University of Mumbai

GNVS Institute of Management

GTB Nagar, Sion- Koliwada (E), Mumbai-400037

Summer Internship Report

Submitted in Partial Fulfillment of

Masters in Management Studies

(Specialization: Finance)
(Topic: Fundamental Analysis on Kolte-Patil Developers Ltd)
Submitted by:
(Name) Dilipkumar B Talari
(Roll No.201457)
Under the Guidance of
(Prof. P.M. Nayak)
2015-2016
1
 DECLARATION

I hereby declare that the Summer Internship Report submitted for the MMS
Degree, GNVS Institute of Management (Affiliated to University of Mumbai) is my
original work and conducted in Shreesuri Wealth Company.

Place: Mumbai

Date:

Signature of the Student

2
 Certificate

This is to certify that the Summer Internship Report is the bonafide internship
work carried out by Mr. Dilipkumar B Talari student of MMS, at GNVS Institute of
Management (Affiliated to University of Mumbai) during the period of May 2015
to July 2015, in partial fulfillment of the requirements for the award of the Degree
of Master in Management Studies.

Place: Mumbai
Signature of Student
Date:

Signature of Internal Guide Signature of External Examiner

College seal Signature of Director

3
 ACKNOWLEDGEMENTS

I wish to express my gratitude to Alkesh Jain from the Shreesuri Wealth company for
providing me valuable information.

I am grateful to GNVS Institute of Management for giving me an opportunity to pursue

MMS. I wish to thank Dr. R. K. Singh, Director, GNVS Institute of Management who has
been a perpetual source of inspiration and offered valuable suggestions to improve my
practical Knowledge.

I am indebted to my Guide P.M. Nayak Professor, GNVS Institute of Management, for

abundant guidance, support, and encouragement throughout my internship Study.

I would like to express my thanks to various people from the Shreesuri Wealth company
for their support and direction.

Place: Mumbai
Date:

Signature of the student

( Dilipkumar B Talari )

4
 INDEX

Sr.no TITLE Page no.

1. Introduction to fundamental analysis 6

2. Economic analysis 12

3. Industry analysis 14

4. Company analysis 18

5. Company profile 22

6. Research design 25

7. Data analysis 29

8. Economic analysis 37

9. Ratio analysis 41

10. Limitations of the project 56

11. Findings 57

12. Conclusion 58

13. Bibliography 59

5
 1.INTRODUCTION TO FUNDAMENTAL
ANALYSIS
FUNDAMENTAL ANALYSIS:

Fundamental analysis is the examination of the underlying forces that affect the
well being of the economy, industry groups, and companies. As with most analysis, the
goal is to derive a forecast and profit from future price movements. At the company
level, fundamental analysis may involve examination of financial data, management,
business concept and competition. At the industry level, there might be an examination
of supply and demand forces for the products offered. For the national economy,
fundamental analysis might focus on economic data to assess the present and future
growth of the economy. To forecast future stock prices, fundamental analysis combines
economic, industry, and company analysis to derive a stock's current fair value and
forecast future value. If fair value is not equal to the current stock price, fundamental
analysts believe that the stock is either over or under valued and the market price will
ultimately gravitate towards fair value. Fundamentalists do not heed the advice of the
random walkers and believe that markets are weak form efficient.

By believing that prices do not accurately reflect all available information,

fundamental analysts look to capitalize on perceived price discrepancies.

STRENGTHS AND WEAKNESS OF FUNDAMENTAL

ANALYSIS

STRENGTHS
Long-term Trends:

Fundamental analysis is good for long-term investments based on long-term

trends, very long-term. The ability to identify and predict long-term economic,
demographic, technological or consumer trends can benefit patient investors who pick
the right industry groups or companies.

6
Value Spotting:

Sound fundamental analysis will help identify companies that represent good
value. Some of the most legendary investors think long-term and value. Graham and
Dodd, Warren Buffett and John Neff are seen as the champions of value investing.
Fundamental analysis can help uncover companies with valuable assets, a strong
balance sheet, stable earnings and staying power

WEAKNESS

Time Constraints:

Fundamental analysis may offer excellent insights, but it can be extraordinarily

time consuming. Time-consuming models often produce valuations that are
contradictory to the current price.

Industry/Company Specific:

Valuation techniques vary depending on the industry group and specifics of each
company. For this reason, a different technique and model is required for different
industries and different companies. This can get quite time consuming and limit the
amount of research that can be performed.

Subjectivity:

Fair value is based on assumptions. Any changes to growth or multiplier

assumptions can greatly alter the ultimate valuation. Fundamental analysts are
generally aware of this and use sensitivity analysis to present a base-case valuation, a
best-case valuation and a worst-case valuation. However, even on a worst case, most
models are almost always bullish, the only question is how much so.

7
Analyst Bias:

The majority of the information that goes into the analysis comes from the
company itself. Companies employ investor relations managers specifically to handle
the analyst community and release information.

What is fundamental analysis?

Fundamental Analysis involves examining the economic, financial and other qualitative
and quantitative factors related to a security in order to determine its intrinsic value. It
attempts to study everything that can affect the security's value, including
macroeconomic factors (like the overall economy and industry conditions) and
individually specific factors (like the financial condition and management of companies).
Fundamental analysis, which is also known as quantitative analysis, involves delving
into a company’s financial statements (such as profit and loss account and balance
sheet) in order to study various financial indicators (such as revenues, earnings,
liabilities, expenses and assets). Such analysis is usually carried out by analysts,
brokers and savvy investors.
Many analysts and investors focus on a single number--net income (or earnings)--to
evaluate performance. When investors attempt to forecast the market value of a firm,
they frequently rely on earnings. Many institutional investors, analysts and regulators
believe earnings are not as relevant as they once were. Due to nonrecurring events,
disparities in measuring risk and management's ability to disguise fundamental earnings
problems, other measures beyond net income can assist in predicting future firm
earnings.

Two Approaches of fundamental analysis:

While carrying out fundamental analysis, investors can use either of the following
approaches:

1 .Top-down approach: In this approach, an analyst investigates both international and

national economic indicators, such as GDP growth rates, energy prices, inflation and
interest rates.

The Search for the best security then trickles down to the analysis of total sales, price
levels and foreign competition in a sector in order to identify the best business in the
sector

2. Bottom-up approach: In this approach, an analyst starts the search with specific
businesses, irrespective of their industry/region.
8
How does fundamental analysis works?
Fundamental analysis is carried out with the aim of predicting the future performance of
a company. It is based on the theory that the market price of a security tends to move
towards its 'real value' or 'intrinsic value.' Thus, the intrinsic value of a security being
higher than the security’s market value represents a time to buy. If the value of the
security is lower than its market price, investors should sell it

The steps involved in fundamental analysis are:

1. Macroeconomic analysis, which involves considering currencies, commodities and
indices.

2. Industry sector analysis, which involves the analysis of companies that are a part of
the sector.

3. Situational analysis of a company.

4. Financial analysis of the company.

5. Valuation.

The valuation of any security is done through the discounted cash flow (DCF) model,
which takes into consideration:

1. Dividends received by investors

2. Earnings or cash flows of a company

3. Debt, which is calculated by using the debt to equity ratio and the current ratio
(current assets/current liabilities)

Fundamental Analysis Tools

These are the most popular tools of fundamental analysis.

