ANALYSIS OF SELECTED EQUITY STOCKS

LISTED IN NATIONAL STOCK EXCHANGE LTD

Project Report
(A Report submitted in Partial Fulfillment of the requirements for the
Degree of Bachelor of Commerce in Loyola College)

Submitted by
PRAVEENKUMAR S
Dept No : 20-UCO-030

Under the Guidance of

Dr. JUSTIN RAYAPPA J

M.Com., M.Phil., PhD., MBA., PGDPMIL., DCFA
&
Dr. SALATHIYAN M
M.Com., M.Phil., PhD., MBA.,

Assistant Professors
Department of Commerce
Loyola College
Chennai-34

Loyola College (Autonomous)

Chennai – 600 034
April 2023

1
 CERTIFICATE OF THE GUIDE

This is to certify that the Project Work titled "ANALYSIS OF

SELECTED EQUITY STOCKS LISTED IN NATIONAL
STOCK EXCHANGE LTD" is a bonafide work of Mr.
PRAVEENKUMAR S (Dept. No: 20-UCO-030) carried out in
partial fulfillment for the award of degree of Bachelor of
Commerce in Loyola College under my guidance. This project
work is original and not submitted earlier for the award of any
degree / diploma or associate ship of any other University /
Institution.

Dr. JUSTIN RAYAPPA J Dr. SALATHIYAN M

Assistant Professor Assistant Professor
Department of Commerce Department of Commerce
Loyola College Loyola College
Chennai -34 Chennai -34

Date:

2
 STUDENT’S DECLARATION

I, Mr. PRAVEENKUMAR S, hereby declare that the Project

Work titled "ANALYSIS OF SELECTED EQUITY STOCKS
LISTED IN NATIONAL STOCK EXCHANGE LTD" is the
original work done by me and submitted to the Loyola College,
Chennai in partial fulfillment of requirement for the award of
Bachelor of Commerce. This is a record of original work done by
me under the supervision of Dr. JUSTIN RAYAPPA J & Dr.
SALATHIYAN M, Assistant Professors, Department of
Commerce, Loyola College, Chennai -34.

Dept No : 20-UCO-030
Date :
Signature of the Student
(Mr. PRAVEENKUMAR S)

3
 ACKNOWLEDGEMENT

First and foremost, I would like to thank God Almighty for giving me the
strength, knowledge, ability and opportunity to undertake this academic
study and to persevere and complete the project work satisfactorily.
Without His blessings, this achievement would not have been possible.

I would like to express my gratitude to our respected Principal of Loyola

College, Rev. Fr. A. THOMAS S.J. for his support and blessings to
accomplish the project. I then wish to convey my sincere thanks to our
HEAD OF THE DEPARTMENT, Dr. A. MARCUS for his support in
carrying out this study.

I owe my deep gratitude to my project guide Dr. JUSTIN RAYAPPA J

& Dr. SALATHIYAN M for the continuous support of my study and
related research, for his patience, motivation, and immense knowledge.
His guidance helped me in all the time of research and writing of this
dissertation. I could not have imagined having a better advisor and mentor
for my study.

I must express my very profound gratitude to my parents for providing me

with unfailing support and continuous encouragement throughout my
years of study and through the process of researching and writing this
thesis. This accomplishment would not have been possible without them.
Last but not least I wish to extend my sincere thanks to my friends and
classmates who were with me in the daily walks of my life, and who have
directly or indirectly helped me to complete this dissertation.

Place : Chennai ( PRAVEENKUMAR S)

4
 EXECUTIVE SUMMARY

The project report of "ANALYSIS OF SELECTED EQUITY STOCKS

LISTED IN NATIONAL STOCK EXCHANGE LTD" is to analysis
about the technical indicators to identify buying signal and selling signal
and performance of selected companies listed in NSE.

The main objective of the study is to know the technical analysis of

selected companies in the stock market and to know which is the best
indicator of selected companies. To analyze all the graphs, technical
analyze is used. In the technical analysis, the technical indicators of
different industries. These are study to take a best invest decisions among
the selected.

The study has been undertaken on the topic of Analysis of selected equity
stocks listed in national stocks exchange to know the concept of technical
analysis. The project report covers Executive Summary, Review of
Literature, company profile, data analysis and interpretation and provides
recommendations based on the findings and the conclusion. It also
contains the financial statements and related graphs of the company.

5
 TABLE OF THE CONTENT

CHAPTER CONTENTS PAGE NO

1 INTRODUCTION

About Stock Exchange In India

About Equity Share

Objectives of the Study

Scope of the Study

Limitations of the Study

Significance of the Study

2 REVIEW OF LITERATURE

3 METHODOLOGY

Reasons for Selecting the Stocks

Data collection techniques

6
 Research tools

4 DATA ANALYSIS AND

INTERPRETATION
5 FINDINGS AND CONCLUSION

Findings, Suggestion and Conclusion

REFERENCES

CHAPTER - 1

INTRODUCTION

7
 INTRODUCTION
ABOUT STOCK EXCHANGES IN INDIA

A stock exchange is a place where securities, shares, bonds and other

financial instruments are listed and bought and sold by traders or brokers.
To be able to trade on a stock exchange, securities must be listed on it.
Stock exchanges help companies to raise funds. Therefore the company
needs to list themselves in the stock exchange. Shares listed on the stock
exchange are known as equity and these shareholders are known as Equity
Shareholders.

STOCK ECXHANGE IN INDIA

8
Indian stock exchange is one of the oldest markets in Asia and is a
yardstick to measure the health and progress of the economy of the
country. Over the course of the period, the market has transitioned into the
electronic market and securities are dealt in dematerialization form.

