“A STUDY ON FUNDAMENTAL AND TECHNICAL ANALYSIS OF

COMPANIES WITH SPECIAL REFERENCE TO RETAIL AND

AUTOMOBILE SECTOR “

Finance Specialisation Project Report

Submitted in Partial fulfilment for the award of the degree of

Master of Management Studies (MMS)

(Under University of Mumbai)

Submitted by

KAJOL NARESH JAIN

Roll No- M1820033

Under the Guidance of

CA. Jai Kotecha

(2018-20)
 CERTIFICATE

This is to certify that project titled “A Study on Fundamental And Technical

Analysis of Companies with special reference to Automobile and Retail
Sector” is successfully completed by MS. KAJOL NARESH JAIN during the IV
semester, in partial fulfilment of the Master's Degree in Management Studies
recognized by the University of Mumbai for academic year 2018-20 through
Thakur Institute of Management Studies & Research, Mumbai.

This project work is original and not submitted earlier for the award of any degree
diploma or associate ship of any other university/Institution.

Name:

Date: (Signature of Guide)

 DECLARATION

I hereby declare that this project report titled “A Study on Fundamental And
Technical Analysis of Companies with special reference to Automobile and
Retail Sector “submitted by me to the University of Mumbai through Thakur
Institute of Management Studies and Research, Mumbai is a bona-fide work
undertaken by me and it is not submitted to any other university or institution for the
award of any degree diploma/certificate or published any time before.

Name:

Roll No: (Signature of the Student)

 ACKNOWLEDGEMENT

It gives me an immense pleasure in submitting this Project Report titled “A Study

on Fundamental and Technical Analysis of Companies with special reference
to Automobile and Retail Sector”. I take this opportunity to convey my profound
and sincere gratitude to CA. Jai Kotecha for his conceptual and moral support,
guidance and substantial feedback throughout the entire process. Further, for guiding
me in this project & also aligning my efforts with the objective of the project and
helping me to understand the execution of the project. He truly deserves much of
the credit for improvements in this project. The valuable suggestions were worth
implementing and his unconditional welcome can be taken as example for others to
be.

Sincere thanks to our Director Sir Pankaj Ramesh Natu who has provided us with
invaluable direction and encouragement.

(Name of the Student)

KAJOL NARESH JAIN

 EXECUTIVE SUMMARY
Technical Analysis can be defined as one of the types of financial analysis that interprets
market data in form of charts and patterns to identify possible entry and exit points for the
profitable trade as well as to save the trader from the losses.
This project is made in order to give an insight of how technical analysis is used in a nutshell
along with the basic patterns and reversal patterns, however, this project majorly focuses on
the application of technical indicators and patterns on two major sectors i.e., RETAIL
SECTOR & AUTOMOBILE SECTOR with an objective to understand how trends are
identified and suitable entry and exit points are found to make a profitable trade.
On the other hand there is also an analysis which plays a major role in investors as well as
traders for short term and long terms i.e., Fundamental analysis.
The fundamental analysis can be defined as a measurement for any stock’s intrinsic value. If
someone is trading or investing in stock market, evaluation of fundamentals of the company
is must. Furthermore, to make money in the market it is very important for any investor to
consider the fundamentals of the company.
If he/she ignores this facts then they may eventually end up making losses in the market. The
big brokerage houses and long term investor take their position in any stock based on such
analysis. The investors or traders in most cases want to enter during the bull run of the any
stock.
In simple words, fundamental analysis is just the finding the right valuation of stock based
on the financial and economic analysis of the company. With correct fundamental analysis
of stocks, one can predict the price movement of stocks. In this project the main focus is on
the fundamental analysis of the Two Major Sectors of the country i.e. THE RETAIL
SECTOR AND THE AUTOMOBILE SECTOR.
Commodities market, Futures and options, Forex (foreign exchange) markets to identify
trends.
LIST OF ABBREVIATIONS

GDP: Gross Domestic Product

EBITDA: Earnings before interest tax depreciation and amortization
EBIT: Earnings before interest and tax
EBT: Earning before tax
PAT: Profit after tax EPS: Earning per share
DPS: Dividend per share
ROA: Return on assets ROE: Return on equity
P/E Ratio: Price to earnings ratio
P/BV Ratio: Price to book value ratio
EV: Enterprise value
M-Cap: Market capitalization
ROCE: Return on capital employed
FY: Financial Year (Indian)
SSSG: Same Store Sales Growth
P/E: Price to Earnings Ratio
P/BV: Price to Book value
 TABLE OF CONTENTS

Sr No Particulars Page No

1 Research Methodology 1

1.1 Research Objective 1

1.2 Statement Of Problem 1

1.3 Scope And Limitation 1

1.4 Methodology 2

2 Review of Literature 3

3 Global Economic Overview 7

4 Indian Economic Overview 14

5 Swot Analysis of both the sector 27

6 Introduction 31

6.1 Technical Analysis 31

6.2 Fundamental Analysis 35

7 Retail Sector(Analysis Of Companies) 36

7.1 Avenue Supermart 37

7.2 Future Retail 43

7.3 Shoppers Stop 49

7.4 Trent 56

7.5 Aditya Birla Fashion 61

 8 Automobile Sector(Analysis Of Companies) 68

8.1 Maruti Suzuki 69

8.2 Tata Motors 77

8.3 Ashok Leyland 84

8.4 Mahindra & Mahindra 91

9 Impact of Coronavirus on both the sector 96

10 Conclusion 97

11 Recommendations 98

12 Learning Outcome 99

13 Findings 100

14 Bibliography 102

LIST OF FIGURES

SR. NO. PARTICULARS PAGE

NO.

Figure 1 Global growth % change Y-o-Y basis 8

Figure 2 US – China trade war effects 9
Figure 3 Global retail development index 2017 10
Figure 4 Smart phone penetration by country (Internet Retailing) 11
Figure 5 Reduction in auto production amide the coronavirus 12
Figure 6 Indian economy overview 14
Figure 7 India’s growth improvement 17
Figure 8 Growth overview of Retail Industry in India 21
Figure 9 India’s retail stock market performance 36
Figure 10 Ownership of Avenue Supermart 36
LIST OF FIGURES (CHARTS)

SR. NO. PARTICULARS PAGE

NO.

Figure 1 Chart Of Avenue Supermart 38

Figure 2 Chart Of Future Retail 45
Figure 3 Chart Of Shoppers Stop 51
Figure 4 Chart Of Trent 57
Figure 5 Chart Of Aditya Birla Fashion 62
Figure 6 Chart Of Maruti Suzuki 75
Figure 7 Chart Of Tata Motors 82
Figure 8 Chart Of Ashok Leyland 89
Figure 9 Chart Of Mahindra & Mahindra 93

LIST OF TABLES (CHARTS)

SR. NO. PARTICULARS PAGE

NO.

Figure 1 Chart Of Avenue Supermart 38

Figure 2 Chart Of Future Retail 45
Figure 3 Chart Of Shoppers Stop 51
Figure 4 Chart Of Trent 57
Figure 5 Chart Of Aditya Birla Fashion 62
Figure 6 Chart Of Maruti Suzuki 75
Figure 7 Chart Of Tata Motors 82
Figure 8 Chart Of Ashok Leyland 89
Figure 9 Chart Of Mahindra & Mahindra 93
 CHAPTER 1
RESEARCH METHODOLOGY

1.1 RESEARCH OBJECTIVE

A) Technical Analysis
• To understand how technical analysis is used for financial analysis.
• To study the current trend and predict the future trend of selected sectors.
• To understand key indicators to find out entry points for profitable trades
• To analyze stock price with the help of retracement lines.

B) Fundamental Analysis
• To study the financial reports of the company. The report includes balance sheets, profit
and loss accounts, different ratios and financial information of the company.
• To study the future outlook of the company. For instance, the expected growth in demand
for its product.
• To analyze the effect of competitor on company’s business
• To understand the debt structure and analyze the debt surrounding the company.

1.2 STATEMENT OF PROBLEM

The problem here is to understand how technical analysis and fundamental analysis
along with some indicators are used to analyze retail, automobile sector along with 5
companies under each sector and also to understand various technical and fundamental
analysis indicators and their utility at different time periods.
The volatility in the market has influenced the stocks in both the sector. Investors should
be very careful and should exercise their skills, knowledge and experience for choosing
investment opportunity or else their investment will go waste.

1.3 SCOPE AND LIMITATIONS

The project entitled ‘TECHNICAL AND FUNDAMENTAL ANALYSIS OF RETAIL
SECTOR AND AUTOMOBILE SECTOR’ will enable from the investors point of view
to refer the performance of the retail sector and automobile sector., their relative growth

1
 and thereby decide on to buy or sell the following stocks.
Scope of the study is limited due to some constraints given below:
• Analysis is only a means not an end. The analysis has been done on the basis of my own
interpretations and up to my best knowledge but every analyst have his or her own
interpretations and suggestions.
• It does not take into consideration the time taken for the completion of the job.
• The non – monitory factors are not taken into consideration for the analysis.
• No personal contacts with stake holders of the company also a limitation for analyzing
the project.
• Error due to some oversight or misinterpretation.

1.4 METHODOLOGY
Research Methodology is the systematic way to solve the research problem. It is a system
of models, procedures and techniques used to find the research problem. So, the research
methodologies not only consider research methods but also consider the logic behind the
method we use in the context of our research study.
The project is on technical and fundamental research analysis of the retail & automobile
sector. Hence, study has to be done on the basis of information and news available about
the retail sector i.e. by collecting secondary data from authenticated sources. This
research has completed by doing fundamental analysis of the company. Secondary data
is collected from the internet, company website and annual report of last financial year.
However, the main source of information is annual report issued by the company and
also quarterly reports of the current and last year showing company’s performances in
current market scenario.
While preparing this project, daily stock market price of retail sector & automotive
stocks is been tracked and also the annual report of company is taken into consideration
for evaluation of company performance. Company’s website is a major source for
collecting the annual report of company. Internet is a major source of information while
preparing the project as most of the data collected is gathered from various websites.
Thus, the knowledge gained from preliminary study forms the basis for future detailed
analytical research.

2
 CHAPTER 2
REVIEW OF LITERATURE

Larke (2019) “in this paper titled “Emphasizes the rapid pace at which the East
Asian economies are developing” which integrates the opportunities for foreign
retailers. However, it is impossible to consider the region as a single whole. The extent
to which the separate economies are developed is rather diverse. Obviously, the main
focus of attention, both academically and in terms of practical retail development, has
been on China. Larke stresses the need to fill the gap in literature that exists concerning
the Indochina countries and their retail markets.

Abhijeet Singh (2018) in this paper titled “Tata Motors uses a customer
relationship management and dealer management system (CRM-DMS)” which
integrates one of the largest applications in the automobile industry, linking more than
1200 dealers across India.CRM DOS has helped Tata Motors to improve its inventory
management, tax calculation and pricing. This system has also proved to be beneficial
to dealers because it has reduced their working capital cost. India has witnessed a boom
in organized retail trade in the last 5 years. More and more players are coming into the
retail business in India to introduce new formats like malls, supermarkets, discount stores
and department stores. The retail format that has shown the maximum growth among all
is the multipurpose shopping complexes or the shopping malls

Gupta, S. (2018). Need of Retail Management in Indian Economy.

The above research paper concludes that the retailing both reflects and determines
culture. We live in a consumer society, where consumer goods are the focus of our
labour, our economy and our collective lifestyles. Retailing is the most unifying and
common force for the youth of our society and the unifying force of people wanting to
look better, feel better and have better lives, drives retailing. This force causes the
retailers to hire managers and leaders who reflect the diversity of the country. Retail
organizations require people across functional areas such as sourcing, merchandising,
product development, supply chain management, store operations and marketing. People

3
from manufacturing, finance, and human resource and info-tech backgrounds too, are
required for the management and support functions. In terms of growth opportunities,
retail probably fares much better when compared to other industries.

Michael Cusumano, Steve Kahl and Fernaando Suarez (2016) in their research
paper “A theory of services in product industries”, has concluded that in many
product oriented industries, services have become increasingly important. In case of
automobiles, many automakers generate the vast majority of their profits from a service
activity closely tied to their product activity. The automobile industry overall generates
a large portion of its profits from other product-related service activities such as
insurance and repairs. The authors argued that despite the seeming importance of
services, there is not much theory to help researchers or practitioners explain the
conditions under which services matter in product industries. The general view that
emerges from the services literature is that services tend to become important for
manufacturing firms once their industries reach a mature stage.

Ratchata Peachavanish (March 2016) examined “Stock Selection and Trading

Based on Cluster Analysis of Trend and Momentum Indicators” researcher proposes
a technique using cluster analysis to recognize a group of stocks that has the greatest
trend and momentum characteristics at a given time. This technique applies to preferred
stocks from Thai stock market.

Mrs. Vimala S. (April 2014) had made “A Study on Analysis of Equity Share Price
Behavior of the Selected Industries” researcher has studies that the securities market
is extremely volatile in nature. In spite of its volatility the investor has probability to
make comfortable profits with the help of moving average, trend line and the relative
strength Index trend lines.

Lawrence Blume, David Easley and Maureen O’hara (March 2014) in this
research paper title “Market statistics and Technical Analysis The Role of
Volume” researcher explore that role of volume and its application for technical
analysis. Researcher also shows that how volume, information and price are associated
4
with each other and shows that how volume and price are edifying and also shows that
trader who uses information contained in market statistics do better than traders who do
not.

Dr. Sreemoyee Guha Roy (2013) had examined the title “Equity Research:
Fundamental and Technical Analysis” researcher examined that investor judgment
most of the time depends upon fundamental analysis of the stock. Fundamental analysis
focus on identifying and analyzing the factors that persuade security pricing whereas
technical analysis exclusively concerned with analyzing the market behavior

Venkatesh, N. (2013). Indian retail industries market analysis: issues, challenges

and its opportunity for the 21st century. International Journal of Application or
Innovation in Engineering & Management (IJAIEM), 164-173.
India is fast becoming the retail destination of the world. India has emerged as the
fourteenth most favorable destination for international retailers, according to GRDI 2013
report. "The Indian retail is poised to become a $1.3 trillion opportunity by 2020. With
the current market size estimated at $500 billion, this translates to an additional $800
billion in the next eight years," said R.V. Kanoria, president of the Federation of Indian
Chambers of Commerce and Industry (FICCI).This research paper provides detailed
information about the growth of retailing industry in India. It examines the growing
awareness and brand consciousness among people across different socioeconomic
classes in India and how the urban and semi - urban retail markets are witnessing
significant growth. India has come a long way from its traditional stores concepts to
huge retail mall’s; with the vast middle class population and its increasing middle class
income; which are the key attractive forces for global retail giants wanting to enter into
newer markets, which in turn will help the India retail industry to grow faster. In this
paper he has explored the policy and reforms - Latest policy change on FDI on retail
industry by the government of India; the entry of foreign retailers into the market.
Further the paper will focus on the strategies, strength, issues and opportunities of retail
industry and its recent/future trends. A survey on consumers behavior on buying
preference will be undertaken in southern state of India (Chennai and Bangalore)
through questionnaires to justify the impact of foreign players into the Indian retailing
5
industry; as well a touch base on organized retail and unorganized retail stores in India
and its challenges faced by the industry in near future.

Jhamb, D., & Kiran, R. (2011). Organized retail in India-drivers facilitator and
SWOT analysis.
This research paper identifies the drivers which affect the growth of the Indian retail
market, looks at the major factors affecting the retail business and to carry out the SWOT
analysis of organized retail in India. The main objective of this research paper is to
strategically analyze the Indian retail Industry. The Indian retail sector is witnessing
tremendous growth with the changing demographics and an increase in the quality of
life of urban people. Retail Sector is the most booming sector in the Indian economy.
With a growing economy, improving income dynamics, rising awareness, and a youth-
heavy customer base, India is well on its way to become one of the most prospective
markets for the domestic and global retailers. The results of the study depict that
infrastructure, economic growth and changing demographics of consumers are the major
driver of organized retail in India. The location of the retail store, management style and
adequate salaries to personnel enhance the effectiveness of retail business and are
important factors for retailers’ success.

Stephen Sault (2010) had conducted a study on fundamental and technical analysis
literatures invest considerable effort in assessing their respective ability to explain
share prices, they invariably do so without reference to each other. In this context, we
propose an equity valuation model integrating both fundamental and technical analysis
and, in doing so, recognize their potential as complements rather than as substitutes.
Testing confirms the complementary nature of fundamental and technical analysis by
showing that, while each performs well in isolation, models integrating both have
superior explanatory power. While our findings relate to the valuation of shares, they
also have implications for other valuation exercises.

