Course Code: FIN547 Course Title: SAPM

Course Instructor: Mr. Rohit Sood

Academic Task No.: CA 2 Section: Q1E13

Date of Allotment: August08, 2020 Date of Submission: October5, 2020

Evaluation Parameters

Learning Outcomes:

It helps to aware about Portfolio construction, portfolio revision and assessment.

Declaration:

I declare that this Assignment is my individual work. I have not copied it from any other
student‟s work or from any other source except where due acknowledgement is made explicitly
in the text, nor has any part been written for me by any other person.

Student’s Signature:

Vishal Akar

Asish Thomas Mathew

Nang Suyenli Manpoong

Reshma.S.Nair

Gul Ahmad Esmati

6TH Week Report [21/09/2020]
BEFORE CHURNING
 STOCKS SOLD
1. BERGER PAINTS
Berger paints India Ltd is the third largest paint manufacturer and second largest
manufacturer in decorative paints. The company’s manufacturing facilities are located in
West Bengal, Uttar Pradesh, Pondicherry, Goa, and Jammu and Kashmir. The Company also
has a joint venture with Nippon Bee Chemical for manufacturing of coatings for plastic
substrates used in automobiles and mobile phones.
Founder: Lewis Berger
Net Income: 460.83 crores
Industry: Paints

Transaction

372 * 578.50 = 215202

Net Amount =214980

Profit: Rs.15511

Analysis

• I bought the stock for Rs. 536.86 and now the price goes to 578.40. And I earned a
profit of Rs. 15511.
 • Berger Paints (India) Ltd. share price moved down by -1.50% from its previous close
of Rs 578.50. Berger Paints (India) Ltd. stock last traded price is 569.85
• For safer position, I sold the stock.

SWOT Analysis

• De growth in Revenue and Profit

• Declining profits every quarter for the past 3 quarters
• Fall in Quarterly Revenue and Net Profit (YoY) Recent
• Results: Declining Operating Profit Margin and Net Profits (YoY)

TECHNICAL ANALYSIS

• Moving Average
• The moving average (MA) is a simple technical analysis tool that smooths out market
data by creating an average price that is constantly updated. The average is calculated
over a given period of time, such as 10 days, 20 minutes, 30 weeks or whatever period
the trader chooses.
• An uptrend, or bullish trend, means that the price is moving higher.
• A downtrend, or bearish trend, means the price is moving lower.
• A sideways trend, where the price is moving sideways.
• When the price crosses below a moving average, it can be used as a simple trading
signal. A move below the moving average suggests that the bears are in control of the
price action and that the asset will likely move lower. Conversely, a cross above a
moving average suggests that the bulls are in control and that the price may be getting
ready to make a move higher.
• In here we can see that, today Berger Paints price is Rs. 578.40, which is below the
simple moving average of 5 days and close to 10 days moving average in the above
table, which means the trend is down.

• MOVING AVERAGE CONVERGENCE DIVERGENCE (MACD)

 Analysis

• Stands for Divergence of Moving Average Convergence. It is a trend tracking

measure of momentum. Three moving averages, which are 9 days EMA, 12 days
EMA & 26
days EMA, are taken for estimation. Together with the 9 day EMA, which is the
"signal line," the 26 day EMA derived from the 12 day EMA offers buy / sell signals.
• MACD=12-Period EMA − 26-Period EMA
• When the MACD is above 0 and crosses the signal line above it is called a bullish
signal. It is known to be a bearish signal if the MACD is below 0 and crosses under
the signal line.
• But in here, the MACD is crossing under the signal line, it means there will be a
chance of bearish. It shows the selling signal.