Earnings per Share – EPS

Price to Earnings Ratio – P/E

Projected Earnings Growth – PEG

Price to Sales – P/S

Price to Book – P/B

9
Dividend Payout Ratio

Dividend Yield

Book Value

Return on Equity

Financial ratios are tools for interpreting financial statements to provide a basis for
valuing securities and appraising financial and management performance.

A good financial analyst will build in financial ratio calculations extensively in a financial
modeling exercise to enable robust analysis. Financial ratios allow a financial analyst to:

Standardize information from financial statements across multiple financial years to

allow comparison of a firm’s performance over time in a financial model.

Standardize information from financial statements from different companies to allow

apples to apples comparison between firms of differing size in a financial model.

Measure key relationships by relating inputs (costs) with outputs (benefits) and
facilitates comparison of these relationships over time and across firms in a financial
model.

In general, there are 4 kinds of financial ratios that a financial analyst will use most
frequently, these are:

 Performance ratios

 Working capital ratios

 Liquidity ratios

 Solvency ratios

These 4 financial ratios allow a good financial analyst to quickly and efficiently address
the following questions or concerns:

Performance ratios
What return is the company making on its capital investment?
What are its profit margins?

Working capital ratios

How quickly are debts paid?
How many times is inventory turned?
10
Liquidity ratios
Can the company continue to pay its liabilities and debts?

Solvency ratios (Longer term)

What is the level of debt in relation to other assets and to equity?
Is the level of interest payable out of profits?

11
 2.ECONOMIC ANALYSIS
The economic analysis aims at determining if the economic climate is conclusive
and is capable of encouraging the growth of business sector, especially the capital
market. When the economy expands, most industry groups and companies are
expected to benefit and grow. When the economy declines, most sectors and
companies usually face survival problems. Hence, to predict share prices, an
investor has to spend time exploring the forces operating in overall economy.
Exploring the global economy is essential in an international investment setting. The
selection of country for investment has to focus itself to examination of a national
economic scenario. It is important to predict the direction of the national economy
because economic activity affects corporate profits, not necessarily through tax
policies but also through foreign policies and administrative procedures.

Tools for Economy Analysis

The most used tools for performing economic analysis are:

Gross Domestic Product (GDP)

Monetary policy and Liquidity

Inflation

Interest rates

International influences

Fiscal policy

Influences on long term expectations

Influences on short term expectations

1) Gross Domestic product

GDP is one measure of economic activity. This is the total amount of goods and
services produced in a country in a year. It is calculated by adding the market values of
all the final goods and services produced in a year.
It is a gross measurement because it includes the total amount of goods and services
produced, of which some merely replace goods that have depreciated or have worn out.
It is domestic production because it includes only goods and services produced within
the country.

12
2) Inflation

Inflation can be defined as a trend of rising prices caused by demand

exceeding supply. Over time, even a small annual increase in prices of say 1 % will
tend to influence the purchasing power of the nation. In others word, if prices rise
steadily, after a number of years, consumers will be able to buy only fewer goods
and services assuming income level does not change with inflation.

3) Interest rate

Interest rate is the price of credit. It is the percentage fee received or paid by
individual or organization when they lend and borrow money. In general, increases
in interest rate, whether caused by inflation, government policy, rising risk premium,
or other factors, will lead to reduced borrowing and economic slowdown.

4) International influences

Rapid growth in overseas market can create surges in demand for exports,
leading to growth in export sensitive industries and overall GDP. In contrast, the
erection of trade barriers, quotas, currency restrictions can hinder the free flow of
currency, goods, and services, and harm the export sector of an economy.

5) Fiscal policy

The fiscal policy of the government involves the collection and spending of
revenue. In particular, fiscal policy refers to the efforts by the government to
stimulate the economic directly, through spending.

13
 3.INDUSTRY ANALYSIS
An industry analysis helps inform business managers about the viability of their current
strategy and on where to focus a business among its competitors in an industry. The
analysis examines factors such as competition and the external business environment,
substitute products, management preferences, buyers and suppliers. Industry analysis
involves reviewing the economic, political and market factors that influence the way the
industry develops. Major factors can include the power wielded by suppliers and buyers,
the condition of competitors. And the likelihood of new market entrants.

Data needs for industry analysis:

Industry analysis requires a variety of quantitative and qualitative data. Though one
single source for all the data needs might not found, industry associates, business
publications and the department of economic analysis perform a comprehensive
industry analysis. A suggestive list of data categories that are utilized for performing
industry analysis is listed below.

 Product lines

 Product growth

 Complementary product

 Economics of scale

 Suppliers

 Labors

 Substitute products

 Buyers and their behavior

 Product pattern (cyclical, seasonal)

 Cost structure

Tools for industry analysis

 Cross-sectional industry

 Industry performance over time

 Differences in industry risk

14
  Prediction about market behavior

 Competitors over the industry life cycle

INDUSTRY PROFILE:

India’s real estate market is expected to reach US$ 180 billion by 2020 from US$ 93.8
billion in 2014. Emergence of nuclear families, rapid urbanisation and rising household
income are likely to remain the key drivers for growth in all spheres of real estate,
including residential, commercial and retail. 
Real estate is currently the fourth-largest sector in the country in terms of Foreign Direct
Investment (FDI) inflows. Total FDI in the construction development sector during April
2000–May 2015 stood at around US$ 24.07 billion.
The Government of India has been supportive to the real estate sector. In August 2015,
the Union Cabinet approved 100 Smart City Projects in India. The Government has also
raised FDI limits for townships and settlements development projects to 100 per cent.
Real estate projects within the Special Economic Zone (SEZ) are also permitted 100 per
cent FDI. In Union Budget 2015-16, the government allocated US$ 3.72 billion for
housing and urban development. The government has also released draft guidelines for
investments by Real Estate Investment Trusts (REITs) in non-residential segment.

MARKET SIZE

The Indian real estate market size is expected to touch US$ 180 billion by 2020. The
housing sector alone contributes 5-6 per cent to the country's gross domestic product
(GDP). Also, in the period FY08-20, the market size of this sector is expected to
increase at a compound annual growth rate (CAGR) of 11.2 per cent. Retail, hospitality
and commercial real estate are also growing significantly, providing the much-needed
infrastructure for India's growing needs.
Real estate has emerged as the second most active sector, raising US$ 1.2 billion from
private equity (PE) investors in the last 10 months.
Foreign investors have bought tenanted office space worth over US$ 2 billion in India in
2014, a four-fold rise compared to the previous year, in order to increase their rent-
yielding commercial assets in Asia's third largest economy.
According to a study by Knight Frank, Mumbai is the best city in India for commercial
real estate investment, with returns of 12-19 per cent likely in the next five years,
followed by Bengaluru and Delhi-National Capital Region (NCR). Also, Delhi-NCR was
the biggest office market in India with 110 million sq ft, out of which 88 million sq ft were
occupied. Sectors such as IT and ITeS, retail, consulting and e-commerce have
registered high demand for office space in recent times.
Delhi’s Central Business District (CBD) of Connaught Place has been ranked as the
sixth most expensive prime office market in the world with occupancy costs at US$ 160
per sq ft per annum, according to a survey by CBRE.