There are two major stock exchanges in India- National Stock Exchange of
India (NSE) and Bombay Stock Exchange (BSE). National Stock
Exchange was established in Mumbai in 1992 and started trading in 1994.
Bombay Stock Exchange was established in 1875 in Mumbai.

MARKET INDICES

There are two major indices in the stock exchange of India - Sensex and
Nifty. Sensex comprises of the weighted average of the market
capitalization of stock of 30 well established and financially sound
companies across different key sectors in India. Nifty comprises of top 50
companies in 12 sectors of the Indian economy in one portfolio. It reflects
the health of the Indian economy from a broader perspective.

SENSEX is an indicator of Bombay Stock Exchange and NIFTY is an

indicator of National Stock Exchange of India.

Trading Hours and Settlement on Stock Exchange of India Trading in the

stock market in India takes place in between 9:55 AM to 3:30 PM Indian
Standard Time, Monday to Friday.

Settlement of securities takes places in T+2 period. It means if the

transaction has happened on Tuesday, it will be settled on Thursday.

FUNCTIONS OF STOCK EXCHANGE IN INDIA

Stock exchange in India ensures,

9
 ⮚ Stability of prices of securities.

⮚ Convenient and transparent place to trade in securities.

⮚ Help companies to raise their funds. Promote the habit of

saving and investment

⮚ Provide forecasting service.

How to Deal in Stock Exchanges in India ?

In order to deal in stock exchange in India, one must have a

Demat A/c. It is just like a bank account. Various banks in India provide
this facility. Through Demat A/c, an investor can buy or sell securities in
trading hours.

REGULATION OF STOCK EXCHANGE IN INDIA

Entire stock exchange of India is regulated by the Securities and

Exchange Board of India (SEBI) which was established in 1992 as an
independent authority. SEBI has the power to impose fines and penalties in
case of violation of rules and regulations. It plays a pivotal role and protects

10
the interest of investors in the stock exchange of India. SEBI promotes
education and training of intermediaries of the stock market.

BULL MARKET & BEAR MARKET

A bull market is a market where buyers are aggressively buying

the shares in an expectation that shares price will rise and will sell at later
date. A bear market is a market where prices are falling.

Strong economic conditions, high employment levels, the

favorable government are few factors which lead to a bull market whereas
poor economic conditions, natural adversity, unemployment or sudden
unfavorable political changes lead to bear market.

FUTURE OF STOCK EXCHANGE IN INDIA

In a growing economy like India, the future of stock exchange is

bright and the volume of transactions will grow substantially in the coming
years.

Out of 1.2 billion people, there are only 20 million demat

accounts as of now. Government's initiative to bring retail customers in
mutual funds and foreign investments in India will help the stock exchange
of India.

EQUITY SHARES

11
 An equity share, normally known as ordinary share is a part
ownership where each member is a fractional owner and initiates the
maximum entrepreneurial liability related to a trading concern. These types
of shareholders in any organization possess the right to vote.

FEATURES

⮚ Equity share capital remains with the company. It is given

back only when the company is closed.

⮚ Equity Shareholders possess voting rights and select the

company's management.

⮚ The dividend rate on the equity capital relies upon the obtain
ability of the surfeit capital. However, there is no fixed rate of
dividend on the equity capital.

OBJECTIVES OF THE STUDY

⮚ To study about stocks listed in NSE by using analysis through

various methods.
⮚ To analyze price movement of the stock by using different analyze
methods like P/E Ratio and by comparing the previous year data.
⮚ To do the brief analysis of selected stocks of NSE whether to buy
or sell or hold the stocks by interpreting the trend.
12
⮚ To forecast the recent trends in the stock market and provide
suitable suggestions to the investors.
⮚ To know the changing of stock price of selected company stocks
through analysis.
⮚ To symbolize the drift in the stock price of the selected company.

SCOPE OF THE STUDY

⮚ The above study mostly keep eye on investment decisions by

analyzing stock price of different companies. It is the study which
is based on five companies' analysis of selected stocks of NSE.
⮚ This gives knowledge to shareholders in creation of decisions by
using this report.
⮚ Examined company shares in proper way.

⮚ This analysis helps for gaining the knowledge in stock price

changing in the securities market.
⮚ This study helps to find out the future trends in the prices of the
selected stocks and hints can be acknowledged by the investors for
their outlook of buying and selling.

LIMITATIONS OF THE STUDY

13
 ⮚ The area of study is limited to only few companies group of stock.

⮚ The accuracy is limited as the data was strictly limited to secondary

sources.
⮚ The accuracy of the data is based on the data presented in the NSE
portal.
⮚ The is only for academic purpose.

SIGNIFICANCE OF THE STUDY

The Equity of an investor are on the performance of a particular

company's stock in the stock market. The stronger the company's share,
the investor will get the more profit. So, it is necessary to determine,
analyze and understand the share of the dissimilar firms in order to know
it's position in the securities market. Therefore, investor can make
investment decisions with the help of this technical analysis through this
project, which ensures the investors whether to buy the shares or sell the
shares or to hold the shares they have in the securities market.

14
 CHAPTER - 2

REVIEW OF LITERATURE

15
● RH Patil (2006) investigated in the early 1990s, India figured low in
the global ranking of the state of capital markets. The adoption of
sophisticated IT tools in trading and settlement mechanisms has now
placed India in the lead. The National Stock Exchange has played an
important role in this transformation. Shorter settlement periods and
dematerialization have been other major developments. But all is not
entirely positive. The introduction of individual stock futures poses a
major risk; so also the large inflow of funds through participatory
notes.