6
 CHAPTER 3
GLOBAL ECONOMIC SITUATION AND PROSPECTS

• Global economic growth is expected to remain at 3.0 per cent in 2020, however, the
steady pace of expansion in the global economy mark an increase in downside risks that
could potentially inflame development challenges in many parts of the world. The global
economy is facing convergence of risks, which could severely disrupt economic activity
and inflict significant damage on long-term development prospects. These risks include
an increase of trade disputes, tightening of global financial conditions, & intensifying
climate risks.
• In many developed countries, growth rates have increased close to their potential, while
unemployment rates have decreased to historical lows. Among the developing
economies, the East and South Asia regions remain on a relatively strong growth
approach, amid strong domestic demand conditions. Beneath strong global headline
figures, however, economic progress has been highly uneven across many regions.
Despite an improvement in growth prospects at the global level, many large developing
countries saw a downfall in per capita income in 2019.
• Economies that are experiencing strong per capita income growth, economic activities
are often driven by core industrial and urban regions, leaving peripheral and rural areas
behind. While economic activities in the commodity-exporting countries, especially fuel
exporters, is slowly recovering, growth remains susceptible to volatile commodity
prices. For these economies, a sharp drop in world commodity prices in 2014/15 has
continued to weigh on fiscal and external balances, while leaving legacy of higher levels
of debt.
• The euro area economy lost much momentum than expected as consumer & business
confidence weakened and car production in Germany was disturbed by the introduction
of new emission standards; investment fell in Italy as sovereign spreads widened; and
external demand, especially from emerging Asia, softened. Elsewhere, natural calamities
hurt activities in Japan.
• Conditions have been relaxed in 2019 as the US Federal Reserve signaled a more
accommodative monetary policy and markets became more optimistic about a US–China

7
 trade deal, but they remain slightly more restrictive than in the fall.
• India will continue to remain the world’s fastest-growing large economy in 2019 as well
as in 2020, much ahead of China. India’s GDP growth is increased to 7.6% in 2019-20
from an estimated 7.4% in the current fiscal ending March 2019. The growth rate may
come down to 7.4% a year later. In the case of China, the growth is projected to decrease
to 6.3% in 2019 from 6.6% in 2018. It may further decline to 6.2% in 2020.

Fig. 1- global growth % change Y-o-Y basis

• Growth amongst advanced economies as a group is anticipated to slow down in 2019,

especially in the Euro Area, due to weak exports and investment. U.S. growth is
estimated to ease to 2.5% this year and decrease to 1.7% in 2020. Euro Area growth is
estimated to flutter around 1.4% in 2020-21, with softness in trade and domestic demand
weighing on activities despite continuous support from monetary policy.
• Steep decline in currency is more common in growing and developing economies than
in advanced economies, & central banks are often required to respond to these
fluctuations to maintain price stability. The exchange rate pass-through to inflation is
limited when central banks pursue credible inflation targets, operate within a flexible
exchange rate control, and are not dependent on the central government. In the current
scenario of low global interest rates & weak growth, additional government borrowings
might seem to be an attractive option for financing growth-enhancing projects. However,
as the long history of financial crises is repeating, debt cannot be treated as a free lunch.
• Growth in the Middle East, North Africa, Afghanistan, and Pakistan regions are expected
8
 to remain low at 2.4% in 2019 before recovering of about 3% in 2020. Various factors
contemplate on the region’s outlook, including weak oil output growth, which balance
an expected pickup in non-oil activity (Saudi Arabia); tightening financing conditions
(Pakistan); US sanctions (Iran); &, across many economies, geopolitical tensions.
• The top downside risks to our global economic forecast remain an upsurge broadening
of the U.S. - China trade war and the collateral effects of U.S. interest-rate normalization.
The top risk had the impact on business and consumer sentiment, spending, &, growth
from the U.S.-China trade war. The direct effects on growth in both countries from
higher tariffs will be less than 1% of GDP (see chart). More difficult to weigh were the
second-round effects on confidence, spending, & growth. These have started to turn in
many countries, although liberating the cyclical effects from those related to the trade
war is problematic.

Fig. 2 – US – China trade war effects

3.1 GLOBAL RETAIL INDUSTRY SITUATION AND PROSPECTS

• The retail markets are matured and highly competitive in the developed economies of
Europe and North America. On the other side, the developing economies of countries in
Asia-Pacific, Middle East, & Latin America have been instrumental in driving the
market growth. Consumer spending, which usually accounts for approximately two-

9
 thirds of the GDP, is considered as a key indicator of the health of the retail market.
• The Retail Industry accounted for USD 23,460 billion in 2017 and is expected to register
a CAGR of 5.3% during the forecast period (2018-2023), to acquire USD 31,880.8
billion by 2023.The market provides various products like food, apparel, furniture,
jeweler, &others. Apart from this, the stores can be classified into various category such
as convenience store, specialty retailer, internet retailing, and many others.
• The rural and urban households witnessed a steady growth of disposable incomes, the
spending power of the Chinese population rose considerably, and the retail market has
positioned itself as one of the largest and still growing consumer markets worldwide. It
is highly competitive and diversified market, and the market shares of the leading
Chinese retail chains were decreasing over the past few years.
• Government policies of India, like FDI allowed up to 100% in single-brand retail and
FDI up to 51% in multi-brand retail is further expected to increase the competition in the
country’s retail market.

Fig. 3 – Global retail development index 2017

• Moreover, the retail industry boasts of 52,417 convenience stores and 240 department
stores in Japan. It is driven by merger and acquisitions and increased in cross-border
investment and international cooperation, which are providing opportunities for the
country to develop and increase local markets and gain benefits from production
networks in Asia.
10
• Internet retailing is the modern way of shopping. With growing use of smartphones and
mobile devices and the internet services, e-commerce has become the major shopping
platform in the world. Although the sector’s market size increased three folds over the
past three fiscal years, internet retailing contributed for a mere 1.5% of the total retail
sales in most of the countries across the world. It is estimated that e-commerce
contributes around one-third of online retail sales in the United States.

Fig. 4 – Smart phone penetration by country (Internet Retailing)

• 2018 experienced a growth of 68% of households having a smartphone, which is

expected to increase to 85% by 2023. As use of mobile internet growing, especially in
emerging markets, mobile internet retailing will reach a peak point in 2019, accounting
for majority of internet retailing sales. The contribution of internet retailing taking place
through a smartphone or tablet will be 52% in 2019. In 2023, it would increase to 58%
• Key points to watch:
1. Rising operating and financing cost and uneven changes in consumer purchasing power.
2. Growth of sales made on mobile device, which suppressed the desktop sales for the first
time during 2017 holiday shopping season.
3. Growing investment in research and development in new technologies that track
consumer’s reaction and emotions.

11
3.2 GLOBAL AUTOMOBILE INDUSTRY SITUATION AND PROSPECTUS
• The auto industry's most important industry segments include commercial vehicles and
passenger cars. Global sales of passenger cars are forecast to fall to 59.5 million units in
2020, down from a peak of 79.6 in 2017. China is counted among the largest automobile
markets worldwide, both in terms of sales and production. Car sales in China dipped for
the first time in 2018; the market has not recovered since.
• As our Statista Dossier on the impact of COVID-19 on automotive industry intends to
outline, the fate of the industry seems to rely on how fast production will be ramped up
following the coronavirus outbreak in the winter of 2019/2020. Amid the outbreak of
the pandemic in China, many factories were closed and no new vehicles were rolling off
the assembly lines in Wuhan. Work stoppages continue to affect the industry on a global
scale. As factories are reopening in some markets, production has come to a halt in many
others.

Fig. 5 – Reduction in auto production amide the coronavirus

• Mass production of automobiles started in the early 1900s, when Ford introduced
assembly line car production to mass-manufacture its Model T. Today, the Ford Motor
Company still ranks among the leading manufacturers of passenger cars, its most popular
passenger light truck model being the Ford F-Series, which was also one of 2019’s best-
selling light vehicles worldwide. Surprisingly, only one American company made it into
the list of major motor vehicle manufacturers in 2019, and the automotive supplier
industry was dominated by European and Japanese players such as Bosch, Continental,
and Denso.
12
• Prompted by global initiatives such as the Paris Agreement, several countries around the
globe are enacting stricter emissions controls on new vehicle models. As such,
automakers are beginning to expand their business into the electric mobility sector.
Every third new car sold is anticipated to be propelled or assisted by an electric battery
by 2025.

13
 CHAPTER 4
INDIAN ECONOMIC SITUATION

• The GDP of India expanded at 5.8 % year on year (YoY) basis in March 2020, following
a growth of 6.6 % in the preceding quarter. Real GDP Growth YoY data in India is
updated on quarterly basis, with an average rate of 7.6 %.
• In the latest, Nominal GDP of India has reached 712.0 USD billion in March 2019. Its
GDP price deflator increased 3.4 % in March 2020. GDP Per Capita in India acquired
2,041.1 USD in March 2019. Its Gross Savings Rate was weighed at 30.5 % in March
2019.
• The government of India has projected gross domestic product growth of 7% for the
fiscal year 2019-2020. The Economic Survey 2019 has introduced the theme of enabling
a “shifting of gears" to maintain the economic growth for achieving the objective of $5
trillion by 2024-25.
• India is estimated to become the world's 5th largest economy by 2019, reaching a total
GDP size of more than $3 trillion, and defeating its former colonial ruler, the United
Kingdom. By 2025, Indian GDP is also estimated to surpass Japan, which would make
India the 2ndlargest economy in the Asia-Pacific region. India is ranked at 77 out of 190
countries that are included on the World Bank's Ease of Doing Business Index for 2019.

Fig. 6 – Indian economy overview

14
• The Make in India programme launched by the Government of India in September 2014
permitted 100% FDI in 25 sectors of the economy. With this programme the government
aimed to increase the contribution of manufacturing sector by 25% of GDP.
• GST, common consumption tax on all goods and services except electricity, petroleum
products and alcoholic drinks was established by the government in July 2017. GST has
caused rise in tax base, easier movement of goods across state and relaxation of tax rate
from 28% to 18% for many products. The monthly collection from GSTs crossed ₹1
lakh crore in October 2018 however, it fell to ₹97637 crore in November 2018. While
the GST collections have reduced from the earlier month, it was higher than the average
monthly collection in the year. This constant increase in collection brings a hope of a
regular monthly collection of ₹1 lakh crore being met soon.
• According to RBI, the gross NPA of Indian Public Sector banks are valued to be around
₹400,000 crore contributing 90% of the total NPA in India. ₹8040 crore given to Vijay
Mallya and ₹13000 crore bank fraud done by Nirav Modi both turn out to be severe
NPAs that the country is still facing the effects of same.
• Increase in the farm sector productions, increase in the contribution to GDP by
manufacturing sector, making India outstand with the concepts of Start-up India and
Stand up India, introducing water transport, establishing better roads and rail networks,
higher FDIs are expected to make Economy of India to grow faster in future. The
employment generation in India is also expected to go up as there are lakhs of jobs which
are going to be offered in coming two years to skilled and unskilled work force in various
sectors in India.
Recent Developments
The improvement in the economic scenario, have led to various investments in various
sectors of the economy. The merger and acquisition activities in India reached record of
US$ 129.4 billion in 2018, while private equity and venture capital investments reached
to around US$ 20.5 billion. Some of the recent developments in Indian economy are as
follows:
1. During 2018-19 (up to February 2019), exports of merchandised from India have raised
by 8.85 % year-on-year to US$ 298.47 billion, while services exports contributed to
around 8.54 % year-on-year to US$ 185.51 billion.
2. Net direct tax collection for period of 2018-19 had reached Rs 10 trillion (US$ 144.57
15
 billion), while GST collection accounted at Rs 10.70 trillion (US$ 154.69 billion) as of
February 2019.
3. Proceeds from Initial Public Offers (IPO) in India reached to US$ 5.5 billion in 2018
and US$ 0.9 billion in first quarter of 2018-19.
4. India's Foreign Direct Investment (FDI) inflows reached US$ 409.15 billion between
April 2000 and December 2019, with maximum contribution from sectors such as
services, computer software and hardware, telecommunications, construction, trading
and automobiles.
5. Net employment generation of the country reached 17-month high in January 2019.
• India ranked 4th largest in the economy for its fastest growth in the fast-moving
consumer goods sector, with Household and Personal Care accounting for 50 per cent of
FMCG sales in the country. India contributed to world’s largest producer of generic
medicines accounting for 20% of the global volume. The Revenue from the FMCG
sector reached 3.4 lakh crore (US$ 52.75 Billion) in FY18 and is expected to reach
US$103.7 billion in the year 2020. The Indian FMCG sector accounted FDI inflows of
US$ 13.63 billion during April 2000 to June 2018.
• Investments and growth follow a same pattern, and investments make up an important
component for overall growth optimization. Historical evidence demonstrates the
importance of higher investments to maintain higher trajectory for growth. Capital
formation raised at 17.5 % during mid-2000s (2004–08) from 5.1 % during 1990–1995,
which corresponded with the period of higher growth. However, the speed of growth in
capital formation slowed thereafter to 4.3 % during 2012–16 has recently started
showing signs of improvement, rising to 7.6 % in FY2017–18

16
 Fig. 7 – India’s growth improvement
• There is no doubt that India’s current budget has tried to maintain a balance between
fiscal prudence and growth. However, with risks growing large, India needs to make its
investment position strong while maintaining fiscal deficit within the target range.
Meeting the revenue collection and disinvestment targets would be important to ensure
the budgeted reduction in the fiscal-deficit-to-GDP ratio. Overall, the government could
do well to manage its public finances and shift focus to projects that would increase
private investment. The real challenge would arise from making the right policy
decisions about the fiscal expenditure mix and incentivizing private players to avoid any
long-term costs.

4.1 INDIAN RETAIL INDUSTRY SITUATION AND ITS PROSPECTS

• Retail Industry is one of the fastest changing and vibrant industries contributing to the
economic growth of our country. Within a very short span of time, Indian retail industry
has become the most attractive and emerging retail market in the world.

• The Indian retail industry estimated to be worth roughly about $600 billion at the
beginning of 2015 and is estimated to expand to $1.3 trillion by 2020. 92% of the revenue
is generated by the unorganised sector (consisting of traditional outlets). Modern trade
which includes supermarkets, hypermarkets, and other organized retail stores accounted
for $60 billion.

17
• Indian retail market is categorized as (1) traditional outlets; (2) established outlets; (3)
cooperative/government stores; and (4) e-commerce.

• India’s GDP is consumption-led economy with 60% expenditure in consumption of

which retailers account near about 50%. At projected nominal GDP growth rate of
around 13%, India is expected to become US$ 3.5 trillion economy by 2020 as per IMF.

• There has been sharp increase& improvement in the consumption pattern of Indian
people which has made the retail sector to boost and the sector is estimated to record a
growth of $1.3 trillion by 2020. If this pattern continues to grow, then there would be a
shift in consumer expenditure to $3,600 billion by 2020 from $1,824 billion in 2017.

• Favorable demographics, steady growth of urbanization, growing young and urban

population and increasing penetration of internet will continue to drive consumption in
India. By FY20, India’s consumption expenditure is expected to be near about 58% of
GDP of US$ 2000bn and is expected to rank among top 5 economies in the world in
terms of consumption.

