noteworthy feature of Indian stock market's current condition is the huge FII funds that

18
now determine the market behavior of both major stock exchanges. Although this has helped to
increase the liquidity and depth of the stock market, relying heavily on FII funds can lead to
adversities if interest rate differentials even out in the future. Therefore, domestic capabilities in
terms of increased participation of domestic financial institutions should be built to sustain the
Indian stock market's current growth rate.

Let us have a look at the following data-:

• Indian broking industry is estimated to post a moderate growth of 5-10 per cent in the
current fiscal (2018-19) with estimated revenue projected at Rs 195 billion-200 billion,
said a report by ICRA.

• Based on geographical concentration, Western region has maximum of 52%, around 24%
are situated in the North, 13% in South, and 10% in the East.

• 3% of firms began broking operations before 1950, 65% between 1950-1995, and 32%
post 1995.

• Based on terminals 40% are situated in Mumbai, 12% in Delhi, 8% in Ahmadabad, 7% in

Kolkata, 4% in Chennai, and 29% in other cities.

• It was found from the study that 36% of firms trade in cash, 27% in derivatives, and 20%
in cash, derivatives and commodities.

• In the cash market, 14% in BSE, 34% trade in NSE, 45% in both. Whereas in debt
market, 26% trades in BSE, 14% in BSE and 43% in both.

• 40% branches are located in North, 31% in West, 24% in South, and 5% in East.

• In terms of sub-brokers, around 55% are situated in South, 29% in West, 11% in North,
and 4% in East.

19
• The top three products offered are Trading, IPOs and Mutual Funds. 90% of firms offer
trading, 67% IPOs, and 53% offering Mutual Fund transaction.

• As far as development, 84% firms have shown their interest in expanding their
institutional clients, 66% firms intend to increase FIIs, and 34% are interested in setting
up Joint Ventures in India and abroad.

• In terms of IT penetration 62% firms provide their website, and 90% firms have email
facility

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PESTEL ANALYSIS OF BROKERAGE INDUSTRY

PESTEL analysis stands for "Political, Economic, Social, Technological, Environmental and
Legal analysis" and describes a framework of macro-environmental factors used in the
environmental scanning component of strategic management. It is a part of the external analysis
when conducting a strategic analysis or doing market research, and gives an overview of the
different macro environmental factors that the company has to take into consideration. It is a
useful strategic tool for understanding market growth or decline, business position, potential and
direction for operations.

 Political factors are how and to what degree a government intervenes in the economy.
Specifically, political factors include areas such as tax policy, labour law, environmental
law, trade restrictions, tariffs, and political stability.

 Economic factors include economic growth, interest rates, exchange rates and the
inflation rate. These factors have major impacts on how businesses operate and make
decisions. For example, interest rates affect a firm's cost of capital and therefore to what
extent a business grows and expands.

 Social factors include the cultural aspects and include health consciousness, population
growth rate, age distribution, career attitudes and emphasis on safety. Trends in social
factors affect the demand for a company's products and how that company operates.

 Technological factors include technological aspects such as R&D activity, automation,

technology incentives and the rate of technological change. They can determine barriers
to entry, minimum efficient production level and influence outsourcing decisions.
Furthermore, technological shifts can affect costs, quality and lead to innovation.

 Environmental factors include ecological and environmental aspects such as weather,

climate, and climate change, which may especially affect industries such as tourism,
farming, and insurance.

21
 Legal factors include discrimination law, consumer law, antitrust law, employment law,
and health and safety law. These factors can affect how a company operates, its costs, and
the demand for its products.

22
Micheal Porter’s Five Force of Share Broking Industry

• Competitors

The industry is now in a fairly high development stage. However the brokerage industry is very
cyclical and is impacted by activity levels in the markets. During the downturns such as 2008-
2009 periods, the smaller players were pressed out of the business. As a result there is a contrast
consolidation happening in the industry. The current competitors in the market are Angel
Broking, Motilal Oswal, Karvy Stock Broking Ltd., Sharekhan, Kotak Securities Ltd., etc. The
threats from competitors lies between moderate to high as every firm has its own strategies to
lead the industry.

23
• Threat of new entrants

A new entrant needs a reasonable level of capital to fund the working requirements of the
business (finance to customers, deposits with exchanges, etc).The requirements are increasing
constantly and to enter the business a new entrant will require higher levels of investments in the
future. As pointed out, it is likely to see many entrants in the industry. Conversely, it is likely that
the smaller players will exit by selling out or closing. The new trend poses for new threats also;
this may be either the entry of local players who can provide lower rates or a very big player who
can enter into a price war. The threat on new entrants is high in this industry.

• Bargaining power of suppliers

Less significant in most segments except investment banking, where employees control client
relationships and consequently have to be highly compensated. Bargaining Power of supplier
shows how strong is the position of a seller. Exchanging cost, from one suppliers to another, is
high. The Bargaining power of suppliers is low in this industry.

• Bargaining power of customers

This is important in the institutional brokerage business which involves high volume and low
brokerage charges. They get income from the amount that customers trade in the market. They
have many options while planning to purchase products. Product is not much differentiated.
Hence it can be said that bargaining power of customers is extremely high in this industry.

• Threat of substitute goods

The products offered by firms in this industry are more or less differentiated. Investing rather
saving in the bank rather than putting resources in a brokerage firm can be one option. This
industry poses great threat of substitutes like people of low risk appetite would like to invest in
bank rather than in share market, real estate, commodities, etc. Its products can be substituted by
substitutes offered by competitors. Hence threat of substitute goods is high.

24
 Chapter 3

Introduction to

Shah Investor’s Home Ltd

25
 Shah Investor’s Home Ltd.

Shah Investors Home Ltd., an ISO 9001:2008 certified company, was established in the year
1994 and which expertises in diversified financial services. The company promoted by Mr.
Upendra Shah and Mrs. Purnima Shah. SIHL was the first broking house in Gujarat to be a
member of National Securities Depository Ltd (NSDL) and the first broking name to render
services in NSE F&O in Ahmedabad. Today, it has emerged as a premium house in stock-
broking by focusing its services on the retail network. It is a trusted financial service provider for
more than 100,000 clients, It operates at major business locations with more than 350 franchisees
and 45 branches. The group has transitioned through many important milestones to reach this
level.
SIHL has always believed in keeping the interest of customers at the forefront. It centers around
client first mentality with customized benefits and straightforward dealings in business practices.
It means to keep building enhanced business stages by recognizing business openings with
healthy long-team perspective for growth and profitability and offering products and services
across a board spectrum of financial services.
SIHL has fulfilled Social responsibilities also. It has been associated with Blind People’s
Association, Apang Manav Mandal and Various other institutions. It has provided fund to
encourage all physically and mentally challenged people. In addition, Director of the Company
has set up trust "Vimal jyot Charitable Trust" in 1992 with a vision of upliftment of individuals
who are less fortunate to avail medical treatment, pursue careers in the various fields like provide
medical treatment to stray animals and to renovate Schools and Deharasar. This trust gives hope
and economic opportunity to the needy families of each community. Trust provides Food,
Medicines, money related help to students with monitoring, guidance and encouragement.

SIHL's Vision
Their vision is to simplify investment tasks for all clients by utilizing their knowledge of the
financial markets and technical expertise. They envision seamless integration of various financial
services and products to create educated and satisfied class of investors.

26
SIHL's Mission
Shah investor's home ltd was established with a mission to provide trustworthy financial services
under one roof. SIHL strives to provide customized solutions for wealth creation to its clients
which results in high level of client satisfaction with uncompromised integrity. Managing one's
financial future can be easy, worry-free and more exciting with their help.

Core Values
• CUSTOMER SATISFACTION - Understand client requirements and do things right the
first time. Provide innovative products and services with the latest technology.

• DISCIPLINE - Meeting commitments while focusing on details.

• CORPORATE GOVERNANCE - Conduct business with honesty and transparency.

Maintain ethical standards.

Milestones
Aug 1995 - Membership of Capital Market Segment of National Stock Exchange Ltd (NSE)
Jul 1997 - Membership of Capital Market Segment of National Stock Exchange Ltd (NSE)
Jan 1999 - CTCL facilities to sub-brokers
Sep 2000 - Trading and Clearing Membership of F & O segment of NSE; again the first one in
city of Ahmedabad
Jan 2003 - Membership of Central Depository Services (I) Ltd. (CDSL)
Oct 2004 - Membership of Capital Market Segment of Mumbai Stock Exchange (BSE)
Mar 2006 - Launched website www.shahinvestors.com now www.sihl.in
Apr 2006 - Started Internet Trading, NRI Services in NSE, BSE
Feb 2007 - Trading and Clearing Membership of F & O segment of Mumbai Stock Exchange
(BSE)
Feb 2007 - Gujarat's first Brokerage House to achieve ISO9001:2000 Certification, now
ISO9001:2008 Certification
Aug 2007 - Started Mutual Fund, Fixed Deposit and Insurance Services
Aug 2008 - Trading and Clearing Membership of NSE Currency Derivatives Segment (NSE-CD)
Sep 2008 - Trading and Clearing Membership of MCX Currency Derivatives Segment (MCX-
27
SX)
Aug 2009 - Membership of National Spot Exchange Ltd. (NSEL)
Jul 2010 - PMS Services started. SEBI Registered Portfolio Manager
Sep 2010 - Operations started in Mumbai focusing Institutional clients
Apr 2011 - In-house ERP developed and released for all branches & franchises with online
module for clients
Jan 2012 - VMWare based virtualized environment setup for trading and back-office operations
Jun 2012 - Market Maker of BSE SME
Jul 2012 -General Insurance business started
Dec 2012 - Membership in Capital Market and Future & Option Segment of MCX Stock
Exchange Ltd.
Apr 2015 - Real estate investment advisory services launched
Nov 2015 - Registered with SEBI as an Investment Advisor
Apr 2016 - Launch of Global Investment Advisory enabling clients to invest in overseas
investment opportunities.
Oct 2018 - SIHL Consultancy Ltd received Category 1 Merchant Banking License from SEBI

Services Provided By SIHL

• Stock Trading - Stock market trading comprises the buying and selling of various
company scrip’s through authorized persons, called stock brokers. When the market
presents an upward trend (i.e. shares are normally being bought in anticipation of price-
rises in the future), we call it a bullish market. However, when the market shows a
negative trend (i.e. shares are sold in anticipation of a fall in price), it is termed as bearish
market. This basically comprises the core of stock market trading.

• DEMAT - Demat stands for Dematerialization that helps an investor hold the securities
in Electronic Form, works similar to a bank account. It is safe, secure and convenient.
SIHL provides demat facility for two major depositories in the country – Central
Depository Services Ltd (CDSL) and National Securities Depository Limited (NSDL).

28
• Mutual Fund - Pool of money received from the investors with a common objective is
called Mutual Fund. Mutual Funds collect, invest and manage the collected funds
professionally using its experience & expertise in equity, debt and other instruments as
pre-defined objective to generate maximum return.

• NRI Corner - India is one of the fastest growing large economy of the world. Many
global investors eye to take part in India’s growth story by investing in the Indian Capital
Markets. The Government of India has allowed NRIs to directly invest in the Indian
markets.

• Fixed Income Plans - Following services are provided under Fixed Income Plan

NCDs/ Bonds - These are Debt instruments floated by NBFCs & Banks.
Corporate Fixed Deposits - Many companies raise deposits directly from the public.
Debt Mutual Funds - Funds is invested in various corporate debt instruments like
commercial paper, perpetual bond, NCDs, Government Securities, etc and try to generate
better yield than the benchmark.
FMPs - Fixed Maturity Plans are Mutual Fund investments where funds are locked in
for a fixed tenure. The fund aims to generate the best possible post tax return.
Government Securities - Government Securities are the most secured form of debt
instruments as they are backed by the sovereign assurance. Hence, they have one of the
lowest yields as well.
• Currency Derivatives -It is simply the trading of one currency against another. Pricing
based on exchange rates currencies are traded in the form of currency pairs.

• Insurance - A contract in which an individual or entity receives financial protection or

reimbursement against losses from an insurance company is known as insurance. SIHL
provides Travel Insurance, Vehicle Insurance and Mediclaim.

• Commodity - In India, there are many spot commodity markets for various classes of
commodities, like agriculture, metals, energy. The organized futures trading is also
permitted on various commodities like agriculture, metal and energy and it is regulated
by SEBI just like the equity and currency futures markets.

29
 • Institutional Broking - Shah Investor's Home Ltd provide research, based on Solid
Fundamentals and Technical picks on regular basis. With Derivatives and Delivery based
Data examined and investigated to arrive at long term investment ideas.

SIHL Group Companies

SIHL Fincap Ltd - Registered with the RBI as a Non-Banking Finance Company (NBFC)
SIHL Consultancy Ltd - Registration received from SEBI for Category 1 Merchant Banker in
Oct 2018.
SIHL Commodities Ltd - Registered with SEBI as a Commodities Broker, Member of Multi
Commodity Exchange of India Ltd (MCX)
SIHL Global Investments (IFSC) Pvt Ltd - SIHL Global Investments (IFSC) Pvt. Ltd. at GIFT
City. This company is among the first members of the international exchanges setup at the
International Financial Services Center (IFSC) setup at the GIFT City SEZ. SIHL Global has
taken up memberships of India International Exchange Ltd. (setup by BSE) and NSE IFSC
Limited (setup by NSE).
SIHL Properties
Stock Book LLP

30
 SWOT Analysis of SIHL

Strengths
i. Innovative range of financial products

ii. Trusted financial service provider for more than 100,000 clients

iii. SIHL operates at major business locations with more than 350 franchisees and 45
branches

iv. Known for transparent functioning

v. Innovative I.T solutions for customers

vi. Emphasis on building stronger bond with customers

vii. Services offered include Demat,Mutual Fund,NRI Corner,Fixed Income Plans,Currency

Derivatives,Insurance,Commodity,Institutional Broking.

Weaknesses
i. Less penetration in rural areas

ii. Lack of awareness among customers

iii. Indians are mostly conservative and prefer investing in Gold and land

Opportunities
i. People are looking to more investment opportunities

ii. Growing rural market

iii. Concentrate on HNI(High Net worth Investors)

iv. Concentrate on PMS(Portfolio Management Service)

Threats
i. Aggressive promotional strategies by close competitors like Motilal Oswal, Angel
Broking, Sharekhan etc.

ii. More and more players are venturing into this domain which can further reduce the
earning of SIHL

31
 Chapter 4

Introduction to Role of
Risk & Return in
Investment Selection and
Portfolio Management

32
 Role Of Risk and Return

Risk and return in the financial world are opposing concepts. Depending on factors such as age,
income, and investment goals, investors may be willing to take substantial investment financial
risks, or investors may prefer to keep things much safer. A company which has a higher market
price is not necessarily the best stock to buy. It may have no growth prospects or it may be
overpriced. Similarly, it may not be the best to buy a company that performs well in any one
year. On the contrary, a company which has been badly for some time might turn the corner and
it may be the best to buy, as its shares may be underpriced and it has good prospects of growth,
hence an analysis of risk or return guides an investor in proper profitable investment.
Any rational investor, before investing his or her investible wealth in the stock, analyses the risk
associated with the particular stock. The actual return that an investor receives from a stock may
differ from expected return, and the risk is expressed in terms of return variability.
The fundamental definition of "risk" is the likelihood that the actual return of an investment will
differ from what was expected. Standard deviation can be used to measure risk in statistics.
Because of risk, investors have the possibility of losing a portion (or even all) of a potential
investment. On the other hand, "Return" is the gain or loss that an investment brings in. Potential
returns also tend to be low at low risk levels. Typically, high risk levels are associated with high
potential returns. A risky investment means that an investor is more likely to lose everything; but,
on the other hand, the amount an investor could bring in is higher. A visual representation of
this association is in the chart below, in which a higher standard deviation means a higher level
of risk, as well as a higher potential return.