● Juhi Ahuja presented a review of Indian Capital Market & its structure.
In last decade or so, it has been observed that there has been a paradigm
shift in Indian capital market. The application of many reforms &
developments in Indian capital market has made the Indian capital
market comparable with the international capital markets. Now, the
market features a developed regulatory mechanism and a modem
market infrastructure with growing market capitalization, market
liquidity, and mobilization of resources. The emergence of Private
Corporate Debt market is also a good innovation replacing the banking
mode of corporate finance. However, the market has witnessed its worst
time with the recent global financial crisis that originated from the US
sub-prime mortgage market and spread over to the entire world as a
contagion. The capital market of India delivered a sluggish
performance.

● Richa Gupta, Deepti Capital (2014) studied the market in any country
plays a pivotal role in the growth of economy and meeting country's
socio economic goals. They are an important constituent of the financial
16
 system, given their role in the financial intermediation process and
capital formation of the country. The importance of the capital market
cannot be underemphasized for developing economy like India which
needs significant amount of capital for the development of strong
infrastructure.

● Poshakwale, Sunil (2002) examined the random walk hypothesis in the

emerging Indian stock market by testing for the nonlinear dependence
using a large disaggregated daily data from the Indian stock market.
The sample used was 38 actively traded stocks in the BSE National
Index. He found that the daily returns from the Indian market do not
conform to a random walk. Daily returns from most individual stocks
and the equally weighted portfolio exhibit significant non- linear
dependence. This is largely consistent with previous research that has
shown evidence of non-linear dependence in returns from the stock
market indexes and individual stocks in the US and the UK. Noor,
Azuddin Yakob, Diana Beal and Delpachitra, Sarath (2006) studied the
stock market seasonality in terms of day-of-the-week, month-of-the-
year, monthly and holiday effects in ten Asian stock markets, namely,
Australia, China, Hong Kong, Japan, India, Indonesia, Malaysia,
Singapore, South Korea and Taiwan. He concluded that the existence of
seasonality in stock markets and also suggested that this is a global
phenomenon.

● Masih, M.M. Abul and Masih, Rumi (1997) examined the dynamic
linkage patterns among national stock exchange prices of four Asian
newly industrializing countries - Taiwan, South Korea, Singapore and

17
 Hong Kong. The sample used comprised end-of-the-month closing
share price indices of the four NIC stock markets from January 1982 to
June 1994. They concluded that the study of these markets are not

mutually exclusive of each other and significant short-run linkages

appear to run among them. Lau, S T and Diltz, J.D. (1994) studied the
transfer of information among Tokyo and New York stock exchanges.
Agarwal, R N (2000) examined the financial integration of capital
markets in developing nations gave insight with regards to the
methodology and the area of study followed.

● In a similar study by Bae, K. Cha, B, and Cheung, Y (1999) the

researchers tried to show the information transmission mechanism that
operates for stocks which are dually listed. This has helped in
understanding the channel of transmission of information that makes the
exchanges dependant on each other.

● Since late twentieth century and particularly after introducing ARCH

model by Engle (1982), as said by Bollerslev (1999) and Granger and
Poon (2000) several hundred researches that mainly accomplished in
developed country and to some extent in developing countries has been
done by researchers about volatility using ARCH-type models. Our
objective in this section is to give the reader just a glimpse of these
studies as follows:

● Engle (1982) published a paper that measured the time-varying

volatility. His model, ARCH, is based on the idea that a natural way to
update a variance forecast is to average it with the most recent squired

18
 "surprise"(i.e. the squired deviation of the rate of return from its mean).
While conventional time series and econometric models operate under
an assumption of constant variance, the ARCH process allows the
conditional variance to change over time as a function of past errors
leaving the unconditional variance constant. In the empirical application
of the ARCH model a relatively long lag in the conditional variance

equation is often called for, and to avoid problems with negative

variance parameters a fixed lag structure is typically imposed.

● Engle and Ng (1993) measure the impact of bad and good news on
volatility and report an asymmetry in stock market volatility towards
good news as compared to bad news. More specifically, market
volatility is assumed to be associated with the arrival of news. A sudden
drop in price is associated with bad news on the other hand, a sudden
increase in price is said to be due to good news. Engle and Ng find that
bad news create more volatility than good news of equal importance.
This asymmetric characteristic of market volatility has come to be
known as the "leverage effect". The studies of Black (1976), Christie
(1982), FSS (1987), Schwert (1990) and Pagan and Schwert (1989) also
explain this volatility asymmetry with the" leverage effect". However,
their models do not capture this asymmetry. Engle and Ng (1993)
provide new diagnostic tests and models, which incorporate the
asymmetry between the type of news and volatility, they advise
researchers to use such enhanced models when studying volatility.

● Kumar (2006) in an article entitled "comparative performance of

volatility forecasting models in Indian markets" evaluated the
comparative ability of different statistical and economic volatility
forecasting models in the context of Indian stock and Forex markets.
19
 Based on the out of sample forecasts and the number of evaluated
measures that rank a particular method as superior he concluded that it
is possible to infer that EWMA will lead to improvements in volatility
forecasts in the stock markets and the GARCH (5.1) will achieve the
same in the Forex market. As he concluded, his findings were contrary
to the findings of Brailsford and Paff (1996) who found no single
method as superior, but the results in stock market were similar to the

findings of Akigray (1989), MeNillian (2001), Anderson and Bollerslev

(1998) and Anderson et al (1999) in the Forex market.