COUNTRY 2014 2015 2020E CONTRIBUTION

TO GDP (2020)
UK 1933 1847 1665 69%
US 11865 12271 13913 68%
BRAZIL 1507 1124 2350 63%
ITALY 1312 1108 1143 63%
INDIA 1011 1125 2000 58%
GERMANY 2112 1813 2108 57%
INDONESIA 509 491 909 56%
FRANCE 1572 1332 1470 55%
THAILAND 211 NA 339 55%
Table 1- global contribution to GDP

18
Few factors responsible for the growth of organized retailing in India are as under:
Growing middle class consumers:
1. In India the middle-class consumer is growing rapidly. With increasing consumer
demand and more disposable income has given opportunity to retail market to grow
and prosper in economy. Consumer expected quality products at decent prices.
Modern retailers served a wide range of products &value-added services to the
consumers. Hence this has led to growth of organized retailing in India. Increasing
consumerism would be a key driver for growth of organized retail in India. Growing
incomes and improvement in infrastructure are contributing to the growth of
consumer markets and accelerating the meeting of consumer tastes.
2. Emerging rural market: In recent times, the rural market in India is facing tough
competition in retail sector. The rural market in India is growing fast as the rural
consumers are becoming quality conscious. Thus, due to high potential in rural
retailing, organized retailers are launching new products and strategies to satisfy and
serve rural customers. In India, Retail industry is proving to be the country’s largest
source of point for employment after agriculture.
3. Entry of corporate sector: Large business leaders such as Tata’s, Birla’s, & Reliance
etc. have stepped into the retail sector. They can provide quality products and
services. As the corporate leaders – the Piramal’s, the Tatas, the Raheja’s, ITC, S.
Kumar’s, RPG Enterprises, and mega retailers- Crosswords, Shopper’s Stop, and
Pantaloons are revolutionizing the retail industry.
4. Entry of foreign retailers: Indian retail sector is attracting the interest of foreign
retailers. Due to liberalization multinationals have entered into our country by way
of joint ventures and franchising. This further is responsible for growth of organized
retailing.
5. Technological impact: Technology is one of the leading factors responsible for the
growth of organized retailing. With introduction of computerization, electronic
media and marketing information system have changed the look of retailing.
Organized retailing in India has a large scope due to vast market and the growing
consciousness of the consumer about product quality &services.
6. Rise in income: Increase in the literacy level of India has resulted into growth of
income level among the population. Such growth has taken place in towns and
19
 remote areas along with increase in growth in cities. As a result, the rise in income
level has led to increase in demand for better quality product goods. Rising income
levels and education have led to the evolution of new retail markets.
7. Rise of consumerism: With the emergence of consumerism, the retailer approaches
more knowledgeable and demanding customers. As the business runs to satisfy
consumer needs, the increasing consumer expectation has forced the retail
organizations to change their format of retail trade. Consumer demand, convenience,
comfort, time, location etc. are termed to the important factors for the growth of
organized retail in India.
8. Value for moneOrganised retailing takes into account high volume and are able to
enjoy economies of large-scale production and distribution. Organized retailers offer
quality products at affordable prices. Example: Big Bazaar and Subhiksha.
Opportunities for making profit attracts more and more new business groups to enter
this sector.
India’s grocery market outlooks
India’s retail industry, especially groceries and budget apparel markets, is poised to hit
purple patch. Though F&G constitute majority share (near about 67%) of the retail
market, it is least penetrated with organized share of around 3%. Structural shift and
major policy measures such as demonetization and GST are likely to formalize industry
further. F&G and general merchandise category is expected to drive the growth of
organized retail in the coming years.
Organized F&G is expected to growth at 26% CAGR to reach around 5% by FY20. Top
3 retailers contribute to around 31% of total F&G (Future group 13%, DMART 10% and
Reliance 8%).

20
 Fig. 8 – Growth overview of Retail Industry in India
Shift from unorganised sector:
The shift from unorganised to organized industry has been seen in last decade but only
at small pace. Demonetization and implementation of GST helped organized sector to
gain share from unorganised industries. This helped in boosting the sales of almost all
organized industries. Value fashion retailers (V-Mart) is expected to increase its sales in
same store by 2019, compared to an average of 7.5% in last 4 years. Shoppers stop
experienced a growth of 12% from same store sales in FY19, almost double of last 4
preceding years. At same time, Avenue Supercar (DMART) experienced a growth of
20%. Also, Future Retail which runs big bazaar outlets experienced increased in stock
price which is nearly double in past years with sustained quality growth of around 10%
during the period.

Fig. 9 – India’s retail stock market performance

21
 HISTORY OF RETAIL INDUSTRY

 In US, the retail market started developing in the 18th century, along with general stores.
In later phase, i.e. around 1846, Marble Palace opened in New York, to sell European
merchandise. In late 1800s, Sears and Roebuck launched the catalogue business &, in
1925, it opened a chain of retail stores. Sears was the leader in the US retail world till
1989, when Walmart overcome it.
 When US suburbs started to grow post World War II, supermarkets began to flourish.
The increasing use of automobiles during 1920-1940 made it easy for people to travel to
supermarkets situated far away and to bring home sizeable quantities of goods.
 With the increase in population in 1950-70, open-air malls were set up, leading to the
establishment of huge supermarkets and hypermarkets.
 In Europe, the Industrial Revolution laid the foundations of the consumer goods market,
and the retail industry began to grow. The first departmental stores to come up was
Bennett’s in Derby, England, in 1734.
 India was also not left behind. As per the article in Spectrum: A Journal of
Multidisciplinary Research, 1869 marked the beginning of the first organised retailing
in the country, with the establishment of the Mumbai Crawford Market.
 In 1874, Hogg Market launched in Calcutta. The second phase started with the launching
of Bata stores in 1931 followed by DCM and Raymond stores. In the early 1980s,
“Akbarallys” in Mumbai and Spencer’s and Nilgiris stores were started in Chennai

QUICK FACTS AND STATISTICS ABOUT THE RETAIL INDUSTRY

 Out of the $24 trillion sales recorded worldwide by the retail industry, hardly 6 %, or
$1.3 trillion, is accounted from e-commerce, proving that epitaphs for the brick-and-
mortar trade were premature. The global retail market is estimated to grow around $28
trillion by 2019.
 The US is above the other nations in the retail sector, with a market size of around $4.5
trillion. But its rule was predicted to end by 2018, while China (market size $3 trillion
in 2015) would surpass it.

22
 The US and China are the biggest players in e-commerce markets, with their total
combined sales of 55 % of the world e-market.
 In 2018, China accounted for 40 % of e-retail, with sales touching $1 trillion, and the
US 20 %, or $500 billion. The UK, Japan, Germany, France, South Korea, Canada,
Russia, & Brazil are the other top e-commerce countries.
 E-commerce contribute to around 6.5 % of the total retail sales in the US, 4.6 % in
France, and 3.8 % in Brazil. The share was below 1 % in India and 10.1 % in China in
2014.
 The top 10 global retailer are Walmart (US, 2013 revenue $464 billion), Tesco (UK,
$120 billion), Costco (US, $120 billion), Carrefour (France, $103 billion), Kroger (US,
$96 billion), Amazon (US, $88 billion), Lidl (Germany, $87 billion), Metro AG ($85
billion), The Home Depot ($74 billion), and Aldi (Germany, $73 billion).

4.2 INDIAN AUTOMOBILE INDUSTRY SITUATION AND PROSPECTS

India became the fourth largest auto market in 2018 with sales increasing 8.3 per cent
year-on-year to 3.99 million units. It was the seventh largest manufacturer of commercial
vehicles in 2018.
The Two Wheelers segment dominates the market in terms of volume owing to a
growing middle class and a young population. Moreover, the growing interest of the
companies in exploring the rural markets further aided the growth of the sector.
India is also a prominent auto exporter and has strong export growth expectations for the
near future. Automobile exports grew 14.50 per cent during FY19. It is expected to grow
at a CAGR of 3.05 per cent during 2016-2026. In addition, several initiatives by the
Government of India and the major automobile players in the Indian market are expected
to make India a leader in the two-wheeler and four-wheeler market in the world by 2020.
Overall domestic automobiles sales increased at 6.71 per cent CAGR between FY13-19
with 26.27 million vehicles getting sold in FY19. Domestic automobile production
increased at 6.96 per cent CAGR between FY13-19 with 30.92 million vehicles
manufactured in the country in FY19.
In FY19, year-on-year growth in domestic sales among all the categories was recorded

23
 in commercial vehicles at 17.55 per cent followed by 10.27 per cent year-on-year growth
in the sales of three-wheelers.
Automobile exports grew 14.50 per cent year-on-year during FY19, while during April-
December 2019, overall export increased by 3.9 per cent.
Premium motorbike sales in India recorded seven-fold jump in domestic sales reaching
13,982 units during April-September 2019. The sale of luxury cars stood between 15,000
to 17,000 in first six months of 2019.
Sales of electric two-wheelers are estimated to have crossed 55,000 vehicles in 2017-18.

In order to keep up with the growing demand, several auto makers have started investing
heavily in various segments of the industry during the last few months. The industry has
attracted Foreign Direct Investment (FDI) worth US$ 23.89 billion during the period
April 2000 to December 2019, according to data released by Department for Promotion
of Industry and Internal Trade (DPIIT).
Some of the recent/planned investments and developments in the automobile sector in
India are as follows:
 In January 2020, Tata Auto Comp Systems, the auto-component arm of the Tata Group
entered a joint venture with Beijing-based Prestolite Electric to enter the electric vehicle
(EV) components market.
 In December 2019, Force Motors planned to invest Rs 600 crore (US$ 85.85 million) in
order to develop two new models over the next two years.
 In December 2019, Morris Garages (MG), a British automobile brand announced plans
24
 to invest Rs 3,000 crore (US$ 429.25 million) more into India.
 Audi India plans to launch nine all-new models including Sedans and SUVs along with
futuristic e-tron electric vehicle (EV) by the end to 2019.
 MG Motor India to launch MG ZS EV electric SUV in early 2020 and plans to launch
affordable EV in next 3-4 years.
 BYD-Olectra, Tata Motors, Ashok Leyland to supply 5,500 electric buses for different
state departments.
 Premium motorbike sales in India recorded seven-fold jump in domestic sales reaching
13,982 units during April-September 2019. The sale of luxury cars stood between 15,000
to 17,000 in first six months of 2019.
 In H1 2019, automobile manufacturers invested US$ 501 million in India’s auto-tech
companies start-ups, according to Venture intelligence
 For self-driving and robotic technology start-ups, Toyota plans to invest US$100
million.
 In India, 7 Series face lift launched by BMW and the new X7 SUV has been introduced
at Rs 98.90 lakh (US$ 0.14 million).
 Ashok Leyland has planned a capital expenditure of Rs 1,000 crore (US$ 155.20 million)
to launch 20-25 new models across various commercial vehicle categories in 2018-19.
 Hyundai is planning to invest US$ 1 billion in India by 2020. SAIC Motor has also
announced to invest US$ 310 million in India.
 Mercedes Benz has increased the manufacturing capacity of its Chakan Plant to 20,000
units per year, highest for any luxury car manufacturing in India.
 As of October 2018, Honda Motors Company is planning to set up its third factory in
India for launching hybrid and electric vehicles with the cost of Rs 9,200 crore (US$
1.31 billion), its largest investment in India so far.
 In November 2018, Mahindra Electric Mobility opened its electric technology
manufacturing hub in Bangalore with an investment of Rs 100 crore (US$ 14.25 million)
which will increase its annual manufacturing capacity to 25,000 units.

25
26
 CHAPTER 5
SWOT ANALYSIS

5.1 SWOT ANALYSIS OF RETAIL INDUSTRY

Strength
 A huge young working population with age of 24 years, nuclear families in urban areas,
along with increasing in working women population & growing opportunities in the
service sector are going to be the key growth drivers of the organised retail sector in
India.
 Customers can access to greater variety of international brand goods.
 Employment opportunities both direct and indirect have risen.
 Farmers get better prices for their products.
 Rise in expenditure for luxury items.
 Contribution to large scale investments in the real estate sector with major national and
global players investing in devolving the infrastructure & construction of the retail
business.
 Large domestic market with a rising middle class and potential customers with
purchasing power.

Weakness
 Retailing today is not just selling at the shop, but also includes researching and surveying
the market, offering choice, competitive prices and retailing consumers as well.
 The rapid growth of retail sector is the sharp improvement in availability of retail space.
But the current rally in property prices, retail real estate rentals have increased
remarkably. Retail companies must pay high rentals which are in the turn blocking of
profits.
 The volume of sales in Indian retailing is very low. India has largest population in the
world and a fast-growing economy.

27
 Opportunities
 Global retail take India as key market. It is rated fifth most attractive retail market.
 The organised retail sector is expected to rise stronger than GDP growth in next 5 years
by changing lifestyles, increase in income & favourable demographic outline.
 Indian retail industry has come 4th as one of the fastest paced industry with several
players entering the market.
 It can become one of the largest industries in terms of numbers of employees &
establishments.
 Rural retailing is growing in Indian market.

Threats
 Difficult to target all segments of society.
 Emergence of hyper and supermarkets trying to provide customer with –value, variety
& volume.
 Huge initial investment is required to compete with other companies.
 Problems of car parking in urban areas is serious issue.
 Sector is not able to employ retail staff on contract basis.

5.2 SWOT ANALYSIS OF AUTOMOBILE INDUSTRY

Strength
 Evolving industry: Automobiles represent freedom and economic growth. Automobiles
allow people to live, work and travel in ways that were unimaginable a century ago.
Automobiles provides access to markets, to doctors, to jobs. Nearly every automobile
trip ends with either an economic transaction or some other benefit to the quality of life.
 Continuous product innovation & technological advancement : With the advent of
E-vehicles & alternative fuel such as Shell gas, CNG and others, Automobile Companies
are increasing R & D expenditure to drive the next phase of growth through use of
renewable sources of energy which may be solar, wind etc.
 Growth shifting to Asian markets : Although American & European market is the
pulse of this Industry, but the focus is shifting to developing markets like China, India
& other Asian nations because of the rise in disposable income, changing lifestyle &

28
 stable economic conditions.
 Increasing demand of VFM vehicles: Intense competition in the matured/developed
markets has forced automobile manufacturers to target developing economies. But these
developing economies have high demand for VFM products (value for money). In the
automobile industry, VFM products would be fuel efficient, high mileage vehicles
because majority of customers in these nations prefer vehicles for commuting. On the
other hand, developed nations need is of vehicles for interstate travelling, and high speed
vehicles suitable for long route with high engine power.
Weaknesses
 Cars recalled: Controversies relating to recalling vehicles on account of some technical
dis-functionality or non-abidance to govt. led rules is becoming very common.
1. Bargaining power of consumers: Over the last 3-4 decades the automobile market
has shifted from demand to supply market. Availability of large number of variants,
Stiff competition between them, and long list of alternatives to choose from has given
power to customers to choose whatever they like.
2. Growth rate of Automobile industry is the in the hands of the government due to
regulations like excise duty, no entry of outside vehicles in the state, decreasing
number of validity of registration period & volatility in the fuel prices. These
factors always affect the growth of the industry.

Opportunities
 Introducing fuel-efficient vehicles: Optimization of fuel-driven combustion engines
and cost efficiency programs are good opportunities for the automobile market.
Emerging markets will be the main growth drivers for a long time to come, and hence
fuel efficient cars are the need of the hour.
 Strategic Alliances: Making strategic alliances can be a smart strategy for Automobile
companies. By using specialized capabilities & partnering with other companies, they
can differentiate their offerings.
 Changing lifestyle & customer groups: Three powerful forces are rolling the auto
industry. Shift in consumer demand, expanded regulatory requirements for safety and
fuel economy, and the increased availability of data and information. Also with the

29
 increase in nuclear families there has been increase in demand of two-wheelers &
compact cars and this will grow further.
 Market expansion : Entering new markets like Asian & BRIC nations will result in
upsurge in demand of vehicles. After these markets, other markets are likely to emerge
soon.
 OEM priorities: Given the increase in electronic content, OEMs need to collaborate
with suppliers and experts outside the traditional auto industry. Accomplishing this will
require changes in the way OEMs function. OEMs will be looking to their top suppliers
to co-invest in new global platforms & this will be the driving force in the future.

Threats

 Intense Competition: Presence of such a large number of players in the Automobile

industry results into extensive competition, every company eating into others share
leaving little scope for new players.
1. Volatility in the fuel Prices: At least for the passenger segment fluctuations in the
fuel prices remains the determining factor for its growth. Also government
regulations relating the use of alternative fuels like CNG. Shell gas is also affecting
the inventories.
2. Sluggish Economy: Macroeconomic uncertainty, Recession, un-employment etc.
are the economic factors which will daunt the automobile industry for a long period
of time.
3. High fixed cost and investment in R & D: Due to the fact that mature markets are
already overcrowded, industry is shifting towards emerging markets by building
facilities, R & D centres in these markets. But the ROI out of these decisions is yet
to be capitalized.

