SUMMER INTERNSHIP PROJECT REPORT

ON

EQUITY RESEARCH ON PSU SECTOR AND

TEXTILE INDUSTRY

SUBMITTED TO

ASIA PACIFIC INSTITUTE OF MANAGEMENT

NEW DELHI

UNDER THE GUIDANCE OF

PROF. RAVINDRA BHATIA
IN THE PARTIAL FULFILLMENT OF THE
REQUIREMENTS
FOR THE AWARD OF
POST GRADUATE DIPLOMA IN MANAGEMENT
SUBMITTED BY
ANKITA PORWAL
2K16GC094
(2016-18)
CERTIFICATE (FROM FACULTY GUIDE):
This is to certify that Ms. Ankita Porwal, Roll No. 2K16GC094, a
student of PGDM in “ASIA PACIFIC INSTITUTE OF
MANAGEMENT, NEW DELHI” has carried out the summer
internship Project work presented in this report titled “EQUITY
RESEARCH PROJECT IN PSU SECTOR AND TEXTILE
INDUSTRY” for the award of Post Graduate Diploma in
Management for the academic batch 2016-18 under my guidance

Name of the Project Guide: Prof. Ravindra Bhatia

SIGNATURE:
Date:

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DECLARATION
I Ankita Porwal, hereby declare that the project work entitled
“EQUITY RESEARCH IN PSU AND TEXTILE SECTOR” submitted
towards partial fulfillment of requirements for the award of Post
Graduate Diploma in Management is my original work and the
dissertation has not formed the basis for award of any degree
associate ship, fellowship or any similar title to the best of my
knowledge.

NEW DELHI

ANKITA PORWAL

2K16GC094

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ACKNOWLEDGEMENT
Some words fall short to show gratitude, the same happened with me
during this project. The immense help and support received from
“Birla Sun Life Insurance Company” overwhelmed me during the
project.
I would like to thank “Asia Pacific Institute Of Management” for
providing me opportunity to work with Birla Sun Life Insurance
Company
It was a great opportunity for me to work with Birla Sun Life
Insurance Company which pioneers in various fields and amongst all
the sectors. I am grateful to the entire team of Birla Sun Life
Insurance Co. who have shared their expertise and knowledge with
me and without whom the completion of this project would have been
virtually impossible.
My Sincere gratitude to “Mr. Nikesh Ruparel”(Vertical Head),for
providing me an opportunity to work with Birla Sun Life Insurance
Co. . I would also like to thank him for his valuable suggestions and
advised he gave for my project.
I am also thankful to my college mentor “Prof.. Ravindra
Bhatia”for providing me his valuable suggestion and guidance in
completion of my internship project.
I would like to thank to my colleague and friend with whom I worked
in Birla and they equally support me towards my project. I am also
thankful to all the other staff members of company and college who
directly and indirectly supported me in completion of my project.

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PREFACE
Post Graduate Diploma In Management( PGDM) programme is one
of the most reputed professional courses in the field of management.
This course includes both theory and its applications as per contents
of its curriculum. Summer Training project report is an integral part
of Post Graduate Diploma in Management in Asia Pacific Institute
of Management. It gives exposure to our practical knowledge and
also to get interact with the various aspects of present market
conditions.
The Training project programmers are designed to give the managers
future of the corporate happenings and work culture. The real life
situation is really different from the stimulated exercise enacted in an
artificial environment inside. The Training project programmers are
designed, so that the managers or tomorrow do not feel when the
time comes to take responsibilities.
The Training project report presented here is a result of my hard
work. This project helps me to learn the stocks behavior of PSU and
Textile sector.

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EXECUTIVE SUMMARY:
My project title of SIP is “Equity Research in PSU and Textile
Sector”
The field of equity research is very vast and one has to look into
various aspects of the functioning of the sector for investing in stock
market. The field of equity research is full of challenges. It is your
door to fame, fortune and, above all, professional challenge.
This project report is about the ‘Equity research in PSU sector &
Textile Industry’. It consist the study of PSU and Textile sector on
macroeconomic and microeconomic basis. Fundamental and
Technical framework is used for equity research. It will be helpful for
investors who are looking for investment in PSU and Textile sector
companies. It will give them approach for investment in whichever
sector they want to invest.
Also, sectorial mutual fund in PSU and Textile (individually with
assumed amount of Rs.10 crores) and mutual fund with diverse
sectors (team with assumed amount of 100 crores) are also created.
Their performance is analyzed with respect to benchmark NIFTY 500
index. Depending upon the analysis we reached to conclusion
whether our mutual fund is really performing well or not compared to
market.

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TABLE OF CONTENT PAGE NO:
CERTIFICATE ................................................................................................................................. 1
DECALARATION ......................................................................................................................... 2
ACKNOWLEDGEMENT........................................................................................................... 3
PREFACE .......................................................................................................................................... 4
EXECUTIVE SUMMARY:........................................................................................................ 5
INTRODUCTION OF COMPANY....................................................................................... 9
Overview of the Company ............................................................................................................... 10
Mission, Vision & Value: .................................................................................................................. 10
ACHIEVEMENTS:............................................................................................................................... 11
MARKETING ..................................................................................................................................... 11
Product Mix of Birla Sun Life Insurance: .......................................................................................... 12
HUMAN RESOURCE .......................................................................................................................... 12
OPERATIONS .................................................................................................................................... 14
FINANCE ........................................................................................................................................... 15
CUSTOMER SERVICE ANALYSIS OF BIRLA......................................................................................... 16
COMPETITOR ANALYSIS ................................................................................................................... 16
SWOT Analysis of Birla Sun Life Insurance:...................................................................................... 19

INTRODUCTION OF PROJECT ........................................................................................ 20

Objective of the project: .................................................................................................................. 21
WHAT IS EQUITY RESEARCH? ........................................................................................................... 21
IMPORTANCE OF EQUITY RESEARCH: ............................................................................................. 21
INDUSTRY ANALYSIS OF PSU SECTOR .............................................................................................. 22
INDIAN ECONOMY IN PSU SECTOR .................................................................................................. 23
INDUSTRY ANALYSIS OF TEXTILE SECTOR ........................................................................................ 24
INDIAN ECONOMY IN TEXTILE INDUSTRY ........................................................................................ 26

LITERATURE REVIEW ............................................................................................................ 27

LITERATURE REVIEW IN PSU SECTOR............................................................................................... 27
LITERATURE REVIEW IN TEXTILE SECTOR ........................................................................................ 28

RESEARCH METHODOLOGY: .......................................................................................... 29

PRIMARY OBJECTIVES ...................................................................................................................... 29
RESEARCH METHOD......................................................................................................................... 29
SOURCES OF COLLECTION OF DATA ................................................................................................ 29

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 LIMITATIONS .................................................................................................................................... 29

FUNDAMENTAL ANALYSIS OF STOCKS ................................................................... 30

BASICS OF FUNDAMENTAL ANALYSIS .............................................................................................. 31
Advantages of Fundamental Analysis .............................................................................................. 33
Disadvantages of Fundamental Analysis ......................................................................................... 33

FUNDAMENTAL ANALYSIS OF PSU AND TEXTILE SECTOR........................ 34

FUNDAMENTAL ANALYSIS OF PSU SECTOR ..................................................................................... 35
FUNDAMENTAL ANALYSIS OF TEXTILE SECTOR ............................................................................... 40

TECHNICAL ANALYSIS .......................................................................................................... 45

Introduction ..................................................................................................................................... 46
Terminologies related to Technical Analysis ................................................................................... 46
Types of Technical Analysis.............................................................................................................. 47

LONG TERM TECHNICAL ANALYSIS ........................................................................... 47

Types of Long Term Technical Analysis Patterns ............................................................................. 47
Long Term Analysis for Selected stocks in PSU sector ..................................................................... 56
Long Term Analysis for Selected stocks of Textile Sector(Value Picks and Growth Picks) of the
Textile Sector .................................................................................................................................. 58

SHORT TERM TECHNICAL ANALYSIS (CANDLESTICKS) ................................ 60

Introduction to Candlesticks ............................................................................................................ 60
Types of Candlesticks ....................................................................................................................... 61
CANDLESTICKS POSITIONING ........................................................................................................... 65
Short Term Technical Analysis of Selected PSU Sector Stocks using Candlesticks ......................... 66
Short Term Technical Analysis of Selected Textile Sector Stocks using Candlesticks ..................... 68

SECTORIAL MUTUAL FUND ............................................................................................. 70

PSU Sector........................................................................................................................................ 70
Textile Sector ................................................................................................................................... 71

DIVERSIFIED MUTUAL FUND .......................................................................................... 72

CONCLUSION ............................................................................................................................. 73
Key Learning From SIP: ...................................................................................................... 74
Reference & Bibiliography ................................................. Error! Bookmark not defined.