FUNDAMENTAL ANALYSIS

BERGER PAINTS

Mar Cap NP Qtr

CMP Rs. P/E Rs.Cr. Div Yld % Rs.Cr. BETA ROCE %

541.5 105.93 52591.55 0.41 15.42 0.76 28.98

News Analysis

• Berger Paints (India) Ltd. shares fall 0.56 per cent in Thursday's trading session

Link: https://economictimes.indiatimes.com/markets/stocks/news/berger-paints-india-
ltd-shares-fall-0-56-per-cent-in-thursdays-trading-session/articleshow/78161364.cms

• Berger Paints (India) Ltd. shares fall 0.3 per cent in Friday's trading session

Link: https://economictimes.indiatimes.com/markets/stocks/news/berger-paints-india-
ltd-shares-fall-0-3-per-cent-in-fridays-trading-session/articleshow/78184471.cms

• Shares of Berger Paints (India) Ltd. falls as Nifty drops

Link: https://economictimes.indiatimes.com/markets/stocks/news/shares-of-berger-
paints-india-ltd-falls-as-nifty-drops/articleshow/78228667.cms
 2. TATA MOTORS

Tata Motors Ltd is India`s largest automobile company. They are the leader in commercial
vehicles in each segment, and among the top three in passenger vehicles with winning
products in the compact, midsize car and utility vehicle segments. The company is the
world`s fourth largest truck manufacturer, and the world`s second largest bus
manufacturer.The product range of the company includes Passenger.

Founder: Jehangir Ratanji Dadabhoy Tata

Net Income: 792,710 crore

Industries: Automotive

Transaction

1649 * 143.90 = 237291

Net Amount =237046

Profit: Rs.40603

Analysis

• I bought the stock for Rs. 123.28 and now the price goes to 143.90. And I earned a
profit of Rs. 40,603.
• Tata Motors Ltd. share price moved down by -7.07% from its previous close of Rs
147.90. Tata Motors Ltd. stock last traded price is 137.45
• For safer position I sold the stock.
SWOT Analysis

• Red Flag: Downgrade by Credit Rating Agency

• Decline in Quarterly Net Profit with falling Profit Margin (YoY)
• Companies with Increasing Debt
• De growth in Quarterly Revenue and Profit in Recent Results(YoY)
• Declining Net Cash Flow : Companies not able to generate net cash.
• Recent Results: Declining Operating Profit Margin and Net Profits (YoY)

TECHNICAL ANALYSIS

• Moving Average
 • In here we can see that, today Tata Motors price is Rs.143.90, which is below the
simple moving average of 5 days ,10 days and 20 days moving average in the above
table, which means the trend is down.
• That is, showing a bearish trend

MOVING AVERAGE CONVERGENCE DIVERGENCE (MACD)

• MACD=12-Period EMA − 26-Period EMA

• The basic bearish signal (sell sign) is generated when the MACD crosses below
the signal line.
• In here, the MACD is crossing under the signal line, it means there will be a chance of
bearish. It is showing the selling signal
• And the MACD rate is 7.03, from the graph itself we can see that the MACD line is
moving downwards. It means the rate is falling from the previous price

FUNDAMENTAL ANALYSIS

TATA MOTORS
Mar Cap NP Qtr BETA
CMP Rs. P/E Rs.Cr. Div Yld % Rs.Cr. ROCE %
1.29
123.55 40424.26 0 -8437.99 -0.37
 • In here, the Beta value is showing 1.29 , it means there is a volatility in stock that is
high risk is there.

News Analysis

• Stock market update: Nifty Auto index sheds over 3%; Motherson Sumi dips 6%

Link:

https://economictimes.indiatimes.com/markets/stocks/news/stock-market-update-
nifty-auto-index-sheds-over-3-motherson-sumi-dips-6/articleshow/78232181.cms
AFTER CHURNING
 STOCKS BOUGHT

1. LUPIN LTD

Lupin Limited is a transnational pharmaceutical Company. The Company is engaged in

producing a range of generic and branded formulations and bulk drugs. It manufactures
Active Pharmaceutical Ingredients (APIs) and several drug formulations. Its product basket
consists of formulations from Cephalosporins, CVS, CNS, Anti-Asthma, Anti-TB,
Diabetology, Dermatology, GI, and other therapy segments. Its APIs products include
Cephalexin, Cefaclor, Cefadroxil, Cefprozil, Rifaximin, Ethambutol, Pyrazinamide,
Rifampicin, Rifabutin, Lisinopril, Simvastatin, Prasugrel, Levetiracetam, Lacosamide,
Eslicarbazepine Acetate, Rasagiline Mesylate, Pregabalin, Flupirtine Maleate and Febuxostat.
As on MMarch 31, 2012, the Company had 19 subsidiaries.