30
 CHAPTER 6
INTRODUCTION

6.1 TECHNICAL ANALYSIS

Technical analysis was first introduced by Charles Dow and the Dow Theory in the late
1800s. Several researchers including William P. Hamilton, Robert Rhea, Edson Gould
and John Magee further contributed to Dow Theory concepts helping to form its basis.
In modern day, technical analysis has evolved with hundreds of patterns and signals
developed through years of research. Technical analysts believe past trading activity and
price changes of a security can be valuable indicators of the security's future price
movements. They may use technical analysis independent of other research efforts or in
combination with some concepts of intrinsic value considerations but most often their
convictions are based solely on the statistical charts of a security. The Market
Technicians Association (MTA) is one of the most popular groups supporting technical
analysts in their investments with the Chartered Market Technicians (CMT) designation
a popular certification for many advanced technical
Analysts.
 Technical analysis is a trading discipline employed to evaluate investments and identify
trading opportunities by analyzing statistical trends gathered from trading activity, such
as price movement and volume. Unlike fundamental analysts, who attempt to evaluate a
security's intrinsic value, technical analysts focus on patterns of price movements,
trading signals and various other analytical charting tools to evaluate a security's strength
or weakness.
 Technical analysis can be used on any security with historical trading data. This includes
stocks, futures, commodities, fixed-income, currencies, and other securities. In this
tutorial, we'll usually analyze stocks in our examples, but keep in mind that these
concepts can be applied to any type of security. In fact, technical analysis is far more
prevalent in commodities and forex markets where traders focus on short-term price
movements.
 The Underlying Assumptions of Technical Analysis There are two primary methods
31
 used to analyze securities and make investment decisions:
Fundamental analysis and technical analysis. Fundamental analysis involves analyzing
a company‘s financial statements to determine the fair value of the business, while
technical analysis assumes that a security‘s price already reflects all publicly-available
information and instead focuses on the statistical analysis of price movement
Analysis with the help of some important indicators
1. AVERAGE TRUE RANGE
 The average true range (ATR) is a technical analysis indicator that measures market
volatility by decomposing the entire range of an asset price for that period. Specifically,
ATR is a measure of volatility introduced by market technician J. Welles Wilder Jr. in
his book, "New Concepts in Technical Trading Systems."
 The true range indicator is taken as the greatest of the following: current high less the
current low; the absolute value of the current high less the previous close; and the
absolute value of the current low less the previous close. The average true range is then
a moving average, generally using 21 days, of the true ranges.

HIGH LOW RANGE

2350 2303 47
2346.50 2269.45 77.05
2350 2274 76
2340 2285 55
2350 2305 45
2389.75 2325 64.75
2345 2269.95 75.05
2329.95 2185.30 144.65
2249 2126.55 122.45
2210 2144 66
2284 2185 99
2358 2270 88
2347 2286.90 60.1

32
 2379 2305 74
2358 2304 54
2340 2290.25 49.75
2370.8 2275 95.8
2355.6 2306 49.6
2454.3 2318 136.3
2519.95 2375 144.95
2518 2381 137

The above table is based on the technical analysis of avenue supercar ltd (smart) for the
basic period of 21 days with the help of indicator called ATR (average true range).The
above figures are calculated by taking into consideration of 21 days OHLC (open, high,
low, close) for predicting the exact estimated movement of price of the particular stock
in the 21 days period. It is considered one of the easiest and the best study tool for
predicting the investors position whether he should sell when he expect low in the price
or to buy when he expects high rise in the price of the stock. The ATR can be calculated
by using the formula:-
ATR=AGGREGATE OF (CURRENT HIGH - CURRENT LOW) / TOTAL
PERIOD

2. SIMPLE MOVING AVERAGE BELT

 A simple moving average (SMA) calculates the average of a selected range of prices,
usually closing prices, by the number of periods in that range.
 The SMA is a technical indicator that can aid in determining if an asset price will
continue or reverse a bull or bear trend.
 The SMA can be enhanced as an exponential moving average (EMA) that more heavily
weights recent price action.
A simple moving average (SMA) is an arithmetic moving average calculated by adding
recent prices and then dividing that by the number of time periods in the calculation
average. For example, one could add the closing price of the security for a number of

33
time periods and then dividing this total by that same number of periods. Short-term
averages respond quickly to changes in the price of the underlying, while long-term
averages are slower to react. There are other types of moving averages, including the
exponential moving average (EMA) and the weighted moving average (WMA).

The particular above figure clearly shows how the belts are formed for 200days,
100days, 50days and 35days respectively, indicating towards the stock bullishness or
bearishness.

34
6.2 FUNDAMENTAL ANALYSIS

 Fundamental analysis is the process of looking at a business at the most basic or

fundamental financial level. This type of analysis examines the key ratios of a business
to determine its financial health. Fundamental analysis can also give you an idea of the
value of what a company's stock should be. It takes several factors into account,
including revenue, asset management, and the production of a business as well as interest
rate.
 Many investors use fundamental analysis alone, but it can be particularly helpful to use
it in combination with other tools to evaluate stocks for investment purposes. The goal
is to determine the current worth of the stock, and, perhaps more importantly, to identify
how the market values the stock.
 Even if you don't plan to do an in-depth fundamental analysis yourself, understanding
the key ratios and terms can help you follow stocks more closely and accurately.

35
 CHAPTER 7
RETAIL SECTOR

 In US, the retail market started developing in the 18th century, along with general stores.
In later phase, i.e. around 1846, Marble Palace opened in New York, to sell European
merchandise. In late 1800s, Sears and Roebuck launched the catalogue business &, in
1925, it opened a chain of retail stores. Sears was the leader in the US retail world till
1989, when Walmart overcome it.
 When US suburbs started to grow post World War II, supermarkets began to flourish.
The increasing use of automobiles during 1920-1940 made it easy for people to travel to
supermarkets situated far away and to bring home sizeable quantities of goods.
 With the increase in population in 1950-70, open-air malls were set up, leading to the
establishment of huge supermarkets and hypermarkets.

Based on market cap, I have selected 5 major leading companies of retail sector
1. Avenue Supermart
2. Future Retail
3. Shoppers Stop
4. Trent
5. Aditya Birla Fashion

Name of the company Market capitalisation (in crores)

Avenue Supermart 161746.10
Future Retail 5470.82
Shoppers Stop 1889.58
Trent 20591.61
Aditya Birla Fashion 10738.53
Table 1- Market Cap.

36
7.1 AVENUE SUPERMART (DMART)

About the company

DMART is owned and operated by Avenue Supermarts Ltd. (ASL) – the company
founded by Mr. Radhakishan Damani and his family addressing the growing needs of
the Indian family. He is respected in the business world as an astute investor in the Indian
equity market. He has built a company that constantly strives towards developing a deep
understanding of customer needs and satisfying them with the right products. A firm
believer in core business fundamentals and strong ethical values, Mr. Damani has built
DMART into an efficient, large and profitable retail chain that is highly respected by
customers, partners and employees alike.

DMART is a one-stop supermarket chain that aims to offer customers a wide range of
basic home and personal products under one roof. Each DMART store stocks home
utility products - including food, toiletries, beauty products, garments, kitchenware,
bed and bath linen, home appliances and more - available at competitive prices that
customers appreciate. Core objective of DMART is to offer customers good products at
great value. The company has its headquarters in Mumbai. The brands DMart, DMart
Minimax, DMart Premia, DHomes, Dutch Harbour, etc are brands owned by Avenue
Supermarts Ltd. Its key product categories include Grocery and Staples, Dairy and
Frozen, Daily Essentials, Luggage, Home and Personal Care, Footwear, Home
Appliances, etc.

Owners
hip#
Public**

Mr
Radhakishan
Damani &
Other
Promoters
80%
Fig. 10 – Ownership of Avenue Supermart

37
 Directors Data
Ramesh Damani Chairman
Ramakant Bahеti Group CFO & WTD
Chandrashеkhar Bhavе Director
Niladri Dеb CFO
Ignatius Noronha CЕO, MD & Director
Еlvin Machado Director
Manjri Chandak Director
SRBC & Co. Auditors
Table 2- Directors Data

Top 10 Holdings % Holding

Noronha Ignatius Navil 2.2
Axis AMC India 1.2
Nomura Holdings Inc. 1.01
HDFC AMC 0.71
Blackrock Inc. 0.57
ICICI Prudеntial AMC 0.37
Capital Group Cos Inc. 0.36
Vanguard Group Inc. 0.33
Kotak Mahindra AMC 0.19
Table 3- Top 10 Holdings
Category No. of shares Percentage

Promoters 506,777,156 81.20

General Public 55,898,316 8.96
Foreign Institutions 34,155,859 5.47

NBFC and Mutual Funds 20,438,862 3.28

Others 4,972,603 0.80

Financial Institutions 1,841,690 0.30

Table 4- Shareholding
38
 TECHNICAL ANALYSIS AND ITS INTERPRETATIONS

Fig. 1 – Chart of Avenue Supermart

 The above figure clearly shows that the stock of DMART has an average movement of
about Rs.99.62 per day, Rs.186.67 in a week and Rs.257.46 in a month which
suggests that there’s no pace in the movement of price. The following stock of
Avenue supermart industry clearly indicates that the stock has gradually rising from a
certain period of time. Now it can again come into the breakdown phase and achieve its
target downwards. One cannot completely rely on only one indicator but it is the most
accurate and easiest indicator which one can use and make profit in the market. The
shoppers stop stock’s atr suggest low pace in the price movement since most of the retail
sector adversely affected due to pandemic outbreak think one who already have this
stock then they should hold it and one can buy it at new entry point.
 Now in case of moving average it clearly shows that the stock has reached its peak point
after achieving all its target from accumulation phase to distribution phase so now it may
enter into the breakdown phase and try to test its support back. As per me one should
hold the stock and wait for the correct exit point in future and then buy again at dip.

39
FUNDAMENTAL ANALYSIS AND ITS INTERPRETATION
BALANCE SHEET
Balance Sheet RSIN
CRORES
Mar 20 Mar-19

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS
Equity Share Capital 647.77 624.08
Total Share Capital 647.77 624.08
Reserves and Surplus 10,487.75 4,970.40
Total Reserves and Surplus 10,487.75 4,970.40
Total Shareholders’ Funds 11,135.52 5,594.48
NON-CURRENT LIABILITIES
Long Term Borrowings 178.13 125.67
Deferred Tax Liabilities [Net] 48.20 64.07
Other Long Term Liabilities 0.47 0.78
Total Non-Current Liabilities 226.80 190.52
CURRENT LIABILITIES
Short Term Borrowings 68.02 299.15
Trade Payables 445.97 458.28
Other Current Liabilities 193.49 442.47
Short Term Provisions 14.33 12.67
Total Current Liabilities 721.81 1,212.57
Total Capital And Liabilities 12,084.13 6,997.57
ASSETS
NON-CURRENT ASSETS
Tangible Assets 6,097.35 4,205.86
Intangible Assets 0.00 10.27
Capital Work-In-Progress 0.00 376.55
Other Assets 0.00 18.10
40
 Fixed Assets 6,097.35 4,610.78
Non-Current Investments 287.30 212.00
Other Non-Current Assets 3,407.21 145.74
Total Non-Current Assets 9,791.86 4,968.52
CURRENT ASSETS
Current Investments 0.00 0.00
Inventories 1,909.43 1,576.22
Trade Receivables 48.53 75.52
Cash And Cash Equivalents 92.24 213.55
Short Term Loans And Advances 0.00 0.00
OtherCurrentAssets 242.07 163.76
Total Current Assets 2,292.27 2,029.05
Total Assets 12,084.13 6,997.57
Table 5- Balance Sheet of Avenue Supermart

RATIOS
Profitability and efficiency:
Particulars March 2020 March 2019

ROCE (%) 24.83 25.64

ROE (%) 16.72 16.36

Inventory turnover 12.98 13.08

Debtors turnover 365.84 552.38
Current ratio 1.64 2.77

Interest coverage ratio 26.24 31.12

Table 6- Profitability Ratios Of Avenue Supermart

Valuation parameters:
Particulars March 2020 March 2019

EPS 21.49 15.00

41
 P/E 119.91 101.71

EV/sales 5.78 4.62

EV/EBITDA 23.69 103.48

Table 7- Valuation Ratios of Avenue Supermart

On analyzing profitability and operating ratios:

 The profitability and operating ratios of DMART draws a picture of constant and stable
growth enabling satisfactorily and smooth functioning.
 The ROE of the company was 16.36 in 2019 which shoot up to 16.72 in 2020.
 Also, the turnover ratios are good enough to convert the inventory into cash quickly
without any lag. Thus, ensuring lower cost of storage and wastage of inventory.
 The debtor turnover is also satisfactory, which means no long term due from debtors and
less of bad debt available within the company.
 The current ratio of present year is above 1 which means there is less of current liabilities
existing in company in comparison to current assets. Thus, reducing debt of firm.

Valuation:
 From above parameters and ratio analysis it can be clearly noted that the company’s
value has increased over a time and is growing more.
 Considering the valuation parameters, the DMART has an EPS of 21.49 in 2020 as
against 15.00 in 2019.
 The companies P/E has increased. High P/E indicates that investor are anticipating
higher growth in future
 Hence, the company seems to be on stable position on valuation scale and thus investors
can buy the stock for longer period for increasing its money worth.

Hence
One can SHORT SELL the stock or hold at high price since according to my analysis
the stock is about fall somehow in future.

42
7.2 FUTURE RETAIL (FRETAIL)

About the company

HISTORY OF FUTURE RETAIL LTD. (FRETAIL)/ FUTURE GROUP

1987- Future Retail Ltd was established under the name “Manz Wear Private Ltd.”
1991- Company changed its name to Pantaloon Fashions (India) Limited.
2013- Changed its name to Future Retail Ltd.
2016- Bharti Retail Ltd joined hand with the company. Subsequently Bharti Retail Ltd
is changed its name to Future Retail Ltd.
Future Retail Ltd is the flagship company of Future Group catering to the entire Indian
consumption. Through multiple retail outlets the company connects a varied and
passionate community of Indian buyers, sellers & businesses.
The collective impact on business is staggering: Over 500 million customers walk into
its stores every year &buy products and services provided by over 30,000 small, medium
and large entrepreneurs &producers from across India. Future Retail operates many retail
outlets in both hypermarket supermarket and home segments of the Indian consumer
market which includes: Big Bazaar, Easyday Fashion at Big Bazaar, Foodhall Home
Town Ezone as India's leading Future Retail inspires trust through innovative offerings
of quality products at reasonable prices that helped customers achieve a better quality of
life each day. It serves customers in more than 250 cities across the nation through 12
million square feet of retail space.
7 November 2016- Future Retail’s Board of Directors approved consolidation of the
retail and allied businesses of Heritage Foods Limited.
The retail business of Heritage Foods includes the famous Heritage store chain of 124
stores in southern cities of Hyderabad, Bangalore and Chennai.
2015-16- Retail and allied businesses of Heritage Foods collected revenue of Rs 629.70
crore.
20 April 2017- Board of Directors of Future Retail held its meeting to consider and
approve segregation of the Home Retail business operated through Hometown stores
43
 into Praxis Home Retail pvt ltd. by means of demerger.
5 October 2017- Board of Directors of Future Retail held its meeting to approve the
acquisition of whole equity share capital of M/s Hyper city Retail (India) Limited
(HRIL) from its existing shareholders for part cash and part share consideration
amounting up to Rs 655 crore.
6 December 2017- Board of Directors of Future Retail held its meeting to approve the
Scheme of Arrangement between Hyper city Retail (India) Limited (HRIL) and Future
Retail Limited.
HRIL is a wholly owned subsidiary of Future Retail.
13 March 2018- Future Retail entered into Shareholders Agreement with Khimji Ramdas
LLC (business conglomerate) in Oman for the formation of a JV to operate fbb brand
fashion outlets commencing in Oman.
1 June 2018- Future Retail completed the acquisition of the Retail Business Undertaking
operated under the brand name Foodworld from Foodworld Supermarkets Private
Limited (FSPL). FSPL originally incorporated on 25 August 1999 which is mainly into
retail business of food FMCG and general merchandise category.

ABOUT FUTURE RETAIL LTD. (FRETAIL)/ FUTURE GROUP

 Chairman and managing director- Kishore Biyani

 Holding stake – Promoters- 40.31%

 FII+DII (Public)- 44.1%

 Company high and low price – High: 489.45

Low: 60.00

 Current market price – 69.95(as on 24th may)

 Peer competitors – Avenue Supermart, Aditya Birla fashion, Brandhouse, Provogue,etc

44
 FRETAIL same store sales growth %

Sales of different brands in future group

45
 TECHNICAL ANALYSIS AND ITS INTERPRETATIONS

Fig. 2 – Chart of Future Retail

 The above figure clearly shows that the stock of FUTURE RETAIL has an average
movement of about Rs.6.48 per day, Rs.29.45 in a week and Rs.74.63 in a month. The
following stock of FRETAIL industry clearly indicates that the stock has gradually fallen
from a certain period of time. Now it can again come into its first phase and achieve its
target sideways. One cannot completely rely on only one indicator but it is the most
accurate and easiest indicator which one can use and make profit in the market. The
shoppers stop stock’s atr suggest low pace in the price movement since most of the retail
sector adversely affected due to pandemic outbreak think one who already have this
stock then they should hold it and one can buy it at new entry point.