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Table of Figures:
Figure 1………………………………………………………………………………………………………………………………………… 35

Figure 2 ................................................................................................................................................ 36
Figure 3 ................................................................................................................................................ 37
Figure 4 ................................................................................................................................................ 38
Figure 5 ................................................................................................................................................ 39
Figure 6 ................................................................................................................................................ 40
Figure 7 ................................................................................................................................................ 41
Figure 8 ................................................................................................................................................ 42
Figure 9 ................................................................................................................................................ 43
Figure 10 .............................................................................................................................................. 44
Figure 11 .............................................................................................................................................. 56
Figure 12 .............................................................................................................................................. 57
Figure 13 .............................................................................................................................................. 58
Figure 14 .............................................................................................................................................. 59
Figure 15 .............................................................................................................................................. 66
Figure 16 .............................................................................................................................................. 67
Figure 17 .............................................................................................................................................. 68
Figure 18 .............................................................................................................................................. 69
Figure 19 .............................................................................................................................................. 70
Figure 20 .............................................................................................................................................. 71
Figure 21 .............................................................................................................................................. 72

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INTRODUCTION
(Detail About Company)

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 Overview of the Company
Birla Sun Life Insurance Company Limited was established in 2000, as a joint venture
between Aditya Birla Group, a well trusted Indian brand and Sun life Financial Inc. leading
international financial services in Canada. Company has strength of Aditya Birla Group which
include knowledge of local Indian Market and other side Sun Life Inc., which has domain
expertise of product they offers so this lead to result in a great company as BSLI.

BSLI is one of the major contributor in growth and development of life insurance industry in
India with an experience of over 10 years, and its currently ranks amongst the top 7 private life
Insurance companies in the country.

BSLI has rated first to its credit because of their innovation and creating industry benchmarks.
BSLI was the first company who introduced “Free Look Period” and later on this concept was
made mandatory for all the other life insurance company who are working in this sector.
Apart from this BSLI launch Unit Linked Life Insurance Plans amongst the private players in
India. BSLI also enjoys the prestige to be the originator of practice to disclose portfolio on
monthly basis,to establish credibility and further transparency. BSLI initiative regarding
category development have helped themto become close to their policy holders expectations,
which help them to offer complete bouquet of insurance product to their customer.

Mission, Vision & Value:

➢ Vision:
• To be a leader and role model in a broad based and integrated financial service
business.
➢ Mission:
• To help people mitigate risks of life, accident, health, and money at all
circumstances.
• Enhance the financial future of our customer including enterprises.
➢ Values:

• Integrity
• Commitment
• Passion
• Seamlessness

• Speed

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 ACHIEVEMENTS:
The Following are some main achievements of the company:

• The first company which in traduce ULIP fund Options.

• The first company that launch illustration so that customers understand the products
better.
• The first one to issue daily NAVs of funds for better transparency in work
• The first one to disclose portfolio on monthly basis.
• The first one to introduce the concept of “Free lock period” that is the period of
fifteen days. This period is that period , If any customer does not like the policy can
return that policy within fifteen days of purchase of that policy.
• One of the efficient features of BSLI is that the claim settlement in this company is
very good that is it is approx. 99.68 out of 100. The rest 0.32 remains unclaimed
because of the missing papers that are required at the time of settlement.
• It can be said that it is number one company in terms of claim settlement, better
than LIC
• Birla sun life insurance Pioneered the unique unit linked life insurance solutions in
India.
• Within four years of its launch Birla sun life insurance has cemented its position as
a leading player in private life insurance industry.

For the better understanding of the company, the following aspects are
studied in detail -

MARKETING
Birla Sun Life insurance has range of products mix in their insurance category which are as
follows:
• Protection Plan:
Secure your family’s future in this increasingly uncertain world and don’t leave
their dreams to fate.
• Saving with protection :
Strike the right balance between living comfortably today and staying financially
secure in the future with small disciplined savings at regular intervals
• Children’s Future:
Give your child the freedom to pursue his/her real passion by ensuring that you
give him the right financial support
• Retirement Plan:
Plan your retirement well to build a good corpus because during retired life,
income stops but expenses don’t.

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 • Health with wellness plan:
Plan and ensure that you spend time with your loved ones when they need you the
most rather than worrying about medical expenses.
• Wealth with Protection plan:
Secure your family’s dreams and live through life’s highs and lows with
confidence while you reach your financial milestones as planned.

PRODUCT MIX OF BIRLA SUN LIFE INSURANCE:

Birla Sun Life Insurance has the distinction of being first insurance company in India to
introduce several innovative schemes like Unit Linked Life Insurance Plans, Free Look
Period and Business Continuity Plan. Company manages financial situations of both
individuals and firms. Some of its main products in its product portfolio are as follows-

• Individual Solutions-It offers life cover and it helps money saving by providing
flexible plans to suit individual needs. Some of them are-
• BSLI Vision Plan
• BSLI Foresight Plan
• BSLI Rainbow Plan
• BSLI Bachat Money
• Children’s future Solutions:
• BSLI Bachat Child Plan
• BSLI Dream Child Plan
• Protection Solutions:
• BSLI Premium Back Term
• BSLI Term Plan
• Retirement Solutions:
• BSLI Dream Life Plan
• BSLI Classic Life Plan
• Health & Wellness Solutions:
• BSLI Health Plan
• BSLI Saral Health Plan

HUMAN RESOURCE

Board of Directors:

Mr. Kumar Manglam Birla – Chairman

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Mr. Pankaj Razdan – CEO

Mr. Ajay Srinivasan – Non Executive Director

Mr. Vishwnath Puranmalka – Non Executive Director

Mr. Kevin Strain- Non Executive Director

Mrs. Tarjani Vakil- Independent Director

Mr. Sandeep Asthana - Non Executive Director

Mr. Colem Fyrene-- Non Executive Director

Mrs. Pinky Atul Mehta- - Non Executive Director

Mr. Haigreve Khaitan-- Independent Director

Mr. Shobhan Thakur-- Independent Director

Management Team:

Mr. Pankaj Razdan – CEO

Mr. Amit Jain- CFO

Mr. Rajesh Nambiar- CFO

Mrs. Shobha Ratna- Head HR & Training

Mr. Vikas Seth – CDO

Mr. Anil Singh – CAO

Mr. Rajesh Varrier- Chief Tech. & Digital

Mr. Parag Raja- Deupty chief distribution officer

Mr. Deven Sangoi- Chief Investment Officer – Equity

Mr. Shailendra Kothvale- Chief Compliance & Risk Officer

Mr. Devendra Singhvi- Chief Investmetn officer – Debt

Key People:

• Mr. Pankaj Razdan, Chief Executive Officer & MD, Birla Sun Life Insurance &
Dy. Chief Executive – Financial Services, Aditya Birla Group
• Mr. Anil Kumar Singh, Chief Actuarial Officer & Appointed Actuary
• Mr. Amit Jain, Chief Finance Officer