15
COMPETITOR ANALYSIS:
 Ashiana Housing Limited
 India Bull Realestate
 Lodha Group
 Oberoi Realty
 Goderj Properties Limited
 DLF Company
 DS Kulkarni

DLF Company

 Founded by Chaudhary Raghvendra Singh in1946

 DLF's first residential project was Krishna Nagar in East Delhi, which was
completed in 1949.
 Largest real estate company with revenues of US$ 1.4 billion (FY13)
 Market capitalisation of US$ 7.2 billion
 Developed 3,000 acre DLF City in Gurgaon
 Net land bank of 348 million sq feet
 Development of 22 urban colonies
 Laing O'Rourke is a UK-based construction company that built Dubai
International Airport and London's Millennium Tower. It will construct all DLF's
landmark projects. Nakheel of Dubai are partnering with DLF for developing
townships in India. 
 WSP Group Plc is also partnering DLF, providing management and consultancy
to the built and natural environment. Feedback Ventures is providing consultancy
for faster project execution.
 DLF has also teamed up with Hilton Hotels to jointly develop hotels in India.

Lodha Group

 Lodha Group was established in 1980 by Mangal Prabhat Lodha. 

 Abhinandan and Abhishek, sons of Mangal Prabhat Lodha are in charge of the
groups developments in Mumbai.
 The Group is currently developing in excess of 35 million sq.ft. of real estate, with
over 30 projects in and around Mumbai.
 The Group also has its presence in Hyderabad and Pune.
 Lodha Group employs over 3000 associates and site-based employment
includes 25,000 workers. 
16
  It was the first Indian real estate company to introduce a Customer Rewards
Programe
 It was also the first to introduce LEED certification for commercial projects
 In 2008 the group received Rs. 1,700 Cr. worth of funding from a consortium of
investors led by Deutsche Bank making it one of the largest FDI deals in the
history of Indian Real Estate  
 The group won the Green GOOD DESIGN Award 2012 for its iconic project
World One

Ashiana Housing limited

 Ashiana Housing Ltd. (AHL) formerly Ashiana Housing & Finance (India) Limited
is a real estate development company established in 1979 with its head office
in New Delhi, India.
 Ashiana Housing Limited (AHL), formerly known as ASHIANA HOUSING &
FINANCE (I) LIMITED was incorporated on 25 June 1986 as a Public Limited
Company.
 Ashiana Housing Ltd was founded by Late Sh. Om Prakash Gupta[5] who served
as the managing director of the company till 1 April 2010.After that he became
thechairman emeritus of Ashiana Housing Ltd.
 Since 1979 Ashiana has built and delivered over 117.54 lac sq.ft. and is
maintaining 80 lac sq.ft. of residential and commercial spaces
in Bihar, Jharkhand, Haryana,Uttar Pradesh, Rajasthan and Delhi NCR.
 Rangoli Gardens awarded as the Best Budget Apartment Project of the Year in
Property award in tier 2 city by NDTV PROFIT 2015
 Ashiana received the Bhamashah Award from Govt. of Rajasthan consecutively
in the years 2013 and 2014 for contribution made in the field of Education
 Ashiana Aangan, Bhiwadi awarded as Best Affordable Housing in India & also
awarded as Best Affordable Housing in Delhi - NCR

17
 4.COMPANY ANALYSIS

Analysis of the company consists of measuring its performance and ascertaining the
cause of this performance. When some companies have done well irrespective of
economic or industry failure, this implies that there are certain unique characteristics for
this particular company that had made it a success. The identification of these
characteristics, whether quantitative or qualitative, is referred to as company analysis.
Quantitative indicators of company analysis are the financial indicators and operational
efficiency indicators. Financial indicators are the profitability indicators and financial
position indicators analyzed through the income and balance sheet statements,
respectively, of the company. Operational indicators are capacity utilization and cost
versus sales efficiency of the company, which includes the marketing edge of the
company.

Besides the quantitative factors, qualitative factors of a company also influence

investment decision process of an institutional investor. The focus of the qualitative
data, as revealed in the annual report- as in the director’s speech. Rather than on
quantitative data.

Tools for company analysis

Company analysis involves choice of investment opportunities within a specific industry
that comprises of several individual companies. The choice of an investible company
broadly depends on the expectations about its future performance in general. Here, the
business cycle that a company is undergoing is a very useful tool to assess the future
performance from the company.

Company analysis ought to examine the levels of competition, demand, and other
forces that affect the company’s ability to be profitable. Of these factors, understanding
the competitive environment is most important.

A business faces five forces of competition (porter’s model) namely, seller’s

competition, buyer’s competition, competition from new entrants, exit competition.
Competitive forces include the power of those who sell the business, those who buy the
business; those who buy from the business, how easily new businesses can enter the
industry, how costly it is to exit, and finally, the competition from those who already in
the industry. How well a company deals with each of these forces will determine
whether the company earns above or below average profit. Each of these forces is
discussed below.

18
The financial statements of the company:
Records that outline the financial activities of a business, an individual or any other
entity. Financial statements are meant to present the financial information of the entity in
question as clearly and concisely as possible for both the entity and for readers.
Financial statements for businesses usually include: income statements, balance sheet,
statements of retained earnings and cash flows, as well as other possible statements

Ratio analysis:
A tool used by individuals to conduct a quantitative analysis of information in a
company's financial statements. Ratios are calculated from current year numbers and
are then compared to previous years, other companies, the industry, or even the
economy to judge the performance of the company. Ratio analysis is predominately
used by proponents of fundamental analysis. There are many ratios that can be
calculated from the financial statements pertaining to a company's performance, activity,
financing and liquidity. Some common ratios include the price-earnings ratio, debt-
equity ratio, earnings per share, asset turnover and working capital.

ROA:
Return on assets, which, offering a different take on management's effectiveness
reveals how much profit a company earns for every dollar of its assets. Assets include
things like cash in the bank, accounts receivable, property, equipment, inventory and
furniture. ROA is calculated like this:

Annual net income/Total assets

ROI:
Return on Investment is one of several commonly used approaches for evaluating the
financial consequences of business investments, decisions, or actions. ROI analysis
compares the magnitude and timing of investment gains directly with the magnitude and
timing of investment costs. A high ROI means that investment gains compare favorably
to investment costs

GAINS- INVESTMENT COSTS

INVESTMENT COSTS

ROE:
Of all the fundamental ratios that investors look at, one of the most important is return
on equity. It's a basic test of how effectively a company's management uses investors'

19
money - ROE shows whether management is growing the company's value at an
acceptable rate. ROE is calculated as:

Annual Net Income

Average Shareholders' Equity

EPS:
The portion of a company's profit allocated to each outstanding share of commonstock.
Earnings per share serve as an indicator of a company's profitability.

DPS:
The sum of declared dividends for every ordinary share issued. Dividend pershare
(DPS) is the total dividends paid out over an entire year (including interim dividends but
not including special dividends) divided by the number of outstanding ordinary shares
issued.