Figure 4. 1 Risk/Return Trade off

33
The risk/return tradeoff only indicates that higher risk levels are associated with the possibility of
higher returns, but nothing is guaranteed. At the same time, higher risk also means higher
potential losses on an investment. The risk and return relationship is a fundamental concept in
not only financial analysis, but in every aspect of life. If a decision is to lead to maximization of
benefits, it is necessary for individuals / institutions to consider the combined impact on expected
(future) return or benefit as well as risk / cost. The requirement that expected return/benefit is
commensurate with risk/ cost is known as the ―risk return trade-off‖ in finance.
On the safe side of the spectrum, the risk-free rate of return is represented by the return on
Government Securities, as their chance of default is essentially zero. So, if at any given time, for
example, the risk-free rate is 6 percent, this means investors can earn 6 percent per year on their
assets, essentially without risking anything.
While a 6% return might sound good, it pales compared to returns of many popular investment
vehicles. If index funds average about 12% per year over the long run, why would someone
prefer to invest in Government Securities? While index funds are safe compared to most
investment vehicles, they are still associated with a certain level of risk, and thus, the return for
any given index fund may be -5 percent for one year, 25% for the following year, etc. The risk to
the investor, particularly on a shorter timescale, is higher, as is volatility. Comparing index funds
to government securities, we call the addition return the risk premium, which is 6% (12%-6%).in
the above example.

(Source: Investopedia.com)
34
Types Of Risk

• Systematic Risk

The risk inherent in the entire market or market segment is systematic risk. Systematic risk,
known as undiversifiable risk, market risk or volatility, affects not just a specific stock or sector,
but the entire market. It's both unpredictable and impossible to control this type of risk. It can not
be mitigated by diversification, only by hedging or using the correct allocation strategy for
assets.
Other investment risks, such as industrial risk, are underlying systematic risk. For example, if an
investor has placed too much emphasis on cyber security stocks, by investing in a range of stocks
in other sectors, such as health care and infrastructure, it is possible to diversify. However,
systematic risk includes, among other major changes, interest rate changes, inflation, recessions
and wars. Shifts in these areas can affect the market as a whole and can not be alleviated by
changing positions within a public equity portfolio.
In order manage systematic risk, investors should ensure that their portfolios include a variety of
asset classes, such as cash and real estate,fixed income each reacting differently in the event of a
major systemic change. For example, an increase in interest rates will make some new issue
bonds more valuable, while causing some corporate stocks to fall in price as investors perceive
executive teams to cut spending. In the event of an interest rate rise, ensuring that a portfolio
incorporates ample income-generating securities will mitigate the loss of value in some equities.
The Great Recession is also a systematic risk example. Anyone who was invested in the market
in 2008 saw from this economic event that the values of their investments changed dramatically.
The Great Recession affected asset classes in various ways as simpler assets, such as Treasury
bonds, became more precious ,while riskier securities (e.g., more leveraged ones) were sold off
in large quantities.
In order to know how much systematic risk a specific security, fund or portfolio has, you can
look at its beta, which measures how volatile this investment is compared to the overall market.
A beta of more than 1 means that the investment has more systematic risk than the market,
whereas less than 1 means less systematic risk than the market. A beta equal to one means that
the investment has the same systematic risk as the market.

35
Figure 4. 2
Types of risk

• Unsystematic Risk

Unsystematic risk is unique to a particular business or industry. Also known in the context of an
investment portfolio as "non-systematic risk," "specific risk," "diversifiable risk" or "residual
risk," unsystematic risk can be reduced by diversification.
Unsystematic risk can be described as the inherent uncertainty of an investment in a business or
industry. Types of unsystematic risk include a new market competitor with the potential to take
significant market share from the investment company, a regulatory change, and a product recall
and/or a management shift.
While some sources of unsystematic risk may be anticipated by investors, it is impossible to be
aware of all or when / how these could occur. For example, an investor in healthcare stocks may
know that a major shift in health policy is on the horizon, yet he / she is unable to know the
specifics of the new laws in advance and how businesses and consumers will respond. The
gradual adoption and then potential repeal of the Affordable Care Act, first written into law in
2010, has made it very challenging for some investors in healthcare stocks to anticipate and place
confident bets on industry direction and/or specific businesses.
By owning a variety of company stocks across different industries, as well as by owning other
types of securities in a variety of asset classes, such as Treasuries and municipal securities,
investors will not be more affected by single events. For example, an investor would face a high
level of unsystematic risk who owned nothing but airline stocks. For example if airline industry
36
employees decided to go on strike an investor would be vulnerable. This event could, even
temporarily, lower airline stock prices. Simply the anticipation of this news could be disastrous
for her portfolio.
By adding uncorrelated holdings to portfolio, such as stocks outside of the transportation
industry, this investor would spread out air-travel-specific concerns. In this case, unsystematic
risk affects not only specific airlines, but also several industries, such as large food businesses,
which many airlines are doing business with. In this regard, by adding US Treasury Bonds as an
additional protection from stock price fluctuations, an investor could completely diversify away
from public equities.

INVESTMENT AVENUES
Definition

An investment is an asset or item acquired for income or appreciation purposes. An investment in

an economic sense is the purchase of goods that are not consumed today but used to create
wealth in the future. In finance, an investment is a monetary asset purchased with the idea that in
the future the asset will provide income or be sold for a profit at a higher price.

Developing countries such as India are facing the enormous task of finding enough capital in
their efforts for development. Most of these countries find it hard to emerge from the vicious
circle of low income poverty, low savings, low investment, low employment, etc. India needs
very high investment rates with a high capital output ratio to make a leap forward in its efforts to
achieve high growth levels. Since the start of planning, the focus has been on investment as the
primary tools of economic growth and national income growth. Investment was considered the
crucial determinant in order to have production as per target and capital formation had to be
supported by adequate savings volume. Investment is the sacrifice for the uncertain future reward
of some present value. Investments are always interesting, rewarding and challenging. More
return rates are generally assured where there is a high risk. Risk and reward go hand in hand.
Safety of the principal amount, liquidity, income stability, appreciation and easy transferability
are the major characteristics of an investment. There are a variety of investment avenues, such as
shares, banks, businesses, gold and silver, real estate, life insurance, postal savings, etc. Based on

37
their risk-taking attitude, all investors invest their surplus money in the avenues mentioned
above.

Investment options:

There are different types of options available for investment.

• Corporate Bonds/Debentures :

A debenture or a bond is a debt recognition. In India no distinction is made between debentures

and bonds. According to Companies Act, 1956, the term debentures includes debenture stock,
bonds and many other securities of a company whether contributing a charge on the assets of
the company or not. To raise long-term financing, a company can use public borrowing. These
loans are raised by the debenture issue. A debenture is an acknowledgement of a debt. A
debenture-holder is a creditor of the company. A fixed interest rate is paid on debentures.
Types of debentures are :-
• Convertible Debentures

• Non-convertible Debentures

• Public Sector Bonds :

A bond for public purposes is a type of debt security used by municipalities to fund facilities
and improvements for public works. A public bond must fund a project that benefits the general
public rather than private individuals. Public bonds are predominantly tax-exempt. At the
federal level, their income is tax-free, and often at the state level when the individual resides in
the bond issuance state.
• Preference shares:

Preference shares, more commonly referred to as preferred stock, are shares of the stock of a
company with dividends paid out to shareholders before the issuance of common stock
dividends. If the company enters bankruptcy, preferred stock holders are entitled to be paid from
company assets before common stockholders. Most preferred shares have a fixed dividend,
whereas generally common stocks do not. Typically, preferred stock shareholders also have no
voting rights, but usually common shareholders do.
38
• Equity Shares:

Equity is typically referred to as shareholder equity which is the amount of money that would be
returned to the shareholders of a company if all the assets were liquidated and all the company's
debt was paid off. Equity is found on the balance sheet of a company and is one of the most
common financial metrics that analysts use to evaluate a company's financial health.
• Debt

Debt is a path that most people will know and experience. There is a wide range of debt
instruments that are present from bank fixed deposits to company fixed deposits. Debt is simple
as the investor ill earn at a fixed percentage of the investment, which will then be returned to the
investor at the time of maturity or redemption of the investment.
• Mutual Funds

This is an emerging investment area and the market has a wide variety of schemes to suit a large
number of people's requirements. In finance in general, after all the debts associated with that
asset are paid off, you can think of equity as ownership in any asset.For example, the owner's
equity is considered to be a car or house with no outstanding debt because he or she can easily
sell the item for cash. Stocks are equity because they represent a company's ownership.
• Company Fixed Deposit

Fixed deposit of the company is the deposit placed for a fixed term by investors with companies
carrying a prescribed interest rate. Company FDs are intended primarily for conservative
investors who do not want to take the risk of stock market vagaries. But the 2013 IBEA,
International Business, Economics and Accounting Conference 20 – 23 March 2013, Bangkok –
Thailand experts say an investor's due diligence is similar to that before buying shares. It is not
advisable to be lured by the high interest rate alone.
• Fixed Deposit

Also referred to as term deposits are fixed deposits with banks. For bank FDs, the minimum
investment period is 30 days. Deposits in banks are very safe due to RBI's regulations and the
deposit insurance company's guarantee. The rate of interest on fixed deposits varies with term
of the deposits Bank deposits enjoy exceptionally high liquidity.Loans against bank deposits can
be raised.
39
• Post Office savings

Post Office Monthly Income Scheme is a low risk saving instrument, which can be availed
through any Post Office The interest rate on deposits is slightly higher than banks. The interest
is calculated semi-annually and paid annually for life insurance policies: many investment
schemes are offered to investors by insurance companies. These schemes promote savings and
also provide cover for insurance. LIC is India's largest life insurance firm. Insurance policies,
while catering to the risk compensation to be faced in the future by investor, also have the
advantage of earning a reasonable interest on their investment insurance premiums.
• Public Provident Fund

A long-term saving tool with a 15-year maturity. A PPF account can be opened at any time
during the year through a nationalized bank and is open to depositing money throughout the
year. Tax benefits can be availed for the amount invested and interest accrued is tax-free. Every
year from the seventh financial year of the account opening date, a withdrawal is permitted.
• Real Estate

Investment in real estate also made at very attractive expected returns. Buying property is an
equally strenuous investment decisions. Investment in real estate is often linked to the location's
future development plans. Currently, investment in real assets is booming, there are different
sources of investment available for investment that invest real estate directly or indirectly. In
addition to this, the more affluent investors are likely to be interested in other type of real estate,
like commercial property, agricultural land, semi urban land, and resorts. The bullion offers
investment opportunity in the form of gold, silver, art objects (paintings ,antiques), precious
stones and other metals (precious objects), specific categories of metals are traded in the metal
exchange. (Patil & Nandawar, 2014)

40
 Portfolio Management

Individual investors approach the markets from a very different perspective than institutions. Due
to the size of an individual investor’s asset pool, investor may not be able to tolerate short-term
fluctuations in the stock market. One way to address this issue is through diversification.
Diversification is a means of risk management and is accomplished by mixing a variety of
financial instruments within a single portfolio. The diversification objective is to minimize the
impact that any security performance will have on the overall performance of the entire portfolio.
As such, diversification lowers the risk associated with the portfolio.
Imagine you live on an island and the economy is made up of just two companies. One company
sells sunscreen and one sells umbrellas. If you were to invest your entire portfolio in the
company selling sunscreen, you would see strong performance during the sunny parts of the
year, but poor performance when it rains. If you also placed all of your assets in the other
company, the reverse would occur. Most investors would prefer a steady and constant return. In
this case, the solution could be to invest 50% in one company and 50% in the other.The result of
this diversification is that throughout the year you would have decent performance as opposed to
excellent performance at one time and awful at another.
Here are the three main practices which can help to ensure optimal diversification of a portfolio:
1. Divide your portfolio among multiple investment vehicles, such as cash, stocks, bonds, mutual
funds, and more.
2. Vary the risk level of the securities you invest in. Pick investments with varied risk levels. This
will help to ensure that large losses are offset by gains in other areas.
3. Vary your securities according to industry. This helps to reduce the impact of risks that are
industry-specific.
―Diversify across securities, across asset classes, across markets—and across time.‖ –
Charley Ellis
Most investors are familiar with the concept of diversification, which can be broadly described
as "not putting all your eggs in one basket." There is more than one way to diversify after all. An
investor should include six forms of diversification in your portfolio.

41
1. Individual Company Diversification
Getting a diversified allocation of stocks through a bevy of different index funds is easier now
than ever before. This has not always been the case. Nobel laureate Harry Markowitz showed a
significant drop in the risk of a portfolio in the 1950s as additional stocks were added to the
portfolio — even if the individual stocks were all of equal risk. Research revealed that nearly
two out of five stocks actually lost money (39 percent) from 1983 to 2006, nearly one out of five
lost at least 75 percent of their value (18.5 percent) and two out of three lost money. In addition,
nearly all the gains were accounted for by the best 25 percent of all stocks over this period.

2. Industry Diversification
Just as getting a mix of individual businesses is an important way to diversify your portfolio, it is
also important to have a balance across the economy's multiple industries. It is particularly
important to remember to distance yourself from the industry you are most familiar with. Like
the home-country bias, for example, people tend to overweight their home industry as well.
According to "JP Morgan's Markets Guide for December 31, 2015," those living in the West tend
to overweight technology as many are familiar with the tech based companies or are working
directly in the industry. The Northeast favors finance, the Midwest, industry, and energy from the
South. As with individual company stocks, the point is that it is not healthy to overweight an
industry that you also count on for your paycheck or regional economic health.

3. Asset Class Diversification

In different economic environments, different assets (stocks, bonds, cash, real estate,
commodities) will perform differently. For example, stocks are likely to perform well during an
economic recovery while bonds provide protection in a recession. Commodities, TIPS or cash
can protect against inflation forces while long-term bonds are often the best investment in a
deflationary environment.

4. Strategy Diversification
There are different approaches for exposure within asset classes — many of these different

42
strategies (also called risk factors, smart beta, etc.) have been shown to deliver superior returns
over time in academic research versus a market-cap weighted index. But this outperformance
does not occur every year, and long periods of underperformance may occur. For most, the best
approach is a mix of these factors (value, small-cap, momentum, high quality, etc.) with the
realization that you're not going to be allocated 100 percent to the hot strategy, but you're not
going to be committed 100 percent to a lagging strategy as well.

5. Geographic Diversification
Again, most investors have a home-country bias, preferring business-based stocks at home. The
research, however, also shows an advantage in diversifying internationally. For example, think
about the Japanese stock market's performance since its peak in 1989. As author Jonathan
Clements wrote:
What if the U.S. turns out to be the next Japan? It strikes me as improbable. But the subsequent
bear market would also have been considered wildly unlikely in the late 1980s, when Japan's
economy was the world's envy.
My contention: If you’re going to invest heavily in stocks, you should consider allocating as
much as 40% to foreign shares, so you aren’t betting too heavily on a single country’s stock
market. I don't know if it's going to help or hurt returns. But it will reduce risk — and save an
investor from financial disaster.
No economic region will consistently outperform as with asset classes or strategies. Best of all,
having a mix.