● Banerjee and Sarkar (2006) in an article entitled" long memory property

of stock returns, evidence from India" examined the presence of long
memory in asset returns in the Indian stock market. They found that
although daily returns are largely uncorrelated, there is strong evidence
of long memory in its conditional variance. They concluded that
FIGARCH is the best-fit volatility model and it outperforms other
Garch type models. They also observed that the leverage effect is
insignificant in Sensex returns and hence symmetric volatility models
turn out to be superior as they expected.

● According to "Avijit Banerjee" (1998) reviewed Fundamental Analysis

and Technical Analysis to analyze the worthiness of the individual
securities needed to be acquired for portfolio construction. Technical
Analysis detects the most appropriate time to buy or sell the stock. It
aims to avoid the pitfalls of wrong timing in the investment decisions.
He also stated that the modern portfolio literature suggests 'beta' value P
as the most acceptable measure of risk of scrip. The securities having
low P should be selected for constructing a portfolio in order to
minimize the risks.
20
● According to "Madhusudan" (1998) found that BSES ensitivity and
national indices did not follow random walk by using correlation
analysis on monthly stock returns data over the period January 1981 to
December 1992.

● According to "Arun Jethmalani" (1999) reviewed the existence and

measurement of risk involved in investing in corporate securities of
shares and debentures. He commended that risk is usually determined,
based on the likely variance of returns. It is more difficult to compare
80 risks within the same class of investments. He is of the opinion that
the investors accept the risk measurement made by the credit rating
agencies, but it was questioned after the Asian crisis He concluded his
article by commenting that risk is not measurable or quanti able. But
risk is calculated on the basis of historic volatility. Returns are
proportional to the risks, and investments should be based on the
investors' ability to bear the risks, he advised.

● According to "Bhanu Pant and Dr. T.R.Bishnoy" (2001) analyzed the

behaviour of the daily and weekly returns of Eve Indian stock market
indices for random walk during April 1996 to June 2001.They found
that Indian Stock Market Indices did not follow random walk.

● According to "Nath and Verma" (2003) examine the interdependence of

the three major stock markets in south Asia stock market indices
namely India (NSE-Nifty) Taiwan (Tuiex) and Singapore (STI) by
21
 employing bivariate and multivariate co integration analysis to model
the linkages among the stock markets, No co- integration was found for
the entire period (daily data from January 1994 to November
2002).They concluded that there is no long run equilibrium.

● According to "Juhi Ahuja" (2012) presents a review of Indian Capital

Market & its structure. In last decade or so, it has been observed that
there has been at paradigm shift in Indian capital market. The
application of many reforms & developments in Indian capital market

has made the Indian capital market comparable with the international
capital markets. Now, the market features a developed regulatory
mechanism and a modern market infrastructure with growing market
capitalization, market liquidity, and mobilization of resources.

● Park and Ratti (2008) did a regression analysis taking US and other 13
European economies and after considering the data for 1986-2005
showed that Norway had positive relation between stock returns and oil
prices. Increases in oil price causes stocks' return to depress. Stock
prices are both negatively and positively related with oil prices
depending upon the fact whether a country is oil importing country or
oil exporting country. Cheung and NG (1998) studied the relationship
between stock prices and real oil price, consumption expenditure,
money supply and GNP across different countries using Johansen co-
integration technique and established the result that there is an
association between these variables and stock prices.

22
● Jamil and Ullah (2013) used co-integration technique to test if there is a
relationship exists between stock prices and exchange rate for Pakistan
economy. Data for the period 1998-2009 was analyzed which
established the result that there is a relation between the variables at-
least in short run. Abdalla and Murinde (1997) investigated in financial
markets of different countries like India, Pakistan, Korea and
Philippines. They found out that there exists a one-way relationship
between exchange rate and stock prices. They recommended that
government should use exchange rate policies very cautiously since it
has impact over stock market of the given economy.

● Taimur Sarif et al. (2015) Analysis of the factors driving stock price
movement. Return on equity, book value per stock, price ratio, and

market capitalization have been closely associated, but dividend yields

and market price per share have been no meaningful correlation.

● Islam et al. (2015) Added factor analysis and proposed five factors viz.
The industry's efficiency, market impact, company's success,
investment decision, and financial position. They also found that the
EPS is closely related to the stock price.

● Qaisi et al. (2016) Factors affecting the market prices of insurance firms
were developed from 2011 to 2015. They have applied many
retrogressions and have built significant connections between ROA,
ROE, debt ratios, company size, and stock prices other than ROE.
Sukhija (2014) there were proven and interbank variations examined in
the nature of stock price variables. They also found that book value and
DPS play an essential role in affecting bank and financial company
23
 stock prices. For oil and mining firms, the P/E ratio, the book value,
growth, and coverage ratios are essential.

● Tabotenow et al. (2016) the shares of South African companies were

investigated in the DPR, ROE, ROA, Size, Liquidity, and Business Risk
links. Following a multiple regression analysis, they found that 58.7
percent of the share prices shifted at DPS, EPS, and P/E ratios. The
correlation between EPS and EPS is also good.

● Samina Haque and Murtzaz Faruque (2013) investigated the effect of

the fundamental factors on the stock price of securities of Dhaka Stock.
They noticed that the key factors in stock prices are highly sensitive.
Overestimated inventories and further unauthorized impact of
knowledge.

● Geeta (2015) such factors are measured for upward and downward
movements of stocks. Positive conations such as book value, EPS, P/E
ratio were found in the following parameters. They also pointed to the
value of the stock market from both points of view. Singh Ankita
(2013) Examined the method to assess stock market prices in India, the
USA, and the UK economies. She found that the three critical factors
influencing any stock market are an investment, savings, and inflation.