DPS can be calculated by using the following

D - Sum of dividends over a period (usually 1 year)
SD - Special, one time dividends
S - Shares outstanding for the period

P/O RATIO:
The amount of earnings paid out in dividends to shareholders. Investors can use the
payout ratio to determine what companies are doing with their earnings

Calculated

20
DIVIDEND YEILD:
financial ratio that shows how much a company pays out in dividends each year relative
to its share price. In the absence of any capital gains, the dividend yield is the return on
investment for a stock. Dividend yield is calculated as follows

21
 5.COMPANY PROFILE
Introduction

Kolte-Patil has been creating landmarks for 25 years.

Founded 2 decades ago and guided by a simple yet profound philosophy; 'Creation, not
construction', Kolte-Patil Developers Ltd. is one of the foremost real estate companies
which is headquartered in Pune. Listed on NSE and BSE Kolte-Patil is Pune's largest
developer and has completed 1 crore sq. ft. of landmark developments in Pune and
Bengaluru. It is also present in Mumbai with some upscale redevelopment projects.

Headed by a team of visionaries and dynamic leaders, Kolte-Patil has till date built
projects in multiple segments such as residential, commercial, retail, IT parks, and
integrated townships. The long standing mission of the company is to dedicate itself to
create spaces that blend in with the surroundings and exude vitality and aesthetic
appeal, making the spaces present-perfect and future-proof. The core values of the
company honesty, innovation, excellence eco-friendliness, technology, sustainability,
value and commitment to time schedules are perfectly aligned with the living and
working spaces it builds.

History
The Company was setup as a partnership firm in 1989 and later incorporated under the
name Kolte-Patil Developers Ltd. (KPDL) on 25 November 1991,by Mr. Rajesh Patil,
Mr. Naresh Patil and Mr. Milind Kolte

Projects classification
Residential or Township

Commercial or Office spaces

Retail or shop

Overview
 Dominant player in the Pune real estate market
1. Undisputed leader in the Pune market with consistent market share ranging
between 8-10%
2. Well-reputed, trusted name with proven execution capabilities
3. Successfully delivered over 7 msf. of area in Pune
 Healthy Project Pipeline
1. 51.7 msf. of saleable area spread across Pune, Mumbai and Bengaluru
22
 2. 30 ongoing and forthcoming projects with a total saleable area of 27.4 msf.
3. Future development potential of 24.3 msf.
 judicious and structured land acquisition
1. Equity led growth supported by JDAs, JVs and PE partnerships (ICICI
Ventures, Portman Holdings, IL&FS)
2. PE investments till date are plain vanilla equity with no guaranteed IRR
structure
 Expanding presence in Bengaluru
1. Expanding presence in high demand Bengaluru market
2. 19 year presence and strong 150 member team catering to Bengaluru market
3. Increased contribution expected going forward with 2.4 msf. of
ongoing/forthcoming projects
 Foray into Mumbai market
1. Unlocking potential of society redevelopment space as an entry strategy
2. Current portfolio includes three projects in high value locations with a saleable
area of 0.3 msf.
3. To aid margin expansion and reduce working capital cycle going forward
 Supply flexibility based on demand
1. Current focus on residential markets with only 10% commercial market
exposure
2. Creating availability at every point of price spectrum
 Advanced Construction Technology
1. Early adopters of new construction technology
2. Providing strong delivery capabilities
3. Superior quality of construction
 Robust Balance Sheet Position
1. Conservative approach to debt financing based on project execution and cash
flow visibility
2. Net debt-equity ratio at 0.2x as on 31st December, 2013
3. Assigned “CRISIL A+/Stable”' rating to the long-term bank facilities and non-
convertible debentures – highest rated listed, pure-play residential player in
the CRISIL universe
 Strong Operational & Financial Performance
1. 2.6 msf. of new area sales in FY13 with on time construction and delivery of 4
msf. expected in the current fiscal year
2. Revenue up 192% YoY to Rs. 727.5 crore and PAT growth of 216% YoY to
Rs. 107.4 crore in FY13
 Strong Corporate Governance
1. Deloitte and KPMG as statutory and internal auditors
2. Board constitution with 50% Independent Directors
3. Stated dividend policy of distributing 15-25% of annual profits
23
  Increasing organizational competences
1. Improving process orientation – implementing ERP, defining SOP‟s
2. Creating robust knowledge management mechanisms
3. Expanding top/middle management layer to support next level of growth
opportunity

(msf= thousand square feet)

24
 6.

RESEARCH DESIGN

INTRODUCTION:

Every stock available in the markets has a value called market price, which is the
indicator of the company’s performance. According to fundamental analysis we will try
to find the intrinsic value of a particular stock, which is the true value of the stock, based
on which investment arguments take place.

STATEMENT OF PROBLEM:

25
 Every asset, financial as well as real, has value. The key to successfully
investing in and managing these assets lies in understanding not only what the value is,
but the sources of the value. Any asset at can be valued but some assets are easier to
value than others, and the details of the valuation will vary from case to case. Thus, the
valuation of a share of a real estate property will require different information and follow
a different format from the valuation of a publicly traded stock. What is surprising;
however, is not the difference in valuation techniques across assets, but the degree of
similarity in basic principles. There is undeniably uncertainty associated with valuation.
Often the

Uncertainty comes from the asset being valued, although the valuation model may add
to that ascertained.

A postulate of sound investing is that an investor does not pay more for asset
than it’s worth. This statement may seem logical and obvious as financial assets are
acquired for the cash flows expected from owning them, which implies that the price that
is paid for any asset should reflect the cash flows it is expected to generate.

The problem in valuation is not that there are not enough models to value an
asset; it is that there are too many. Choosing the right model to use in valuation is as
critical to arriving at a reasonable value as understanding how to use the model.
Analysts use a wide variety of models from simple to the sophisticated. These models
often make different assumptions about pricing, but they do share some common
characteristics so in the study we tried to use price-earnings multiples and discounted
cash flow models of valuation.

OBJECTIVES OF THE STUDY:

 To understand the macroeconomic variables those will an impact on the company

progress.
 To study the various trends, opportunities, challenges of the industry in which the
company operates.
 To understand the various policies of the company those have impact on the
financial performance of the company.
26
 To understand the various investment valuation models that can be used.
 To select the appropriate model that suits the stock.
 To recommend whether to buy, hold or sell the stock based on the analysis.

SCOPE OF THE STUDY:

The study basically tries to identify the intrinsic value of the company by using
the published financial details of the company. The study is restricted to one particular
company in the sector. The study also includes testing the intrinsic value of the
company.

RESEARCH METHODOLOGY:

Type of research:

Research design is the conceptual structure within which research is conducted.

It constitutes the blue print for the collection, measurement, and analysis of data. The
type of research adopted for the study is descriptive research as the research does not
require any manipulation of variables and does not establish causal relationship
between events; it just simply describes the variables.

Sources of data:

Primary data

Those are the data that are obtained by a study specially designed to fulfill the
data needs of the problem. Meeting the company professionals personally collected the
information necessary for the study.