6. Time Diversification
Also called dollar-cost averaging, if you’re still contributing to your investment accounts, it can
reduce the impact of poor investment behavior (a lack of discipline) or unlucky timing. While
research shows that around 70 percent of the time a lump sum is invested is better than investing
it over time, averaging dollar-cost or any rules-based approach can lead to better investor
behavior and thus better investment results. As author Ben Carlson wrote, ―Dollar cost averaging
takes the responsibility of poor timing decisions out of your hands. It's not the perfect solution,
but it helps move you from short-term forecasts to long-term planning.

43
FMCG Sector
Favorable demographics and rise in income level to boost FMCG market. FMCG market in India
is expected to grow at a CAGR of 27.86 per cent and is expected to reach US$ 103.70 billion by
2020 from US$ 52.75 billion in FY18. FMCG is the 4th largest sector in the Indian economy.
Final consumption expenditure is set to increase at a CAGR of 25.44 per cent from 2017-2021.
Final consumption expenditure is expected to reach nearly US$ 3.6 trillion by 2020 from US$
1.82 trillion in 2017. Rise in rural consumption to drive the FMCG market. In FY18, Rural
consumption rose by 9.7 per cent. The rural FMCG market in India is expected to grow to US$
220.00 billion by 2025 from US$ 23.63 billion in FY18.

Figure 4. 3 FMCG Sector

44
ITC

ITC Limited is a holding company involved in fast-moving consumer

goods (FMGC) marketing. The Company operates through four
segments: FMCG; Hotels; Paperboards, Paper and Packaging, and Agri
Business. The FMCG segment includes Cigarettes, such as cigarettes
and cigars, and Others, such as branded packaged foods businesses (Staples, Snacks and Meals;
Dairy and Beverages, and Confections); Apparel; Education and Stationery Products; Personal
Care Products; Safety Matches, and Agarbattis. Its Hotels segment includes Hoteliering. Its
Paperboards, Paper and Packaging segment includes paperboards; paper, including specialty
paper, and packaging, including flexibles. Its segment of Agri Business includes commodities
such as soy, spices, coffee and tobacco leaf. Aashirvaad, Sunfeast Dark Fantasy, Bingo!,
Yumitos, YiPPee!, Candyman, GumOn, Classmate, Fiama Di Wills, Vivel, Superia, Engage,
Wills Lifestyle, John Players, Mangaldeep and Aim, among others are its brands.

Table 4.1 Management

Name Designation
Sanjiv Puri Managing Director
Nakul Anand Executive Director
Shilabhadra Banerjee Non Executive Director
Sunil Behari Mathur Non Executive Director
Meera Shankar Non Executive Director
John Pulinthanam Non Executive Director
Rajiv Tandon Executive Director & CFO
David Robert Simpson Non Executive Director
Arun Duggal Non Executive Director
Sahibzada Syed Habib-ur-Rehman Non Executive Director
Nirupama Rao Non Executive Director
Hemant Bhargava Non Executive Director

45
Marico

Marico Limited is a consumer product company that operates in the

area of beauty and wellness. The main products of the company
include edible oils and value-added hair oils. The Company's
geographic segments include India and International, which
includes primarily the Middle East, The South Asian Association for Regional Cooperation
(SAARC) countries, Egypt, Myanmar, Malaysia, South Africa and Vietnam. It offers different
brands in the hair care, skin care, health foods, male grooming, and fabric care categories. The
company produces and markets products in India under multiple brands, including Parachute,
Parachute Advansed, Nihar, Nihar Naturals, Saffola, Hair & Care, Revive, Mediker, Livon, Set-
wet and Code 10. Its international portfolio includes brands, such as Fiancee, Hair Code, Caivil,
Hercules, Black Chic, Ingwe, X-men and Thuan Phat. Marico Bangladesh Limited, Marico
Middle East FZE, Marico South Africa (Pty) Limited, and Marico Consumer Care Limited are
among its subsidiaries.

Table 4.2 Management

Name Designation
Harsh Mariwala Chairman & Non-Exe.Director
Rajen Mariwala Non Executive Director
B S Nagesh Independent Director
Rajeev Bakshi Independent Director
Ananth Sankaranarayanan Independent Director
Saugata Gupta Managing Director & CEO
Rishabh Mariwala Non Executive Director
Hema Ravichandar Independent Director
Nikhil Khattau Independent Director

46
Dabur

Dabur India Limited is a fast-moving consumer goods company

(FMCG). The company operates in various categories of
products, including hair care, oral care, health care, skin care,
home care, and food. Consumer Care Business, Foods Business and International Business are its
business units. The Consumer Care Business Unit includes health care consisting of health
supplements, digestive supplements, over - the-counter (OTC) and Ayurvedic ethical products,
and home and personal care consisting of hair care, oral care, skin care and salon care products,
and home care products. Its food business consists of the business of fruit-based beverages and
food pastes. Its International Business Unit offers a range of Middle East, Africa, South Asia,
Europe and Americas hair, skin and oral care products. The company, among others, markets its
products under the brands Dabur Chyawanprash, Dabur Honey, Dabur Baby, Vatika, Hajmola,
Real, Fem, Dabur Amla and Dabur red Tooth Paste.

Table 4.3 Management

Name Designation
Anand C Burman Chairman
Sunil Duggal Whole Time Director
Mohit Burman Director
P N Vijay Director
S Narayan Director
Sanjay Kumar Bhattacharyya Director
Amit Burman Vice Chairman
P D Narang Whole Time Director
Saket Burman Director
R C Bhargava Director
Ajay Dua Director
Falguni Sanjay Nayar Director
Mohit Malhotra WholeTime Director & CEO

47
HUL

Hindustan Unilever Limited is engaged in fast-moving

consumer goods business that includes home care and
personal care, food and drinks. The Company's segments
are soaps and detergents that include soaps, detergent bars, detergent powders, detergent liquids
and scourers ; personal products that include oral care products, skin care (excluding soaps), hair
care, deodorants, talcum powder, color cosmetics and salon services; Beverages that include tea
and coffee ; packaged foods that include branded staples (atta, salt and bread), food products
(tomato-based products, fruit-based products and soups) and frozen desserts, as well as other
products that include exports, chemicals, water and infant care products. Export sales of marine
and leather products are also included in the Others segment. Brands include Lux, Surf Excel,
Rin, Wheel, Fair & Lovely, Pond's, Vaseline, Lakme, Dove, Clinic Plus, Sunsilk, Axe, Brooke
Bond, Bru, Knorr, Kissan, and Pureit.

Table 4.4 Management

Name Designation
Sanjiv Mehta Managing Director & CEO
Dev Bajpai Executive Director
S Ramadorai Independent Director
Sanjiv Misra Independent Director
Aditya Narayan Independent Director
Pradeep Banerjee Executive Director
Srinivas Phatak Executive Director & CFO
O P Bhatt Independent Director
Kalpana Morparia Independent Director
Leo Puri Independent Director

48
P&G

Procter & Gamble Hygiene and Health Care Limited is an India-

based company which is engaged in the production and sale of
fast-moving branded packaged consumer goods in female and
healthcare businesses. The Company offers ayurvedic products and sanitary napkins. The
company is involved in health and hygiene products manufacturing, trading and marketing. The
brands of the company are Ambi Pur, Ariel, Duracell, Gillette, Olay, Oral-B, Pampers, Pantene,
Tide, Vicks, Wella and Whisper. The Company's products include ointments and creams, cough
drops, tablets, personal products and toilet preparations, among others. Products of the Company
are sold through retail operations, drug stores, mass merchandisers, club membership stores,
grocery stores, department stores and high-frequency stores. The company has manufacturing
sites at Goa and Baddi in Himachal Pradesh, apart from manufacturing sites spread throughout
India.

Table 4.5 Management

Name Designation
Rajendra A Shah Chairman
Bansidhar S Mehta Director
Pramod Agarwal Director
Sonali Dhawan Director
Meena Ganesh Ind. Non-Executive Director
Madhusudan Gopalan Managing Director
Anil Kumar Gupta Director
Karthik Natarajan Director
Gagan Sawhney Non Executive Director
Ghanashyam Hegde Non Executive Director

49
Nestle

Nestle India Limited is a food business based in India. The

Company operates in the Food segment. The food business of
the company includes product groups including dairy and
nutrition products, beverages, prepared dishes and cooking aids,
and chocolate and confectionery. Its milk and nutritional
products include NESTLE BABY & me and NESTLE NESLAC. Its drinks include coffee
products like NESCAFE, NESCAFE CLASSIC, NESCAFE Sunrise, NESCAFE Cappuccino
and NESCAFE GOLD. MAGGI, MAGGI Oat Noodles, MAGGI Bhuna Masala, MAGGI
Vegetable Atta Noodles, MAGGI Nutritious PAZZTA and MAGGI Sauces are all prepared
dishes and cooking aids. Nestle KitKat, Nestle BarOne, Nestle Alpino, Nestle Munch, Nestle
CLASSIC, Eclairs and POLO are the chocolate and confectionery products of the company. The
plants of the Company are in Moga, Samalkha, Nanjangud, Choladi, Ponda, Bicholim, Pantnagar
and Tahliwal.

Table 4.6 Management

Name Designation
Suresh Narayanan Chairman & Managing Director
Martin Roemkens Director - Technical
Swati A Piramal Ind. Non-Executive Director
Rama Bijapurkar Ind. Non-Executive Director
Shobinder Duggal Director & CFO
Rajya Vardhan Kanoria Ind. Non-Executive Director
Rakesh Mohan Ind. Non-Executive Director
Roopa Kudva Ind. Non-Executive Director

50
Britannia

Britannia Industries Limited is a food company that

produces biscuits, cakes and rusks. The Company operates
through the bakery and dairy products segment of Foods.
Marie Gold, Crackers, Good Day, Tiger, Milk Bikis, NutriChoice, Jim Jam + Treat, Bourbon,
Little Hearts, Pure Magic and Nice Time are the product brands in the biscuits category. Its
products under breads include Whole Wheat Breads, White Sandwich Breads and Bread
Assortment. Its dairy products include cheese, fresh milk and accompaniments. The products of
Bar Cakes, Veg Cakes, Chunk Cake, Nut & Raisin Romance and Mufills are among the cakes. Its
product under rusk category includes Premium Bake. The company's products are exported
worldwide, including Countries of the Gulf Cooperation Council (GCC), African Countries, and
American Countries. Manna Foods Private Limited and International Bakery Products Limited
are subsidiaries of this company.

Table 4.7 Management

Name Designation
Nusli N Wadia Chairman
A K Hirjee Director
Nimesh N Kampani Director
Keki Dadiseth Director
Ness N Wadia Director
Y S P Thorat Director
Keki Elavia Director
Varun Berry Managing Director
Avijit Deb Director
Jeh N Wadia Director
Ranjana Kumar Director
Ajay Shah Director

51
Colgate Palmolive

Colgate-Palmolive (Colgate) is a consumer products company.

The company operates in two segments of products: Oral,
Personal and Home Care, and Pet Nutrition. The product
segment of Oral, Personal and Home Care operates across five geographic segments, including
North America, Latin America, Europe, Asia Pacific, and Africa / Eurasia. Colgate Total, Colgate
Sensitive Pro-Relief, Colgate Max Fresh and Colgate Optic White are among the oral care
products of the company. The company is also involved with operations in liquid hand soap,
which it sells under the brands Palmolive, Protex and Softsoap, in various product categories of
the personal care market. The company manufactures and markets a range of home care
products, including dishwashing liquids from Palmolive and Ajax, household cleaners from
Fabuloso and Ajax, and Oil Soap from Murphy. The company manufactures pet nutrition
products for dogs and cats through its Hill's Pet Nutrition segment (Hill's).

Table 4.8 Management

Name Designation
Mukul Deoras Chairman
P K Ghosh Deputy Chairman, Non Exe. & Ind.Director
M S Jacob WholeTime Director & CFO
Indu Shahani Ind. Non-Executive Director
Vikram Mehta Ind. Non-Executive Director
R A Shah Vice Chairman, Non Exe. & Ind.Director
Issam Bachaalani Managing Director
M Chandrasekar Whole Time Director
Shyamala Gopinath Ind. Non-Executive Director
Sukanya Kripalu Independent Director

52
Banking Sector

Value of public sector bank assets increased to US$ 1.56 trillion in FY18 from US$ 1.52 trillion
in FY17. Total lending has increased at a CAGR of 10.94 per cent during FY07-18 and total
deposits have increased at a CAGR of 11.66 per cent, during FY07-18 and are further poised for
growth, backed by demand for housing and personal finance. As of September 2018, total
number of ATMs in India increased to 205,866 and is further expected to increase to 407,000 by
2021. As of December 2018, 56 regional rural banks are functioning in the country. RBI has
allowed, regional rural banks with net worth of at least US$ 15.28 million to launch internet
banking facilities. As of September 2018, the Government of India has launched India Post
Payments Bank (IPPB) and has opened branches across 650 districts to achieve the objective of
financial inclusion.
Figure 4. 4 Banking Sector

53
HDFC Bank

HDFC Bank Limited is a holding company. The Bank provides

a range of banking services covering wholesale-side commercial and investment banking and
retail-side transactional / branch banking. It provides financial services as well. The segments of
the Bank are Treasury, Retail Banking, Wholesale Banking, and Other Banking. The Treasury
segment consists primarily of net interest earnings from the investment portfolio of the Bank,
borrowing and lending on the money market, gains or losses from investment operations and
foreign exchange trading and derivative contracts. The Retail Banking segment serves retail
customers as well as alternative delivery channels through a branch network and other delivery
channels. The Bank offers a range of commercial and transactional banking products to its
corporate and institutional clients. The Other Business segment includes revenue from para-bank
operations.

Table 4.9 Management

Name Designation
Shyamala Gopinath Chairperson
Kaizad Bharucha Executive Director
Malay Patel Director
Srikanth Nadhamuni Director
Srikanth Nadhamuni Director
Aditya Puri Managing Director
Keki Mistry Director
Umesh Chandra Sarangi Director
MD Ranganath Addnl. & Ind.Director
Srikanth Nadhamuni Director

54
ICICI Bank

ICICI Bank Limited is a banking company. Banking and financial

services of the bank includes commercial banking, retail banking,
project and corporate finance, working capital finance, insurance, venture capital and private
equity, investment banking, broking and treasury goods and services. The business segments of
the Bank are Retail Banking, Wholesale Banking, Treasury, Other Banking, Life Insurance, and
Others. It has a network of approximately 18,210 branches and automated teller machines
(ATMs). The Bank has about 110 branches of Touch Banking across more than 30 cities.
International banking provide solutions to the international banking requirements of its corporate
clients and to leverage economic corridors between India and other countries. As part of its
microfinance initiatives, the Bank serves the financial needs of women entrepreneurs through its
Self-Help Group (SHG) program.

Table 4. 10 Mangement

Name Designation
Girish Chandra Chaturvedi Non Exe.Part Time Chairman
Vijay Chandok Executive Director
Sandeep Bakhshi Managing Director & CEO
Hari L Mundra Independent Director
B Sriram Independent Director
Subramanian Madhavan Independent Director
Vishakha Mulye Executive Director
Anup Bagchi Executive Director
Neelam Dhawan Non Executive Director
Radhakrishnan Nair Independent Director
Lalit Kumar Chandel Government Nominee Director
Rama Bijapurkar Independent Director
Rama Bijapurkar Independent Director

55
Kotak Mahindra Bank

Kotak Mahindra Bank Limited is a bank. The Bank's segments

include the Treasury, BMU and Corporate Center, which
includes debt, money and money market, forex market,
derivatives and investments, and government securities primary dealership and Balance Sheet
Management unit (BMU); Retail Banking, which includes lending and credit cards;
Corporate/Wholesale Banking, which includes wholesale borrowings and lending, and other
related services; Vehicle Financing, which includes retail Vehicle finance and wholesale finance ;
other lending activities, including securities financing and other loans ; broking, engaged in
market transactions on behalf of clients ; consulting and transactional services, providing
financial and transactional services ; asset management, managing investments on behalf of
clients and funds ; and insurance ; which provides general and life insurance insurance.