Founder: Desh Bandhu Gupta

Net Income: Rs 606.55 crore

Industries: Pharmaceuticals/OTC/FMCG

Transaction

184 * 1085.90 = 199805

Net Amount =200011

Analysis

• New 52 Week High

• Company with Low Debt
• Company able to generate Net Cash - Improving Net Cash Flow for last 2 years
• Company with Zero Promoter Pledge
• FII / FPI or Institutions increasing their shareholding
• Strong Momentum: Price above short, medium and long term moving averages

TECHNICAL ANALYSIS

• Moving Average
• When the price crosses below a moving average, it can be used as a simple trading
signal. A move below the moving average suggests that the bears are in control of the
price action and that the asset will likely move lower. Conversely, a cross above a
moving average suggests that the bulls are in control and that the price may be getting
ready to make a move higher.
• In here we can see that, today’s Lupin ltd is Rs 1085.90 which is above the simple
moving average in the above table, which means the trend is up. That is, showing a
bullish trend
• Above table shows that Lupin ltd is showing a high price from the previous days.

• MOVING AVERAGE CONVERGENCE DIVERGENCE (MACD)

• MACD is one of the most commonly used technical analysis indicators. It works
using three components: two moving averages and a histogram. If the two moving
averages come together, they are said to be 'converging' and if they move away
from each other they are 'diverging'
 • MACD=12-Period EMA − 26-Period EMA
• In here, MACD (12,26,9) is 16.28. It shows Bullish in nature.
• When the MACD is above 0 and crosses the signal line above it is called a bullish
signal. It is known to be a bearish signal if the MACD is below 0 and crosses under
the signal line.
• But in here, the MACD is crossing above the signal line, it means there will be a
chance of bullish. It shows the buying signal.

FUNDAMENTAL ANALYSIS

LUPIN
CMP Rs. P/E Mar Div Qtr ROCE % BETA
Cap Rs.Cr. Yld % Profit
Var %
1085.9 73.07 49208 0.55 -64.09 9.23 0.29

P/E Ratio

• A higher P/E ratio shows that investors are willing to pay a higher share price today
because of growth expectations in the future.
• In here, P/E ratio is only the average that is 73.07 times it means the current stock price is
high relative to earnings. If a company has a high P/E, investors are paying a higher price
for the stock compared to its earnings.
• In here, A higher P/E ratio shows that investors are willing to pay a higher share price
today because of growth expectations in the future. The average P/E for the S&P 500 has
historically ranged from 13 to 15. Lupin Ltd with a current P/E of 73.07, above the S&P
average, trades at 73.07 times earnings. The high multiple indicates that investors expect
higher growth from the company compared to the overall market.
• According to BSE data, the stock traded at a P/E multiple of 73.07 and a price-to-book
ratio of 2.13. A higher P/E ratio shows investors are willing to pay a higher price because
of better future growth expectations. Price-to-book value indicates the inherent value of a
company and is the measure of the price that investors are ready to pay even for no
growth in the business.
Dividend

• For the year ending March 2020 Lupin has declared an equity dividend of 300.00%
amounting to Rs 6 per share. At the current share price of Rs 1040.55 this results in a
dividend yield of 0.58%.
• The company has a good dividend track report and has consistently declared
dividends for the last 5 years.

News Analysis

• Lupin, Cipla to benefit from Perrigo’s recall of asthma drug albuterol sulphate
MDI in the US

Cipla has already launched the gProventil in April, while Lupin’s gProAir launch is expected
this month. Dublin-based Perrigo recalled the device, saying some units may fail to dispense
due to clogging

Link: https://www.moneycontrol.com/news/business/companies/lupin-cipla-to-benefit-
from-perrigos-recall-of-asthma-drug-albuterol-sulphate-mdi-in-the-us-5855821.html

• Lupin Ltd. shares up 5.31% as Nifty gains

Link

https://economictimes.indiatimes.com/markets/stocks/news/lupin-ltd-shares-up-5-31-as-
nifty-gains/articleshow/78180626.cms

2. HERO MOTOCORP

HeroMotoCorp is the World`s single largest two-wheeler motorcycle company. Hero Honda
became the first company in the country to introduce four-stroke motorcycles and set the
standards for fuel efficiency, pollution control and quality. They have an excellent
distribution and service network spread throughout the country.