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 • Mr. Rajesh Nambiar, Chief Marketing Officer (CMO)
• Mr. Vikas Seth, Chief Distribution Officer (CDO)
• Mr. Ashok Suvarna - Chief Operations Officer
• Ms. Shobha Ratna - Head HR & Training
• Mr. Rajesh Varrier - Chief Technology & Digital Officer
• Mr. Amber Gupta - Head - Legal & Company Secretary
• Ms. Punam Sharma – Head – Internal Audit
• Mr. Deven Sangoi, Chief Investment Officer – Equity
• Mr. Devendra Singhvi, Chief Investment Officer – Debt
• Mr. Shailendra Kothavale, Chief Compliance & Risk Officer

OPERATIONS
Following steps is followed in operation management of Birla Sun Life Insurance for the
purpose of offering any product:

Suspecting

Prospecting

Appointment

First Sales Call

Follows Up

Sales Closed

Office Work

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FINANCE

Financial management part of Birla Sun Life Insurance is consist of following:

➢ Share Holding of BSLI:

In Birla Sun Life, the two companies are having shareholding pattern as follows:

74% --- Aditya Birla Group

26%--- Sun Life Financial Inc.

Share Holding
0% 0%
Aditya Birla
26% Group
Sun Life
74% Financial Inc.

➢ Market Share of BSLI:

LIC(82.3%)

ICICI PRUDENTIAL(5.63%)

BIRLA SUN LIFE(2.56%)

BAJAJ ALLIANZ(2.03%)

SBI LIFE(1.8%)

HDFC STANDARD(1.36%)

TATA AIG(1.29%)

MAX NEW YORK(0.9%)

AVIVA (0.8%)

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 CUSTOMER SERVICE ANALYSIS OF BIRLA
BSLI has provided their customer best possible services for not ony their product but also
for investment counseling which played a major role in their success. For the purpose of
better customer service BSLI has made six major categories which is as follows:

 Manage Your Policy : This section solve all your query and account related
query like Pay premium, Change premium payment frequency, update your contact
details, Subscribe to E-statement.
 Premium Payment Option: This option include Net banking, Direct debit, NEFT,
Debit card, CAMS service sector, Common service sector.
 Track Application: This include about knowing what happened to the application
you had filed? Enter your application identification number and find out.
 IVR Flow: This is A step-by-step guide of IVR(Interactive Voice Response) flow of
how your call will be processed to ensure that you have an easy and quick resolution
of your queries.
 Claim Procedures: This include if you wish to make a claim, our customer service
team is here to assist you.

COMPETITOR ANALYSIS
There are mainly some major competitor of birla sun life insurance which are as follows:

• Life Insurance Corporation

• Bajaj Allianz general insurance corporation
• ICICI prudential
• SBI Life Insurance

LIFE INSURANCE CORPORATION:

Every day we wake up to the fact that more than 250 millions lives are part of our
family called LIC.
We are humbled by the magnitude of our responsibility we carry and realize the lives
that are associated with us very valuable indeed.
Though this journey started over five decades ago, we are still conscious of the fact
that, while insurance may be a business for us, being part of millions of lives
everyday for the past 52 years has been a process called TRUST.
Objectives of LIC
• Spread life insurance widely
• Maximize mobilization of people saving by making insurance linked saving
adequately attractive
• Conduct business with utmost economy and with the full realization that the money
belong to the policyholders.
• Act as trustees of insured people in their individual and collective capacities.

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 • Meet the various life insurance need of community that would arise in the changing
social and economic environment.
• Involve all people working in the corporations to the best of their capabilities in
futhering the interest of the insured public by providing efficient service with
courtesy.

BAJAJ ALLIANZ GENERAL INSURANCE CORPORATION:

It is a joint venture between Bajaj Finserv Limited (recently demerged from Bajaj Auto
Limited) and Allianz SE. Both enjoy a reputation of expertise, stability and strength.
Bajaj Allianz received the Insurance Regulatory and Development Authority (IRDA)
certificate of Registration on 2nd May, 2001 to conduct various businesses (including Health
Insurance business) in India. The Company has an authorized and paid up capital of Rs 110
crores. Bajaj Finserv Limited holds 74% and the remaining 26% is held by Allianz, SE.
As on 31st March 2016, Bajaj Allianz continues to be one of the most financially robust
insurers in the industry by maintaining its growth as well as profitability. The company has
made a profit before tax of Rs. 771 crore and emerged as the most profitable insurer
recording a profit after tax of Rs.564 crore. The company reported a GWP of Rs. 5901 crore,
which has grown by 11.3% compared to the last fiscal, despite claims post Chennai Floods.

Vision:
• To be first choice insurer for customer
• To be the preferred employer for the staff in the insurance industry.
• To be the numberone insurer for creating shareholder value

Mission:

• As a responsible customer focused market leader, we will strive to understand the

needs of consumers and translate it into affordable products that deliver value for

money .
ICICI PRUDENTIAL:
ICICI Prudential Life Insurance Company Ltd. (ICICI Prudential Life) is a joint venture
between ICICI Bank Ltd., one of India's largest private sector banks, and Prudential
Corporation Holdings Limited.
ICICI Prudential Life began its operations in fiscal year 2001 and has consistently been the
market leader* amongst private players in the Indian life insurance sector. Our Assets Under
Management (AUM) as on 31st March 2017 were `1,229.19 billion.
At ICICI Prudential Life, we operate on the core philosophy of customer centricity. We offer
long term savings and protection products to meet different life stage requirements of our
customers. We have developed and implemented various initiatives to provide cost-effective
products, superior quality services, consistent fund performance and a hassle-free claim
settlement experience to our customers.
ICICI Prudential Life is the first private life insurer to attain assets under management of `1
trillion and In-force sum assured of over `3 trillion. ICICI Prudential Life is also the first
insurance company in India to be listed on NSE and BSE.

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SBI LIFE INSURANCE :

SBI Life Insurance Co Ltd is a joint venture between State Bank of India (SBI) and BNP
Paribas Cardif. SBI owns 70.1% of the total capital and BNP Paribas Cardif holds 26%,
while Value Line Pte. Ltd. (an affiliate of KKR Asian Fund II L.P.) and MacRitchie
Investments Pte. Ltd. (an indirect wholly owned subsidiary of Temasek Holdings Pvt. Ltd.)
hold 1.95% each. SBI Life Insurance has an authorized capital of Rs. 2,000 crores and a paid
up capital of Rs 1,000 crores.
Values:
Trustworthiness, Ambition, Innovation, Dynamism, Excellence

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 SWOT ANALYSIS OF BIRLA SUN LIFE INSURANCE:

Strength: Weakness:
1.BSLI has Network of 600 branches and 1.Low Presence in Rural Market
advisors spread over 1500 towns in India
having over 130,000 advisors 2. . Lesser advertising as compared to
2.Backed by rich brands like Aditya Birla competitors
Brand and Sun Life financial services 3.High risk investment option
3.Emphasis on Customer Satisfaction
through Transparent Functioning 4.Cost like brookerage, transaction
4.Strong Capital Base
related taxes to be incurred
5.High rate of return possible 5. No security or gaurantee of returns
6.Good for people with higher risk taking
capacity
7.Provides Capital Appreciation

SWOT
Opportunites
1.Growing potential in the Rural
Market
Threats
2.Alignment with government 1.Economic crisis and economic
schemes instability
Better awareness amongst people for 2. Entry of new NBFCs in the sector
getting insurance 3. Initial capital may get wiped out
3. Considered to be best investment 4. Volatility can impact returns
option in long run
Many local and global factors affect
4. You can vote in certain dicisions of share pruces and if they are negative,
the comapny. there may be a big impact.
5. Long term capital gains and
dividendsare tax free.