Table 4. 11 Management

Name Designation
Shankar Acharya Chairman
Dipak Gupta Joint Managing Director
Uday Khanna Director
S Mahendra Dev Director
Uday Shankar Independent Director
Uday Kotak Managing Director & CEO
Farida Khambata Director
C Jayaram Director
Prakash Apte Director

56
State Bank of India
State Bank of India offers a variety of products and services to
private, commercial, large corporate, public and institutional
clients. Its segments include Treasury, which includes the entire
portfolio of investments and derivative contract and foreign
exchange trading ; Corporate / Wholesale Banking, which
includes the lending activities of the Corporate Accounts Group,
Mid Corporate Accounts Group and Stressed Assets Management Group ; Retail Banking,
Comprising branches within the National Banking Group, which include primarily Personal
Banking activities, including lending to corporate clients with branches within the National
Banking Group, and Other Banking Business, This includes all non-bank subsidiary / joint
ventures other than SBI Life Insurance Co operations. General Insurance Co. Ltd. and SBI. Ltd.
Domestic operations and foreign operations are part of its geographical segments.

Table 4.12 Management

Name Designation
Rajnish Kumar Chairman
Dinesh Kumar Khara Managing Director
Bhaskar Pramanik Shareholder Director
Rajiv Kumar Nominee Director
Pushpendra Rai Nominee Director
Purnima Gupta Nominee Director
B Venugopal Shareholder Director
P K Gupta Managing Director
Girish K Ahuja Nominee Director
Chandan Sinha Nominee Director
Arijit Basu Managing Director
Anshula Kant Managing Director

57
Axis Bank

Axis Bank Limited (the Bank) offers a suite of banking

products for corporate and retail. The segments of the
Bank include Treasury, Retail Banking, Corporate / Wholesale Banking, and Other Business
Banking. Its Treasury operations include investments in trading transactions, mutual funds and
equity, sovereign and corporate debt, derivative trading and foreign exchange transactions on the
proprietary and customer account. Its Retail Banking constitutes lending to individuals/small
businesses and activities include liability products, card services, Internet banking, mobile
banking and financial advisory services, among others. Its Corporate / Wholesale Banking
includes non-Retail Banking corporate relationships, corporate advisory services, placements and
syndication, project assessments, services related to the capital market and cash management
services. Its Other Banking Business encompasses para-banking activities such as distribution of
third-party products and other banking transactions.

Table 4. 13 Management

Name Designation
Sanjiv Misra Chairman
B Babu Rao Director
Som Mittal Director
Usha Sangwan Director
Rakesh Makhija Director
Amitabh Chaudhry Managing Director
Ketaki Bhagwati Director
Samir K Barua Director
Rohit Bhagat Director
S Vishvanathan Director
Stephen Pagliuca Director
Amitabh Chaudhry Managing Director & CEO

58
Bank of Baroda

Bank of Baroda is engaged in providing various services, such as

personal banking, corporate banking, international banking, small
and medium enterprise (SME) banking, rural banking, non-resident
Indian (NRI) services and treasury services. Treasury, Corporate /
Wholesale Banking, Retail Banking and Other Banking Operations are the segments of the Bank.
The Bank offers personal banking services, such as deposits, loans, mobile banking and wealth
management services; business banking services, such as debit cards and collection services,
Baroda Money Express ; corporate banking services, such as appraisal and merchant banking,
and cash management and remittances; international banking services, such as export, import and
trade finance, and correspondent banking; rural banking services, Treasury services such as
deposits, priority sector advances, financial inclusion and lockers, such as domestic and forex
operations. The Bank operates around 5,330 branches of a network.

Table 4. 14 Management

Name Designation

P S Jayakumar Managing Director & CEO

Bharatkumar D Dangar Director

Ajay Kumar Director

Debashish Panda Nominee Director

V S Khichi Executive Director

Hasmukh Adhia Non Executive Chairman

Papia Sengupta Executive Director

Gopal Krishan Agarwal Director

Soundara Kumar Director

Shanti Lal Jain Executive Director

Srinivasan Sridhar Shareholder Director

59
Punjab National Bank

Punjab National Bank (PNB or Bank) is a bank of the public

sector..The Bank provides a variety of banking services including
digital banking, personal banking, social banking, micro, small and
medium-sized (MSME) banking, agricultural banking, corporate
banking, international banking or non-resident Indian (NRI) banking, and financial services. The
Bank operates through four segments: Treasury, Corporate and Wholesale banking, Retail
banking and Other banking operations. The Banks digital banking services include PNB Retail
Internet Banking, PNB Corporate Internet Banking, PNB Mobile Banking and PNB SMS
Banking. Its personal banking services include the account of savings funds, fixed deposit
schemes and cards. Its services in the social banking sector include financial inclusion and
priority sector. Its services for corporate banking include loans against future rentals and cash
management services. Its financial services include insurance, merchant banking, mutual funds
and services for wealth management.

Table 4. 15 Management

Name Designation

Sunil Mehta. Non Executive Chairman

L V Prabhakar Executive Director

Mahesh Baboo Gupta Director

Ravi Mital Director

Agyey Kumar Azad Executive Director

Asha Bhandarker Independent Director

Sunil Mehta Managing Director & CEO

Rabi N Mishra Director

Sanjay Verma Director

Asha Bhandarker Independent Director

Rajesh Kumar Yaduvanshi Executive Director

60
Yes Bank

YES BANK Limited is a bank of the private sector. The Bank

provides banking services including corporate and institutional
banking, financial markets, investment banking, corporate finance,
branch banking, corporate banking, business and transaction banking,
and wealth management. The segments of the Company are Treasury, Corporate / Wholesale
Banking, Retail Banking, and Other Banking. Its Treasury segment includes investments and
activities on the financial markets undertaken on behalf of the Bank's customers, trading,
maintaining reserve requirements and mobilizing resources. Corporate / Wholesale Banking
includes lending, receiving deposits and other services that are available to corporate clients.
Retail banking includes lending, receiving deposits, and other retail customer services. The
segment Other Banking Operations includes, among others, para-banking activities such as
distribution of third-party products and merchant banking.
Table 4. 16 Management

Name Designation
Brahm Dutt Part Time Chairman
Uttam Prakash Agarwal Independent Director
Maheswar Sahu Independent Director
Pratima Sheorey Independent Director
R Gandhi Additional Director
Subhash Chander Kalia Non Exe.Non Ind.Director
Ravneet Gill Managing Director & CEO
T S Vijayan Independent Director
Anil Jaggia Independent Director
Ajai Kumar Non Exe.Non Ind.Director
Subhash Chander Kali Ind. Non-Executive Director

61
Automobile Sector

The automotive manufacturing industry comprises the production of commercial vehicles,

passenger cars, three & two-wheelers. India became the 4th largest auto market in 2017 with
sales (excluding two-wheelers) increasing 9.5 per cent year-on-year to 4.02 million units in 2017.
Overall domestic automobiles sales increased at 7.01 per cent CAGR between FY13-18 with
24.97 million vehicles getting sold in FY18. Domestic automobile production increased at 6.96
per cent CAGR between FY13-19 with 30.92 million vehicles manufactured in the country in
FY19. In FY19, commercial vehicles recorded the fastest pace of growth in domestic sales at
17.55 per cent year-on-year, followed by three-wheelers at 10.27 per cent year-on-year. Overall
automobile exports reached 4.04 million vehicles in FY18, implying a CAGR of 6.86 per cent
between FY13-18. Two-wheelers made up 69.7 per cent of the exported vehicles, followed by
passenger vehicles at 18.5 per cent, three-wheelers at 9.4 per cent and commercial vehicles at 2.4
per cent. Overall automobile exports increased by 14.50 per cent year-on-year in FY19.
Indian automotive industry (including component manufacturing) is expected to reach Rs 16.16-
18.18 trillion (US$ 251.4-282.8 billion) by 2026. Two-wheelers are expected to grow 9 per cent
in 2018. Indian auto industry is expected to see 8-12 per cent increase in its hiring during FY19.
Figure 4. 5 Auto Sector

62
TATA Motors
Tata Motors Limited is an automobile company. The Company is
engaged in motor vehicle manufacturing. The Company is mainly
engaged in the automobile product business consisting of all types
of commercial and passenger vehicles, including vehicle financing
sold by the Company. The segments of the company include
automotive operations as well as all other operations. The Company's automotive segment
operations include all activities relating to the development, design, manufacture, assembly and
sale of vehicles, including vehicle financing, as well as sale of related parts and accessories. The
Company manufactures and sells passenger vehicles, utility vehicles, light commercial vehicles,
and medium and heavy commercial vehicles in the automotive segment. The Company's other
segment of operations mainly comprises information technology (IT) services, and machine tools
and factory automation services. The Company operates in over 160 countries across the world.
Table 4. 17 Management

Name Designation

Ratan N Tata Chairman Emeritus

Guenter Butschek Managing Director & CEO

Ralf Speth Non Executive Director

Falguni Nayar Ind. Non-Executive Director

Om Prakash Bhatt Ind. Non-Executive Director

N Chandrasekaran Chairman & Non-Exe.Director

Satish Borwankar Exe.Director & COO

Vinesh Kumar Jairath Ind. Non-Executive Director

Nasser Munjee Ind. Non-Executive Director

Hanne Sorensen Ind. Non-Executive Director

63
Mahindra & Mahindra

Mahindra and Mahindra Limited is engaged in the manufacture of

passenger cars, commercial vehicles and tractors. The Company's
segments include Automotive, which is engaged in the sale of
automobiles, spare parts and related services; Farm Equipment, which
is engaged in the sale tractors, spare parts and related services; IT Services, which includes
business consulting and related support activities; Financial Services, which includes services
relating to financing, leasing and hire purchase of automobiles and tractors; Steel Trading and
Processing, which is engaged in trading and processing of steel; Infrastructure, including
operation of commercial complexes, project management and development; Hospitality,
including sale of Timeshare; Systech, which consists of automotive components and other related
products and services; Two wheelers, which consists of sale of two wheelers, spare parts and
related services, and Others, which includes logistics, after-market and investments.
Table 4. 18 Management

Name Designation

Keshub Mahindra Chairman Emeritus

Pawan Goenka Managing Director

M M Murugappan Independent Director

Anupam Puri Independent Director

Vikram Singh Mehta Independent Director

Vijay Kumar Sharma Non Exe.Non Ind.Director

Anand G Mahindra Executive Chairman

Nadir B Godrej Independent Director

R K Kulkarni Independent Director

Vishakha N Desai Independent Director

64
Maruti Suzuki India Ltd.

Maruti Suzuki India Limited is a holding company. The company manufactures, buys and sells
motor vehicles, components and spare parts (automobiles). The Company's other activities
include facilitating pre-owned car sales, managing the fleet and financing the car. Geographic
segments include the domestic segment, which includes sales to Indian-based customers, and the
overseas segment, which includes sales to outside India customers. The product portfolio of the
company is comprised of Alto 800, Alto K10, Wagon R, Celerio, Ritz, Swift, DZire, Ertiga,
Omni, Eeco, Gypsy and Ciaz. Maruti Finance, True Value, Maruti Genuine Parts, Maruti
Genuine Accessories, Maruti Suzuki Auto Card and Maruti Driving School are among its service
offerings. It has about five plants in Palam Gurgaon Road, Gurgaon, Haryana, and Manesar
Industrial Town, Gurgaon, Haryana, with an installed capacity of more than 1.5 million vehicles
per year.
Table 4. 19 Management

Name Designation

R C Bhargava Chairman

T Hasuike Director

K Saito Director

K Ayabe Director

R P Singh Independent Director

D S Brar Independent Director

K Ayukawa Managing Director & CEO

T Suzuki Director

O Suzuki Director

K Yamaguchi Director - Production

P Shroff Independent Director

R S Karnad Independent Director

65
Hero MotoCorp Ltd

Hero MotoCorp Limited is a manufacturer of two wheels. The company

manufactures and sells two motorized wheelers with engine capacity,
spare parts and related services up to 350 cubic centimeters (cc). Karizma ZMR, Karizma,
Xtreme Sports, Xtreme, Hunk, Impulse, Achiever, Ignitor, Glamour, Passion XPRO, iSmart 110,
Passion PRO, Passion PRO TR, Splendor iSmart, Splendor PRO Classic, Splendor PRO,
Splendor PRO, Splendor+, HF Deluxe ECO, HF Deluxe, HF Dawn, Duet, Maestro Edge,
Maestro and Pleasure products. It offers more than 20 products including categories of 100 cubic
centimeters (CC), 110CC, 125CC, 150CC, 225CC and scooter. Located in Dharuhera, Haryana ;
Gurgaon, Haryana ; Haridwar, Uttarakhand ; Neemrana, Rajasthan ; and Villa Rica, Colombia. It
has a Global Parts Center in Neemrana, Rajasthan, to manufacture and supply the parts on local
and global markets.
Table 4. 20 Management

Name Designation

Pawan Munjal Chairman & M.D & CEO

Suman Kant Munjal Non Executive Director

Paul Edgerley Ind. Non-Executive Director

Shobana Kamineni Ind. Non-Executive Director

M Damodaran Ind. Non-Executive Director

Name Designation

Vikram S Kasbekar Executive Director - Operations

Jagmohan Singh Raju Independent Director

Pradeep Dinodia Ind. Non-Executive Director

Anand C Burman Ind. Non-Executive Director

Ravi Nath Ind. Non-Executive Director

66
Bajaj Auto

Bajaj Auto Limited is a motorcycle, three-wheelers and parts

manufacturer based in India. Automotive, Investments and
Others are the business segments of the Company. The
Company's vehicles include two-wheelers and commercial vehicles. Two-wheelers include Bajaj
V, Bajaj V Avenger, Avenger Cruise 220, Pulsar RS 200, Pulsar FOS, Pulsar 200 NS, Pulsar 220,
Pulsar 180, Pulsar 150, Pulsar 135 LS Discover, Discover 125, Discover 150S, New Discover
150F, Platina 100, Platina 100 ES, CT 100, CT 100 Ninja, Ninja 650R and Ninja 300. Its
products also include CT 100B, Avenger 220 Cruise, Boxer BM150X, Avenger 220 Street,
Avenger 150 Street, Pulsar AS 150 and Maxima-Cargo. The geographic segments of the
Company include India and the rest of the world. The Company offers troubleshooting services.
The plants of the company include the plant of Waluj, the plant of Chakan and the plant of
Pantnagar. The Company's subsidiaries include PT. Bajaj Auto Indonesia and Bajaj Auto
International Holdings BV.
Table 4. 21 Management