 Now in case of moving average it clearly shows that the stock has reached its peak point
after achieving all its target from accumulation phase to distribution phase so now it may
enter into the breakdown phase and try to test its support back. As per me one should
hold the stock and wait for the correct exit point in future and then buy again at dip.

46
FUNDAMENTAL ANALYSIS AND ITS INTERPRETATION

TREND RATIOS OF FUTURE RETAIL

1.LIQUIDITY RATIOS

YEAR 2020 2019 2018 2017

Current Ratio 1.04 1.22 1.17 1.19

Quick Ratio 0.90 0.70 0.80 0.78

Debt Equity Ratio 0.66 0.40 0.42 0.63

Long Term Debt Equity Ratio 0.10 0.07 -- --

Table 8- Liquidity Ratios Of Future Retail

0
2020 2019 2018 2017

Current Ratio Quick Ratio Debt Equity Long Term Ratio

Future retail has been seen stable in growth of current assets throughout the year, as they
have good liquidity and asset management
When we compare the ratios with the year base year 2017, future retail has made a
tremendous improvement in this liquidity management

2.PROFITABILITY RATIOS

YEAR 2020 2019 2018 2017

Return On Capital Employed (%) 14.93 18.29 15.76 2.14

Return On Net Worth (%) 19.02 19.86 14.42 0.81

Table 9- Profitability Ratios Of Future Retail

47
 The company has observed a consistent increase in the profit after tax with marginal
increase in sales
Due to sharp increase in the fixed expenses i.e. interest and tax rates has been a decline
in the returns on the capital employed.

Valuation parameters:
particulars March 2020 March 2019

EPS 14.47 0.23

P/E 7.73 6.13

EV/sales 1.24 1.56

EV/EBITDA 23.69 103.48

Table 10- Valuation Ratios of Future Retail

 From above parameters and ratio analysis it can be clearly noted that the company’s
value has increased over a time and is growing more.
 Considering the valuation parameters, the future retail has an EPS of 14.47 in 2019 as
against 0.23 in 2018.
 The enterprise value of future group accounts to 25049.49 approximately taking into
consideration few factors as calculated above.
 Hence, the company seems to be on stable position on valuation scale and thus investors
can buy the stock for longer period for increasing its money worth.

Hence
One can SHORT SELL the stock or hold at high price since according to my analysis
the stock is about grow somehow in future.

48
7.3 SHOPPERS STOP
About the company

Shoppers Stop is an Indian department store chain, owned by the K Raheja Corp. There
are 86 stores across 40 cities in India, with clothing, accessories, handbags, shoes,
jewellery, fragrances, cosmetics, health and beauty products, home furnishing and decor
products. The first store was opened in Andheri, Mumbai in 1991.[3] The company
opened its 22nd store at Lucknow in 2006.[4] In 2007, it entered into partnership with
Nuance Group AG, and opened stores in Mumbai T1 and Bengaluru Airports.[5] An e-
store with delivery across major cities in India was launched in 2008, with a smartphone
app in 2016.[6] In June 2018, the retail chain underwent a board rejig in which promoter
Chandru L Raheja resigned as the non-executive chairman after having served for over
two decades.[7] Chandru Raheja was succeeded by BS Nagesh.

Directors Data
B S Nagesh Non-Executive
Chairman
Rajiv Suri MD & CEO
Rajiv C Raheja Dirеctor
Neel C Raheja Director
Nitin Sanghavi Dirеctor
Ameera Shah Dirеctor
Robert Bready Dirеctor
SRBC & Co. Auditors

Incorporated as a private limited company on June 16, 1997, we became a deemed public
limited company on December 8, 1997. Pursuant to an amendment to the Companies
Act in the year 2000, our Company was converted from a deemed public company to a
full-fledged public company with effect from October 6, 2003. Prior to incorporation
two of our existing stores at Mumbai and Bangalore were run by a division of Ivory
Properties & Hotels Limited (IPHL) under the brand named Shoppers' Stop. Soon after

49
our incorporation, IPHL executed a conducting agreement with us dated November 3,
1997 giving us a right to participate in running the departmental stores which included
the right to use
the Bangalore Shoppers' Stop property (iii) the agreements and arrangements with
various parties relating to purchases, sales, franchises and co-sponsorship (iv) the brands
developed (v) the diverse modes of rendering services to the customers (vi) the data bank
of Shopper's Stop, the membership of the First citizen's Club etc.; (vii) the software,
various systems and training programmes (viii)books and cassettes providing knowledge
for retail trade, (ix) the business sport systems and (x) the names of the stores and logos
of the stores. This agreement was terminated and a fresh Conducting Agreement was
executed with IPHL dated March 31, 2000. IPHL signed a Deed of Assignment dated
March 31, 2000 with us for transferring the ownership of certain trademarks, trade
names, goodwill and brand names in our favour known as SHOPPER' STOP (label),
STUDIO KRT (label), STOP (label with colour schemes)STOP(device), STOP(label),
FIRSTCITIZENS'CLUB, BLUESBIZAAR, BLUES BIZARRE, BLUESBIZAR (word
& label) BLUES BIZAAR (word & complete label) is(in-house brand), is(in-house
brand), B (in-house brand). Out of the various trademarks under which we presently
market our in-house products only six are registered in our name. Three of the
trademarks we presently market some of our in-house products are registered in the name
of our Promoter, Ivory Properties and Hotels Pt. Ltd. and applications are yet to be made
to register them in the name of our Company. For the rest, applications for the
registration of these trademarks in the name of our Company have been submitted to the
relevant trademark authorities and are still pending with them. We initially acquired 790
equity shares of Rs 100 each in UTL from some of the existing shareholders and
increased our stake in the company to 1265 Equity Shares (25.3% of the equity capital)
on March 23, 1999 at a purchase price of Rs.100 per share. UTL was a trading company,
and was one of our suppliers for garments and accessories. We enhanced our stake in
UTL to 100% in February 2000. UTL has discontinued its trading operations from
January 2003. UTL handles our distribution and logistics function since February 2000
and now operates through four distribution centres located in Mumbai, Bangalore, New
Delhi and Kolkata. Shoppers' Stop Services (India) Ltd was incorporated as our wholly
owned subsidiary in March 2000 to provide shared services and consultation, in
50
 accounting and logistics operations. Currently, this subsidiary has limited operations.
Shoppers' Stop.Com (India) Ltd was incorporated in February 2000 as our wholly owned
subsidiary to provide on-line shopping facilities to our customers. As this venture did
not yield desired results, its operations were discontinued in February 2001.

SWOT ANALYSIS OF SHOPPERS STOP

Strength
 Good financial position
 Loyal customer base
 Presence across various segments
 Increasing footballs and conversion rates
 Well establishes and management team

Weakness
 Operating cost is very high
 Employee retention
 Investing too much revenue on IT

Opportunity
 Private labels
 Enter new segments-consumer goods
 Preferred partner for foreign players

Threat
 Threat of new entrants
 Economic slowdown
 Unorganised sector

51
TECHNICAL ANALYSIS AND ITS INTERPRETATION

Fig. 3 – Chart of Shoppers Stop

 The above figure clearly shows that the stock of shoppers stop has an average movement
of about Rs.13.77 per day, Rs.32.98 in a week and Rs.74.19 in a month. One cannot
completely rely on only one indicator but it is the most accurate and easiest indicator
which one can use and make profit in the market. The shoppers stop stock’s atr suggest
low pace in the price movement since most of the retail sector adversely affected due to
pandemic outbreak think one who already have this stock then they should hold it and
one can buy it at new entry point.

 Moving average belt clearly shows that the stock will gradually rise and become bullish
as it will try to achieve its target of 200, 100, 50&35days respectively. So one should
BUY the stock and hold it till you get the price you have set.

52
 FUNDAMENTAL ANALYSIS AND ITS INTERPREATION

Balance Sheet of Shoppers Stop (in Rs. Cr.) Mar '20 Mar
'19

Sources Of Funds
Total Share Capital 44.0 44.0
Equity Share Capital 44.0 44.0
Reserves 933.5 909.4
Net worth 977.7 953.4
Secured Loans 0.0 47.4
Unsecured Loans 0.0 0.0
Total Debt 0.0 47.4
Total Liabilities 977.7 1000.8
Gross Block 711.8 885.3
Less: Aksum. Depreciation 117.0 237.5
Net Block 594.9 647.8
Capital Work in Progress 35.1 18.2
Investments 293.5 317.6
Inventories 1053.6 328.4
Sundry Debtors 44.4 43.7
Cash and Bank Balance 16.7 5.2
Total Current Assets 1114.7 377.4
Loans and Advances 437.2 401.6
Total CA, Loans & Advances 1551.9 779.0
Current Liabilities 1488.4 753.8
Provisions 9.4 7.9
Total CL & Provisions 1497.7 761.8
Net Current Assets 54.2 17.2
Total Assets 977.7 1000.7

53
 RATIOS
Profitability and efficiency ratio:

Particulars March 2020 March 2019

ROCE (%) 13.92 1.16

ROE (%) 8.05 1.21

Inventory turnover 12.98 13.08

Debtors turnover 140.63 203.76
Current ratio 0.92 0.73

Interest coverage ratio 8.97 3.00

Table 11- Profitability Ratios of Shoppers Stop

Valuation parameters:
Particulars March 2020 March 2019

EPS 8.95 1.37

P/E 63.91 18.22

EV/sales 1.19 1.31

EV/EBITDA 4130.24 4693.06

Table 12- Valuation Ratios of Shoppers Stop

On analyzing profitability and operating ratios:

 The profitability and operating ratios of shoppers stop draws a picture of constant and
stable growth enabling satisfactorily and smooth functioning.
 The ROE of the company was 1.21 in 2019 which shoot up to 8.05 in 2020.
 Also, the turnover ratios are good enough to convert the inventory into cash quickly
without any lag. Thus, ensuring lower cost of storage and wastage of inventory.

54
 The debtor turnover is also satisfactory, which means no long term due from debtors and
less of bad debt available within the company.
 The current ratio of present year is below 0 which means there is more of current
liabilities existing in company in comparison to current assets. Thus, increasing debt of
firm.

Valuation:
 From above parameters and ratio analysis it can be clearly noted that the company’s
value has increased over a time and is growing more.
 Considering the valuation parameters, the shoppers stop has an EPS of 8.95in 2020 as
against 1.37 in 2019.
 The companies P/E has increased. High P/E indicates that investor are anticipating
higher growth in future
 Hence, the company seems to be on stable position on valuation scale and thus investors
can buy the stock for longer period for increasing its money worth.

Hence
One can BUY the stock or hold it till price you have set since according to my analysis
the stock is about to rise somehow in future.

55
 7.4 TRENT
About the company

 Established in 1998 and part of the Tata group, Trent is headquartered in Mumbai but
has pan-India operations. Trent is one of the leading players in the branded retail industry
in India.

 The company primarily operates stores across four formats, as below.

 Westside offers an exclusive range of its own branded fashion apparel and is the
mainstay of the retailing business of the company. The company has already established
143 Westside stores measuring 8,000-34,000 sq. ft. across 82 cities.

 Zudio offers irresistible fashion at irresistible prices. The company has established 20
Zudio stores across 12 cities.

 Star, is a fresh food and grocery retail chain, operating 26 supermarkets and 10
hypermarkets.

 Landmark, a family entertainment concept, operates through five independent stores and
retailed through select Westside locations.
 Business Highlights FY18
 Continued emphasis on aspirational fashionability
 Scaled up exciting exclusive brands
 Ensured faster store opening to scale up reach
 Focused on the speed of delivering latest fashion each week
 Built omnichannel presence

56
 Trent Ltd. (Westside)

Type Public
Traded as NSE: TRENT
Industry Retail
Founded 1998
Headquarters Mumbai, Maharashtra
,
India
Revenue 2,346 Crores (2018)
Net income 86 crores (2018)
Parent Tata Group
Website www.westside.com

Trent ltd Current situation

They realized that the market is there, and 96% is yet to be tapped by modern retail.
Look at the total retail market in India. It’s a ₹ 47 lakh crore (₹ 47 trillion) market, and
modern retail and e-commerce together is less than ₹ 2 lakh crore, or just around 4%.
The market is growing at 7%, or ₹ 3.5 lakh crore a year. There’s a lot of time, and lot of
space in the market. And there’s space for everybody. Realizing this, we have speeded
up our expansion. But, yes, we could have grown faster. It is the one thing that we could
have done better.
The total revenue, all businesses put together, is close to ₹ 5,000 crore at present. Over
the next 10 years, it should certainly be three times, and we’ll maintain the profitability.

57
 TECHNICAL ANALYSIS AND ITS INTERPRETATION

Fig. 4 – Chart of Trent

 The above figure clearly shows that the stock of shoppers stop has an average movement
of about Rs.30.42 per day, Rs.61.93 in a week and Rs.80.32 in a month which
suggests that there’s no pace in the movement of price. The following stock of Trent
industry clearly indicates that the stock has gradually falling from a certain period of
time. One cannot completely rely on only one indicator but it is the most accurate and
easiest indicator which one can use and make profit in the market. The shoppers stop
stock’s atr suggest low pace in the price movement since most of the retail sector
adversely affected due to pandemic outbreak think one who already have this stock then
they should hold it and one can buy it at new entry point.

 In case of moving average belt stock is trying to reach its first target towards upside but
with a very slow pace. Risk takers can HOLD the stock till they get their price and profit
since there’s no momentum in the price movement as per the ATR so one can wait and
also buyers can enter into the market but at correct entry point.

58
FUNDAMENTAL ANALYSIS AND ITS INTERPRETATION
TREND RATIOS OF TRENT LTD

Growth percentage:
particulars March 2020 March 2019

Revenue from operation 3177.67 2491.20

EBITDA 20.11 8.21

EBT 6.65 5.69

PAT 2.61 55.74

EPS 0.07 1.75

Table 13- Growth Percentage of Trent

Profitability and efficiency ratio:
particulars March 2020 March 2019

ROCE (%) 9.73 11.25

ROE (%) 6.18 7.51

Inventory turnover 5.42 5.17

Debtors turnover 68.76 74.18
Current ratio 3.63 1.43

Interest coverage ratio 1.80 5.90

Table 14- Profitability Ratios of Trent

Valuation parameters:
particulars March 2019 March 2018

EPS 4.45 3.84

P/E 137.21 121.13

EV/sales 5.44 4.86

EV/EBITDA 17290.61 12301.05

59
 On analyzing the growth percentage:
 On seeing the growth percentage table as above, its clearly seen that there is a huge profit
accounted in current year recording approximately Rs 686 crore net profit from almost
nil or negative profit (loss) in previous year.
 Such huge profit was possible due to increase in net sales of company and at same time
reduction in few expenses incurred by Trent in previous years, leading to growth
percentage.
 Also, the big player of Trent Westside have greatly contributed to group in achieving
higher sales and thus higher profits.
 Thus, the growth percentage table implies that the company is growing rapidly to achieve
more shares in retail industry.
 Hence with increase in year on year sale it can be recommended to investor to invest in
this share.

On analyzing profitability and operating ratios:

 The profitability and operating ratios of Trent draws a picture of slow and stable growth
enabling satisfactorily and smooth functioning.
 The ROE of the company was 7.51% in 2019 which shoot up to 6.18%in 2020.
 Also, the turnover ratios are good enough to convert the inventory into cash quickly
without any lag. Thus, ensuring lower cost of storage and wastage of inventory.
 The debtor turnover is also satisfactory, which means no long term due from debtors and
less of bad debt available within the company.
 The current ratio of present year is above 1 which means there is less of current liabilities
existing in company in comparison to current assets. Thus, reducing debt of firm.
Valuation:
 From above parameters and ratio analysis it can be clearly noted that the company’s
value has increased over a time and is growing more.
 Considering the valuation parameters, the future retail has an EPS of 4.45 in 2020 as
against 3.84 in 2019.
The enterprise value of Trent group accounts to 17290.61 approximately taking into
consideration few factors as calculated above.