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INTRODUCTION
(Detail About Project)
“Equity Research in PSU and
Textile Sector”

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 OBJECTIVE OF THE PROJECT:

The primary objective of the project is to do equity research in PSU sector and Textile
industry by understanding equities behavior in PSU and textile sector and to do proper
fundamental and technical analysis of their stocks so that investor can invest with better
profitability and less risk.

WHAT IS EQUITY RESEARCH?

In simple words, equity research is understanding and studying any equity or stock.
Equity Research primarily means analyzing company’s financials, perform ratio
analysis, forecast the financial position and explore scenarios with an objective
of making BUY/SELL stock investment recommendation.

IMPORTANCE OF EQUITY RESEARCH:

• Equity Research plays a very critical role that fills the information gap between the
buyers and sellers of shares.
• Reason is that at all levels (individual or institutional) may not have the resources or
the capabilities to analyze every stocks so equity research is comparatively easy .
• Additionally, full information is not provided by the management due to which
further in-efficiencies are created and stocks trade below or above the fair value so
it help to identify the correct value of any stock.
• Equity Researcher analyst spend lot of time, energy and expertise to analyze stocks,
follow news, talking to the management and provide an estimate of stock valuations
but through equity research technical and fundamental analysis it has made quite
easy.
• Also, equity research tries to identify the value stocks out of the massive ocean of
stocks and help the buyers to generate profits.
• It helps the investor to identify pool of investment in stocks so investor get to know
which stocks will generate more profit in future according to market scenario.

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INDUSTRY ANALYSIS OF PSU SECTOR

The Indian saving money framework comprises of 26 open area banks, 20 private division
banks, 43 outside banks, 56 local rustic banks, 1,589 urban helpful banks and 93,550 country
agreeable banks, notwithstanding agreeable credit foundations. Add up to loaning and stores
expanded at a compound yearly development rate (CAGR) of 20.7 for each penny and 19.7
for every penny, individually, amid FY14-15 and are additionally balanced for development,
sponsored by interest for lodging and individual back. Add up to resource size of managing
account part resources is relied upon to increment to US$ 28.5 trillion by FY25. Stores have
developed at a CAGR of 13.6 for each penny amid FY05–15 to an expected US$ 1.48
trillion in FY15. Store development has been principally determined by solid development in
investment funds in the midst of rising discretionary cash flow levels. Indian banks are
progressively concentrating on receiving incorporated way to deal with hazard
administration. Rising salaries are relied upon to upgrade the requirement for managing an
account benefits in provincial ranges and in this manner drive the development of the
division; programs like MNREGA have helped in expanding country wage supported by the
current Jan Dhan Yojana. The Reserve Bank of India (RBI) has lose its branch authorizing
strategy, along these lines permitting banks (which meet certain money related parameters)
to set-up new branches in level 2 to level 6 focuses, without earlier endorsement from RBI. It
has underlined the need to concentrate on spreading the range of managing account
administrations to the un-kept money populace of India. Add up to no. of ATMs in India
have expanded to 189,189 before the finish of August 2015 and is additionally anticipated
that would twofold finished the following couple of years, there by taking the no. of ATMs
per million populace from 105 of every 2012 to 300 out of 2017. As of March 2015, 56
Regional Rural Banks are working in the nation, with the arrangement of Financial
Inclusion, covering 3,90,387 towns with 14,207 Branches. Indian Banking Sector has
developed at sound Pace regarding Lending. 6 Deposit development has been basically
determined by solid development in funds in the midst of rising discretionary cash flow
levels Access to the keeping money framework has likewise enhanced throughout the years
because of persevering government endeavors to advance managing an account innovation,
and advance extension in unbanked and non-metropolitan areas in the meantime India's
saving money segment has stayed stable in spite of worldwide changes, in this way holding
open certainty over the course of the years Under Pradhan Mantri Jan Dhan Yojana
(PMJDY), stores has expanded. As on November2015, USD4412 million has been kept
while 192.7 million records are opened.

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 INDIAN ECONOMY IN PSU SECTOR

The offer of the saving money part held by general society banks kept on becoming
through the 1980s, and by 1991 the general population area banks represented 90%
of the keeping money segment. After a year, in March, 1992, the joined aggregate of
branches held by open segment banks was 60,646 crosswise over India, and stores
represented Rs. 1,10,000 crore. The larger part of these banks were beneficial, with
just a single out of the 21 open division banks revealing a loss.[4]

Issue, with nationalized banks detailing a consolidated loss of Rs. 1160 crores. In any
case, the mid 2000s saw an inversion of this pattern, with the end goal that in 2002-
03 a benefit of Rs. 7780 crores by the general population area banks: a pattern that
proceeded consistently, with a Rs. 16856 crore benefit in 2008-2009

The Central Government entered the managing an account business with the
nationalization of the Imperial Bank Of India in 1955. A 60% stake was taken by the
Reserve Bank of India and the new bank was named as the State Bank of India. The
seven other state banks turned into the backups of the new bank when nationalized
on 19 July 1960.[2] The following significant nationalization of banks occurred in
1969 when the administration of India, under executive Indira Gandhi, nationalized
an extra 14 noteworthy banks. The aggregate stores in the banks nationalized in
1969 added up to 50 crores. This move expanded the nearness of nationalized banks
in India, with 84% of the aggregate branches going under government control.[3]

The following round of nationalization occurred in April 1980. The administration

nationalized six banks. The aggregate stores of these banks added up to around 200
crores. This move prompted a further increment in the quantity of branches in the
market, expanding to 91% of the aggregate branch system of the nation. The goals
behind nationalization were:

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 INDUSTRY ANALYSIS OF TEXTILE SECTOR

English inventors in the 18th century began to automate textile cottage industry processes
including carding, spinning and weaving. James Hargreaves developed the spinning Jenny, a
device which replaced eight hand spines in one operation. Richard Arkwright assembled these
processes and started the first factory on the Derwent River in Cromford, England in 1771. In the
early 1800s, cotton was raised in the Southern United States and exported to mills in England
and north. In 1814, James Cabot Lowell of Boston Associate built a factory in Waltham, up the
Charles River from Boston. Later, the Boston Associates built an entire mill town on the
Merrimack River, and later named it “Lowell” in memory of James Cabot Lowell. In the 1990s,
a new world began to replace. Buying from the lowest cost producer drove much textile
manufacture out of the production side and into imports.

STRUCTURE OF TEXTILE INDUSTRY

Indian textile industry can be divided to several segments, some of which can be listed as below-

• Cotton Textile
• Silk Textile
• Woolen Textile
• Readymade Garments
• Handcrafted Textile
• Jute and coir

SWOT ANALYSIS OF TEXTILE INDUSTRY

STRENGTH

• India has rich resources of raw materials of textile industry. It is one of the largest
producers of cotton in the world and is also rich in resources of fibres like polyester, silk,
viscose etc.
• India is rich in highly trained manpower. The country has a huge advantage due to lower
wage rates. Because of low labor rates the manufacturing cost in textile automatically
comes down to very reasonable rates.

24
WEAKNESS

• Knitted garments manufacturing has remained as an extremely fragmented industry.

Global players would prefer to source their entire requirement from two or three vendors
and the Indian garment units find it difficult to meet the capacity requirements.
• Labor force giving low productivity as compared to other competing countries.  Low
bargaining power in a customer-ruled market.

OPPORTUNITY

• Low per-capita domestic consumption of textile indicating significant potential growth.

• Domestic market extremely sensitive to fashion fads and this has resulted in the
development of a responsive garment industry.
• India's global share is just 3% while China controls about 15%. In post-2005, China is
expected to capture 43% of global textile trade.