Name Designation

Rahul Bajaj Chairman

Rajiv Bajaj Managing Director

Sanjiv Bajaj Director

Gita Piramal Director

D J Balaji Rao Director

Naushad Forbes Director

Anami Roy Director

Lila Poonawalla Independent Director

Rakesh Sharma Executive Director

Madhur Bajaj Vice Chairman

67
Pradeep Shrivastava Executive Director

Niraj Bajaj Director

Shekhar Bajaj Director

Nanoo Pamnani Director

Omkar Goswami Director

Rakesh Sharma Executive Director

Pradip Shah Independent Director

68
TVS Motors

TVS Motor Company Limited produces scooters, motorcycles, three

wheelers, mopeds, components and accessories.Phoenix 125, Apache Series RTR, Victor, StaR
City+, Sport and Max4R are among the
company's motorcycles. Jupiter, Wego, Scooty Zest 110, Scooty Streak and Scooty Pep+ are
among its scooters. There are XL 100, XL Super and XL Super Heavy Duty mopeds.TVS King
is its three wheeler. It has about four production plants, about three in India (Hosur, Tamil Nadu ;
Mysore, Karnataka, and Nalagarh, Himachal Pradesh) and one in Indonesia (Karawang).The
Company's mobile application features of TVSM Service(Beta) include, among others, service
schedules, service bookings, news and updates.PT is included in its subsidiaries. TVS Indonesia
Motor Company, TVS Motor Company B.V., TVS Motor (Singapore) Pte. Limited, among
others, Sundaram Business Development Consulting Company Limited (Shanghai) and
Sundaram Holding USA Inc.
Table 4. 22 Management

Name Designation
Venu Srinivasan Chairman & Managing Director
Rajesh Narasimhan Director
T Kannan Director
Lakshmi Venu Director
Prince Asirvatham Director
Lalita D Gupte Independent Director
Sudarshan Venu Joint Managing Director
H Lakshmanan Director
C R Dua Director
R Ramakrishnan Director
K N Radhakrishnan Whole Time Director
R Gopalan Independent Director

69
Eicher Motors

Eicher Motors Limited is a parent of Royal Enfiled that

offers middleweight motorcycles in India. Royal Enfield
operates in India, and over 40 countries around the world.
The company is engaged in the manufacture of products and related components for
automobiles. The Company operates in vertical business, including motorcycles, commercial
vehicles and vehicles for personal use. The company designs, manufactures and markets five-49
ton trucks and buses through its joint venture, Volvo Eicher Commercial Vehicles Limited
(VECV), and its manufacturing plant in Pithampur, Madhya Pradesh is the hub for Volvo Group's
five and eight liter medium-duty engines. VECV includes Eicher Trucks and Busses, Volvo
Trucks India, Eicher Engineering Components, VE Powertrain and Bus Body Plant. The
Company, through Eicher Polaris Pvt Limited (EPPL), offers Multix three in one vehicle, built
for the independent businessman.
Table 4. 23 Management

Name Designation

S Sandilya Chairman

Manvi Sinha Ind. Non-Executive Director

Vinod K Dasari WholeTime Director & CEO

Siddhartha Lal Managing Director & CEO

Inder Mohan Singh Independent Director

Vinod Aggarwal Non Executive Director

70
Ashok Leyland

Ashok Leyland Limited is a holding company. Commercial

vehicles and related components are the company's business. It is
involved in the manufacture and trading of medium and heavy
commercial vehicles, light commercial vehicles, passenger vehicles, automotive aggregates,
vehicle financing and engineering services through its subsidiaries. It offers a range of 18 to 80-
seater busses in categories, such as city and electric busses. It offers a variety of trucks, including
long haul trucks, trucks for mining and construction, and trucks for distribution. It designs,
develops and manufactures defense vehicles for armed forces. It offers DOST, PARTNER,
STILE and MiTR light vehicles. It offers power solutions for generating electricity, combining
farm harvesters, earth moving and building equipment, and marine and other non-automotive
applications. It has operations in the Middle East, India, Sri Lanka, Bangladesh, Mauritius, and
Africa.
Table 4. 24 Management

Name Designation

R J Shahaney Chairman Emeritus

Andreas H Biagosch Director

Jean Brunol Director

Manisha Girotra Director

Jose Maria Alapont Director

Jose Maria Alapont Director

Dheeraj G Hinduja Executive Chairman

D L Balaji Rao Director

Sanjay K Asher Director

Andrew C Palmer Director

Jose Maria Alapont Director

71
IT Sector
India’s IT industry contributed around 7.7 per cent to the country’s GDP and is expected to
contribute 10 per cent of India’s GDP by 2025. IT industry employs nearly 3.97 million people in
India of which 105,000 were added in FY18. The industry added around 105,000 jobs in FY18
and is expected to add over 250,000 new jobs in 2019.
IT industry is fueling the growth of start-ups in India, with the presence of around 5,300 tech
start-ups in India. The IT-BPM sector in India expanded at a CAGR of 10.71 per cent to US$
167 billion in FY18 from US$ 74 billion in FY10, which is 3–4 times higher than the global IT-
BPM growth. It is estimated that the size of the industry will grow to US$ 350 billion by 2025.
India is the leading sourcing destination across the world, accounting for approximately 55 per
cent market share of the US$ 185-190 billion global services sourcing business in 2017-18.
The computer software and hardware sector in India attracted cumulative Foreign Direct
Investment (FDI) inflows worth US$ 35.82 billion between April 2000 and December 2018 and
ranks second in inflow of FDI, as per data released by the Department for Promotion of Industry
and Internal Trade (DPIIT).
Total export revenue of the industry is expected to grow 7-9 per cent year-on-year to US$ 135-
137 billion in FY19. IT-BPM sector accounts for largest share in total Indian services export,
which is 45 per cent.The contribution of the IT sector to India’s GDP stood at 7.9 per cent in
2017-18.
Figure 4. 6
IT Sector

72
Tata Consultancy Services

Tata Consultancy Services Limited (TCS) is engaged in

providing information technology (IT) services, digital and
business solutions. The fragment of the Company includes banking, finance and insurance,
manufacturing, retail and consumer goods, telecommunications, media and entertainment, and
others such as energy, resources and utilities, high-tech services, healthcare and life science, s-
governance, travel, transportation, and hospitality. Its services include IT and insurance, business
intelligence and performance management, business process services, cloud services, connected
marketing solutions, consulting, engineering and industrial services, business solutions, services
for IT infrastructure, products for mobility and services and solutions for platforms. Digital
Software and Solutions, TCS BaNCS and TCS MasterCraft, among others, are among its
software offerings. It serves sectors including insurance, healthcare, retail, telecommunications
and others.
Table 4. 25 Management

Name Designation
N Chandrasekaran Chairman
N G Subramaniam Exe.Director & COO
A Mehta Independent Director
O P Bhatt Independent Director
Hanne Birgitte Breinbjerg Sorensen Independent Director
Daniel Hughes Callahan Independent Director
Rajesh Gopinathan Managing Director & CEO
Aarthi Subramanian Director
R Sommer Independent Director
P K Khosla Independent Director

73
Infosys

Infosys Limited provides consulting, technology,

outsourcing and services of the next generation.
Together with its subsidiaries, the Company also provides business information technology
services that include application development and maintenance, infrastructure management,
independent validation, engineering services that include product engineering, life cycle
solutions and business process management ; consulting and system integration services that
include consulting, business solutions; systems integration and advanced technology ; products,
business platforms and solutions to accelerate innovation driven by intellectual property,
including Finacle, its banking solution, and Analytics, Cloud and Digital Transformation
offerings. Its segments are , Manufacturing and Hi-Tech (MFG & Hi-TECH), Financial Services
and Insurance (FSI), Communications and Services (ECS), Energy & Utilities, Retail, Consumer
Packaged Goods and Logistics (RCL) and Life Sciences and Healthcare (LSH).
Table 4. 26 Management

Name Designation
Nandan M Nilekani Chairman
U B Pravin Rao Whole Time Director & COO
Punita Kumar Sinha Independent Director
D Sundaram Independent Director
Salil Parekh Managing Director & CEO
Roopa Kudva Independent Director
D N Prahlad Independent Director
Kiran Mazumdar Shaw Independent Director

74
Wipro

Wipro Limited (Wipro) is a global provider of IT services,

consultancy services and business services. It operates through two
segments: IT Services and IT Products. The IT Services business of
the Company provides a range of IT and IT services, including digital
strategy consultancy, customer-centric design, technology consultancy, IT consultancy, custom
application design, development, reengineering and maintenance, system integration, package
implementation, global infrastructure services, analytics services, business process services,
hardware and software design research and development. The IT Products segment provides a
range of third-party IT products, enabling it to provide services for IT system integration. Its
products include platforms and storage, computing, networking solutions, security of enterprise
information, and software products, including databases and operating systems. Through its
direct sales force, it is a reseller of third-party business products.
Table 4. 27 Management

Name Designation
Azim H Premji Executive Chairman
Rishad Premji Executive Director
Ashok S Ganguly Independent Director
M K Sharma Independent Director
Patrick J Ennis Independent Director
Arundhati Bhattacharya Independent Director
Abidali Z Neemuchwala Executive Director & CEO
Narayanan Vaghul Independent Director
William Arthur Owens Independent Director
Ireena Vittal Independent Director
Patrick Dupuis Independent Director

75
Tech Mahindra

Tech Mahindra Limited is involved in the programming, consulting

and related services business of computers. The segments of the
company include the services of information technology (IT) and
outsourcing of business processing (BPO). The company operates in different sectors, including
the business of telecommunications and business solutions. The telecom business provides
consulting-led integrated portfolio services to customers, which are telecom equipment
manufacturers, telecom service providers and IT infrastructure services, and BPO, as well as
enterprise services (banking, financial services and insurance (BFSI), retail and logistics, and
manufacturing, among others) of IT and IT-enabled services delivered through a network of
various locations around the world. The business of enterprise solutions provides IT services
including IT-enabled services, application development and maintenance, business solutions for
consulting and enterprise, extended engineering solutions and services for infrastructure
management.
Table 4. 28 Management

Name Designation
Anand G Mahindra Chairman
Anupam Puri Director
M Rajyalakshmi Rao Director
T N Manoharan Director
V S Parthasarathy Director
C P Gurnani Managing Director & CEO
M Damodaran Director
Ravindra Kulkarni Director
Ulhas N Yargop Director
Mukti Khaire Additional Director

76
Tata Elxsi Limited

Tata Elxsi Limited is involved in computer hardware and software

design and development. The company operates in two segments:
integration and support of the system, and development of software and services. Its segment of
system integration & support is involved in the implementation and integration of computer,
broadcast, virtual reality, storage and disaster recovery systems and solutions. Its Software
Development & Services segment comprises three business divisions: Embedded Product
Design, which provides consulting technology, new product design, development and testing
services for broadcasting, consumer electronics, healthcare, telecommunications and transport
industries ; Industrial Design (ID), which serves a variety of industries, including automotive,
consumer electronics,retail and consumer goods and healthcare, as well as Visual Computing
Labs (VCL), providing three dimensional (3D) animation services for feature film, television and
advertising content development.
Table 4. 29 Management

Name Designation
N Ganapathy Subramaniam Chairman
M S Ananth Independent Director
S Gopinath Independent Director
Ankur Verma Additional Director
Name Designation
Madhukar Dev Managing Director & CEO
Sudhakar Rao Independent Director
P McGoldrick Independent Director

77
Oracle

Oracle Financial Services Software Limited develops, sells

and markets computer systems, computer software as well as
consulting and other activities related to information technology. The Company provides
outsourcing services for banking products, business consulting services and knowledge
processes. Its segments include licenses for products and related activities (products),IT solutions
and consulting (Services) and outsourcing services (BPO-Services) for business processing. The
segment of Products deals with different banking software products. Its activities are related to
improvements, implementation and maintenance. Its Services segment offers services that span
the lifecycle of financial service institutions' applications. This segment's portfolio includes
consulting, application, support and technology services. Its BPO-Services segment provides
business process outsourcing services to the lending, collections, customer service and capital
market industry.
Table 4. 30 Management

Name Designation
S Venkatachalam Chairman
Harinderjit Singh Director
Robert K Weiler Director
Kimberly Woolley Director
Vincent Secondo Grelli Non Exe.Non Ind.Director
Makarand Padalkar Whole Time Director
Chaitanya Kamat Managing Director & CEO
Richard Jackson Director
Sridhar Srinivasan Director
Yong Meng Kau Non Exe.Non Ind.Director
Jane Murphy Ind. Non-Executive Director

78
Mindtree

MindTree Limited is a holding company which is an

international consulting and implementation company for
information technology that delivers business solutions
through the development of global software. The Company operates in five segments: Retail,
Banking, Financial Services and Insurance (BFSI); CPG and Manufacturing (RCM);
Technology, Media and Services (TMS); Travel and Hospitality (TH), and Others. It provides
services in the areas of analytics and information management, application development and
maintenance, business process management, business technology consulting, cloud, independent
testing, digital business's, infrastructure management services, product engineering, and
systems, mobility. It has offices in India, the U.S., the U.K., Singapore, Japan, Malaysia,
Australia, Germany, Sweden, Switzerland, UAE, the Netherlands, Canada, Belgium, France,
Ireland, South Africa, and China.
Table 4. 31 Management

Name Designation
Krishnakumar Natarajan Executive Chairman
Rostow Ravanan Managing Director & CEO
Bijou Kurien Independent Director
Akshaya Bhargava Independent Director
N S Parthasarathy Executive Vice Chairman
Subroto Bagchi Non Executive Director
Apurva Purohit Independent Director
Milind Sarwate Independent Director

79
HCL Technologies

HCL Technologies Limited provides a range of services for software

development, business process outsourcing, and IT infrastructure
services. The segments of the Company include software services,
services for infrastructure management and services for outsourcing business processes.The
Software Services segment provides services for global customers in the areas of application
development and maintenance, enterprise application, software as a service (SAAS) application
and engineering, and R&D. The segment of infrastructure management services involves
managing the IT assets of the customer. The business process outsourcing services segment
includes contact center and help desk services. The Company delivers its solutions across select
verticals, including financial services, manufacturing, retail and consumer products, media,
publishing and entertainment, public services, energy and utility, healthcare, and travel, transport
and logistics.
Table 4. 32 Management

Name Designation
Shiv Nadar Chairman & Chief Strategy Officer
Ramanathan Srinivasan Ind. Non-Executive Director
Sosale Shankara Sastry Ind. Non-Executive Director
Thomas Sieber Ind. Non-Executive Director
Deepak Kapoor Ind. Non-Executive Director
Roshni Nadar Malhotra Non Executive Director
Robin Abrams Ind. Non-Executive Director
Subramanian Madhavan Ind. Non-Executive Director
Nishi Vasudeva Ind. Non-Executive Director
James Philip Adamczyk Ind. Non-Executive Director

80
Consumer Durables

Indian consumer durables market is broadly segregated into urban and rural markets, and is
attracting marketers from across the world. The sector comprises of a huge middle class,
relatively large affluent class and a small economically disadvantaged class. Global corporations
view India as one of the key markets from where future growth is likely to emerge. The growth
in India’s consumer market would be primarily driven by a favorable population composition
and increasing disposable incomes. Per capita GDP of India is expected to reach US$ 3,273.85 in
2023 from US$ 1,983 in 2012. The maximum consumer spending is likely to occur in food,
housing, consumer durables, and transport and communication sectors. The growing purchasing
power and rising influence of the social media have enabled Indian consumers to splurge on
good things. Import of electronic goods reached US$ 53 billion in FY18.Indian appliance and
consumer electronics (ACE) market reached Rs 2.05 trillion (US$ 31.48 billion) in 2017. India is
one of the largest growing electronics market in the world. Indian electronics market is expected
to grow at 41 per cent CAGR between 2017-20 to reach US$ 400 billion. As of FY18, washing
machine, refrigerator and air conditioner market in India were estimated around Rs 7,000 crore
(US$ 1.09 billion), Rs 19,500 crore (US$ 3.03 billion) and Rs 20,000 crore (US$ 3.1 billion),
respectively. India’s smartphone market in 2018 grew by 14.5 per cent with a shipment of 142.3
million units. India is expected to have 829 million smartphone users by 2022. Consumer
durables index under the Index of Industrial Production (IIP) has grown 7.5 per cent year-on-
year between Apr-Dec 2018.
Figure 4. 7
Consumer
Durables

81
Titan
Titan Company Limited offers watches, jewelry and other
products. The Company's segments include Watches,
Jewellery, Eyewear and Others. The Company offers plain
and studded brands of gold jewelry, such as Tanishq,
GoldPlus, Zoya, Mia, retailed through Tanishq, GoldPlus,
Zoya & Mia stores. The Company provides watches and accessories such as bags, brand
sunglasses, including Titan, Sonata, Fastrack, and sub-brands such as Raga, Xylys, and Edge.
The watches and accessories of the company are retailed through the stores of World of Titan,
Helios and Fastrack. The company offers in brands such as Eye+ frames, contact lenses, and
sunglasses. Titan Eye Plus stores retail the company's eyewear brands. It also offers solutions for
component and subassembly precision engineering (PECSA) and machine building and
automation (MBA). The Company's subsidiaries include Titan TimeProducts Limited, Favre
Leuba AG and Titan Engineering and Automation Limited.