● Niladiri et al. (2009) There were essential factors and affected price
movements in the industry. The positive effects of profitability, ROI,

24
 and growth potentials on stock prices were seen. However, uncertainty
and increased risk have adverse effects.

● Godwin et al. (2019) Financial factors affecting Nigeria's stock prices

have been inspected by deposit money banks. They had an important
and positive link to the price sharing and the negative correlation
between book value and dividend. Amanullah (2019) Different
elements were examined and their relation to the Karachi stock
exchange system. There have been numerous hypotheses about the data
collected and a broad and optimistic GDP, dividend, and P/E price
movement analysis. It was examined. However, the rates of interest and
book value have a significant influence.

● Alaagam (2019) Detailed relationships between the Net Profit Margin,

ROA, ROE, and the Saudi Arabia Banks' share of profits. He used an
autoregressive lag model distributed and found no correlation between
profitability and share prices. Yet short-term ROA and share prices
operate.

● Avdalovic (2017), the key drivers of stock prices were included in the
Belgrade stock exchange. From 2010 to 2014, data for 42 companies
have been analyzed by regressive paneling data. ROA, leverage, EPS,
BV, P/B were considered critical in stock price forecasts

LIBERALIZATION OF INDIAN CAPITAL MARKET

25
 With the liberalization of Indian capital markets, there have been
significant amount of research carried out to determine the extent of
dependence of Indian capital market with its global counter parts. For the
last two or three decades. researchers worldwide have shown interest in
studying the dependence of various stock markets. The review of the past
studies shows that the presence or absence of cointegration can throw
meaningful insight into the working and policies of a particular stock
exchange. Few of the research articles reviewed for the study are listed
below. David (1994) in his working paper studied the market linkages
using Cointegration rank test with special application to the US Natural
Gas Industry. Likelihood based tests for cointegration was applied to data
from natural gas spot markets. The Johansen method was used to study the
spatial market linkages. The results indicated that the natural gas spot
markets at dispersed locations in the pipeline network are strongly
connected. Out of 19 market pairs examined, most of the market pairs (13)
satisfied a more stringent condition for perfectmarketintegration. Chan,
BentonandMin (1997) conducted a study on integration of stock markets
by including 18 nations covering a 32 year period. These markets were
analyzed both separately and collectively in regions to test for the weak
form market efficiency. The cross country market efficiency is tested by
using Johansen's cointegration test. The results showed that only small
number of stock markets shown evidence of cointegration with others.

Bala and Mukund (2001) in their study examined the nature and extent of
linkage between the US and the Indian stock markets. They used the
theory of cointegration to study the interdependence between the Bombay
stock exchange (BSE), the NYSE and NASDAQ. The data consisted of
daily closing prices for the three indices from January 1991 through
December 1999. The results supported that the Indian stock market was
not affected by the movements in US markets for the entire sample period.
Wong, Agarwal and Du Jun (2004) have empirically investigated the long-
26
run equilibrium relationship and short-run dynamic linkage between the
Indian stock market and the stock markets in major developed countries by
examining the Granger causality relationship and the pair-wise, multiple
and fractional cointegrations between the Indian stock market and the
developed stock markets such as US, UK and Japan. The findings of the
study revealed that the Indian stock market is statistically, significantly co-
integrated with stock markets of United States, United Kingdom and
Japan. There is existence of a unidirectional granger causality running
from the US, UK and Japanese stock markets to the Indian stock markets.
Indian stock index and the mature stock indices form fractionally
cointegrated relationship in the long run with a common fractional,
nonstationary component and revealed the cointegration relationship using
the Johansen method.

In the recent times the Indian stock market has become more open to the
rest of the world and, the relationship between the Indian market and the
developed stock markets may keep changing. Hence the current study tries
to re-examine the nature of co-movement between Indian market and the
American markets.

● Kiran Rothak, Rishikesh Patel, and Ashvin Patil (2007) in a study of

Indian Stock Market using the data from January 1995 to December
1999 concluded that high stock returns on Wednesday and Monday and
lowest returns on Friday due to t+5 rolling settlement effects. Another
study of day-of-the week effect by Golaka C., Nath and Manoj Dalvi in
the same market evidenced significantly higher returns on Mondays and
Fridays than on other days of the week before rolling effect in January

27
 2002 but after the introduction of rolling settlement, only Friday effect
was seen in the market

Since January 2020, most researchers are working on finding the impact
of COVID-19 on various parameters like health, economy, packages,
climate change, reverse migration, and many more, including the stock
market. Few researchers have conducted this study for different
countries but mainly on composite indices of the developed market.
There are very few studies on emerging markets, but very few studies
have been conducted considering sectoral indices. None of the studies
are conducted pertaining only to the Indian stock market, considering
composite and sectoral indices.

● Thomas and Sycara (2000) worked on the behavior of financial

markets. Textual information is available on the website of a company
impacts its business. They proposed two models based on maximum
entropy and genetic algorithm to predict financial markets. They
concluded that the combination of these two models outperformed the
stand-alone models.

● Then, Peramunetilleke and Wong (2002) proposed a new model for

forecasting exchange rates based on the current status of world financial
markets. The study investigated on how news headlines of the financial
market could be helpful for forecasting the currency exchange rates.

They concluded that the proposed approach was better than random
guessing and suggested that hybrid models for better prediction.

28
● Koppel and Shtrimberg (2006) proposed a model based on the news
articles for stock prediction. They extracted the features from the
Multex Significant Development corpus and predicted the Standard &
Poor 500 (S&P 500) stock index. During the process of modeling, they
labeled the news as positive or negative according to their impact on the
price. Later, they employed SVM to train the news articles and reported
an accuracy of 70%.