THREATS

• Competition in post-2005 is not just in exports, but is also likely within the country due
to cheaper imports of goods of higher quality at lower costs.
• Alternative competitive advantages would continue to be a barrier

25
 INDIAN ECONOMY IN TEXTILE INDUSTRY

India’s textile industry is one of the economy’s largest the industry scenario started changing
after the economic liberalization of Indian economy in 1991. It has now become the largest
industry in the world. Indian textile industry contributes about 14% to industrial production.
4% to country’s gross domestic product. 17% to country’s export earnings. It provide direct
employments to over 35million people. The textile industry of India contributes nearly14%
of the total industrial production of the country. It also contributes around 3% to the GDP of
the country. It is the largest provider of employment after agriculture. Indian textile exports
in 2016 45% readymade garment cotton, 25% Man made textile, 28% handi crafts, 4% silk &
Handloom, 18% Wool & Woolen textile and 4% other.

Major Player in textile industries are as follows:

• Welspun India LTD.

• Home Textile Bathrobes
• Vardhaman group
• Raymond
• Denim

26
LITERATURE REVIEW

LITERATURE REVIEW IN PSU SECTOR

A lot investor trading in the financial markets with securities and stocks are trying to foresee the
market movement and performance of PSU’s in recent era. Following are the some literature
review for PSU.

(Madhavan Kutty, 2007) concludes the banking system in India has attained enough maturity
and is ready to address prudential management practices as comprehensively as possible, which
an integral part of policy is making. Banking in India is poised to enter yet another phase of
reforms once the door opens further to foreign players in 2009. This requires further
improvement in technology management, human resource management and the ability to foresee
rapid changes in the financial landscape and adopt quickly. Banks have to lay down sound risk
management strategies and internal capital adequacy assessment committees to ensure that they
do not diverge from the prudential requirements.

(Singla, 2008)examines that how financial management plays a crucial role industrialists growth
of banking. It is concerned with examining the profitability position of the selected sixteen banks
of banker index for a period of six years. The study reveals that the profitability position was
reasonable during the period of study when compared with the previous years. Strong capital
position and balance sheet place. Banks are in better position to deal with and absorb the
economic constant over a period of time.

27
 LITERATURE REVIEW IN TEXTILE SECTOR

A lot investor trading in the financial markets with securities and stocks are trying to forsee the
market movement and performance of PSU’s in this era. Following are the some research
findings for Textile Industry.

(Chaudhary, 2006),did a very comprehensive study “On the productivity of Indian Textile
sector . Very technical formulas are used to analyze the competitiveness of Indian Textile
Industry. He concludes in his study that this is very potential sector for India and India has much
more market to develop in this sector”

(Tridevi, 2005) in his article concluded that the textile is one sector where India has high
ambitions and can achieve robust growth through moderate human skills. India has skilled labor
and does better in this sector as compared to others. This will also Increase the employment and
the social structure will be better off.

28
RESEARCH METHODOLOGY:

PRIMARY OBJECTIVES
The primary objective of the project is to do equity research in PSU sector and Textile industry
by understanding equities behavior in PSU and textile sector and to do proper fundamental and
technical analysis of their stocks so that investor can invest with better profitability and less risk.

RESEARCH METHOD
This research is based on secondary data and from various internet sources. For the purpose of analysis
of stock Fundamental and Technical analysis have been done and for this analysis, company has
allocated us assumed amount of 10 crore. I have took 7 crore for Large Capitalization. i.e. PSU sector and
3 crore for mid capitalization i.e. Textile Industry. Nifty 50 is the stock Benchmark for our stocks.

SOURCES OF COLLECTION OF DATA

This research is based on secondary data and from various internet sources.

• Internet& Web Portals

• Various magazines/bulletins
• News papers

LIMITATIONS OF THE STUDY

• This study has been conducted purely to understand equity analysis for investors
• It is based on Secondary Data.
• The study is restricted to two sectors based on fundamental and technical analysis.
• Based on single benchmark Nifty 50.
• Time Constraint

29
 Fundamental Analysis of
Stocks

30
BASICS OF FUNDAMENTAL ANALYSIS

Introduction to Fundamental Analysis

It is a method used to evaluate a security that entails attempting to measure its intrinsic value by
examining related economic, financial and other qualitative and quantitative factors.

Fundamental analysis is about using real data to evaluate a security's value. Although most
analysts use fundamental analysis to value stocks, this method of valuation can be used for just
about any type of security. It assumes that over the long term, a stock price will reflect the
company's intrinsic value.

The Fundamental analyst attempt to study everything that can affect the security's value,
including macroeconomic factors (like the overall economy and industry conditions) and
company-specific factors (like financial condition and growth. management).

An investor, for instance can perform fundamental analysis on a bond's value by looking at
economic factors, such as interest rates and the overall state of the economy, and information
about the bond issuer, such as potential changes in credit ratings. For assessing stocks, this
method uses revenues, earnings, future growth, return on equity, profit margins and other
data to determine a company's underlying value and potential for future

It is critical for an investor to separate the daily short term noise in the stock prices and
concentrate on the underlying business performance. Over the long term, the stock prices of
a fundamentally strong company tend to appreciate, thereby creating wealth for its investors.

The end goal of performing fundamental analysis is to produce a value that an investor can
compare with the security's current price, with the aim of figuring out what sort of position
to take with that security (Undervalued = buy, Overvalued = sell).

Growth is also considered as an important factor in the fundamental analysis because if the
security does not grow or if there is a negative growth (loss making company) then irrespective
of whether it is an overvalued or undervalued security, there is no point in analyzing it further for
fundamental analysis.

In case of stocks, Undervalued stocks can be considered for further analysis only if they grow
Year On Year. The undervalued securities with positive Year On Year growth are considered as
Value Picks.

31
Overvalued stocks can be considered for further analysis only if their P/E growth ratios (also
known as PEG ratios) lie between 0 and 1 including those having P/E growth ratio near or equal
to 1. Such overvalued stocks are known as Growth Picks.

Fundamental analysts focus on the underlying business of the company being evaluated and
specifically look at quantitative measures such as:

• Revenues


• Earnings


• Assets


• Debts

These financial measures are often combined to produce fundamental or financial ratios that
analysts can use to compare the company they are analyzing to:

• Other companies in the same industry



• The overall market



• Previous periods results for the same company.

Analysts use a variety of ratios to compare the two companies or the stocks of the two companies
like Net Income margin, ROE, Debt to Equity ratio, etc. The ratios used for comparison vary
from sector to sector.

32
Advantages of Fundamental Analysis

• It uses sound mathematical and statistical principles to produce ratios so that there is no
room for personal bias.


• The markets are usually driven by fundamental factors over the long term. Fundamental
analysis can look at long-term economic, demographic, technologic or consumer trends.


• By determining an intrinsic value, fundamental analysts can determine appropriate buy

prices that represent 'good value'.


• Research into fundamentals provides the investor with a better understanding of the
company and its business.


Disadvantages of Fundamental Analysis

• Fundamental analysis can be hard work and be overly complicated. Given the time and
 difficulty constraints, it may be difficult to get an edge

• In the short term, markets will not always move in the same direction as fundamental
value meaning that often short term momentum will override the fundamentals


• Six monthly issuing of financial information may mean a company's fundamentals have
significantly changed and means a time lag for investment decisions. This applies
especially to a lack of opportunity to react quickly to exit stocks


• Fundamental analysis for future estimated value can only be based on assumptions so a
best and worst case valuation model may need to be considered.


• No valuation model can take into account any unexpected negative economic, political or
legislative changes.


33
 • Another important point to consider is that most information considered in fundamental
analysis comes from the company itself and assumptions have to be made that the
company is providing accurate and true information.