Table 4. 33 Management

Name Designation
N N Tata Vice Chairman
Ramesh Chand Meena Director
Hema Ravichandar Director
Harish Bhat Director
B Santhanam Director
N Muruganandam Chairman & Director
Bhaskar Bhat Managing Director
T K Balaji Director
Ireena Vittal Director
Ashwani Puri Director
Arun Roy Additional Director
Pradyumna Rameshchandra Vyas Independent Director

82
Voltas

Voltas Limited is an engineering and air conditioning company.

The Company engages in rooms air conditioners , contract
revenue, commercial refrigeration products, and service sales.
The segments of the Company include Electro-mechanical Projects and Services ; Engineering
Products and Services ; Comfort and Commercial Unitary Cooling Products, and Others. The
Company is engaged as an engineering, procurement and construction (EPC) contractor in the
field of air conditioning, refrigeration and in the business of electro-mechanical projects. The
Company is also engaged in the mining, water management and treatment, construction
equipment and textile industry engineering product services business. The Company offers
products, including textile machinery; mining and construction equipment; heating, ventilation,
air conditioning and refrigeration (HVAC&R), and water coolers and dispensers. The Company
has presence in India among others.

Table 4. 34 Management

Name Designation
Noel N Tata Chairman
Anil George Deputy Managing Director
V Deshpande Director
Bahram N Vakil Director
Hemant Bhargava Director
Pradeep Bakshi Managing Director
Nani Javeri Director
D Sarangi Director
Anjali Bansal Director
Arun Kumar Adhikari Director

83
Whirlpool

Whirlpool of India Limited is a home appliance manufacturer.

The company is primarily engaged in the manufacture and
trading of refrigerators, air conditioners, washing machines,
microwave ovens and small appliances, supplying domestic and international markets. It
provides product development and procurement services to Whirlpool Corporation, the U.S., and
other group firms. Its geographic segments include sales within India, representing sales to
customers within India and sales outside India, representing sales to customers outside India. The
Company also offers Water Purifiers, Built-In Appliances and Induction cooktop. The company
offers coolers, washing machines, air conditioners, microwave ovens and water purifiers
accessories. It offers Surge Protector and Affresh Accessories. Its plants are located at Faridabad,
Haryana; Rajangaon, Pune, and Thirubhuvanai Village, Puducherry.

Table 4. 35 Management

Name Designation
Arvind Uppal Non Executive Chairman
Anil Berera Executive Director
Anand Narain Bhatia Independent Director
Sonu Halan Bhasin Independent Director
Sunil D’Souza Managing Director
Arumalla Hari Bhavanarayana Reddy Executive Director
Sanjiv Verma Independent Director

84
IFB

IFB Industries Limited is involved in the engineering and manufacture of

various motor vehicle components and accessories. The company is also
involved in the manufacture and trading of home appliances, as well as
the manufacture of fine blanking components. Its segments include
Engineering and Home Appliances. It has two divisions: Fine Blanking and Home Appliances.
The Fine Blanking division's products range from fine blanked components and tools to related
machines, such as straighteners, decoilers and strip loaders. Its engineering divisions are located
in Kolkata and Bangalore. The Home Appliances Division includes washing machines, clothes
dryers, dishwashers, microwave ovens, air conditioners, chimneys, refrigerators, modular
kitchens, built-in ovens and built-in hobs. The Bangalore unit, apart from Fine Blanked
components, manufactures motors for White goods, as well as automotive applications. The
Company has an approximately 650 franchise service network.

Table 4. 36 Management

Name Designation
Bijon Nag Executive Chairman
Sudam Maitra Deputy Managing Director
Sudip Banerjee Non Executive Director
Rathindra Nath Mitra Independent Director
Rahul Choudhuri Independent Director
Bikram Nag Jt.Exe.Chairman & M.D
Prabir Chatterjee Director & CFO
Ashok Bhandari Independent Director
Sangeeta Shankaran Sumesh Independent Director

85
Bajaj Electricals

Bajaj Electricals Limited engages in engineering and projects ;

businesses dealing with power distribution, lighting and consumer
sustainability. The business segments of the company are Lighting ;
Consumer Durables ; Engineering & Projects, and Others. Lights, tubes and luminaires are
included in the Lighting segment. There are appliances and fans in the Consumer Durables
segment. The segment Engineering & Projects includes transmission line towers, towers for
telecommunications, high mast, poles and special projects. Other segments include diecasting
and wind power. It has a range of household and kitchen appliances including water heaters,
room heaters, coolers, iron, mixers, induction cookers, toasters, kettles, microwaves, rice
cookers, gas cookers, non-electrical cooking aids and pressure cookers. It offers table, ceiling,
pedestal, wall, fresh air and industrial fans as well as lighting solutions such as light sources,
household luminaires, lighting products based on inverters, torches and lamps.

Table 4. 37 Management

Name Designation
Shekhar Bajaj Chairman & Managing Director
Ashok Jalan Director
Indu Shahani Director
Anuj Poddar Executive Director
Munish Khetrapal Ind. Non-Executive Director
Harsh Vardhan Goenka Director
Madhur Bajaj Director
Rajendra Prasad Singh Director
Siddharth Mehta Director
Pooja Bajaj Non Executive Director

86
Havells

Havells India Limited is a holding company. The company

manufactures Switchgears, Cable, Lighting and Fixtures and
Durables for Electric Consumer. The company operates in four
segments: switchgears, lighting and fixtures, cables and durables for electrical consumers. The
segment of Switchgear consists of domestic and industrial switchgears, accessories for electrical
wiring, industrial motors, pumps and capacitors. The segment of lighting and fixture consists of
energy-saving lamps (CFL) and luminaires. The segment Cables includes domestic cables and
underground industrial cables. The segment Electrical Consumer Durable includes fans, water
heaters and household appliances. Havells Sylvania Brasil Iluminacao Ltda., Havells Sylvania
(Thailand) Ltd., Havells USA Inc., Havells Sylvania Iluminacion (Chile) Ltda., Havells
International Limited, Havells Holdings Limited are its subsidiary companies.
Table 4. 38 Management

Name
Anil Rai Gupta
Ameet Kumar Gupta
Puneet Bhatia
Vijay Kumar Chopra
Surender Kumar Tuteja
Vellayan Subbiah
Upendra Kumar Sinha
Rajesh Kumar Gupta
Surjit Kumar Gupta
T V Mohandas Pai
Pratima Ram
Adarsh Kishore
Jalaj Ashwin Dani
Designation
Chairman & Managing Director
Whole Time Director
Non Exe.Non Ind.Director
Independent Director
Independent Director
Independent Director
Independent Director
Whole-time Director (Finance) and Group CFO
Non Exe.Non Ind.Director
Non Exe.Non Ind.Director
Independent Director
Independent Director
Independent Director

87
Symphony

Symphony Limited, and its subsidiaries are engaged in

manufacturing and trading of residential, commercial and industrial
air coolers, both in the domestic and international markets. The
Company operates through two segments: Air Coolers and Corporate
Funds. It offers air coolers in various categories, such as residential air coolers, packaged air
coolers and central air coolers. It provides tower, personal, desert, room and window air coolers
for residences, shops, showrooms and offices; central air cooling solutions for factories,
warehouses and large halls, among others, and heavy duty industrial air coolers for factories,
offices, schools, malls, assembly halls, warehouses and metro stations, among others. Its
products in residential air coolers category include Storm 100i, Storm 70i, Ice Cube XL, Jumbo,
Sumo, Siesta 70, Window 70, Window 41, Window 51, R28i and R28. The Company offers its
services to banks, auto industry, packaging, distilleries and railways, among others.

Table 4. 39 Management

Name Designation
Ashish Deshpande Independent Director
Nrupesh Shah Executive Director
Naishadh Parikh Independent Director
Reena Bhagwati Independent Woman Director
Achal Bakeri Chairman & Managing Director
Jonaki Bakeri Non Executive Director
Dipak Palkar Independent Director

88
V-Guard

V-Guard Industries Limited (V-Guard) is a company based in India

that produces, trades and sells electronic products. Electronics,
Electrical / Electro Mechanical and Others are the segments of the Company. The Electronics
segment of V-Guard includes products such as voltage stabilizers, UPS and digital UPS. The
Company's Electrical/Electro Mechanical segment includes products, such as PVC Cables,
Pumps and Motors, Electric Water Heaters, Fans, Switchgears, Induction Cooktops and Mixer
Grinder. The Company's Others segment includes products, such as solar water heater and solar
inverter. VIC 05, VG 400, VG 500, VIC 2000, Insignia and Turbo Grind are part of its product
portfolio. The Company has its manufacturing facilities located at Coimbatore, Tamil Nadu;
Kashipur, Utharakhand; Kala Amb, Himachal Pradesh, and SIPCOT Industrial growth center,
Perundurai, Tamil Nadu, and Majhitar, Sikkim.

Table 4. 40Management

Name Designation
Kochouseph Chittilappilly Chairman
Mithun K Chittilappilly Managing Director
A K Nair Director
Ullas K Kamath Director
Radha Unni Independent Director
Cherian N Punnoose Vice Chairman
V Ramachandran Director & COO
Joshna Johnson Thomas Director
C J George Director

89
 Chapter 5

Analysis and
interpretation

90
Tools and Techniques used in the analysis

1) Return =close price-previous price/previous price*100

2) RISK=√ΣD2/(n-1)

Where, Difference = Return-Average

D2 =Difference*Difference

5) Beta = Covariance / Variance

 The data of 8 Companies has been studied from 5 sectors.

 The companies have been selected on the basis of Market Capitalization.

 Monthly price of the selected companies was analyzed from April 2015 to March 2019
to find risk, return and beta of the companies.

91
Table 5. 1 Risk, Return & Beta of FMCG Sector

Sr. No. Company name Return Risk Beta

1 HUL 1.50% 4.961815 0.826862672

2 ITC 0.96% 7.586454 0.969305891

3 Dabur 0.87% 5.813651 0.868999731

4 Marico 3.05% 13.28034 -0.01609864

5 P&G 0.81% 4.362928 0.23642345

6 Nestle 0.76% 6.437345 0.923352708

7 Britannia 3.81% 13.67544 0.082320825

8 Colgate 0.37% 4.943792 0.565945047

Figure 5. 1 Risk and Return of FMCG Sector

13.28034 13.67544

7.586454
6.437345
5.813651
4.961815 4.943792
4.362928
3.81
3.05
1.5
0.96 0.87 0.81 0.76 0.37

HUL ITC Dabur Marico P&G Nestle Britannia Colgate

Return Risk

92
Interpretation
 From the above graph and table it can be concluded that Britannia has the highest
risk(13.67544) and gives highest return(3.81%).

 Colgate provides the lowest return(0.37%) and hence has the lowest risk(0.5659).

 HUL has a moderate risk(4.9618) and moderate return(1.50%).

 The average return of the companies studied in FMCG sector is 1.52%.

 Average risk of the 8 companies is 7.632721.

 ITC has the highest beta(0.9693) which shows that the company is highly volatile to the
market indice Nifty FMCG.

 Marico has a negative beta(-0.016) through which we can conclude that the company does
not perform along with the market.

 The second highest company providing return(3.05%) is Marico and similarly it has
risk(13.28034).

93
Table 5.2 Risk, Return & Beta of Auto Sector

Sr. No. Company name Return Risk Beta

1 Tata Motors -1.37% 10.89596 1.417406782

2 Maruti Suzuki 1.26% 8.124842 1.18507114

3 Mahindra & Mahindra 0.24% 6.780145 0.74784864

4 Hero Motorcop 0.21% 6.527818 0.90863097

5 Baja Auto 0.85% 6.280103 0.70632949

6 TVS 1.61% 8.294871 0.87985417

7 Ashok Leyland 0.37% 9.520022 0.846886465

8 Eicher Motors 0.47% 7.797662 0.728468158

Figure 5. 2 Risk and Return of Auto Sector

12
10.89596

10 9.520022

8.124842 8.294871
7.797662
8
6.780145 6.527818 6.280103
6

2 1.61
1.26
0.85
0.24 0.21 0.37 0.47
0 -1.37
Tata Motors Maruti Mahindra & Hero Baja Auto TVS Ashok Eicher
Suzuki Mahindra Motorcop Leyland Motors
-2

Return Risk

94
Interpretation
 Tata Motors has the highest risk(10.8959) among the 8 companies. But it provides the
negative returns(-1.37%).

 So it can be said that investing in Tata Motors involves high risk but does not provide returns
to the shareholder.

 Ashok Leyland also has high risk(9.52) but does not provide returns(0.37%) accordingly.

 TVS is the 3rd company if risk(8.294871) is taken into consideration and it provides the
highest return(1.61%) among the companies.

 Maruti Suzuki also provides good return(1.26%) if compared to risk(8.1248) associated with
the company.

 Bajaj Auto gives a better return(0.85%) as compared to the risk(6.2801).

 Tata Motors has high beta(1.4174) so it is highly volatile in nature and as Bajaj Auto is
having lowest Beta(0.7063) it is not much volatile to market index.

 Average return of the 8 companies in Auto sector is 0.46% and average risk is 8.027.

95
Table 5.3 Risk, Return & Beta of IT Sector

Sr. No. Company name Return Risk Beta

1 TCS 1.39% 6.95878 1.281830343

2 Infosys 0.93% 5.829648 1.027527664

3 Wipro 0.63% 5.573201 0.753746193

4 Tech Mahindra 0.80% 8.11503 1.032759077

5 Tata Elxsi 1.41% 10.88112 0.934100701

6 Oracle 0.22% 6.232523 0.743215947

7 Mindtree 1.24% 10.7289 1.328976613

8 HCL 1.02% 5.404864 0.780247837

Figure 5. 3 Risk and Return of IT Sector

10.88112 10.7289

8.11503
6.95878
6.232523
5.829648 5.573201 5.404864

1.39 1.41 1.24

0.93 0.8 1.02
0.63
0.22

TCS Infosys Wipro Tech Tata Elxsi Oracle Mindtree HCL

Mahindra

Return Risk

96
Interpretation

 The company having highest risk(10.88) is Tata Elxsi and also it provides return(1.41%)
accordingly as highest.

 Mindtree has second highest risk(6.95) but TCS provides more return(1.39%) than
mindtree(1.24%).

 TCS involves low risk (6.95) and good returns(1.39%)

 Wipro, Infosys & HCL can also be considered as good investment options because they
provide better return as compared to the risk their stocks hold.