60
7.5 ADITYA BIRLA FASHION AND RETAIL (ABFRL)
About the company

ABFRL is a part of USD 48.3 billion Aditya Birla Group. With revenue of Rs8, 118 cr.
spanning retail space of 7.5 million sq. (as on March 31, 2019), it is India's first billion-
dollar pure-play fashion powerhouse with an elegant bouquet of leading fashion brands
and retail formats.
ABFRL emerged after the consolidation of the branded apparel businesses of Aditya
Birla Group comprising ABNL's Madura Fashion division and ABNL's subsidiaries -
Pantaloons Fashion and Retail (PFRL) and Madura Fashion & Lifestyle (MFL) in May
2015. Post the consolidation, PFRL was renamed Aditya Birla Fashion and Retail Ltd.
ABFRL brings together the learnings and businesses of two renowned Indian fashion
icons, Madura Fashion & Lifestyle and Pantaloons creating a synergistic core that will
act as the nucleus of the future fashion businesses of the Aditya Birla Group.
As a fashion conglomerate, ABFRL has a strong network of 2,714 brand stores across
750 cities in the country. It is present across 18000+ multi-brand outlets and 5000+ point
of sales in department stores across India. It has a repertoire of leading brands such as
Louis Philippe, Van Heusen, Allen Solly and Peter England established for over 25
years.
Pantaloons is one of India's largest fast fashion store brand. The International Brands
portfolio boasts of - The Collective, India's largest multi-brand retailer of international
brands and select mono-brands such as Ted Baker, Ralph Lauren, American eagle and
Simon Carter.

61
Performance summary

The Board of Directors of the Company at its meeting today have approved the results
for the quarter and nine months ended 31st Dec 2019. These financials are post factoring
in necessary adjustments under Ind AS 116.
The Company posted a record performance in Q3 FY20 despite the economic slowdown
and tepid consumer sentiment. For the third quarter, sales grew by a robust 12 per cent
to Rs.2562 Cr. from Rs.2282 Cr. in Q3 FY19.
The Company also reported a 22 per cent jump in EBITDA to post its highest-ever
quarterly EBITDA of Rs.227 Cr., (comparable basis) with reported EBITDA (post Ind
AS 116) at Rs.424 Cr. PBT of the Company on a comparable basis soared by 58 per
cent to Rs.111 Cr. vs Rs.70 Cr. in the same quarter last year.
For the year till date of this fiscal, the Company recorded sales growth of 12 per cent at
Rs.6925 Cr. The comparable EBITDA for the period grew by 19 per cent to Rs.561 Cr.
with margins expanding from 7.6 per cent in YTD FY19 to 8.1 per cent in YTD FY20.
During this period, the Company posted 88 per cent increase in its comparable PBT at
Rs.223 Cr. from Rs.119 Cr. last year.
As the Company has moved to a lower corporate tax regime, it recorded a one-time tax
impact of Rs.106 Cr. for the quarter (Rs.130 Cr. for nine months). Excluding this one-
time impact, the comparable PAT would have been Rs.86 Cr. for the quarter and Rs.179
Cr. for nine months. The transition to the new corporate tax regime should improve cash
flows for the next 2 years.
Aditya Birla Fashion and Retail posts record all-round performance in a muted market,
Q3 PBT grows 58 per cent.

62
 TECHNICAL ANALYSIS AND ITS INTERPRETATION

Fig. 5 – Chart of Aditya Birla Fashion

 By seeing the above figure firstly we can see the stock has fallen from a certain high
price to lower from certain period of time. Also chart shows that the liquidity in the stock
has become so low this year
 Now as per the moving average belt the stock will try to come up and achieve its targets
but there is a small risk in it since there’s no liquidity in the stock so how longer it can
take to come up is little risky.
 Coming at the ATR (Average True Range) the stock’s price movement is about Rs.9.29
per day, Rs. 21.39 per week, Rs. 35.38 per month which clearly indicates that the price
is moving up but there’s no pace/momentum in the price as clearly seen in the month
and week price movement. So, one can exit at current price and try to reenter at dip and
earn profit.

63
FUNDAMENTAL ANALYSIS AND ITS INTERPRETATION

Balance Sheet of Aditya Birla Fashion & Mar-19 Mar-18

Retail (in Rs. Cr.)

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS
Equity Share Capital 773.5 771.7
Total Share Capital 774.0 772.2
Reserves and Surplus 655.3 319.6
Total Reserves and Surplus 655.3 319.6
Total Shareholders’ Funds 1,429.3 1,091.8
NON-CURRENT LIABILITIES
Long Term Borrowings 723.3 1,187.4
Deferred Tax Liabilities [Net] 0.0 0.0
Other Long Term Liabilities 173.7 160.7
Long Term Provisions 115.2 121.1
Total Non-Current Liabilities 1,012.2 1,469.2
CURRENT LIABILITIES
Short Term Borrowings 474.5 570.5
Trade Payables 2,398.6 2,009.3
Other Current Liabilities 1,219.4 520.4
Short Term Provisions 87.0 70.9
Total Current Liabilities 4,179.5 3,171.0
Total Capital And Liabilities 6,621.1 5,733.8
ASSETS
NON-CURRENT ASSETS
Tangible Assets 636.4 646.5
Intangible Assets 1,919.1 1,935.9
Capital Work-In-Progress 22.4 45.9
Other Assets 0.0 0.0

64
 Fixed Assets 2,577.9 2,628.2
Non-Current Investments 4.2 4.2
Deferred Tax Assets [Net] 263.4 68.8
Long Term Loans And Advances 3.1 2.9
Other Non-Current Assets 403.4 379.4
Total Non-Current Assets 3,251.9 3,083.5
CURRENT ASSETS
Inventories 1,921.3 1,691.2
Trade Receivables 786.6 551.8
Cash And Cash Equivalents 57.4 72.8
Short Term Loans And Advances 5.4 4.7
OtherCurrentAssets 598.5 329.8
Total Current Assets 3,369.2 2,650.3
Total Assets 6,621.1 5,733.8

Growth percentage:
Particulars March 2019 March 2018

Revenue from operation 8117.72 7157.84

EBITDA 618.85 501.09

EBT 149.10 48.97

PAT 321.22 117.79

EPS 4.15 1.53

Table 15- Growth Percentage of Aditya Birla Fashion

Profitability and efficiency ratio:

Particulars March 2019 March 2018

ROCE (%) 12.80 7.73

65
 ROE (%) 22.48 10.79

Inventory turnover 4.23 4.25

Debtors turnover 12.13 14.29
Current ratio 0.82 0.77

Interest coverage ratio 1.80 1.29

Table 16- Profitability Ratios of Aditya Birla Fashion

Valuation parameters:
Particulars March 2019 March 2018

EPS 4.15 1.52

P/E 24.51 41.11

EV/sales 5.44 4.86

EV/EBITDA 17290.61 12301.05

Table 17- Valuation Ratios of Aditya Birla Fashion

On analyzing the growth percentage:

 On seeing the growth percentage table as above, its clearly seen that there is a huge profit
accounted in current year recording approximately Rs 4989 crore net profit from almost
nil or negative profit (loss) in previous year.
 Such huge profit was possible due to increase in net sales of company and at same time
reduction in few expenses incurred by Aditya Birla fashion in previous years, leading to
growth percentage.
 Also, the big player of Aditya Birla pantaloons have greatly contributed to group in
achieving higher sales and thus higher profits.
 Thus, the growth percentage table implies that the company is growing rapidly to achieve
more shares in retail industry.
 Hence with increase in year on year sale it can be recommended to investor to invest in
this share.

66
 On analyzing profitability and operating ratios:
 The profitability and operating ratios of Aditya Birla draws a picture of slow and stable
growth enabling satisfactorily and smooth functioning.
 The ROE of the company was 10.19% in 2019 which shoot up to 22.48%in 2019.
 Also, the turnover ratios are good enough to convert the inventory into cash quickly
without any lag. Thus, ensuring lower cost of storage and wastage of inventory.
 The debtor turnover is also satisfactory, which means no long term due from debtors and
less of bad debt available within the company.
 The current ratio of present year is below 0 which means there is more of current
liabilities existing in company in comparison to current assets. Thus, increasing debt of
firm.

Valuation:
 From above parameters and ratio analysis it can be clearly noted that the company’s
value has increased over a time and is growing more.
 Considering the valuation parameters, the Aditya Birla fashion has an EPS of 4.15 in
2019 as against 1.52 in 2018.
 The enterprise value of Aditya Birla group accounts to 17290.61 approximately taking
into consideration few factors as calculated above.
 Hence, the company seems to be on stable position on valuation scale and thus investors
can buy the stock for longer period with a little risk since most of the retail sector is
largely affected due to major outbreak of corona for increasing its money worth.

67
 CHAPTER 8
AUTOMOBILE SECTOR

The Indian automobile market is one of the largest in the world, both in terms of sales
volume and production. Talking about historical roots of the car market in India, the first
time that a vehicle came on road was in 1897. Till 1930, India did not have any
manufacturing facility and cars were imported directly from other countries. The
landmark decade in the manufacturing process was that of 1940s, in which Indian
companies like Hindustan Motors and Premier started to manufacture cars of other firms.
During the same decade, Mahindra & Mahindra also started to produce utility vehicles.
Soon after independence 1947, Government of India tried to create an automotive
component manufacturing industry in order to supplement the automobile fraternity.
From 1960 to 1980s, the Indian market was dominated by Hindustan Motors, which
gathered a large amount of share due to its Ambassador model. However, during 1950s
till 1960s, the overall industry moved at a slow pace due to trade restrictions set on
imports. Soon after this repressive phase, demand surged but to a smaller extent, which
was mainly seen in the tractor and commercial vehicles segment.

Based on market cap, I have selected 4 major leading companies of automobile sector
1. Maruti Suzuki
2. Tata Motors
3. Ashok Leyland
4. Mahindra & Mahindra

Name of the company Market capitalisation (in crores)

Maruti Suzuki 173658.27
Tata Motors 34194.94
Ashok Leyland 14193.27
Mahindra & Mahindra 60195.38
Table 17- Market Cap.

68
8.1 MARUTI SUZUKI INDIA LTD
About the company

Maruti Suzuki India Limited is a publicly listed automaker in India. It is a leading four-
wheeler automobile manufacturer in South Asia. Suzuki Motor Corporation of Japan
holds a majority stake in the company. It was the first company in India to mass- produce
and sell more than a million cars. It is largely credited for having brought in an
automobile revolution to India. It is the market leader in India. On 17 September, 2007,
Maruti Udyog was renamed to Maruti Suzuki India Limited. The company's
headquarters remain in Gurgaon, near Delhi.
Maruti Suzuki India Limited, formerly known as Maruti Udyog Limited, is an
automobile manufacturer in India. It is a 56.21% owned subsidiary of the Japanese car
and motorcycle manufacturer Suzuki Motor Corporation. As of July 2019, it had a
market share of 53% of the Indian passenger car market.
Maruti Suzuki is one of India's leading automobile manufacturers and the market leader
in the car segment, both in terms of volume of vehicles sold and revenue earned. Until
recently, 18.28% of the company was owned by the Indian government, and 54.2% by
Suzuki of Japan. The Indian government held an initial public offering of 25% of the
company in June 2003. As of May 10, 2007, Govt. of India sold its complete share to
Indian financial institutions. With this, Govt. of India no longer has stake in Maruti
Udyog.
Maruti Udyog Limited (MUL) was established in February 1981, though the actual
production commenced in 1983. Through 2004, Maruti has produced over 5 Million
vehicles. Marutis are sold in India and various several other countries, depending upon
export orders. Cars similar to Marutis (but not manufactured by Maruti Udyog) are sold
by Suzuki in Pakistan and other South Asian countries.
The company annually exports more than 30,000 cars and has an extremely large
domestic market in India selling over 500,000 cars annually. Maruti 800, till 2004, was
the India's largest selling compact car ever since it was launched in 1983. More than a
million units of this car have been sold worldwide so far. Currently, Maruti Alto tops the
sales charts.
69
Due to the large number of Maruti 800s sold in the Indian market, the term "Maruti" is
commonly used to refer to this compact car model. Till recently the term "Maruti", in
popular Indian culture, was associated to the Maruti 800 model.
Maruti Suzuki India Limited, a subsidiary of Suzuki Motor Corporation of Japan, has
been the leader of the Indian car market for over two decades.
It’s manufacturing facilities are located at two facilities Gurgaon and Manesar south of
New Delhi. Maruti’s Gurgaon facility has an installed capacity of 350,000 units per
annum. The Manesar facilities, launched in February 2007 comprise a vehicle assembly
plant with a capacity of 100,000 units per year and a Diesel Engine plant with an annual
capacity of 100,000 engines and transmissions. Manesar and Gurgaon facilities have a
combined capability to produce over 700,000 units annually.
More than half the cars sold in India are Maruti cars. The company is a subsidiary of
Suzuki Motor Corporation, Japan, which owns 54.2 per cent of Maruti. The rest is owned
by the public and financial institutions. It is listed on the Bombay Stock Exchange and
National Stock Exchange in India.

The company vouches for customer satisfaction. For its sincere efforts it has been rated
(by customers) first in customer satisfaction among all car makers in India for seven
years in a row in annual survey by J D Power Asia Pacific.

Maruti Suzuki was born as a government company, with Suzuki as a minor partner, to
make a people’s car for middle class India. Over the years, the product range has
widened, ownership has changed hands and the customer has evolved. What remains
unchanged, then and now, is Maruti’s mission to motorize India.
On 25 April 2019, Maruti Suzuki announced that it would phase out production of diesel
cars by 1 April 2020, when the Bharat Stage VI emission standards come into effect.
The new standards would require a significant investment from the company to upgrade
its existing diesel engines to comply with the more stringent emission standards.
Chairman R.C. Bhargava stated, "We have taken this decision so that in 2022 we are
able to meet the Corporate Average Fuel Efficiency norms and higher share of CNG
vehicles will help us comply with the norms. I hope the union government's policies will

70
help grow the market for CNG vehicles." Diesel cars accounted for about 23% of Maruti
Suzuki's annual sales.

With the entire country in lockdown mode - effectively rendering all manufacturing
plants and dealerships shuttered - the first big impact on the automobile industry has
been announced.

Passenger vehicle market leader Maruti Suzuki has announced that it had “zero sales in
the domestic market - including sales to OEM (which means no Glanzas were sent to
Toyota) - in April 2020. This was because, in compliance with the Government orders,
all production facilities were closed.”

The company adds that "following resumption of port operations, the first export
shipment of 632 units was undertaken from the Mundra port, ensuring that all guidelines
for safety were followed.”

71
FUNDAMENTAL ANALYSIS AND ITS INTERPRETATIONS

Balance Sheet of Maruti Suzuki India (in Mar-20 Mar-19

Rs. Cr.)

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS
Equity Share Capital 151.0 151.0
Total Share Capital 151.0 151.0
Reserves and Surplus 48286.0 45990.5
Total Reserves and Surplus 48286.0 45990.5
Total Shareholders’ Funds 48437.0 46141.5
NON-CURRENT LIABILITIES
Long Term Borrowings 0.0 0.0
Deferred Tax Liabilities [Net] 598.4 564.0
Other Long Term Liabilities 2170.3 2036.5
Long Term Provisions 51.6 39.5
Total Non-Current Liabilities 2820.3 2640.0
CURRENT LIABILITIES
Short Term Borrowings 106.3 149.6
Trade Payables 7494.1 9633.0
Other Current Liabilities 3014.8 3743.3
Short Term Provisions 679.6 624.4
Total Current Liabilities 11294.8 14150.3
Total Capital And Liabilities 62552.1 62931.8
ASSETS
NON-CURRENT ASSETS
Tangible Assets 17118.6 14956.7
Intangible Assets 0.0 451.1
Capital Work-In-Progress 0.0 1600.1
Other Assets 0.0 0.0

72
 Fixed Assets 17118.6 17007.9
Non-Current Investments 35248.8 31469.5
Deferred Tax Assets [Net] 0.0 0.0
Long Term Loans And Advances 0.2 0.2
Other Non-Current Assets 1757.1 2092.6
Total Non-Current Assets 54124.7 50570.2
CURRENT ASSETS
Current Investments 1218.8 5045.5
Inventories 3214.9 3325.7
Trade Receivables 2127.0 2310.4
Cash And Cash Equivalents 21.1 178.9
Short Term Loans And Advances 16.9 16.0
OtherCurrentAssets 1828.7 1485.1
Total Current Assets 8427.4 12361.6
Total Assets 62552.1 62931.8

Growth percentage:
Particulars March 2020 March 2019

Revenue from operation 71690.40 83026.50

EBITDA 1603.80 2028.10

EBT 1575.50 2006.40

PAT 1291.70 1564.80

EPS 187.06 248.30

Table 18- Growth Percentage Of Maruti Suzuki

Profitability and efficiency ratio:

Particulars March 2019 March 2018

ROCE (%) 14.04 21.60

73
 ROE (%) 11.66 16.25

Inventory turnover 23.52 25.87

Debtors turnover 34.08 45.61
Current ratio 0.75 0.87

Interest coverage ratio 53.04 138.92

Table 19- Profitability Ratio of Maruti Suzuki

Valuation parameters:
Particulars March 2020 March 2019

EPS 187.06 248.30

P/E 22.82 23.65

EV/sales 1.71 2.34

EV/EBITDA 129575.25 201456.04

Table 20- Valuation Ratios of Maruti Suzuki

On analyzing the growth percentage:

 On seeing the growth percentage table as above, its clearly seen that there is a loss
accounted in current year recording approximately Rs 11336 crore net loss from almost
nil or negative profit (loss) in previous year.
 Such loss was possible due to coronavirus outbreak, decrease in net sales of company
and at same time increase in few expenses incurred by maruti Suzuki in previous years,
leading to growth percentage.
 Also, the big player of maruti Suzuki swift have greatly contributed to group in achieving
loss.
 Thus, the growth percentage table implies that the company is losing its position rapidly
to achieve more shares in automobile industry.
 Hence with decrease in year on year sale it can be recommended to investor to sell in
this share.
74
 On analyzing profitability and operating ratios:
 The profitability and operating ratios of Maruti Suzuki draws a picture of slow growth
enabling satisfactorily and smooth functioning.
 The ROE of the company was 16.25% in 2019 which reduced up to 11.66%in 2020.
 Also, the turnover ratios are not good enough to convert the inventory into cash quickly
without any lag. Thus, ensuring higher cost of storage and wastage of inventory.
 The debtor turnover is also satisfactory, which means no long term due from debtors and
less of bad debt available within the company.
 The current ratio of present year is below 0 which means there is more of current
liabilities existing in company in comparison to current assets. Thus, increasing debt of
firm.