Fundamental analysis of stocks of psu and textile sector

Fundamental Analysis of this sector of stocks include following steps:

• Selection of Stock
• Determination of sectorial P/E ratio
• Valuation of stock
• Selection of value picks
• Determination of LTPT(Long term price target)
• Selection of growth picks
• List of value pick and growth pick
• NIM(Net interest margin) based selection
• Ranking Procedure for selected stocks
• Index
• Mutual fund portfolio

34
 FUNDAMENTAL ANALYSIS OF PSU SECTOR

➢ Selection of Stock: In the very first step of fundamental analysis I have taken all the

large cap stocks of PSU sector and I have compared their NII(net interest income ) and

NIM( net interest margin with previous year NII and NIM and if both are increasing or

any of them is increasing I have accepted that stock in my portfolio otherwise I have

rejected it.

Figure 1

35
 ➢ Determination of Sectorial P/E, Valuation of Stocks, Selection of Value
picks, Determination of LTPT, Selection of growth pick:
In next step of fundamental analysis I have taken market price of stocks and by dividing
market price with EPS Price to earning ratio is decided. And then I have compared
sectorial P/E with each company P/E and overvalued and undervalued shares are defined.
Then PEG ratio is identified of stocks and on the basis of that stocks are selected in my
portfolio.

Figure 2

36
 ➢ List of value pick and growth pick, NIM based selection,
Ranking Procedure for selected stocks, Mutual fund
portfolio:
Next step is selected stock have been provided ranking for the purpose of
investment and this ranking criteria is NIM of banks.

Figure 3

37
 ➢ Index:
This is the Index of PSU sector which consist of free float market with their
weightage and market price of that stock so that ease of investment will be there
for investor.

Figure 4

38
MONEY ALLOCATION:
I have received 7 crore assumed amount from company for PSU sector investment and I have
allocated this money on the basis of their NIM by their weightage and through market price I
have identified no. of shares that are need to be invested in PSU sector.

Figure 5

39
 FUNDAMENTAL ANALYSIS OF TEXTILE SECTOR
➢ Selection of Stock: In the very first step of fundamental analysis I have taken
all the large and mid cap stocks of textile sector and I have compared their
revenue and profit with previous year revenue and profit and if both are
increasing or any of them is increasing I have accepted that stock in my portfolio
otherwise I have rejected it

Figure 6

40
 ➢ Determination of Sectorial P/E, Valuation of Stocks, Selection of Value
picks, Determination of LTPT, Selection of growth pick:
In next step of fundamental analysis I have taken market price of stocks and by dividing
market price with EPS Price to earning ratio is decided. And then I have compared
sectorial P/E with each company P/E and overvalued and undervalued shares are defined.
Then PEG ratio is identified of stocks and on the basis of that stocks are selected in my
portfolio.

Figure 7

41
 • List of value pick and growth pick, NIM based selection, Ranking
Procedure for selected stocks, Mutual fund portfolio:
Next step is selected stock have been provided ranking for the purpose of investment and
this ranking criteria is ROI of textile sector.

Money Allocation

Figure 8

42
 INDEX:
This is the Index of textile sector which consist of free float market with their weightage and
market price of that stock so that ease of investment will be there for investor.

Figure 9

43
 MONEY ALLOCATION:
I have received 3 crore assumed amount from company for textile sector investment and I have
allocated this money on the basis of their ROI by their weightage and through market price I
have identified no. of shares that are need to be invested in textile sector.

Figure 10

44
 TECHNICAL
ANALYSIS

45
 INTRODUCTION
Technical analysis is the examination of past price movements to forecast future price
movements. Technical analysts are sometimes referred to as chartists because they rely almost
exclusively on charts for their analysis.

It is a method of evaluating securities by analyzing the statistics generated by market activity,

such as past prices and volume. Technical analysts do not attempt to measure a security's
intrinsic value, but instead use charts and other tools to identify patterns that can suggest future
activity.

Technical analysts exclusively use of historical price and volume data is what separates them
from their fundamental counterparts. Unlike fundamental analysts, technical analysts don't care
whether a stock is undervalued - the only thing that matters is a security's past trading data and
what information this data can provide about where the security might move in the future.

Technical analysis is applicable to stocks, indices, commodities, futures or any tradable

instrument where the price is influenced by the forces of supply and demand.

Price refers to any combination of the open, high, low or close for a given security over a
specific timeframe. The time frame can be based on intraday (tick, 5-minute, 15-minute or
hourly), daily, weekly or monthly price data and last a few hours or many years. In addition,
some technical analysts include volume or open interest figures with their study of price action.

TERMINOLOGIES RELATED TO TECHNICAL ANALYSIS

1. Support: Areas of congestion or previous lows below the current price mark support
levels. A break below support would be considered bearish.

2. Resistance: Areas of congestion and previous highs above the current price mark the
resistance levels. A break above resistance would be considered bullish

46
TYPES OF TECHNICAL ANALYSIS

3. Long Term Technical Analysis

4. Short Term Technical Analysis

LONG TERM TECHNICAL ANALYSIS

➢ INTRODUCTION

Long Term Technical Analysis is generally done for a period of minimum 5 years. We generally
look for patterns which will help us to understand present trend of stock and as per trend we can
take position buy or sell. Basically it gives us idea about business cycle phase.

Types of Long Term Technical Analysis Patterns

• Rounding Bottom

The rounding bottom is a long-term reversal pattern that is best suited for weekly
charts. It is also referred to as a saucer bottom, and represents a long consolidation
period that turns from a bearish bias to a bullish bias.

47
 • Cup with Handle

The Cup with Handle is a bullish continuation pattern that marks a consolidation period
followed by a breakout. It was developed by William O'Neil and introduced in his 1988
book, How to Make Money in Stocks.

As its name implies, there are two parts to the pattern: the cup and the handle. The cup
forms after an advance and looks like a bowl or rounding bottom. As the cup is
completed, a trading range develops on the right hand side and the handle is formed. A
subsequent breakout from the handle's trading range signals a continuation of the prior
advance.

• Bump and Run reversal

A Rising trendline is drawn which connects atleast 3 lows of a price series (troughs) of 3
different periods respectively as shown in the below Figure 5.3. Then a Bump is seen which can
be observed as a bullish pattern and finally the point where the trendline is broken, the pattern
enters into a Run phase. This point is called as a sell point i.e. Investor is supposed to sell the
stock at this point.

48
• Double Top

The double top is a major reversal pattern that forms after an extended uptrend. As its name
implies, the pattern is made up of two consecutive peaks that are roughly equal, with a
moderate trough in between as shown in Figure 5.4. Atleast an intermediate change, if not
long-term change, in trend from bullish to bearish as soon as the support is broken. Many
potential double tops can form along the way up, but until key support is broken, a reversal
cannot be confirmed.

49
Key Points Regarding Double Bottom Chart Pattern:

i. Resistance break: Even after trading down to support, the double top and
trend reversal are still not complete. Breaking support from the lowest point
between the peaks completes the double top.

ii. Resistance turned support: Broken support becomes potential resistance and
there is sometimes a test of this newfound resistance level with a reaction
rally. Such a test can offer a second chance to exit a position or initiate a short.

iii. Price Target: The distance from support break to peak can be subtracted from
the support break for a price target. This would infer that the bigger the
formation is, the larger the potential decline

• Double bottom

The double bottom is a major reversal pattern that forms after an extended downtrend. As
its name implies, the pattern is made up of two consecutive troughs that are roughly
equal, with a moderate peak in between. Although there can be variations, the classic
double bottom usually marks an intermediate or long-term change in trend when the
resistance is broken. Many potential double bottoms can form along the way down, but
until key resistance is broken, a reversal cannot be confirmed

50
Key Points Regarding Double Bottom Chart Pattern:
i. Resistance break: Even after trading up to resistance, the double top
and trend reversal are still not complete. Breaking resistance from the
highest point between the troughs completes the double bottom. This too
should occur with an increase in volume and/or an accelerated ascent.

ii. Resistance turned support: Broken resistance becomes potential

support and there is sometimes a test of this newfound support level with
the first correction. Such a test can offer a second chance to close a short
position or initiate a long.

iii. Price Target: The distance from the resistance breakout to trough lows
can be added on top of the resistance break to estimate a target. This
would imply that the bigger the formation is, the larger the potential
advance.