 Mindtree is highly volatile(1.3289) to the market index Nifty IT.

 Oracle is least volatile(0.7432) among the 8 companies.

97
Table 5.4 Risk, Return & Beta of Banking Sector

Sr. No. Company name Return Risk Beta

1 SBI 0.33% 8.981331 1.35380506

2 BOB -0.11% 12.48354 1.18913901

3 PNB -0.46% 16.75148 1.93184217

4 HDFC 1.80% 4.764655 0.74210634

5 Axis 0.65% 7.047046 0.92667412

6 Kotak 1.76% 5.574787 0.80707853

7 Yes 7.50% 46.70583 -0.708041

8 ICICI 1.13% 7.935958 1.08687719

Figure 5. 4 Risk and Return of Banking Sector

46.70583

16.75148
12.48354
8.981331 7.935958
7.047046 7.5
4.764655 5.574787
1.8 0.65 1.76 1.13
0.33

SBI BOB PNB HDFC Axis Kotak Yes ICICI

-0.46
-0.11

Retrun Risk

98
Interpretation

 Yes bank has a very high risk(46.705) and hence it is able to provide good returns(7.50%)
to the stock holders but this huge standard is highly risky to the investors and also its
fundamentals are not quite strong.

 BOB and PNB stocks also involve high risk but provide returns in negative.

 HDFC, Kotak and ICICI as compared to others companies involve low risk and provide
good returns.

 Average return of the 8 stocks is 1.58% and risk is 13.78.

 PNB has the highest beta(1.9318) is volatile to the market.

99
Table 5.5 Risk, Return & Beta of Consumer Durables Sector

Sr. No. Company name Return Risk Beta

1 Titan 2.44% 8.30781 0.27353971

2 Voltas 1.88% 9.811336 -0.0698331

3 Whirlpool 1.31% 8.464095 -0.0096359

4 IFB 1.74% 13.76623 0.66147053

5 Bajaj 2.04% 10.34568 0.10877083

6 Havells 2.30% 7.949284 -0.0671407

7 Symphony 3.52% 24.70737 0.51862131

8 V-Guard 28.65% 175.3691 4.87985452

Figure 5. 5 Risk and Return of Consumer Durables

175.3691

28.65
24.70737
8.30781 9.811336 8.464095 13.76623 10.34568 7.949284
2.44 1.88 2.3 3.52
1.31 1.74 2.04
Titan Voltas Whirlpool IFB Bajaj Havells Symphony V-Guard

Return Risk

100
Interpretation

 V-Guard has the highest risk(175.36) and it is too much for a investor as the prices fluctuated
highly in only one month and it can be considered to be very risky. The returns(28.65%) also
resulted to be very high as a result of that month. Hence investing in this stock is very risky.

 Havells has a lowest risk (7.94) and provides a return of 2.30% which can be considered as a
good option for a investor.

 Average return of the 8 companies is 5.49% and risk is 32.34.

 Whirlpool gives good return(1.31%) though it has risk less(8.46) involved.

 V-Guard has high beta(4.87) and hence it can be said that it is highly volatile to market index
Nifty Cons.

 Voltas has negative beta(-0.06) and hence it is not volatile to the market.

101
Suggested Portfolios

1. Portfolio A

Table 5.6 High Risk High return Portfolio

 The below mentioned stocks are suggested on the basis of companies which have high risk
and provide high return among the companies of each sector.

Companies Sector

Britannia FMCG

TVS Auto

Tata Elxsi IT

Yes Banking

V-Guard Consumer Durables

2. Porfolio B

Table 5.7 Moderate Risk Moderate Return Portfolio

 The below mentioned companies are suggested with the parameter of stocks having moderate
risk and giving moderate return.

Companies Sector

HUL FMCG

Eicher Motors Auto

Infosys IT

Kotak Banking

Titan Consumer Durables

102
3. Portfolio C

Table 5.8 Low Risk Low Return Portfolio

 The below mentioned companies are the one which provide low risk and low return among
the 8 companies.

Companies Sector

P&G FMCG

Hero Motorcop Auto

HCL IT

SBI Banking

Whirlpool Consumer Durables

4. Portfolio D

Table 5.9 Low Risk High Return Portfolio

 The following companies have been selected on the basis of low risk and high return.

Companies Sector

HUL FMCG

Bajaj Auto Auto

HCL IT

HDFC Banking

Havells Consumer Durables

103
5. Portfolio E

Table 5.10 Based on fundamentals Portfolio

 Net profit ratio, Debt ratio, P/E Ratio, EPS, Return on assets, Return on equity were studied
to suggest below portfolio.

(Source : Annexure)

Companies Sector

HUL FMCG

Eicher Motors Auto

Oracle IT

HDFC Banking

Symphony Consumer Durables

Table 5.11 Sector Wise Companies Portfolio

 The below suggested stocks are of each sector

FMCG IT Banking Auto (Portfolio Consumer Durable

(Portfolio F) (Portfolio H) I) (Portfolio J)
(Portfolio G)

HUL TCS HDFC Maruti Suzuki Symphony

ITC Infosys Kotak Hero MotoCrop V-Guard

104
Calculation of Certain ratios of Suggested Portfolios

1) Treynor Ratio

The Treynor ratio, also known as the reward-to-volatility ratio, is a performance metric to
determine how much exess return has been produced by a portfolio for each risk unit.

In this sense, excess return refers to the return earned above the return that a risk-free investment
could have earned. Risk in the Treynor ratio refers to systematic risk as measured by a
portfolio's beta. Beta measures the tendency of a portfolio's return to change in response to
changes in return for the overall market.

Treynor:Ratio=rp−rf÷βp
Where,rp=portfolio return
rf=risk-free rate
βp=beta of the portfolio

Treynor Rank
Portfolio A 0.022127 2
Portfolio B -0.22628 8
Portfolio C -1.24875 10
Portfolio D -0.32288 9
Portfolio E -0.18202 7
Portfolio F -0.05757 5
Portfolio G -0.04538 4
Portfolio H -0.05964 6
Portfolio I -0.03305 3
Portfolio J 0.03588 1
Table 5.12 Treynor ratio

105
Interpretation

 The Treynor ratio calculates how much an investment earned for the assumed risk unit above
the risk-free market rate. Although similar to the Sharpe ratio, its risk measurement is
different. While the Sharpe ratio considers the investment's total risk, the Treynor ratio only
considers the systematic risk, assuming that the portfolio's development of non-systematic
risk is completely diversified. Risk is the systematic risk or non-diversifiable risk in the
Treynor ratio, represented by beta. The Treynor measure represents the excess return per risk
unit. As the Treynor measure implicitly assumes the portfolio is well diverse.
 According to the above table, Portfolio J is having the highest Treynor Ratio. This shows that
the portfolio is well diversified than others. As per above table Portfolio C is having lowest
treynor ratio and the portfolio is not well diversified.

106
2) Jensen Ratio

The Jensen measure is a risk-adjusted performance measure that reflects the average return on a
portfolio or investment above or below the capital asset pricing model(CAPM) forecast,
considering the beta of the portfolio or investment and the average market return. This metric
also frequently referred to as the alpha of Jensen, or merely alpha.

Jensen's measure is one of the ways to determine if a portfolio is earning the proper return for its
level of risk. If the value is positive, then the portfolio is earning excess returns.

R(i) = the realized return of the portfolio or investment

R(m) = the realized return of the appropriate market index

R(f) = the risk-free rate of return for the time period

B = the beta of the portfolio of investment with respect to the chosen market index

Using these variables, the formula for Jensen's alpha is:

Alpha = R(i) - (R(f) + B x (R(m) - R(f)))

Table 5.13 Jensen Ratio

Jensen Rank
Portfolio A 0.092193 2
Portfolio B -0.03423 8
Portfolio C -0.05343 10
Portfolio D -0.03831 9
Portfolio E -0.02994 7
Portfolio F 0.011856 5
Portfolio G 0.029315 4

107
Portfolio H 0.008617 6
Portfolio I 0.039484 3
Portfolio J 0.287872 1

Interpretation

 Jensen’s measure is one of the ways to determine if a portfolio is earning the proper return
for its level of risk. If the value is positive, then the portfolio is earning excess returns. In
other words, a positive value for Jensen’s alpha means a fund manager has ―beat the market‖
with his stock

 Jensen measure is used in comparison of fund’s performance with its benchmark. The
negative ratio shows the underperformed fund and positive ratio shows the outer performance
of the fund.

108
3) Sharpe Ratio

The Sharpe ratio was developed by Nobel laureate William F. Sharpe and is used to help
investors understand the return of an investment compared to its risk. The ratio is the average
return earned in excess of the risk-free rate per unit of volatility or total risk.

Sharpe Ratio= Rp−Rf/ σp

where:Rp=return of portfolio

Rf=risk-free rate

σp=standard deviation of the portfolio’s excess return

The greater a portfolio's Sharpe ratio, the better its risk-adjusted performance. If the analysis
results in a negative Sharpe ratio, it either means the risk-free rate is greater than the portfolio’s
return, or the portfolio's return is expected to be negative.

Table 5.14 Sharpe Ratio

Sharpe Rank
Portfolio A 0.187212 2
Portfolio B -0.88612 7
Portfolio C -0.89197 8
Portfolio D -1.53793 10
Portfolio E -0.86998 6
Portfolio F -0.70628 4
Portfolio G -1.4124 9
Portfolio H -0.7075 5
Portfolio I -0.42981 3
Portfolio J 0.431595 1

109
Interpretation

 Modern portfolio theory states that adding Assets to a diversified portfolio that have
correlations of less than one with each other can decrease portfolio risk without sacrificing
return. Such diversification will serve to increase the Sharpe ratio of a portfolio.

 The Sharpe ratio is often used to compare the change in a portfolio’s overall risk-return
characteristics when a new asset or asset class is added to it. Also, Sharpe ratio can help in
explaining whether a portfolio’s excess returns are due to smart investment decisions or a
result of too much risk.

 According to the above table, as portfolio J’s Sharpe ratio is highest, it has the ability to give
the highest return.

110
4) Fama Measure

The Fama and French Three-Factor Model (or the Fama French Model for short) is an asset
pricing model developed in 1992 that expands on the capital asset pricing model (CAPM) by
adding size risk and value risk factors to the market risk factor in CAPM. This model considers
the fact that value and small-cap stocks outperform markets on a regular basis. By including
these two additional factors, the model adjusts for this outperforming tendency, which is thought
to make it a better tool for evaluating manager performance.

Fama Measure = Rp – [Rf + SDp/SDm(Rm-Rf)]

Table 5.15 Fama measure

Fama Rank
Portfolio A 0.237804 2
Portfolio B 0.053614 8
Portfolio C 0.060207 6
Portfolio D 0.009639 10
Portfolio E 0.054618 7
Portfolio F 0.082996 4
Portfolio G 0.015868 9
Portfolio H 0.073959 5
Portfolio I 0.113528 3
Portfolio J 0.509769 1

Interpretation

 According to the above concept of Fama measure, highest ratio shows the best situation of
the fund.
 As per the above table, portfolio J shows the highest Fama measure, which is good for the
investment. Fama measure compares the Rp with market securities. Portfolio D shows the
lowest ratio which is quite risky to invest in.

111
5) Sortino Ratio

The Sortino ratio is a variation of the Sharpe ratio that differentiates harmful volatility from total
overall volatility by using the asset's standard deviation of negative portfolio returns,
called downside deviation, instead of the total standard deviation of portfolio returns.

Sortino Ratio=Rp−rf÷σd
where,
Rp=Actual or expected portfolio return
rf=Risk-free rate
σd=Standard deviation of the downside

Just like the Sharpe ratio, a higher Sortino ratio result is better. When looking at two similar
investments, a rational investor would prefer the one with the higher Sortino ratio because it
means that the investment is earning more return per unit of the bad risk that it takes on.

Table 5 16 Sortino Ratio

Sortino Rank
Portfolio A 3.3988547 2
Portfolio B -7.707785 7
Portfolio C -8.766445 10
Portfolio D -7.593252 6
Portfolio E -7.58087 5
Portfolio F -8.001857 8
Portfolio G -8.1102 9
Portfolio H -7.150596 4
Portfolio I -5.355208 3
Portfolio J 14.98994 1

112
Interpretation

 According to the above concept of Sortino Ratio, highest ratio shows the best situation of the
fund.
 As per the above table, portfolio J shows the highest Sortino Ratio, which is good for the
investment. Portfolio D shows the lowest ratio which is quite risky to invest in.

113
Chapter 6

Findings

114
 In FMCG sector Britannia has highest risk(13.67544) and gives highest
return(3.81%).Colgate provides the lowest return(0.37%) and hence has the lowest
risk(0.5659).

 Tata Motors has the highest risk(10.8959) among the 8 companies. But it provides the
negative returns(-1.37%). Maruti Suzuki also provides good return(1.26%) if compared to
risk(8.1248) associated with the company. Average return of the 8 companies in Auto sector
is 0.46% and average risk is 8.027.
 The company having highest risk(10.88) is Tata Elxsi and also it provides return(1.41%)
accordingly as highest. Mindtree has second highest risk(6.95) but TCS provides more
return(1.39%) than mindtree(1.24%). TCS involves low risk (6.95) and good returns(1.39%).

 Yes bank has a very high risk(46.705) and hence it is able to provide good returns(7.50%) to
the stock holders but this huge standard is highly risky to the investors and also its
fundamentals are not quite strong. HDFC, Kotak and ICICI as compared to others companies
involve low risk and provide good returns.

 V-Guard has the highest risk(175.36) and it is too much for a investor as the prices fluctuated
highly in only one month and it can be considered to be very risky. The returns(28.65%) also
resulted to be very high as a result of that month. Hence investing in this stock is very risky.
Havells has a lowest risk (7.94) and provides a return of 2.30% which can be considered as a
good option for a investor.

 According to Treynor Ratio, Portfolio J is well diversified. Portfolio C is having lowest

treynor ratio which means it is less diversified portfolio.
 According to Jensen Ratio also, Portfolio J is having the highest reatio. Portfolio C is having
lowest jensen ratio which means it is less diversified portfolio.
 Portfolio J has the highest Sharpe ratio which shows its ability to give highest return.
 Portfolio J shows the highest Fama measure, which is good for the investment.
 Portfolio J shows the highest Sortino Ratio, which is good for the investment. Portfolio D
shows the lowest ratio which is quite risky to invest in.

115
 Chapter 7

Recommendations

116
The researcher has done analysis through various measures to evaluate the performance of
different portfolios. According to the figures the rank has also been given to the particular
portfolio. Here are the top five portfolios according to each measure.

Treynor Ratio
 Portfolio J Sector Wise Companies(Consumer Durables)

 Portfolio A High Risk High Return

 Portfolio I Sector Wise Companies(Auto)

 Portfolio G Sector Wise Companies(IT)

 Portfolio F Sector Wise Companies(FMCG)

Jensen Ratio
 Portfolio J Sector Wise Companies(Consumer Durables)

 Portfolio A High Risk High Return

 Portfolio I Sector Wise Companies(Auto)
 Portfolio G Sector Wise Companies(IT)

 Portfolio F Sector Wise Companies(FMCG)

Sharpe Ratio
 Portfolio J Sector Wise Companies(Consumer Durables)

 Portfolio A High Risk High Return

 Portfolio I Sector Wise Companies(Auto)
 Portfolio F Sector Wise Companies(FMCG)
 Portfolio H Sector Wise Companies(Banking)

117
Fama Measure
 Portfolio J Sector Wise Companies(Consumer Durables)

 Portfolio A High Risk High Return

 Portfolio I Sector Wise Companies(Auto)
 Portfolio F Sector Wise Companies(FMCG)
 Portfolio H Sector Wise Companies(Banking)

Sortino Ratio
 Portfolio J Sector Wise Companies(Consumer Durables)
 Portfolio A High Risk High Return
 Portfolio I Sector Wise Companies(Auto)
 Portfolio H Sector Wise Companies(Banking)
 Portfolio E Based on fundamentals

118
Chapter 8

Conclusion

119
Analysis of Risk-return relationship on Indian Stock Market showed that risk and return has
positive relationship. So we can say that risk-return can be used in Indian Stock Market to
evaluate security/portfolio. Which also suggest that excess return of market and the portfolios
risk are the most significant determinants of the on any portfolio.