Secondary data
27
 The sources of secondary data for solve the problems are:-

Company Annual Report

HDFC securities institutional research

Internet-websites

Period of study

The period of the study is 5 years i.e. (2011-2015). Company 4 years data has been
taken for the analysis.

Tools

These are the most popular tools of fundamental analysis. They focus on earnings,
growth, and value in the market.

Earnings per Share – EPS

Price to Earnings Ratio – P/E

Projected Earnings Growth – PEG

Price to Sales – P/S

Price to Book – P/B

Dividend Payout Ratio

Dividend Yield

Book Value

Ratio Analysis

Liquid ratio

28
 7.DATA ANALYSIS
The process of evaluating data using analytical and logical reasoning to examine each
component of the data provided. This form of analysis is just one of the many steps
that must be completed when conducting a research experiment. Data from various
sources is gathered, reviewed, and then analyzed to form some sort of finding or
conclusion. There are a variety of specific data analysis method, some of which
include data mining, text analytics, business intelligence, and data visualizations

Data can be of several types

Quantitative data is a number

Qualitative data is a pass/fail or the presence of a characteristic

Quantitative data is data measured or identified on a numerical scale. Numerical data

29
can be analyzed using statistical methods, and results can be displayed using tables,
charts, histograms and graphs.

The term qualitative data is used to describe certain types of information. This is almost
the converse of quantitative data, in which items are more precisely described as data
in terms of quantity and in which numerical values are used. However, data originally
obtained as qualitative information about individual items may give rise to quantitative
data if they are summarized by means of counts.

Qualitative data described items in terms of some quality or categorization that may be
'informal' or may use relatively ill-defined characteristics such as warmth and flavor.
However, qualitative data can include well-defined aspects such as gender, nationality
or commodity type.

BALANCESHEET
Consolidated Balance Sheet of Kolte-Patil
------------------- in Rs. Cr. -------------------
Developers

Mar '15 Mar '14 Mar '13 Mar '12 Mar '11

12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds
Total Share Capital 75.77 75.77 75.77 75.77 75.77
Equity Share Capital 75.77 75.77 75.77 75.77 75.77
Share Application Money 0.00 0.00 0.00 12.95 0.00
Preference Share Capital 0.00 0.00 0.00 0.00 0.00

30
Init. Contribution Settler 0.00 0.00 0.00 0.00 0.00
Preference Share Application Money 0.00 0.00 0.00 0.00 0.00
Employee Stock Opiton 0.00 0.00 0.00 0.00 0.00
Reserves 765.74 729.75 641.47 632.36 623.74
Networth 841.51 805.52 717.24 721.08 699.51
Secured Loans 241.66 229.92 102.79 85.99 69.67
Unsecured Loans 47.77 47.50 51.27 103.02 89.96
Total Debt 289.43 277.42 154.06 189.01 159.63
Minority Interest 192.56 174.02 149.11 148.18 134.76
Policy Holders Funds 0.00 0.00 0.00 0.00 0.00
Group Share in Joint Venture 0.00 0.00 0.00 0.00 0.00
1,323.5
Total Liabilities 1,256.96 1,020.41 1,058.27 993.90
0
Mar '15 Mar '14 Mar '13 Mar '12 Mar '11

12 mths 12 mths 12 mths 12 mths 12 mths

Application Of Funds
Gross Block 146.75 129.96 91.61 61.78 64.57
Less: Revaluation Reserves 0.00 0.00 0.00 0.00 0.00
Less: Accum. Depreciation 27.81 17.88 11.97 7.00 5.23
Net Block 118.94 112.08 79.64 54.78 59.34
Capital Work in Progress 10.91 14.98 5.49 1.17 3.68
Investments 6.10 15.41 39.41 72.53 78.48
1,467.1
Inventories 1,269.40 982.56 989.17 873.80
9
Sundry Debtors 100.89 84.59 76.24 44.31 37.46
Cash and Bank Balance 40.50 69.57 112.15 46.42 41.24
1,608.5
Total Current Assets 1,423.56 1,170.95 1,079.90 952.50
8
Loans and Advances 398.76 306.67 295.43 282.70 220.31
Fixed Deposits 0.00 0.00 0.00 0.00 0.00
2,007.3
Total CA, Loans & Advances 1,730.23 1,466.38 1,362.60 1,172.81
4
Deferred Credit 0.00 0.00 0.00 0.00 0.00
Current Liabilities 686.35 555.91 359.51 264.86 150.14
Provisions 133.44 59.83 210.99 167.95 170.25
Total CL & Provisions 819.79 615.74 570.50 432.81 320.39
1,187.5
Net Current Assets 1,114.49 895.88 929.79 852.42
5
Minority Interest 0.00 0.00 0.00 0.00 0.00
Group Share in Joint Venture 0.00 0.00 0.00 0.00 0.00
Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.00
1,323.5
Total Assets 1,256.96 1,020.42 1,058.27 993.92
0

Contingent Liabilities 255.68 201.45 203.01 301.19 226.32

31
Book Value (Rs) 111.05 106.30 94.65 93.45 92.31

PROFIT AND LOSS ACCOUNT

Consolidated Profit & Loss account of Kolte- ------------------- in Rs. Cr. -------------------
Patil Developers
Mar
Mar '14 Mar '13 Mar '12 Mar '11
'15

12
12 mths 12 mths 12 mths 12 mths
mths

Income

696.6
Sales Turnover 764.22 727.48 249.24 202.80
4

Excise Duty 0.00 0.00 0.00 0.00 0.00

696.6
Net Sales 764.22 727.48 249.24 202.80
4

Other Income 11.71 15.16 36.53 10.46 6.22

Stock Adjustments 0.00 0.00 0.00 0.00 0.00

708.3
Total Income 779.38 764.01 259.70 209.02
5

Expenditure

Raw Materials 0.00 0.00 0.00 0.00 0.00

Power & Fuel Cost 0.00 0.00 0.00 0.00 0.00

Employee Cost 42.83 29.22 27.87 18.06 16.32

379.8
Other Manufacturing Expenses 461.73 460.02 129.87 79.38
0

Selling and Admin Expenses 0.00 0.00 0.00 0.00 0.00

Miscellaneous Expenses 69.64 52.45 47.53 28.93 17.74

Preoperative Exp Capitalised 0.00 0.00 0.00 0.00 0.00

32
 492.2
Total Expenses 543.40 535.42 176.86 113.44
7

Mar
Mar '14 Mar '13 Mar '12 Mar '11
'15

12
12 mths 12 mths 12 mths 12 mths
mths

204.3
Operating Profit 220.82 192.06 72.38 89.36
7

216.0
PBDIT 235.98 228.59 82.84 95.58
8

Interest 43.96 45.67 36.35 26.25 6.83

172.1
PBDT 190.31 192.24 56.59 88.75
2

Depreciation 10.06 7.08 5.87 2.11 1.74

Other Written Off 0.00 0.00 0.00 4.67 4.79

162.0
Profit Before Tax 183.23 186.37 49.81 82.22
6

Extra-ordinary items 0.00 0.00 0.00 0.00 0.00

162.0
PBT (Post Extra-ord Items) 183.23 186.37 49.81 82.22
6

Tax 60.21 66.32 62.46 14.05 29.76

101.8
Reported Net Profit 116.91 123.91 35.76 52.47
5

Minority Interest 36.53 24.87 16.47 1.68 4.56

Share Of P/L Of Associates 0.00 0.00 0.00 0.00 0.00

Net P/L After Minority Interest & Share Of

65.32 92.04 107.44 34.08 47.91
Associates

492.2
Total Value Addition 543.40 535.42 176.85 113.44
7

33
Preference Dividend 0.00 0.00 0.00 0.00 0.00

Equity Dividend 22.16 24.79 3.35 12.12 12.12

Corporate Dividend Tax 6.47 5.72 0.76 1.97 1.97

Per share data (annualised)