• Head and Shoulders Top

A head and shoulders reversal pattern forms after an uptrend, and its completion marks a
trend reversal. The pattern contains three successive peaks with the middle peak (head)
being the highest and the two outside peaks (shoulders) being low and roughly equal. The
reaction lows of each peak can be connected to form support, or a neckline .As its name
implies, the head and shoulders reversal pattern is made up of a left shoulder, head, right
shoulder and neckline. Other parts playing a role in the pattern are volume, the breakout,
price target and support turned resistance.

51
Key Points Regarding Double Bottom Chart Pattern:

i. Neckline: The neckline forms by connecting low points 1 and 2. Low point
1marks the end of the left shoulder and the beginning of the head. Low point 2
marks the end of the head and the beginning of the right shoulder. Depending on
the relationship between the two low points, the neckline can slope up, slope
down or be horizontal. The slope of the neckline will affect the pattern's degree of
bearishness: a downward slope is more bearish than an upward slope. Sometimes
more than one low point can be used to form the neckline.

ii. Neckline Break: The head and shoulders pattern is not complete and uptrend
isnot reversed until neckline support is broken.

iii. Support turned resistance: Once support is broken, it is common for this
samesupport level to turn into resistance. Sometimes, but certainly not always, the
price will return to the support break and offer a second chance to sell.

iv. Price Target: After breaking neckline support, the projected price decline
isfound by measuring the distance from the neckline to the top of the head. This
distance is then subtracted from the neckline to reach a price target.

• Head & Shoulders Bottom

The head and shoulders bottom is sometimes referred to as an inverse head and
shoulders. The pattern shares many common characteristics with its comparable partner,
but relies more on volume patterns for confirmation.

As a major reversal pattern, the head and shoulders bottom forms after a downtrend, and
its completion marks a change in trend. The pattern contains three successive troughs
with the middle trough (head) being the deepest and the two outside troughs (shoulders)
being shallower. Ideally, the two shoulders would be equal in height and width. The
reaction highs in the middle of the pattern can be connected to form resistance, or a
neckline.

52
 The price action forming both head and shoulders top and head and shoulders bottom
patterns remains roughly the same, but reversed.

Key Points Regarding Double Bottom Chart Pattern:

i. Neckline: The neckline forms by connecting reaction highs 1 and 2. Reaction high 1
marks the end of the left shoulder and the beginning of the head. Reaction high 2 marks
the end of the head and the beginning of the right shoulder. Depending on the relationship
between the two reaction highs, the neckline can slope up, slope down or be horizontal.
The slope of the neckline will affect the pattern's degree of bullishness: an upward slope
is more bullish than downward slope.

ii. Neckline Break: The head and shoulders pattern is not complete and the down trend is
not reversed until neckline resistance is broken.

iii. Resistance turned support: Once resistance is broken, it is common for this same
resistance level to turn into support. Often, the price will return to the resistance break
and offer a second chance to buy.

53
 iv. Price Target: After breaking neckline resistance, the projected advance is foundby
measuring the distance from the neckline to the bottom of the head. This distance is then
added to the neckline to reach a price target.

• Triple Top
The triple top is a reversal pattern made up of three equal highs followed by a break below
support. In contrast to the triple bottom, triple tops usually form over a shorter time frame
and typically range from 3 to 6 months. Generally speaking, bottoms take longer to form
than tops.

Key Points Regarding Triple Top Chart Pattern:

i. Support break: As with many other reversal patterns, the triple top is
notcomplete until a support break. The lowest point of the formation, which
would be the lowest of the intermittent lows, marks this key support level.

ii. Support turns resistance: Broken support becomes potential resistance, andthere
is sometimes a test of this newfound resistance level with a subsequent reaction
rally.
iii. Price Target: The distance from the support break to highs can be measured
andsubtracted from the support break for a price target.

54
 • Triple Bottom

The triple bottom is a reversal pattern made up of three equal lows followed by a
breakout above resistance. While this pattern can form over just a few months, it is
usually a long-term pattern that covers many months.

Key Points Regarding Triple Bottom Chart Pattern:

i. Resistance break: As with many other reversal patterns, the triple bottom is
not complete until a resistance breakout. The highest point of the formation,
which would be the highest of the intermittent highs, marks resistance.

ii. Resistance turns support: Broken resistance becomes potential support, and
there is sometimes a test of this newfound support level with the first correction.
Because the triple bottom is a long-term pattern, the test of newfound support may
occur many months later.

iii. Price Target: The distance from the resistance breakout to lows can be
measured and added to the resistance break for a price target.

55
 Long Term Analysis for Selected stocks in PSU sector

1. State Bank of India Stock

Figure 11

ANALYSIS: So in this Long term Share trend Share slightly go up and it suddenly
fall down for some time and made a rounding bottom pattern when it reversely go
up and then stock performance go up and made clearly Head and shoulder pattern
and currently stock is in up trend.

56
 2.Punjab & Sind Bank

Figure 12

ANALYSIS: So in this Long term Share trend Share slightly go up and it

suddenly fall down for some time and made a Double Top Reversal Pattern when it
reversely go up and currently stock is in up trend.

57
Long Term Analysis for Selected stocks of Textile Sector

1. Lakshmi Machine

Figure 13

ANALYSIS: So in this Long term Share trend Share is continuously going up

and made clearly Head and shoulder pattern with sideways performance and
currently stock is in up trend.

58
 2. KPR Mills

Figure 14

ANALYSIS: So in this Long term Share trend from starting share is in down
trend later on it maintain sideways and made a Cup with handle pattern and
currently stock is in up trend.

59
SHORT TERM TECHNICAL ANALYSIS (CANDLESTICKS)

Introduction to Candlesticks

Originating in Japan over 300 years ago, candlestick charts have become quite popular in recent
years. For a candlestick chart, the open, high, low and close are all required. A daily candlestick
is based on the open price, the intraday high and low, and the close.

White (green) candlesticks form when the close is higher than the open and black (red)
candlesticks form when the close is lower than the open. The white and black portion formed
from the open and close is called the body (white body or black body). The lines above and
below are called shadows and represent the high and low.

60
 TYPES OF CANDLESTICKS

Doji, Hammer, Hanging man, Inverted hammer and shooting star are five most important
candlesticks.

• Doji

Doji are important candlesticks that provide information on their own and also
feature in a number of important patterns. Doji form when a security's open and
close are virtually equal. The length of the upper and lower shadows can vary and
the resulting candlestick looks like a cross, inverted cross or plus sign. Alone,
Doji are neutral patterns. Any bullish or bearish bias is based on preceding price
action and future confirmation. The word "Doji" refers to both the singular and
plural form.

Ideally, but not necessarily, the open and close should be equal. Doji convey a sense of
indecision or tug-of-war between buyers and sellers. Prices move above and below the opening
level during the session, but close at or near the opening level. The result is a standoff. Neither
bulls nor bears were able to gain control and a turning point could be developing.

The relevance of a Doji depends on the preceding trend or preceding candlesticks. After an
advance, or long white candlestick, a Doji signals that the buying pressure is starting to weaken.

61
After a decline, or long black candlestick, a Doji signals that selling pressure is starting to
diminish. Doji indicate that the forces of supply and demand are becoming more evenly matched
and a change in trend may be near. Doji alone are not enough to mark a reversal and further
confirmation may be warranted.

• Hammer and Hanging Man

Hammer and Hanging Man, are identical with small bodies and long lower shadows.
Only preceding price action and further confirmation determine the bullish or bearish
nature of these candlesticks.