Founder: Brijmohan Lall Munjal

Net Income: ₹3,466 crore

Industry: Automotive
Transaction

65 * 3080.45 = 200229

Net Amount =200436

Analysis

• Promoters increasing shareholding

• Company with Low Debt
• Company able to generate Net Cash - Improving Net Cash Flow for last 2 years
• Book Value per share Improving for last 2 years
• Company with Zero Promoter Pledge
• FII / FPI or Institutions increasing their shareholding
• Near 52 Week High
• Strong Momentum: Price above short, medium and long term moving averages

TECHNICAL ANALYSIS
 • Moving Average

• In here we can see that, today’s Hero Motorcrop ltd is Rs 3092.20 which is above the
simple moving averages of all period in the above table, which means the trend is up.
That is, showing a bullish trend
• Above table shows that Hero Motorcrop ltd is showing a high price from the previous
days.

• MOVING AVERAGE CONVERGENCE DIVERGENCE (MACD)

 • MACD=12-Period EMA − 26-Period EMA
• In here, MACD (12,26,9) is 50.67. It shows Bullish in nature.
• When the MACD is above 0 and crosses the signal line above it is called a bullish
signal. It is known to be a bearish signal if the MACD is below 0 and crosses under
the signal line. In here, MACD line overcomes the entry signal by coming above
signal line.
• In here, the MACD is crossing above the signal line, it means there will be a chance
of bullish. It shows the buying signal.

FUNDAMENTAL ANALYSIS

HERO MOTOCORP LTD

CMP Rs. P/E Mar Div NP BETA ROCE %
Cap Rs.Cr. Yld % Qtr Rs.Cr.
3112.65 24.79 62175.04 2.89 59.14 0.91 27.23

P/E Ratio

• In here, P/E ratio is only the average that is 24.79 times it means the current stock price is
high relative to earnings. If a company has a high P/E, investors are paying a higher price
for the stock compared to its earnings.
 • In here, A higher P/E ratio shows that investors are willing to pay a higher share price
today because of growth expectations in the future. The average P/E for the S&P 500
has historically ranged from 13 to 15. Lupin Ltd with a current P/E of 24.79, above
the S&P average, trades at 24.79 times earnings. The high multiple indicates that
investors expect higher growth from the company compared to the overall market.

Dividend

• For the year ending March 2020 Hero Motocorp has declared an equity dividend of
4500.00% amounting to Rs 90 per share. At the current share price of Rs 3055.35 this
results in a dividend yield of 2.95%.
• The company has a good dividend track report and has consistently declared
dividends for the last 5 years.

News Analysis

• Buy Hero MotoCorp, target price Rs 3900: Motilal Oswal

Hero MotoCorp Ltd., incorporated in the year 1984, is a Large Cap company (having a
market cap of Rs 61140.73 Crore) operating in Auto sector.

Link: https://economictimes.indiatimes.com/markets/stocks/recos/buy-hero-motocorp-target-
price-rs-3900-motilal-oswalnbsp/articleshow/78180669.cms

• Indian two-wheeler makers gain market share amid Covid-19

A deep rural reach and a large portfolio of entry-level vehicles have helped the Indian brands
to do better than the Japanese, who are weak on both these facets in the Indian market.

Hero MotoCorp ,Indian companies expanded their market share by 4.5-5 percentage points
between April and August, or the first five months of the ongoing fiscal year.

Link: https://economictimes.indiatimes.com/industry/auto/two-wheelers-three-
wheelers/indian-two-wheeler-makers-gain-market-share-amid-covid-
19/articleshow/78175836.cms