757.7
Shares in issue (lakhs) 757.75 757.75 757.75 757.75
5

Earning Per Share (Rs) 13.44 15.43 16.35 4.72 6.92

Equity Dividend (%) 0.00 0.00 0.00 0.00 0.00

111.0
Book Value (Rs) 106.30 94.65 93.45 92.31
5

CASH FLOW
Consolidated Cash Flow of Kolte-Patil ------------------- in Rs. Cr. -------------------
Developers
Mar '15 Mar '14 Mar '13 Mar '12 Mar '11

12 mths 12 mths 12 mths 12 mths 12 mths

Net Profit Before Tax 162.06 183.23 186.37 34.08 82.23

Net Cash From Operating Activities 34.36 -116.99 208.22 15.40 177.09

Net Cash (used in)/from

0.45 -23.62 -45.84 2.74 -47.65
Investing Activities

Net Cash (used in)/from Financing Activities -53.36 97.96 -96.65 -12.95 -119.84

Net (decrease)/increase In Cash and Cash

-18.55 -42.65 65.73 5.19 9.61
Equivalents

Opening Cash & Cash Equivalents 56.23 111.81 46.42 41.24 31.63

Closing Cash & Cash Equivalents 37.68 69.16 112.15 46.42 41.24

34
KEY FINANCIAL RATIO
Consolidated Key Financial Ratios of Kolte- ------------------- in Rs. Cr. -------------------
Patil Developers