Valuation:
 From above parameters and ratio analysis it can be clearly noted that the company’s
value has decreased over a time and is reducing more.
 Considering the valuation parameters, the maruti Suzuki has an EPS of 187 in 2020 as
against 248 in 2019.
 The enterprise value of maruti Suzuki accounts to 129575 approximately taking into
consideration few factors as calculated above.
 The companies P/E has Decreased. Low P/E ratio indicates that investor is anticipating lower
growth in future.
 Hence, the company seems to be on lower position on valuation scale and thus investors
can sell the stock and re-enter at a dip with a little risk since most of the automobile
sector is largely affected due to major outbreak of corona for increasing its money worth.

75
TECHNICAL ANALYSIS AND ITS INTERPRETATION

Fig. 6 – Chart of Maruti Suzuki

 The following stock of maruti Suzuki has fallen this year since the production was
affected and due to corona virus pandemic so as the company resulted into zero sales
of its vehicle in the month of April 2020.
 According to ATR the price movement is about Rs.298.71 per day, Rs.573.85 per
week, Rs.915.58 in a month which is constant and stable movement. The traders who
want quick return can trade position ally in this scrip.
 Now, as per the Moving Average belt the stock is trying to reach the upside and
achieve its targets and stable pace in the movement.

 Hence, the company seems to be on stable position on valuation scale and thus
investors can buy the stock for longer period with a little risk since most of the
automobile sector is largely affected due to major outbreak of corona for increasing
its money worth.

76
8.2 TATA MOTORS
About the Company

Tata Motors Limited formerly known as TELCO (TATA Engineering and Locomotive
Company), (NYSE: TTM) - is India's largest passenger automobile and commercial
vehicle manufacturing company. It is a part of the Tata Group, and has its headquarters
in Mumbai, Maharashtra. One of the world's largest manufacturers of commercial
vehicles and known for its hatchback passenger vehicle Tata India, Tata Motors has its
manufacturing base in Jamshedpur, Lucknow, Pune and Singur. The OICA ranked it as
the world's 21st largest vehicle manufacturer, based on figures for2006.

Tata Motors was established in 1945, when the company began making trains. Tata
Motors was first listed on the NYSE in 2004. Tata Motors gained Rs. 320 billion during
2001-2006 which was among the top 10 corporate profits in India. In 2004 it also bought
Daewoo's truck manufacturing unit, now known as Tata Daewoo Commercial Vehicle,
in South Korea. In March 2005, it acquired a 21% stake in Hispano Carrocera SA, giving
it controlling rights in the company. On 10 January 2008, Tata Motors launched their
much awaited Tata Nano, noted for its Rs 100,000 price-tag, at Auto Expo 2008 in
Pragati Maidan, Delhi.

Tata Motors Limited is India's largest automobile company, with revenues of Rs. 32,426
crores (USD 7.2 billion) in 2006-07. It is the leader by far in commercial vehicles in
each segment, and the second largest in the passenger vehicles market with winning
products in the compact, midsize car and utility vehicle segments. The company is the
world's fifth largest medium and heavy commercial vehicle manufacturer, and the
world's second largest medium and heavy bus manufacturer.
The company's 22,000 employees are guided by the vision to be "best in the manner in
which we operate, best in the products we deliver, and best in our value system and
ethics." Tata Motors helps its employees realise their potential through innovative HR
practices. The company's goal is to empower and provide employees with dynamic
career paths in congruence with corporate objectives. All-round potential development
and performance improvement is ensured by regular in-house and external training. The
77
company has won several awards recognizing its training programmes.
CURRENT SITUATION
The Tata Group is one of India's largest and most respected business conglomerates,
with revenues in 2006-07 of $28.8 billion, the equivalent of about 3.2 per cent of the
country's GDP, and the international revenues of the Group in 2006-07 were US$ 10.8
billion, contributing to 38% of the total Group revenues. Tata companies together
employ over 300,000 people.
Tata MotorsNSE -1.55 % expect demand for personal vehicles to go up in the country
as social distancing and fear associated with COVID-19 veer people away from public
transport.
Tata Motors Ltd Share Holding as on 31-03-2020

Category No. of shares Percentage

Promoters 1,309,551,138 42.39

Foreign
520,083,072 16.84
Institutions

NBFC and
Mutual 189,812,210 6.14
Funds

Central
4,944,144 0.16
Government

Others 432,665,607 14.01

General
407,147,148 13.18
Public

78
FUNDAMENTAL ANALYSIS AND ITS INTREPRETATION

Balance Sheet of Tata Motors (in Rs. Mar-19 Mar-18

Cr.)

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS
Equity Share Capital 679.2 679.2
Total Share Capital 679.2 679.2
Reserves and Surplus 59500.3 94748.7
Total Reserves and Surplus 59500.3 94748.7
Total Shareholders’ Funds 60179.6 95427.9
Minority Interest 523.1 525.1
NON-CURRENT LIABILITIES
Long Term Borrowings 70973.7 61199.5
Deferred Tax Liabilities [Net] 1491.0 6125.8
Other Long Term Liabilities 16714.9 13904.3
Long Term Provisions 11854.9 10948.4
Total Non-Current Liabilities 101034.5 92178.1
CURRENT LIABILITIES
Short Term Borrowings 20150.3 16794.9
Trade Payables 68513.5 76939.8
Other Current Liabilities 46596.9 41531.3
Short Term Provisions 10196.8 7953.5
Total Current Liabilities 145457.4 143219.5
Total Capital And Liabilities 307194.5 331350.5
ASSETS
NON-CURRENT ASSETS
Tangible Assets 72619.9 73867.8
Intangible Assets 37866.7 47429.6
Capital Work-In-Progress 8538.2 16142.9
79
 Fixed Assets 142370.4 161330.9
Non-Current Investments 6240.9 5651.7
Deferred Tax Assets [Net] 5151.1 4158.7
Long Term Loans And Advances 407.4 495.4
Other Non-Current Assets 28845.6 23624.6
Total Non-Current Assets 183763.4 195377.7
CURRENT ASSETS
Current Investments 9529.8 15161.1
Inventories 39013.7 42137.6
Trade Receivables 18996.2 19893.3
Cash And Cash Equivalents 32648.8 34613.9
Short Term Loans And Advances 1268.7 2279.7
OtherCurrentAssets 21973.9 21887.2
Total Current Assets 123431.2 135972.8
Total Assets 307194.5 331350.5

Growth percentage:
Particulars March 2019 March 2018

Revenue from operation 68764.88 60389.01

EBITDA (541.42) (843.74)

EBT (1023) (1269)

PAT (1039.51) (1281)

EPS 5.94 (3.05)

Table 21- Growth Percentage of Tata Motors

Profitability and efficiency ratio:

Particulars March 2019 March 2018

ROCE (%) 11.57 5.04

80
 ROE (%) 9.11 (5.13)

Inventory turnover 14.84 10.38

Debtors turnover 20.56 20.98
Current ratio 0.58 0.62

Interest coverage ratio 0.70 2.96

Table 22- Profitability Ratios of Tata Motors

Valuation parameters:
Particulars March 2019 March 2018

EPS 5.94 (3.05)

P/E (2.05) 12.35

EV/sales 1.09 2.15

EV/EBITDA 75424.94 126665.65

Table 23- Valuation Ratio of Tata Motors

On analyzing the growth percentage:

 On seeing the growth percentage table as above, its clearly seen that there is a loss
accounted in current year recording approximately Rs 8375 crore net loss from almost
nil or negative profit (loss) in previous year.
 Such loss was possible due to coronavirus outbreak, as there was no new innovation
build in the company, threats to new entrants, and decrease in net sales of company and
at same time increase in few expenses incurred by Tata motors in previous years, leading
to growth percentage.
 Thus, the growth percentage table implies that the company is losing its position rapidly
to achieve more shares in automobile industry.
 Hence with decrease in year on year sale it can be recommended to investor to sell in
this share.

81
 On analyzing profitability and operating ratios:
 The profitability and operating ratios of Tata Motors draws a picture of slow growth
enabling satisfactorily and smooth functioning.
 The ROE of the company was (5.13) % in 2018 which boosted up to 9.13%in 2019.
 Also, the turnover ratios are not good enough to convert the inventory into cash quickly
without any lag. Thus, ensuring higher cost of storage and wastage of inventory.
 As the company has no new innovation builded up since 2018
 The debtor turnover is also satisfactory, which means no long term due from debtors and
less of bad debt available within the company.
 The current ratio of present year is below 0 which means there is more of current
liabilities existing in company in comparison to current assets. Thus, increasing debt of
firm.

Valuation:
 From above parameters and ratio analysis it can be clearly noted that the company’s
value has decreased over a time and is reducing more.
 Considering the valuation parameters, the Tata motors has an EPS of 5.94 in 2019 as
against (3.05) in 2018.
 The enterprise value of Tata motors accounts to 75424 approximately taking into
consideration few factors as calculated above.
 Hence, the company seems to be on lower position on valuation scale and thus investors
can sell the stock and re-enter at a dip with a little risk since most of the automobile
sector is largely affected due to major outbreak of corona for increasing its money worth.

82
TECHNICAL ANALYSIS AND ITS INTERPRETATION

Fig. 7 – Chart of Tata Motors

 The following stock of TATA MOTORS has fallen this year since there was no
innovation its products and due to corona virus pandemic so as the company resulted
into low sales of its vehicle in 2020.
 According to ATR the price movement is about Rs.5.1904 per day, Rs.15.42 per
week, Rs.46.73 in a month which is indicating towards no pace in its movement. The
investors who want to invest in in the scrip for long term can invest in this scrip but
with little risk since the liquidity of the stock is also low.
 Now, as per the Moving Average belt the stock is trying to reach the upside and
achieve its targets with very low pace in the movement.
 Hence, the company seems to be on stable position on valuation scale and thus
investors can buy the stock for longer period with a little risk since most of the
automobile sector is largely affected due to major outbreak of corona for increasing
its money worth.

83
8.3 Leyland Ltd. (ASHOKLEY)
About the company

Ashok Leyland Ltd is the 2nd largest manufacturer of commercial vehicles in India the 4th
largest manufacturer of buses in the world and the 12th largest manufacturer of trucks
globally. The company's products include buses trucks engines defense and special vehicles.
From 18 seater to 82 seater double-decker buses from 7.5 ton to 49 ton in haulage vehicles
from numerous special application vehicles to diesel engines for industrial marine and genset
applications Ashok Leyland offers a range of products. The company is the flagship of the
Hinduja Group. Headquartered in Chennai India Ashok Leyland's manufacturing footprint
spreads across the globe with 9 plants; including one each at Great Britain and Ras Al
Khaimah (UAE). The company's Joint Venture partners include John Deere (USA) for
Construction Equipment Continental AG (Germany) for Automotive Infotronics and the
Alteams Group for the manufacture of high-press die-casting extruded aluminum
components for the automotive and telecommunications sectors.Ashok Leyland Ltd was
incorporated in the year 1948 with the name Ashok Motors. The company was set up in
collaboration with Austin Motor Company England for the assembly of Austin cars. In The
year 1949 they commenced production at the factory situated at Ennore south of Madras.
Also they rolled out the first indigenously assembled A40 Austin car.In the year 1950 the
company made an agreement with Leyland UK in which Ashok Motors got sole rights to
import assemble and progressively manufacture Leyland trucks for seven years. In the year
1954 the Government approved the progressive manufacture of Leyland commercial
vehicles and a license was granted for the manufacture of 1000 Comets a year.The company
signs a MoU with Bank of Maharashtra for vehicle financing.In 2015 the company has tied
up with Lakshmi Vilas Bank to provide finance to its commercial vehicle buyers.
Automotive Infotronics Limited joint venture and Ashley Airways Limited an associate of
the Company are under liquidation.
During the year under review 2016-2017 the Board of Directors of the Company at their
meeting held on September 14 2016 approved the draft scheme of amalgamation of Hinduja
Foundries Limited (HFL) with the Company and their respective shareholders and creditors
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under Sections 391 to 394 of the Companies Act 1956 subject to regulatory approvals. The
Appointed Date for the scheme of amalgamation was October 1 2016. The intended
amalgamation has been approved by the shareholders at the Court Convened Meeting held
on January 23 2017 and through Postal Ballot on January 25 2017. The Hon'ble National
Company Law Tribunal Chennai Bench (NCLT) which heard the Company's petition on
April 18 2017 sanctioned the scheme of amalgamation of HFL with the Company and their
respective shareholders and creditors. Automotive Infotronics Limited joint venture and
Ashley Airways Limited an associate of the Company are under liquidation.

Hinduja Leyland Finance Ltd., a non-banking finance company, has filed a draft red
herring prospectus for its Initial Public Offering (IPO) with the SEBI. The fresh issue of
equity shares is ₹500 crore and offer for sale is ₹600 crore, said S. Nagarajan, executive vice
chairman, Hinduja Leyland Finance. Axis Capital, Citi Group Global Markets India and
YES Securities are book running lead managers for the issue.
According to him, private equity firm Everstone has over 13% stake in Ashok Leyland’s
subsidiary and is looking to dilute 50% of its stake. HLF’s has assets under management
stand at around ₹8,500 crore against ₹6,500 crore last year.
In fact, it is the second attempt of the commercial vehicle finance unit to enter the capital
market. HLF had filed its earlier DRHP on March 29, 2016 and withdrew it on June 16,
2107. The selling shareholder Everfin Holding granted its consent to withdraw the draft red
herring prospectus with the SEBI.

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FUNDAMENTAL ANALYSIS AND ITS INTERPRETATION

Balance Sheet of Ashok Leyland (in Rs. Mar-19 Mar-18

Cr.)