The hammer and hanging man look exactly alike, but have different implications based on the
preceding price action. Both have small real bodies (black or white), long lower shadows and
short or non-existent upper shadows. As with most single and double candlestick formations, the
hammer and hanging man require confirmation before action.

62
The hammer is a bullish reversal pattern that forms after a decline. In addition to a potential trend
reversal, hammers can mark bottoms or support levels. After a decline, hammers signal a bullish
revival. The low of the long lower shadow implies that sellers drove prices lower during the
session. However, the strong finish indicates that buyers regained their footing to end the session
on a strong note. While this may seem enough to act on, hammers require further bullish
confirmation. The low of the hammer shows that plenty of sellers remain. Further buying
pressure, and preferably on expanding volume, is needed before acting. Such confirmation could
come from a gap up or long white candlestick. Hammers are similar to selling climaxes and
heavy volume can serve to reinforce the validity of the reversal.

The hanging man is a bearish reversal pattern that can also mark a top or resistance level.
Forming after an advance, a hanging man signals that selling pressure is starting to increase. The
low of the long lower shadow confirms that sellers pushed prices lower during the session. Even
though the bulls regained their footing and drove prices higher by the finish, the appearance of
selling pressure raises the yellow flag. As with the hammer, a hanging man requires bearish
confirmation before action. Such confirmation can come as a gap down or long black candlestick
on heavy volume.

• Inverted Hammer and Shooting Star

Shooting star and inverted hammer, are also identical with small bodies and long upper
shadows. Only preceding price action and further confirmation determine the bullish
or bearish nature of these candlesticks.

The inverted hammer and shooting star look exactly alike, but have different implications
based on previous price action. Both candlesticks have small real bodies (black or white),

63
 long upper shadows and small or non-existent lower shadows. These candlesticks mark
potential trend reversals, but require confirmation before action.

The shooting star is a bearish reversal pattern that forms after an advance and in the star position,
hence its name. A shooting star can mark a potential trend reversal or resistance level. The
candlestick forms when prices gap higher on the open, advance during the session and close well
off their highs. The resulting candlestick has a long upper shadow and small black or white body.
After a large advance (the upper shadow), the ability of the bears to force prices down raises the
yellow flag. To indicate a substantial reversal, the upper shadow should relatively long and at
least 2 times the length of the body. Bearish confirmation is required after the shooting star and
can take the form of a gap down or long black candlestick on heavy volume.

The inverted hammer looks exactly like a shooting star, but forms after a decline or downtrend.
Inverted hammers represent a potential trend reversal or support levels. After a decline, the long
upper shadow indicates buying pressure during the session. However, the bulls were not able to
sustain this buying pressure and prices closed well off of their highs to create the long upper
shadow. Because of this failure, bullish confirmation is required before action. An inverted
hammer followed by a gap up or long white candlestick with heavy volume could act as bullish
confirmation.

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 CANDLESTICKS POSITIONING
• \Star Position

A candlestick that gaps away from the previous candlestick is said to be in star position. The
first candlestick usually has a large real body, but not always, and the second candlestick in
star position has a small real body. Depending on the previous candlestick, the star position
candlestick gaps up or down and appears isolated from previous price action. The two
candlesticks can be any combination of white and black. Doji, hammers, shooting stars and
spinning tops have small real bodies and can form in the star position. Later we will examine
2- and 3-candlestick patterns that utilize the star position.

• Harami Position:
A candlestick that forms within the real body of the previous candlestick is in Harami position.
Harami means pregnant in Japanese and the second candlestick is nestled inside the first. The
first candlestick usually has a large real body and the second a smaller real body than the first.
The shadows (high/low) of the second candlestick do not have to be contained within the first,
though it's preferable if they are. Doji has small real bodies and can form in the harami position
as well. Later we will examine candlestick patterns that utilize the harami position.

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 Short Term Technical Analysis of Selected PSU Sector Stocks using
Candlesticks
1. PUNJAB & SIND BANK

Figure 15

ANALYSIS: In the given Share trend of Short term there is Star Position then
share price go up substantially later on there was a useful doji from where the share
price starts going down, after that there is a hammer from where the share price went
slightly up and then there is a useful doji from where the share price starts going down.

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 1. STATEBANKOF INDIA

Figure 16

ANALYSIS: In the given Share trend of Short term there is shooting

Star Position then share price go down substantially later on there was a
useful Doji from where the Share price change their position ,after that
there is again useful Doji has come from where the Share Price went
slightly up..

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 SHORT TERM TECHNICAL ANALYSIS OF SELECTED TEXTILE SECTOR
STOCKS USING CANDLESTICKS

1. LAKSHMI MACHINE

Figure 17

ANALYSIS: In the given Share trend of Short term there is useful Doji
has come because of that share pattern change their position and share
price go up substantially later on there was Shooting Star has come from
where the Share price starts going down ,after that again doji and shooting
star has come and change their position slightly change candlesticks
position.

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 2. KPR MILLS

Figure 18

ANALYSIS: In the given Share trend of Short term there is useful Doji
because of that share price go up substantially later on there was a
Hammer from where the Share price starts going up ,after that there is a
Useful Doji from where the Share Price went down

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SECTORIAL MUTUAL FUND

• PSU Sector: This is the PSU sector money allocation of 7 crore on the basis of NIM
weightage and through market price no. of share are identified which needs to invested in
this sector.

Figure 19

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 • Textile Sector: This is the textile sector money allocation of 3 crore on the basis of
ROI weightage and through market price no. of share are identified which needs to
invested in this sector.

Figure 20

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 DIVERSIFIED MUTUAL FUND
ASIA PACIFIC MUTUAL FUND: This is the total Mutual fund portfolio of 100 crore
created by our Asia Pacific group of student which represent total sectorial distribution of
different sector

Figure 21

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CONCLUSION

Equity research is important for every investor in order to do wise investment. Relative valuation
model is simplest method for fundamental analysis. Also ,another method that is Technical
analysis is very useful long term and short term along with fundamental analysis. Calculating
long term target price investor can achieve maximum profit and they also get an idea for how
much period they should hold the stock.

Sectorial mutual fund of PSU and Textile sector and mutual fund consisting of diverse sectors
will give idea about how the mutual funds NAV is calculated and their performance is analyzed
with respect to market. If mutual fund is outperforming market, it indicates that stocks selected
in portfolio are good.

So by this PSU and Textile sector Analysis through Fundamental and Technical Analysis I am
able to reach at conclusion that for the point of investment in this sector which companies are
best to invest for any investor who is looking further for investment.

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KEY LEARNING FROM SIP:

1st week: Basic training about equity and research

2nd Week: Investment Banking Training
3rd Week: Business Idea Training
4th Week: Birla Sun Life Product Training
5th week: Share Trading
6th Week:Mutual Fund Training
7th week: Fundamental and Technical Analysis of stocks
8th Week: Derivatives

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Reference &Bibliography
(For Literature Review):
Chaudhary. (2006). On the productivity of Indian Textile sectro.

Madhavan Kutty. (2007). Indian Public Banking System.

Singla. (2008). Role of Financial Management in Banking Industry.

Tridevi. (2005). High growth with robust amn skills in textile.

Web links:
• https://insurance.birlasunlife.com/Pages/Individual/K3B.aspx?BannerID=2 For
Company Profile
• http://www.moneycontrol.com/stock-charts/statebankbikanerjaipur/charts/SBB02
For Stock charts
• https://www.nseindia.com/live_market/dynaContent/live_watch/pre_open_market
/pre_open_market.htm For Financial and Fundamental analysis
• Moneycontrol.com for the market value of the stocks and the data
regarding stocks

Material provided by company:

• PDF of StockCharts.com - Introduction to Candlesticks Part 4

Guiding Persons:

• Mr.NikeshRuparel–Company Guide
• Prof. Ravindra Bhatia–Finance Mentor

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