Mar
Mar '14 Mar '13 Mar '12 Mar '11
'15

Investment Valuation Ratios

Face Value 10.00 10.00 10.00 10.00 10.00

Dividend Per Share -- -- -- -- --

Operating Profit Per Share (Rs) 26.97 29.14 25.35 9.55 11.79

Net Operating Profit Per Share (Rs) 91.94 100.85 96.01 32.89 26.76

Free Reserves Per Share (Rs) -- -- -- -- --

Bonus in Equity Capital 28.90 28.90 28.90 28.90 28.90

Profitability Ratios

Operating Profit Margin(%) 29.33 28.89 26.40 29.04 44.06

Profit Before Interest And Tax Margin(%) 27.43 27.42 24.36 27.05 41.92

Gross Profit Margin(%) 27.89 27.96 25.59 28.19 43.20

Cash Profit Margin(%) 15.79 15.90 16.98 16.38 28.22

Adjusted Cash Margin(%) 15.79 15.90 16.98 16.38 28.22

Net Profit Margin(%) 9.37 12.04 14.76 13.67 23.62

Adjusted Net Profit Margin(%) 9.22 11.80 14.06 13.12 22.92

Return On Capital Employed(%) 18.21 21.13 25.56 8.35 10.36

Return On Net Worth(%) 7.76 11.42 14.97 4.81 6.84

35
Adjusted Return on Net Worth(%) 12.10 14.51 17.27 5.05 7.50

111.0
Return on Assets Excluding Revaluations 106.30 94.65 93.45 92.31
5

111.0
Return on Assets Including Revaluations 106.30 94.65 93.45 92.31
5

Return on Long Term Funds(%) 18.88 21.60 27.15 9.11 11.11

Liquidity And Solvency Ratios

Current Ratio 2.26 2.65 2.20 2.64 2.96

Quick Ratio 0.65 0.74 0.84 0.85 0.93

Debt Equity Ratio 0.34 0.34 0.21 0.27 0.23

Long Term Debt Equity Ratio 0.30 0.32 0.14 0.18 0.14

Debt Coverage Ratios

Interest Cover 4.69 5.01 6.13 2.90 13.04

Total Debt to Owners Fund 0.34 0.34 0.21 0.27 0.23

Financial Charges Coverage Ratio 4.92 5.17 6.29 3.16 14.00

Financial Charges Coverage Ratio Post Tax 2.71 3.17 4.12 2.56 8.97

Management Efficiency Ratios

Inventory Turnover Ratio 0.47 0.60 0.74 0.25 0.23

Debtors Turnover Ratio 7.51 9.50 12.07 6.10 4.74

Investments Turnover Ratio 0.47 0.60 0.74 0.25 0.23

Fixed Assets Turnover Ratio 6.02 7.16 8.03 4.14 3.19

Total Assets Turnover Ratio 0.54 0.62 0.71 0.24 0.20

Asset Turnover Ratio 0.54 0.67 0.70 0.24 0.21

Average Raw Material Holding -- -- -- -- --

Average Finished Goods Held -- -- -- -- --

605.8
Number of Days In Working Capital 529.43 429.71 1,303.67 1,512.78
3

Profit & Loss Account Ratios

36
Material Cost Composition -- -- -- -- --

Imported Composition of Raw Materials

-- -- -- -- --
Consumed

Selling Distribution Cost Composition -- -- -- -- --

Expenses as Composition of Total Sales -- -- -- -- --

Cash Flow Indicator Ratios

Dividend Payout Ratio Net Profit 43.83 33.14 3.82 41.34 29.41

Dividend Payout Ratio Cash Profit 37.98 30.78 3.63 34.48 25.88

Earning Retention Ratio 71.90 73.91 96.68 60.60 73.15

Cash Earning Retention Ratio 74.42 75.40 96.83 66.88 76.12

AdjustedCash Flow Times 2.59 2.24 1.19 4.44 2.71

37
 8.ECONOMIC ANALYSIS
The Economy of India is the seventh-largest in the world by nominal GDP and the third-
largest by purchasing power parity (PPP).The country classified as newly industrialized
country, one of the G-20 major economies, a member of BRICS and a developing
economy with approximately 7% average growth rate for the last two decades. India's
economy became the world's fastest growing major economy from the last quarter of
2014, replacing China's.
The long-term growth prospective of the Indian economy is moderately positive due to
its young population, corresponding low dependency ratio, healthy savings and
investment rates, and increasing integration into the global economy, The Indian
economy has the potential to become the world's 3rd-largest economy by the next
decade, and one of the largest economies by mid-century. And the outlook for short-
term growth is also good as according to the IMF, the Indian economy is the "bright
spot" in the global landscape. India also topped the World Bank’s growth outlook for
2015-16 for the first time with the economy having grown 7.3% in 2014-15 and expected
to grow 7.5-8.3% in 2015-16.
India has the one of fastest growing service sectors in the world with annual growth rate
of above 9% since 2001, which contributed to 57% of GDP in 2012-13. India has
capitalized its economy based on its large educated English-speaking population to
become a major exporter of IT services, BPO services, and software services with
$167.0 billion worth of service exports in 2013-14. It is also the fastest-growing part of
the economy. The IT industry continues to be the largest private sector employer in
India. India is also the fourth largest start-up hub in the world with over 3,100 technology
start-ups in 2014-15 The agricultural sector is the largest employer in India's economy
but contributes to a declining share of its GDP (17% in 2013-14). India ranks
second worldwide in farm output. The Industry sector has held a constant share of its
economic contribution(26% of GDP in 2013-14). The Indian auto industry is one of the
largest in the world with an annual production of 21.48 million vehicles in FY 2013-
14. India has $600 billion worth of retail market in 2015 and one of world's fastest
growing E-Commerce markets.
India's two major stock exchanges, Bombay Stock Exchange and National Stock
Exchange of India, had a market capitalization of US$1.71 trillion and US$1.68 trillion
respectively as of Feb 2015, which ranks 11th & 12 largest in the world respectively
38
according to the World Federation of Exchanges. India also home to world's third largest
Billionaires pool with 97 billionaires in 2014 and fourth largest number of ultra-high-net-
worth households that have more than 100 million dollars.
India is a member of the Commonwealth of Nations,the South Asian Association for
Regional Cooperation,the G20,the International Monetary Fund,the World Bank,
the World Trade Organization, the Asian Infrastructure Investment Bank, the United
Nations and the New Development BRICS Bank.

GDP (gross domestic product)

The gross domestic product (GDP) measures of national income and output for a given
country's economy. The gross domestic product (GDP) is equal to the total expenditures
for all final goods and services produced within the country in a stipulated period of
time.
The Gross Domestic Product (GDP) in India was worth 2066.90 billion US dollars in
2014. The GDP value of India represents 3.33 percent of the world economy. GDP in
India averaged 550.27 USD Billion from 1970 until 2014, reaching an all time high of
2066.90 USD Billion in 2014 and a record low of 63.50 USD Billion in 1970. GDP in
India is reported by the World Bank Group.

INFLATION RATE
In 2013, the consumer price index replaced the wholesale price index (WPI) as a main
measure of inflation. In India, the most important category in the consumer price index
39
is Food and beverages (45.86 percent of total weight). Housing accounts for 10 percent;
Transport and communication for 8.6 percent; Fuel and light for 6.84 percent; Clothing
and footwear for 6.5 percent; Medical care for 5.9 percent and education for 4.5
percent. Consumer price changes in India can be very volatile due to dependence on
energy imports, the uncertain impact of monsoon rains on its large farm sector,
difficulties transporting food items to market because of its poor roads and infrastructure
and high fiscal deficit.
The inflation rate in India was recorded at 3.78 percent in July of 2015. Inflation Rate in
India averaged 8.33 percent from 2012 until 2015, reaching an all time high of 11.16
percent in November of 2013 and a record low of 3.78 percent in July of 2015. Inflation
Rate in India is reported by the Ministry of Statistics and Programmed Implementation
(MOSPI), India.

INTEREST RATES
In India, interest rate decisions are taken by the Reserve Bank of India's Central Board
of Directors. The official interest rate is the benchmark repurchase rate. In 2014, the
primary objective of the RBI monetary policy became price stability, giving less
importance to government's borrowing, the stability of the rupee exchange rate and the
need to protect exports. In February 2015, the government and the central bank agreed
to set a consumer inflation target of 4 percent, with a band of plus or minus 2
percentage points, from the financial year ending in March 2017.

The benchmark interest rate in India was last recorded at 7.25 percent. Interest Rate in
India averaged 6.71 percent from 2000 until 2015, reaching an all time high of 14.50
40
percent in August of 2000 and a record low of 4.25 percent in April of 2009. Interest
Rate in India is reported by the Reserve Bank of India.

41
 9.RATIO ANALYSIS
MEANING OF RATIO:-

A ratio is only a comparison of the numerator with the denominator. The

term ratio reefers to the numerical or quantitative relationship between two figures and
obtained by dividing the former by the latter.

Ratio analysis is an important and age old technique of financial analysis. The data
given in financial statements ratio are relative form of financial data and very
useful techniques to check upon the efficiency of a firm. Some ratioindicates the trend
or progress or downfall of the firm

IMPORTANCE OF RATIO:

Ratio analysis of firm’s financial statement is of interest to a number

of parties mainly. Shareholders, creditor, financial executives etc. shareholders are
interested with earning capacity of the firm: creditors are interested in
knowingthe ability of firm to meet financial obligation and financial executi
ves are concerned with evolving analytical tools that will measures and
compare costs, efficiency liquidity and profitability with a view to making
intelligent decisions.

42
 1. OPERATING PROFIT RATIO
PERCENTA
YEAR GE
MAR'1
2 29.04
MAR'1
3 26.4
MAR'1
4 28.89
MAR'1
5 29.33

30

29
29.04

28
PERCENTAGE
27

26

25

24
MAR'12 MAR'13 MAR'14 MAR'15

INTERPRETATION: Operating profit ratios are not having more difference in

March’12 to march’15. But comparing to other company it is very high. I t a l s o
shows that firm’s cost of operation is low and operating in very
g o o d s i t u a t i o n . I t r e f l e c t s a n e f f i c i e n t management of a company. Firm’s
position is good.

43
2. GROSS PROFIT RATIO:

PERCENTA
YEAR GE
MAR'1
2 28.19
MAR'1
3 25.59
MAR'1
4 27.96
MAR'1
5 27.89

28.5

28

27.5

27

26.5
PERCENTAGE
26

25.5

25

24.5

24
MAR'12 MAR'13 MAR'14 MAR'15

INTERPRETATION: Gross profit ratio shows the relationship between

gross profit and sales . Here gross profit ratio slightly decreased from year 12 to
13.it indicates that firm’s selling is same .it also may continue to grow  in
future. It  suggests that selling price is competitive and earning good profit
by selling larger volume. So it shows that firm’s position is good

44
 3. NET PROFIT:
PERCENTA
YEAR GE
MAR'1
2 13.67
MAR'1
3 14.76
MAR'1
4 12.04
MAR'1
5 9.37

PERCENTAGE
16

14

12

10
PERCENTAGE
8

0
MAR'12 MAR'13 MAR'14 MAR'15

INTERPRETATION: Net profit ratio has been decreased by near 50% March 12 to
March 13. so it indicates that net profit decreased, which indicates that firm is not able
to survive in the face of raising cost of production and falling prices. so it indicates firm
is running in not so good position

45
 4. EARNING PER SHARE:

YEAR Rs
MAR'12 4.01
MAR'13 8.67
MAR'14 6.12
MAR'15 5.76

Rs
10
9
8
7
6
Rs
5
4
3
2
1
0
MAR'12 MAR'13 MAR'14 MAR'15

INTERPRETATION:
Earnings per share have been decreased with
6.25% compare to previous year. Here the portion of a company’s profit allocated
to each outstanding share of a common stock is low and it is bad for investors as the
returns are low. So it shows that firm’s position is not so good.