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS
Equity Share Capital 293.6 292.7
Total Share Capital 293.6 292.7
Reserves and Surplus 8038.9 6952.8
Total Reserves and Surplus 8038.9 6952.8
Total Shareholders’ Funds 8332.4 7245.5
NON-CURRENT LIABILITIES
Long Term Borrowings 298.4 512.6
Deferred Tax Liabilities [Net] 249.7 298.6
Other Long Term Liabilities 305.3 205.2
Long Term Provisions 249.6 255.0
Total Non-Current Liabilities 1103.0 1271.4
CURRENT LIABILITIES
Short Term Borrowings 100.0 100.0
Trade Payables 5018.9 4887.9
Other Current Liabilities 2867.3 3023.1
Short Term Provisions 802.8 808.5
Total Current Liabilities 8789.0 8819.5
Total Capital And Liabilities 18224.4 17336.4
ASSETS
NON-CURRENT ASSETS
Tangible Assets 4806.0 4811.4
Intangible Assets 808.5 736.5
Capital Work-In-Progress 274.6 234.3
Other Assets 0.0 0.0
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 Fixed Assets 6272.1 5970.6
Non-Current Investments 2636.5 2451.5
Deferred Tax Assets [Net] 0.0 0.0
Long Term Loans And Advances 31.7 33.5
Other Non-Current Assets 1097.7 817.3
Total Non-Current Assets 10038.1 9272.9
CURRENT ASSETS
Current Investments 0.0 3155.2
Inventories 2684.7 1758.3
Trade Receivables 2505.5 944.8
Cash And Cash Equivalents 1373.6 1042.2
Short Term Loans And Advances 22.5 24.1
OtherCurrentAssets 1600.1 1138.9
Total Current Assets 8186.3 8063.5
Total Assets 18224.4 17336.4

Growth percentage:
Particulars March 2019 March 2018

Revenue from operation 29164.89 26552.98

EBITDA 2554.29 2414.34

EBT 2496.80 2385.83

PAT 1983.20 1717.73

EPS 6.76 5.87

Table 24- Growth Percentage of Ashok Leyland

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Profitability and efficiency ratio:
Particulars March 2019 March 2018

ROCE (%) 27.81 30.07

ROE (%) 23.80 23.70

Inventory turnover 10.82 14.99

Debtors turnover 20.56 20.98
Current ratio 0.93 0.91

Interest coverage ratio 2.90 3.09

Table 25- Profitability of Ashok Leyland

Valuation parameters:
Particulars March 2019 March 2018

EPS 6.76 5.87

P/E 19 6

EV/sales 0.89 1.60

EV/EBITDA 25825.93 42101.15

Table 26- Valuation Ratio of Ashok Leyland

On analyzing the growth percentage:

 On seeing the growth percentage table as above, its clearly seen that there is a profit
accounted in current year recording approximately Rs 2611.91crore net profit from
almost nil or negative profit (loss) in previous year.
 Such profit was possible due to increase in net sales of company and at same time
increase in few expenses incurred by shook Leyland in previous years, leading to growth
percentage.

88
 Thus, the growth percentage table implies that the company is increasing its position
rapidly to achieve more shares in automobile industry.
 Hence with increase in year on year sale it can be recommended to investor to hold in
this share.

On analyzing profitability and operating ratios:

 The profitability and operating ratios of Ashok Leyland draws a picture of slow growth
enabling satisfactorily and smooth functioning.
 The ROE of the company was 23.70% in 2018 which boosted up to 23.80%in 2019.
 Also, the turnover ratios are good enough to convert the inventory into cash quickly
without any lag. Thus, ensuring higher cost of storage and wastage of inventory.
 The debtor turnover is also satisfactory, which means no long term due from debtors and
less of bad debt available within the company.
 The current ratio of present year is below 0 which means there is more of current
liabilities existing in company in comparison to current assets. Thus, increasing debt of
firm.

Valuation:
 From above parameters and ratio analysis it can be clearly noted that the company’s
value has decreased over a time and is reducing more.
 Considering the valuation parameters, the Ashok Leyland has an EPS of 6.76 in 2019 as
against 5.87 in 2018.
 The enterprise value of Ashok Leyland accounts to 75424 approximately taking into
consideration few factors as calculated above.
 The company’s P/E ratio is increasing every year. High P/E ratio indicates that investor is
anticipating higher growth in future.
 Hence, the company seems to be on lower position on valuation scale and thus investors
can sell the stock and re-enter at a dip with a little risk since most of the automobile
sector is largely affected due to major outbreak of corona for increasing its money worth.

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 TECHNICAL ANALYSIS OF ASHOK LEYLAND

Fig. 8 – Chart of Ashok Leyland

 The following stock of ASHOK LEYLAND has fallen this year since there was no
innovation its products and due to corona virus pandemic so as the company resulted
into low sales of its vehicle in 2020.According to ATR the price movement is about
 Rs.3.5032 per day, Rs.8.55 per week, Rs.16.95 in a month which is indicating towards
no pace in its movement. The investors who want to invest in in the scrip for long term
can invest in this scrip but with little risk since the liquidity of the stock is also low.
 Now, as per the Moving Average belt the stock is trying to reach the upside and achieve
its 100 days target which is in red color belt with very low pace in the movement.
 Hence, the company seems to be on stable with little risky position on valuation scale
and thus investors can buy the stock for longer period with a little risk since most of the
automobile sector is largely affected due to major outbreak of corona for increasing its
money worth. One have to wait for longer period to get good returns.

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 8.4 MAHINDRA & MAHINDRA
About the company

 Mahindra and Mahindra Limited was established in 1945 by two brothers K.C. Mahindra
and J.C. Mahindra and Malik Ghulam Mohammed in Ludhiana. After the independence
Malik Ghulam Mohammed went to Pakistan and there he became the first finance
minister. Initially the company used to deal in steel with the traders of England and
U.S.A. This company got its present name in1948. Earlier they got recognized for their
manufacturing of jeeps, gradually they started producing Light commercial vehicles and
agricultural tractors.
 The company Mahindra and Mahindra has its presence all over the world; it not only
deals in cars but also in other automobile products. The trucks of this company are being
sold in almost six continents. It has a manufacturing plant in China and United Kingdom
along with three assembly plants in U.S.A. Mahindra and Mahindra is partners with two
of the international companies and they are Renault SA of France and International
Truck and Engine Corporation of U.S.A.
 M&M announced the introduction of petrol variant of its premium SUV the XUV500
priced at Rs 15.49 lacs (ex-showroom Delhi). On 14 December 2017 M&M announced
that it plans to increase prices of its passenger and commercial vehicles by up to 3% with
effect from 1 January 2018. The price hike is due to increase in commodity prices M&M
said. On 30 January 2018 M&M's Farm Equipment unit announced the acquisition of a
26% equity stake in M.I.T.R.A. Agro Equipment’s Pvt Ltd (MITRA) a Maharashtra
based AgTech company which designs and manufactures proprietary sprayers for
horticulture crops. M&M will acquire 26% equity stake in MITRA through a fresh
infusion of capital into the company. As a part of a series of initiatives under its digital
transformation strategy M&M on 31 January 2018 announced an industry first initiative
in the automotive retail space with the launch of its 'Bring the Showroom Home' a
portable mobile based interactive Virtual Reality experience. On 2 February 2018
Mahindra First Choice Wheels (MFCWL) a diversified used vehicle automotive services
provider announced that it has raised a new round of $15 million (Rs 100 crore).

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FUNDAMENTAL ANALYSIS AND ITS INTERPRETATION
TREND RATIOS OF MAHINDRA AND MAHINDRA

Growth percentage:
Particulars March 2019 March 2018

Revenue from operation 52960.80 49721.91

EBITDA 6354.74 5668.76

EBT 6325.01 6102.37

PAT 4796.04 4356.01

EPS 40.29 36.64

Table 27- Growth Percentage of M&M

Profitability and efficiency ratio:

Particulars March 2019 March 2018

ROCE (%) 16.86 16.95

ROE (%) 14.01 14.37

Inventory turnover 13.96 18.02

Debtors turnover 20.56 20.98
Current ratio 1.26 1.24

Interest coverage ratio 2.45 2.65

Table 28- Profitability Ratio of M&M

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 Valuation parameters:
Particulars March 2019 March 2018

EPS 40.29 36.64

P/E 13.78 10.68

EV/sales 1.47 1.81

EV/EBITDA 78800.35 88050.00

Table 29- Valuation Ratio of M&M

On analyzing the growth percentage:

 On seeing the growth percentage table as above, its clearly seen that there is a profit
accounted in current year recording approximately Rs 4796 crore net profit from
almost nil or negative profit (loss) in previous year.
 Such profit was possible due to increase in net sales of company and at same time
increase in few expenses incurred by Mahindra & Mahindra in previous years, leading
to growth percentage.
 Thus, the growth percentage table implies that the company is increasing its position
rapidly to achieve more shares in automobile industry.
 Hence with increase in year on year sale it can be recommended to investor to hold in
this share.
On analyzing profitability and operating ratios:
 The profitability and operating ratios of Mahindra & Mahindra draws a picture of slow
growth enabling satisfactorily and smooth functioning.
 The ROE of the company was 14.37% in 2018 which reduced up to 14.01%in 2019.
 Also, the turnover ratios are good enough to convert the inventory into cash quickly
without any lag. Thus, ensuring higher cost of storage and wastage of inventory.
 The debtor turnover is also satisfactory, which means no long term due from debtors
and less of bad debt available within the company.
 The current ratio of present year is above 1 which means there is less of current
liabilities existing in company in comparison to current assets. Thus, decreasing debt
of firm.
93
Valuation:
 From above parameters and ratio analysis it can be clearly noted that the company’s
value has decreased over a time and is reducing more.
 Considering the valuation parameters, the Mahindra & Mahindra has an EPS of 40.29
in 2019 as against 36.64 in 2018.
 The enterprise value of Mahindra & Mahindra accounts to 78800 approximately taking
into consideration few factors as calculated above.
 Hence, the company seems to be on lower position on valuation scale and thus
investors can sell the stock and re-enter at a dip with a little risk since most of the
automobile sector is largely affected due to major outbreak of corona for increasing its
money worth.

94
 TECHNICAL ANALYSIS AND ITS INTERPRETATION

Fig. 9 – Chart of Mahindra & Mahindra

 The following stock of Mahindra & Mahindra has fallen this year since there was no
innovation its products and due to corona virus pandemic so as the company resulted
into low sales of its vehicle in 2020. According to ATR the price movement is about
Rs.24.02 per day, Rs.49.63 per week, Rs.91.86 in a month which is indicating towards
a stable movement. The following scrip of m & m is good stock and a major stock of
automobile sector and it is suitable for both long term and short term traders for getting
good returns.
 Now, as per the Moving Average belt the stock is trying to reach the upside and achieve
its 100 days target which is in red color belt with very low pace in the movement.
 Hence, the company seems to be on stable with little risky position on valuation scale
and thus investors can buy the stock for longer period as well as for shorter span with a
little risk since most of the automobile sector is largely affected due to major outbreak
of corona for increasing its money worth. One have to wait for longer period to get high
and good returns.

95
IMPACT OF CORONAVIRUS OUTBREAK ON BOTH SECTORS

Since from the starting of the year 2020, everything was going right suddenly there came
the virus from china which affected almost all the parts of the world. Due to increasing
cases of the infection every government of around every country have declared it as a
major outbreak which in turn made every country to get its citizen locked in their
house.Thus,due to lockdown phase in most parts of the world the business were shut
which resulted into huge loss to people
Now coming onto the Retail as well as Automobile sector, this industries suffered a lot
since all the business were shut and as people were asked not to step out of their place
the demand and supply chain was affected a lot. As we all are aware that most people
purchase the thing only after physical touch so if people can’t go out then they can’t
purchase the products thus making the sales of company affected.
On the other hand automobile industry faced a lot of loss as consumption of vehicles
were affected during the outbreak and almost all the vehicle whether commercial or
personal were idle for this months. Also in this case there would no such purchase
especially of commercial vehicles as around 90 lakhs trucks are standing idle because of
this there’s no revenue there will be no liquidity and if there’s no liquidity there would
be no income and no new purchase.
This way the outbreak of corona has affected the world negatively.

96
 CONCLUSION

Technical analysis is more of an intuitive analysis than anything else because the only
way to analyses the movement is to look at the charts and to deep down find the real
reason as to what was the pattern behind a tremendous bull run. It’s obvious that there
exists a pattern behind a bull run so it is rather more important to focus on the minute
details of the chart and try to correlate the chart movement with human sentiment to get
a clear picture. However, to become a master in reading, analysing and predicting the
movement accurately is not done overnight. It is as good as the famous saying “Rome
was not built in a day” so with careful observation, good understanding of human
tendency, right balance of fear and greed and strongly backed up by intuitive power will
definitely make someone master in technical analysis. It must also be noted that technical
analysis is not the only factor to consider while investing or trading in stocks.
One has to see the fundamental aspects as well because if the stock is fundamentally
strong, due to obvious reasons, it has higher volatility which makes price surge and slip.
So a right blend of Fundamental and technical analysis can make someone enter in right
trade and book profits and the time of shorting it.

97
 RECOMMENDATIONS

 Investors should avoid anticipating while investing into share, anticipating usually leads
to making up loss for the investors because they just anticipate the price and think share
market is just to bet in companies.
 Investors should not trade their position they should invest in the companies to earn good
amount of returns.
 Different factors should be considered by investors while investing like liquidity, return,
risk, tax benefits, capital appreciation, diversification benefit and most prominent factor
is the good return on equity.
 Investors should not blindly trust the calls given by the brokers, they must analyze the
company properly before investing to earn good amount of returns.
 Investors should have patience for holding up the share for longer period of time to earn
good amount of returns in future, usually stocks give appreciation after 3 to 5 years or
more.
 Investors should know to diversify their portfolio as per their risk appetite so that they
do not tend to lose their investment by investing in one particular stock.
Investors should always trade with triple screening system (monthly, weekly, daily)
charts

98
 LEARNING OUTCOME

This project helps us to understand the Mechanism of the chosen Industry in terms of
their Performance, their Gains in the market and the investors benefit, their Growth as a
company and as an Industry. I have selected automobile and retail as my sector of
research and was astonished to understand the depth and the growth available in the
Industry. This sectors requires higher Investments and a very dynamic plan to run
successfully.
Key takeaways from this project are: -
 AFS of both industries was done with a single objective of understanding the
performance of both the sectors and their key players, their investment opportunities etc.
which was achieved.
 It is understood that both the sectors after being an open market, it’s difficult to enter the
industry. As this business is high on Investment and operating expense is very high. It is
not possible for any organization to earn profits in the beginning itself, making the
industry more difficult and reluctant for new entities. Cost is a major constraint for every
business but it’s the most difficult one in this business and it is evident that the existing
players such as Mahindra and Mahindra, Trent, etc are also having a tough time in this
Industries.
 This project helped us to understand the importance of Excel as a finance student and
was helpful to brush up us excel knowledge
 It helped to understand how an actual research person would work to generate reports
and how difficult it is to collect Data.
 Major tools which were thought to us were brought into use in practicality for this project
and hence a wider usage of these tools was understood.
 Overall this project was a very Challenging, yet an important project for every
individual.

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 FINDINGS

The Analysis suggests that all the above mentioned companies are highly efficient and has
the potential to become market leaders if they proceed in the constant manner or take a boom
and are able to sustain the outburst of the growth.

1. AVENUE SUPERMART:
 The performance of DMART has been good, it has suffered certain dips but is retaining

back its position in the market. It is approaching its ‘High’ point and still growing.

 This is also because the company has great potential and currently undervalued, which

indicates that the firm will achieve the Industry P/E and surpass the expectations.

2. MARUTI SUZUKI:
 Maruti Suzuki is one of the best performing automobile company in India and as we can

see, it has seen a growth of almost 5% in the share value, even when there was

tremendous volatility and global pressure on the auto sector.

 Even Maruti is undervalued, but still has a better belief system among the investors. This

suggests that the company will move forward and there is scope of earnings seen in a

long-term investment. As we saw the financials earlier, the company is on the constant

path of growth and can enjoy great demands in the near future.

3. TRENT
 TRENT being a subsidiary of Tata Global Retail, even when their production capacity

is very high, they have state of the art technology and more importantly, they spend 30%

of their total production cost in R&D.

100
 The P/E is becoming stronger as compared to the industry, which suggests that the

company has a long way to go, which also gives an opportunity to the investor to make

quick money. This is also possible as the company came out of the profit in 2017, later

has seen a growth every year.

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 BIBLIOGRAPHY

 www.timesofindia.com

 www.economictimes.com
 www.ibef.org/industry/retail-india.aspx

 www.bseindia.com/stock-share-price/avenue-supermarts-ltd/dmart/540376/

 www.business-standard.com/company/m-m-365/information/company-history

 www.dmartindia.com
 www.eulerhermes.com/economic-research

 www.marutisuzuki.com

 www.trent.com

 www.Futureretail.com/

 www.tatamotors.com

 www.ashokleyland.com

 Jhamb, D., & Kiran, R. (2011). Organized retail in India-drivers facilitator

and SWOT analysis.
 Venkatesh, N. (2013). Indian retail industries market analysis: issues, challenges
and its opportunity for the 21st century. International Journal of Application or
Innovation in Engineering & Management (IJAIEM), 164-173.

 Shenoy, S., Sequeira, A. H., & Devaraj, K. (2013). The saga of Indian retail avalanche.
Security Analysis & Portfolio Management- S.Kevin, PHI learning pvt ltd.

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PLAGIARISM

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