● Rachlin et al., (2007) proposed a model called ADMIRAL, based on

textual information of web documents and time series data. They
employed automatic extraction of text instead of the predefined expert
list. They explained the functionality of ADMIRAL which consists of
six steps: Data collection, feature extraction, term weighting, and
combined data construction, classification using that hybrid model of
character n-gram yielded the best performance compare to other models
concerning the percentage of returns.

● Bollenet al., (2010) proposed a model for stock prediction using Twitter
tweets. The opinion of the tweets are extracted using OpinionFinder and
GPOMS tools, where Opinion Finder consists of positive or negative
opinion, GPOMS consists of 6 mood states namely alert, calm, happy,
kind, sure, and vital. They employed a self-organizing fuzzy neural
network for prediction of the Dow Jones Industrial Average values.
They predicted the up and down values of the stock (closing values)
with an accuracy of 87.6%. They concluded that through this approach
the MAPE value was reduced by more than 6%.

29
● Groth and Muntermann (2011) published work in the field of intra-day
market risk management by using textual data analysis to discover
patterns that can explain risk exposure. Different learners used included
Naive Bayes, k-Nearest Neighbor, Neural Network, and Support Vector
Machine to processed feature datasets followed by traditional measures
of evaluation namely accuracy, recall, precision and F-measure as well
as domain specific simulation-based model evaluation. The results
clearly supported the influence of textual information in financial risk
management.

● Chan and Franklin (2011) proposed a novel text-based decision support

system which extracts event sequences from text patterns and predicts
the likelihood of the occurrence of events using a Hidden Markov
Model -based inference engine. They investigated more than 2000
financial reports with 28,000 sentences. Experiments showed that the
prediction accuracy of the model outperformed similar statistical
models by 7% for the seen data while significantly improving the
prediction accuracy of the unseen data. Further comparisons
substantiate the experimental findings.

● The effect of macro news on upward and downward movements of

FOREX is studied by Chatrath et al., (2014). They employed
multivariate regression model in this approach. They investigated the
currencies of UK, Japan, Swiss and Euro onthe arrival of news. They
observed that US announcements are directly linking towards nearly of
15% currency jumps. They concluded that 56% of currency change is
happening within the 5 min of news arrival.

30
● Li et al., (2014) presented work based on Extreme Learning Machine
(ELM) for stock market prediction. By considering the news articles
and stock prices, they employed SVM and Neural Network, etc. They
carried out the experiments on 23 stocks of the H-share (Chinese)
market and its corresponding news. They concluded that with the
proposed ELM approach outperformed other techniques. FOREX
market prediction using news headlines as predictors is reported by
Nassirtoussi et al., (2015). They proposed a multilayer architecture
consisting of semantic abstraction, sentiments aggregation, and dynamic
model creation. They concluded that their approach yielded an accuracy
of 83.33%.

● Haoyuan Liyand, Roger K. Lohz, 2020) conducted research on the topic

"The information cycle and return seasonality'. They studied the impact
of size, book to market value, beta, earning announcement, buy-and-
hold (from the month t- 12 to 1-2) return on the stock market return and
used descriptive statistics and regression analysis approach to analyze
the data. They found that Seasonality anomaly is much stronger when it
is consistent with information cycle.

● Carlos F. Alves & Duarte A. Reis, 2019 conducted research on the topic
'Exposition of evidence for idiosyncratic versus induced seasonality in
ETF performance'. They studied the impact of alpha, beta, price and net
asset value on the stock market return. They used i. Fama and French's
(1993) three-factor model and ii. Carhart's (1997) four-factor model
approach to analyze the data. For April returns, they discovered signs of
induced seasonality.

31
● Dr. Silky Vigg Kushwah and Ms. Sulekha Munshi, 2018) conducted
research on the topic "The effect of Seasonality over stock exchanges in
India'. They studied the impact of the week in which budget is
announced by the Government of India. They also studied the impact
due to change in financial and calendar year and the week in which
Diwali is celebrated on the stock market return.

● Capelle-Blancard and Desroziers (2020) analyse information about the

Covid-19 pandemic and the subsequent lockdowns in various countries.
Considering a panel of 74 countries from January to April 2020, they
have divided the situation in each country into four phases: Incubation,
Outbreak, Fear, and Rebound. They collected country-specific daily
data on stock prices, volatility in the global market, the number of cases
and death due to COVID-19, different interventions that the
government has undertaken, and so on. They find no effect of country-
specific characteristics on stock prices but the number of Covid-19
cases in neighbouring and wealthy countries affected investor
sentiments. They have also observed that government policy measures
helped prevent the fall in stock prices. Hence their results suggest that
stock markets remained unconnected with the economic fundamentals
in each of those countries before the crisis, they became rather sensitive
to short-term reactions during the crisis.

32
 CHAPTER – 3

METHODOLOGY

33
 REASON FOR SELECTING THE STOCKS

The research is based on the stock prices of Three stocks selected from
NIFTY & Next Fifty i.e.,

1. Tamilnad Mercantile Bank Limited

2. Larsen & Toubro Ltd
3. GAIL

Is an analytical and systematically one. The purpose is to predict the future

performance of companies and accordingly inform prospective investors.
For this purpose, fundamental analysis has been done to see analyses
companies future performance based on current trends and future prediction.
Fundamental and Stock Analysis is done to see how the company's assets
are valued and have an opportunity to grow. Data has been collected from
secondary sources like equity market in NSE, books related on subject
matter, journals, magazines screener websites and ticker finology website.
The research is based on apparatus of technical investigation and involves
the calculation of different Ratios and so on.