5. DIVIDEND PER SHARE:

YEAR Rs
MAR'12 1.6

46
 MAR'13 3.5
MAR'14 3.1
MAR'15 2

Rs
4

3.5

2.5
Rs
2

1.5

0.5

0
MAR'12 MAR'13 MAR'14 MAR'15

INTERPRETATION: Dividend per share has been decreased with 35%

compare to previous year. Here the portion of a company’s profit allocated to each
outstanding share of a common stock is low and it is good for investors as the returns
are low. So it shows that firm’s position is not so good.

6. BOOK VALUE PER SHARE:

YEAR Rs
MAR'12 95.3
MAR'13 100.27
MAR'14 99.56
MAR'15 102.84

47
 Rs
104

102

100

98
Rs

96

94

92

90
MAR'12 MAR'13 MAR'14 MAR'15

INTERPRETATION:
Book value of shares are increasing every year, it means the investors are growing
every year, they are investing in this stock, it indicates positive response to the
company,

7. CURRENT RATIO:
YEAR Times
MAR'12 2.64
MAR'13 2.2
MAR'14 2.65
MAR'15 2.26

48
 Times
3

2.5

2
Times
1.5

0.5

0
MAR'12 MAR'13 MAR'14 MAR'15

INTERPRETATION: Current ratio is 2.26 which is near about ideal criteria 2:1.it
reflects that company can easily able to meet short term obligation as a measure of
current financial liquidity.

8. QUICK RATIO:
YEAR Times
MAR'12 0.85
MAR'13 0.84
MAR'14 0.74
MAR'15 0.65

49
 Times
0.9

0.8

0.7

0.6

0.5 Times

0.4

0.3

0.2

0.1

0
MAR'12 MAR'13 MAR'14 MAR'15

INTERPRETATION: An ideal criterion to test liquidity of a firm is 1:1 and

here quick ratio lies near about this ratio in 2012, but in the next year its decreasing
so we have to increase quick assets or decrease liability. So it indicates to liquidity
position of a firm is near about satisfactory.

9. INVENTORY TURNOVER RATIO:

YEAR Times
MAR'12 0.25
MAR'13 0.74
MAR'14 0.6
MAR'15 0.47

50
 Times
0.8

0.7

0.6

0.5
Times
0.4

0.3

0.2

0.1

0
MAR'12 MAR'13 MAR'14 MAR'15

INTERPRETATION: I T O R o f t h e c o m p a n y i s i n c r e a s i n g w h i c h
s h o w s i n   I n v e n t o r y holding period. It also reflects good sales policy which
indicates good progress of the company. So firm is in very good condition currently.

10. DEBT EQUITY RATIO:

year Times
MAR'12 0.27
MAR'13 0.21
MAR'14 0.34
MAR'15 0.34

51
 Times
0.4

0.35

0.3

0.25
Times
0.2

0.15

0.1

0.05

0
MAR'12 MAR'13 MAR'14 MAR'15

INTERPRETATION: I t i s u s e d t o m e a s u r e l o n g - t e r m s o l v e n c y
position of a concern. Here debt/equity ratio is increasing which
i s n o t g o o d f o r a c o m p a n y . I t a l s o s h o w s t h a t company’s policies are not
sound.

11. DIVIDEND PAYOUT RATIO:

YEAR TIMES
MAR'12 34.48
MAR'13 3.63
MAR'14 30.78
MAR'15 37.98

52
 TIMES
40

35

30

25
TIMES
20

15

10

0
MAR'12 MAR'13 MAR'14 MAR'15

INTERPRETATION:
Dividend payout ratio has been increased by 23.39% which shows that
percentage of income has been issued to the owner at the end of the year. Here it has
been increasing with 23.39% that shows good returns for  the investors. So
firm is able to meet investors expectation.

12. RETURN ON LONG TERM FUNDS:

YEAR PERCENTAG
E
MAR'12 9.11
MAR'13 27.15
MAR'14 21.6
MAR'15 18.88
INTERPRETATION: Company’s return on
long term funds has been increased with 5 1 . 7 4 % f r o m 1 2 t o 1 4 . i t
s h o w s t h a t c o m p a n y i s g e t t i n g h i g h r e t u r n o n t o t a l capital employed. It
shows that firm is operating in very good condition.

53
 13. P/E RATIO:

YEAR Times
MAR'13 11.565167
MAR'14 16.267974
MAR'15 17.549488

Times
20
18
16
14
12
Times
10
8
6
4
2
0
MAR'13 MAR'14 MAR'15

INTERPRETATION: Company’s price earnings ratio has been increasing from the
previous year so it shows that its market price compared to earnings per share is high
so it is good sign for the firm. So firm is operating in very good condition.

TREND ANALYSIS

NET SALES:
YEAR NETSALE PERCEN

54
 S TAGE
MAR'12 249.24 100
MAR'13 727.48 291.87931
MAR'14 764.22 306.62013
MAR'15 696.54 279.46558

900

800

700

600

500
NETSALES
400 PERCENTAGE

300

200

100

0
MAR'12 MAR'13 MAR'14 MAR'15

55
10. LIMITATIONS OF THE PROJECT

1. As the data available to me has been taken from the secondary sources (like
internet). It is not sure that collected data are accurate and complete.
2. Because of the time limitations, it may be possible that some important data are
left out.
3. As the time available was very less, so fundamental analysis has been done for
four years.
4. Today’s stock market is totally running on the investors perception so the
conclusion derived on the basis if fundamental analysis would not viable in long
run.

5. The study was confined only to one particular sector.

6. The study was done for a short period of time, which might not hold true over a
long period of time.

7. The study assumes no changes in the tax rates in the country.

8. As the scope is defined by the researcher it restricts the number of variables
which Influence the industry.

56
11. FINDINGS

1. Kolte-Patil Developers has also very good condition so far as liquidity is

concerned. So it reflects that the firm position is good.
2. Kolte-Patil Developers has good financial liquidity. So it able to meet current
financial requirement.
3. Kolte-Patil Developers P/E ratio is high so it shows good earnings and in very
good position.
4. Kolte-Patil Developers Debt to Equity ratio is low as compared to other real
estate companies.
5. Kolte-Patil Developers I T O R o f t h e c o m p a n y i s i n c r e a s i n g w h i c h
reflects good sales policy which indicates good progress of the company.

57
 12. CONCLUSION

1. Kolte-Patil Developers has stable earnings per share so it indicates good sign for
investors.
2. Kolte-Patil Developers has also good condition so far as liquidity is concerned.
So it reflects that the firm position is good.
3. Kolte-Patil Developers has good financial liquidity. So it able to meet current
financial requirement.
4. Kolte-Patil Developers’s P/E ratio is high so it shows good earnings and in very
good position
5. Current market price (C0) of the share is lower than Expected price of Share
(P0).Here share price is undervalued so investors are advised to buy the share of
the company

58
 13. BIBLIOGRAPHY

 WEBSITES

 www.bseindia.com
 www.nseindia.com
 www.koltepatil.com
 www.moneycontrol.com
 www.wikipedia.com
 www.investopedia.com
 www.tradingeconmics.com

 NEWSPAPERS

 The Economic times

 MINT
 The Hindu Business Line

59
60