The study risk return investigation helps the investor to pick up the securities based on his
choice. The study of this kind provides information about the performance of various stocks in
the market in terms of risk and return. This project report emphasizes on the market fluctuations
relations to the prices of Scrip’s though it is difficult to observe a pattern for the price
movements. Using parameters such as risk and return some stocks and portfolios are suggested
to the investors. However, we cannot say that any one method is sufficient to analyze and
interpret the fluctuations but they help the investor to define the trends to some extent.

From our study we can conclude that there is a strong positive relation between risk and return of
equity stocks. This helps in planning one’s investment corresponding to his/her expected rate of
return and the risk appetite.

120
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Management: Evidence from the Kingdom. Research Journal of Finance and
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Aliu, F., Pavelkova, D., & Dehning, B. (2017, December). Portfolio risk-return analysis: The
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10(4), 72-83.

Brindha, D. (2013, June). Article on Portfolio Management. International Journal of Innovative

Research in Science, Engineering and Technology, 2(6), 2182-2186.

Fathi, S., Zarei, F., & Esfahani, S. S. (2012, May). Studying the Role of Financial Risk
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Gautami, D., & Kalyan, D. B. (2018, May). A Comparative Study on Risk & Return Analysis of
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Subramanyam, D., & Kalyan, D. B. (2018). A Study on risk and return analysis of selected
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 Websites

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www.ijsrm.in
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www.investopedia.com
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www.bseindia.com
www.sihl.in
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www.wallstreetmojo.com
www.screener.in

122
Annexure
TCS
2018-19 2018-17 2017-16 2016-15
Net Margin 24.4 25.92 25.51 26.87
Return on Equity 38.1 33.27 30.31 35.49
Retrun on Assets 30.21 27.72 26.35 29.8
Debt ratio 0 0 0 0
P/E 27.01
EPS 79.34 131.15 120.04 117.11

Wipro
2018-19 2018-17 2017-16 2016-15
Net Margin 15.82 17.27 17.72 18.35
Return on Equity 15.41 18.27 17.47 19.89
Retrun on Assets 11.36 13.16 12.92 13.91
Debt ratio 0.1 0.11 0.13 0.16
P/E 19.98
EPS 12.67 16.26 33.61 33.38

Infosys
2018-19 2018-17 2017-16 2016-15
Net Margin 20.11 26.08 23.3 23.51
Return on Equity 23.44 25.44 20.31 20.78
Retrun on Assets 18.62 21.29 17.29 17.45
Debt ratio
P/E 21.58
EPS 33.66 71.28 60.16 55.26

Tech Mahindra
2018-19 2018-17 2017-16 2016-15
Net Margin 16.09 16.9 13.15 15.35
Return on Equity 21.21 20.46 18.04 23.75
Retrun on Assets 14.43 14.92 12.84 15.59
Debt ratio 0 0.01 0.01 0.01
P/E 16.78
EPS 44.58 40.84 31.37 33.4

HCL
2018-19 2018-17 2017-16 2016-15

123
Net Margin 31.46 33.35 35.57 35.12
Return on Equity 26.88 26.7 26.46 21.95
Retrun on Assets 21.85 22.43 21.23 17.74
Debt ratio
P/E 14.85
EPS 59.69 52.54 48.18 33.52

Oracle
2018-19 2018-17 2017-16 2016-15
Net Margin 35.81 26.05 34.47 23.98
Return on Equity 33.05 26.42 48.13 22.68
Retrun on Assets 28.84 21.63 25.24 17.87
Debt ratio
P/E 20.51
EPS 149.77 117.91 151.57 105.95

Tata Elxsi
2018-19 2018-17 2017-16 2016-15
Net Margin 18.15 17.31 14.12 14.39
Return on Equity 30.75 32.5 31.34 40.13
Retrun on Assets 25.36 25.3 24.43 25.81
Debt ratio
P/E 18.38
EPS 46.56 38.54 56.13 49.72

HUL
2018-19 2018-17 2017-16 2016-15
Net Margin 15.41 14.7 13.53 12.92
Return on Equity 76.95 71.61 66.37 62.96
Retrun on Assets 32.49 29.19 28.49 27.97
Debt ratio 0.01 0 0.04 0.03
P/E 64.58
EPS 27.97 24.09 20.68 19.1

ITC
2018-19 2018-17 2017-16 2016-15
Net Margin 26.52 26.43 24.47 24.22
Return on Equity 21.29 21.46 22.16 21.89
Retrun on Assets 17.53 17.53 18.39 18.07
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Debt ratio 0 0 0 0
P/E 27.53
EPS 10.3 9.26 8.5 7.75

P&G
Jun-18 Jun-17 Jun-16 Jun-15
Net Margin 15.25 18.64 17.03 14.83
Return on Equity 46.5 82.24 28 28.17
Retrun on Assets 26.28 37.3 19.55 17.77
Debt ratio
P/E 89.42
EPS 115.4 133.31 130.37 106.63

Marico
2018-19 2018-17 2017-16 2016-15
Net Margin 15.48 13.08 13.72 12.02
Return on Equity 37.27 32.03 34.33 35.26
Retrun on Assets 23.57 19.95 21.98 21.04
Debt ratio 0.12 0.12 0.1 0.08
P/E 43.05
EPS 8.67 6.32 6.21 5.53

Britannia
2018-19 2018-17 2017-16 2016-15
Net Margin 10.46 10.12 9.76 9.81
Return on Equity 27.25 29.48 32.8 39.41
Retrun on Assets 18.57 19.35 21.52 23.59
Debt ratio 0.03 0.05 0.04 0.06
P/E 62.13
EPS 48.25 83.65 73.71 68.73

Nestle
Dec-18 Dec-17 Dec-16 Dec-15
Net Margin 14.23 12.24 10.04 6.88
Return on Equity 43.74 35.81 30.74 19.98
Retrun on Assets 19.86 16.64 13.61 9.26
Debt ratio 0.01 0.01 0.01 0.01
P/E 68.5
EPS 166.67 127.07 96.1 58.42

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 Dabur
2018-19 2018-17 2017-16 2016-15
Net Margin 16.93 17.57 16.81 16.11
Return on Equity 25.61 23.73 26.34 29.99
Retrun on Assets 17.09 15.56 16.51 18.04
Debt ratio 0.09 0.15 0.19 0.19
P/E 48.52
EPS 8.17 7.69 7.25 7.12

Colgate
2018-19 2018-17 2017-16 2016-15
Net Margin 17.37 16.07 14.5 13.85
Return on Equity 53.6 44.16 45.33 56.55
Retrun on Assets 29.52 26.26 24.99 29.66
Debt ratio 0.05 0 0 0
P/E 42.27
EPS 28.51 24.76 21.23 21.2

Tata Motors
2018-19 2018-17 2017-16 2016-15
Net Margin 2.91 -1.75 -5.48 -0.14
Return on Equity 9.11 -5.13 -11.48 -0.26
Retrun on Assets 3.31 -1.74 -4.12 -0.1
Debt ratio 0.79 0.81 0.89 0.61
P/E
EPS 6.04 -3.05 -7.15 -0.18

Mahindra & Mahindra

2018-19 2018-17 2017-16 2016-15
Net Margin 8.94 8.94 8.27 7.83
Return on Equity 14.01 14.37 13.6 14.29
Retrun on Assets 9.1 9.18 9.11 9.02
Debt ratio 0.07 0.09 0.1 0.08
P/E 13.72
EPS 40.29 36.64 30.69 53.05

Maruti Suzuki
2018-19 2018-17 2017-16 2016-15
Net Margin 8.71 9.68 10.8 9.32
Return on Equity 16.25 18.49 20.17 17.95

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Retrun on Assets 11.91 13 14.34 12.79
Debt ratio 0 0 0.01 0
P/E 27.6
EPS 248.3 255.62 243.32 177.58

TVS
2018-19 2018-17 2017-16 2016-15
Net Margin 3.68 4.37 4.59 4.4
Return on Equity 20.02 23 23.17 24.98
Retrun on Assets 8 9.22 9.45 9.88
Debt ratio 0.41 0.36 0.45 0.39
P/E 33.6
EPS 14.11 13.95 11.75 10.3

Hero Motorcop
2018-19 2018-17 2017-16 2016-15
Net Margin 10.05 11.47 11.84 10.95
Return on Equity 26.32 31.41 33.39 39.42
Retrun on Assets 19.18 22.08 22.98 25.38
Debt ratio
P/E 16.1
EPS 169.48 185.14 169.12 156.86

Bajaj Auto
2018-19 2018-17 2017-16 2016-15
Net Margin 15.45 16.16 17.58 17.39
Return on Equity 21.46 21.29 22.46 29.62
Retrun on Assets 17.07 17.07 18.38 23.83
Debt ratio 0 0.01 0.01 0
P/E 18.19
EPS 161.6 140.6 132.3 135.8

Ashok Leyland
2018-19 2018-17 2017-16 2016-15
Net Margin 6.82 5.95 6.07 2.05
Return on Equity 23.8 21.8 19.96 7.2
Retrun on Assets 10.88 9.42 8.71 3.04
Debt ratio 0.05 0.07 0.22 0.34
P/E 13.29
EPS 6.76 5.34 4.24 1.37

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 Eicher Motors
2018-19 2018-17 2017-16 2016-15
Net Margin 20.97 19.12 22.16 21.16
Return on Equity 28.82 31.88 39.77 56.03
Retrun on Assets 21.67 21.97 28.15 36.12
Debt ratio 0.01 0.02 0.02 0.01
P/E 24.91
EPS 753.37 629.07 573.75 482.45

SBI
2018-19 2018-17 2017-16 2016-15
Net Margin 0.35 -2.96 5.97 6.06
Return on Equity 0.39 -3.37 6.69 6.89
Retrun on Assets 0.02 -0.18 0.38 0.42
Debt ratio
P/E 132.66
EPS 0.97 -7.67 13.43 12.98

PNB
2018-19 2018-17 2017-16 2016-15
Net Margin -25.59 2.8 -8.38 6.61
Return on Equity -32.85 3.47 -11.2 8.12
Retrun on Assets -1.6 0.18 -0.59 0.5
Debt ratio
P/E
EPS -55.39 6.45 -20.82 16.91

BOB
2018-19 2018-17 2017-16 2016-15
Net Margin 0.86 -5.57 3.27 -12.24
Return on Equity 0.94 -5.6 3.43 -13.42
Retrun on Assets 0.05 -0.33 0.19 -0.8
Debt ratio
P/E 38.23
EPS 1.64 -10.53 6 -23.89

HDFC
2018-19 2018-17 2017-16 2016-15
Net Margin 21.29 21.79 20.99 20.41
Return on Equity 14.12 16.45 16.26 16.91

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Retrun on Assets 1.69 1.64 1.68 1.73
Debt ratio
P/E 31.42
EPS 78.65 67.76 57.18 48.84

Kotak
2018-19 2018-17 2017-16 2016-15
Net Margin 20.32 20.68 19.27 12.75
Return on Equity 11.47 10.89 12.35 8.72
Retrun on Assets 1.55 1.54 1.58 1.08
Debt ratio
P/E 41.98
EPS 25.52 21.54 18.57 11.42

ICICI
2018-19 2018-17 2017-16 2016-15
Net Margin 5.3 12.33 18.09 18.44
Return on Equity 3.1 6.63 10.11 11.19
Retrun on Assets 0.34 0.77 1.26 1.34
Debt ratio
P/E 63.38
EPS 5.23 10.56 15.31 16.75

Yes
2018-19 2018-17 2017-16 2016-15
Net Margin 5.8 20.84 20.27 18.76
Return on Equity 6.39 16.4 15.09 18.41
Retrun on Assets 0.45 1.35 1.54 1.53
Debt ratio
P/E 18.15
EPS 7.45 18.43 15.78 60.62

Axis
2018-19 2018-17 2017-16 2016-15
Net Margin 8.5 0.6 8.26 20.06
Return on Equity 7.01 0.43 6.59 15.46
Retrun on Assets 0.58 0.03 0.61 1.56
Debt ratio
P/E 513.4
EPS 18.2 1.13 15.4 34.59

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 Titan
2018-19 2018-17 2017-16 2016-15
Net Margin 7.2 7.44 5.9 6.26
Return on Equity 22.23 22.38 17.66 20.08
Retrun on Assets 11.98 12.37 9.15 11.06
Debt ratio 0.37 0.31 0.43 0.03
P/E 81.49
EPS 15.48 13.1 8.58 7.95

Havells
2018-19 2018-17 2017-16 2016-15
Net Margin 7.86 8.75 8.78 13.15
Return on Equity 18.65 19.05 16.46 27.05
Retrun on Assets 11.02 10.89 10.86 17.9
Debt ratio 0.01 0.03 0.06 0
P/E 61.79
EPS 12.66 11.4 8.63 11.45

Voltas
2018-19 2018-17 2017-16 2016-15
Net Margin 6.93 8.62 8.98 6.41
Return on Equity 12.4 14.26 16.28 16.01
Retrun on Assets 6.81 7.74 8.68 7.44
Debt ratio 0.03 0.01 0.02 0.06
P/E 38.86
EPS 14.04 15.15 14.69 10.06

Whirlpool
2018-19 2018-17 2017-16 2016-15
Net Margin 7.25 7.87 6.97 6.39
Return on Equity 19.52 20.93 20.59 23.31
Retrun on Assets 10.87 10.79 10.66 11.38
Debt ratio
P/E 47.55
EPS 27.64 24.47 18.92 16.59

IFB
2018-19 2018-17 2017-16 2016-15
130
Net Margin 2.91 3.87 3.16 2.08
Return on Equity 11.91 15.12 11.69 7.52
Retrun on Assets 6.14 7.69 6.25 3.96
Debt ratio 0.01 0.03 0.05 0.04
P/E 54.09
EPS 18.25 20.55 13.61 7.74

Bajaj
2018-19 2018-17 2017-16 2016-15
Net Margin 2.5 1.77 2.52 2.07
Return on Equity 15.5 8.85 12.35 12.85
Retrun on Assets 3.23 2.4 3.48 3.32
Debt ratio 1.46 0.76 0.63 0.26
P/E 31.13
EPS 16.34 8.23 10.65 9.48

Symphony
2018-19 2018-17 2017-16 2016-15
Net Margin 19.27 26.63 26.3 29.65
Return on Equity 15.09 30.32 37.61 39.94
Retrun on Assets 13.13 26.7 31.88 33.78
Debt ratio
P/E 87.02
EPS 14.44 26.15 24.96 35.17

V-Guard
2018-19 2018-17 2017-16 2016-15
Net Margin 6.44 5.75 6.93 5.99
Return on Equity 18.39 17.7 22.79 23.72
Retrun on Assets 12.17 11.52 15.47 15.58
Debt ratio 0.01 0 0 0.02
P/E 61.9
EPS 3.88 3.13 3.42 37.22

131