DATA COLLECTION
The total data collection has been studied under two categories.

Primary Data:
The source of primary data is the yield where the researcher has
collected a fresh hand information or data from the customers

Secondary Data:
The next step involved after primary data is the secondary data. The
information which has already been passed through statistical process is
known as secondary data.
34
 RESEARCH TOOLS

There are various tools used in order to derive the conclusion.

They are,

1) Price to Earnings Ratio

2) Dividend Yield Ratio
3) Dividend Pay Out Ratio
4) Current Asset
5) Sales Growth
6) Return On Equity
7) Return On Investment
8) Operating Margin
9) Return on Asset
10) Debt - Equity Ratio

35
 CHAPTER – 3

DATA ANALYSIS AND

INTERPRETATION

36
 1.Tamilnad Mercantile Bank Limited

Tamilnad Mercantile Bank Limited (TMB) is a bank headquartered

at Thoothukudi, Tamil Nadu, India. TMB was founded in 1921 as the
Nadar Bank, but changed its name to Tamilnad Mercantile Bank in
November 1962 to widen its appeal beyond the Nadar community. For the
financial year 2018–2019, the bank reported a net profit of 2585 million.
The bank currently has 509 full branches throughout India, 12 Regional
offices and two link offices, two central processing centres, one Service
Branch, four Currency Chests, 48 eLobby centres, 262 Cash Recycler
Machines (Cash deposit machine) and 1151 Automated Teller Machines
(ATM).The bank has been expanding its footprint all over India

BUSINESS AREA :
TMB is one of the oldest private sector banks with a history of over 100
years. Tamilnad Mercantile Bank take in fund called deposits from those
with money, pool them, and lend them to those who need funds. The
bank offers a wide range of services primarily to micro, small and
medium enterprises, agricultural and retail customers. It Undertaking
safe custody of valuables, important documents, and securities by
providing safe deposit vaults or lockers. Providing customers with
facilities of foreign exchange dealings and also Underwriting of shares
and debentures.The bank currently has 509 full branches throughout
India.
37
BUSINESSES / PRODUCTS & SERVICES:

Corporate Banking : Corporate banking refers to the aspect of banking

that deals with corporate customers. Commercial banks make loans that
enable businesses to grow and hire people, contributing to the expansion
of the economy. Both types of banks offer various products and services.

Retail banking : Retail banking, also known as consumer banking or

personal banking, is banking that provides financial services to individual
consumers rather than businesses. Retail banking is a way for individual
consumers to manage their money, have access to credit, and deposit their
money in a secure manner.

Agriculture Loan : Agricultural loans are availed by a farmer to fund

seasonal agricultural operations or related activities like animal farming,
pisci-culture or purchase of land or agricultural tools. This type of loan
also helps buying inputs such as fertilizers, seeds, insecticides etc.
Foreign Trade : Trade with other countries is called foreign trade.
Foreign trade is of three types. Import Trade: When the goods or services
are purchased from other countries it is called import trade. Export trade:
When the goods are sold to other countries, it is called export trade.
Entrepot trade: It is also called re-exporting.

Treasury Services : Treasury services concentrates and invests client

money, and provides trade finance and logistics solutions as well as
safeguards, values, clears and services securities and portfolios for
investors and broker-dealers. Treasury Services is a transaction intensive
and system intensive business.

38
AWARDS & ACHIEVEMENTS:

2008 - Our bank rated #1 for overall performance in savings bank customer
satisfaction survey 2008 by GALLUP Inc and IBA.

2009 - Our bank adjudged as best bank in rural reach for the year 2009,
by Dun & Bradstreet. Our bank has been awarded as No: 2 among all
old private sector banks in India for two years consecutively 2009 and
2010 by the financial express.

2010 - The financial express- Ernst and young best bank survey 2010-11
ranked us as best banks among old private sector banks. The business
world/ price water house coopers survey 2010 ranked us as #l in
performance among small size banks. Our bank has got the "Best Bank
Award" among all private sector banks, including new generation
banks, for 2010 from ‘The Analyst’

2011 - Our Bank was ranked first amongst old private sector banks at the
"Financial Express - India's Best Banks Awards" for the Fiscal 2011-12
The business world/ price water house coopers survey 2011 ranked us as #2
in best small sized banks and #5 in fastest growing small sized banks.

2012 - Our Bank was rated as the best bank in priority sector and the
second best bank in efficiency and profitability at the "Sunday Standard
FINWIZ Best Bankers Awards 2012". Our Bank was awarded the
"SFBC Kerala Banking Excellence Award 2012" for being ranked as the
third best bank in the private sector banks category by the State Forum of
Bankers' Club, Kerala. Our bank has been rated 3 best bank in small banks
category (out of 19 banks) by business world under India's best banks 2012.
Our bank has been rated 5th fastest growing bank among 19 small sized
banks by business world under India's best banks 2012.

39
2013 - Our Bank was ranked second amongst old private sector banks
at the "Financial Express-India's Best Banks Awards" for the Fiscal
2013-14. Our Bank was awarded the "Best Banker award in the customer
orientation and human resources categories at the "The Indian Express
Sunday Standards Best Bankers Awards 2013". Our Bank was felicitated
by the Life Insurance Corporation of India for achieving "100% Log In"
on June 14, 2013. Our Bank was felicitated by the Life Insurance
Corporation of India for "Outstanding Performance in Bancassurance"
for the Fiscal 2012-13. Our Bank was awarded the "SFBCK Banking
Excellence Award 2013" for being ranked as the second best bank at the
national level in the private sector by State Forum of Bankers' Club Kerala.

2014 - Our Bank was awarded the "Social Banking Excellence Award
2014" for being categorized as the winner in the private sector banks
category by ASSOCHAM India.

2015 - Our Bank was awarded the "Social Banking Excellence Award
2015" for being recognized as the overall best social bank and for
participation in government schemes in the small banks category by
ASSOCHAM India. Our Bank was recognized as the "Best Bank in
Private Sector" by BFSI on February 14, 2015 and July 24, 2015.
Our Bank was awarded the "SFBCK Banking Excellence Award 2015"
for being ranked as the third best bank at the national level in the private
sector by State Forum of Bankers' Club, Kerala. Our Bank was felicitated
by the Life Insurance Corporation of India on completion of "33.55 Crore
First Premium" in the Fiscal 2015-16. Our Bank was awarded the first
prize at the "Tami Nadu SHG BLP Awards 2014-15" organized by
NABARD, Chennai. Our Bank, was awarded for "Credit Quality" at the
"Financial Express India's Best Banks Awards" for the Fiscal 2014-15.

2016 - Our Bank was awarded the "Social Banking Excellence Award
2016" forbeing recognized as the overall best social bank and also as the
winner in agricultural banking in the small banks category by

40
ASSOCHAM India. Our Bank was awarded the "SFBCK Banking
Excellence Award 2016" for being ranked as the third best bank at the
national level in the private sector by State Forum of Bankers' Club Kerala.
Our Bank was felicitated by the Life Insurance of India on completion of
“5156 Crore First Premium” in the Fiscal 2016-17.

2017 - Our Bank was recognized as the "Best Bank in Private Sector" by
BFSI on February 14, 2017.

2018 - Our Bank was awarded the "Social Banking Excellence Awards
2018" for being recognized as the overall best social bank and also as the
winner in agricultural banking in the small banks category by
ASSOCHAM India.

2019 - Our Bank was awarded the "BFSI Award for Digital Financial
Inclusion" by BFSI May 29, 2019.

2021 - Our Bank was awarded the "12th SFBCK Banking Excellence
Award 2020" for being ranked as the second best bank at the national level
in the old private sector category by State Forum of Bankers' Club Kerala.

2022 - Our Bank was awarded the "Best Small Indian Bank Award", in
the Best Banks Survey for the year 2022 done by Business Today
KPMG(BT-KPMG Best banks survey).

41
Source : ticker.finology.in\website

1. Rs.406 is the highest value in that day.

2. Rs.400 is the lowest price in that day.

42
Source : ticker.finology.in\website

1. Rs. 6,346.73 Cr is the market capitalization.

2. Rs. 425.69 is the book value of the share.
3. Rs. 1,815,23 Cr is the Net Interest Income.

43
Source : ticker.finology.in\website
The price of the share is Rs. 400.8 on 5th April 2023.

Source: ticker.finology.in/website

44
 Price Earnings Ratio (P/E ratio) compares the current stock price
of a company to its Earnings Per Share (EPS). It is a valuation ratio that
helps investors analyze if a stock is undervalued or overvalued.

Earnings are important while evaluating a company, as this

shows the current profitability and also helps in estimating the company's
future profitability. Furthermore, in case the company's growth is slow and
the earnings are constant, the P/E can be considered as the number of years
it takes the company to pay back the price paid for each share.

PE Ratio = Market Price of the Stock/ Earnings per Share

Normally it is advisable to invest or buy a stock when the P/E

ratio of the company is low. Because PE ratio is nothing but how much
year the company will take to payback the price paid by the investors to
buy the share.

source : https://www.screener.in/website
The P/E Ratio is low so it is advised to invest in the company.

45
46
47
2. Larsen & Toubro Ltd

48
 Larsen & Toubro originated from a company founded in 1946 in
Bombay by two Danish engineers, Henning Holck-Larsen and Søren
Kristian Toubro. Larsen & Toubro Ltd, commonly known as L&T, is
an Indian multinational conglomerate company, with business interests in
engineering, construction, manufacturing, technology, information
technology and financial services, headquartered in Mumbai. The company
is counted among world's top five construction companies. As at March 31,
2022, the L&T Group comprises 93 subsidiaries, 5 associate companies, 27
joint ventures and 35 jointly held operations, operating across basic and
heavy engineering, construction, realty, manufacturing of capital goods,
information technology, and financial services.

BUSINESS AREA :
Larsen & Toubro (L&T) is a technology, engineering, construction and
manufacturing company. It is one of the largest and most respected
companies in India's private sector. L&T Construction is among the world's
top contractors. The business encompasses multiple business - Buildings &
Factories, Transport Infrastructure, Heavy Civil Infrastructure, Smart World
& Communication, Water & Renewable Energy and Power Transmission &
Distribution. Three key products/services which L&T is engaged in
are: Construction and project-related activity; manufacturing and trading
activity; and engineering services.

BUSINESSES / PRODUCTS & SERVICES:

The main business services of L&T is Construction and project
related activity; manufacturing and trading activity; and engineering services.
For administrative purposes, the conglomerate has been structured into
sixteen subsidiary companies, L & T Construction , L & T Hydrocarbon,
49
L & T Power,L & T Mineral & Metals, L & T Heavy Engineering, L & T
Defence, L & T Shipbuilding, L & T Construction & Mining Machinery, L &
T Valves, L & T Technology Services, L & T Metro Rail, L & T Financial
Services, L & T Realty, L & T SuFin, L & T EduTech, L & T Infotech,
LTIMindtree.

Construction :

L&T Construction is among the world's top 15 contractors.The

business involves the construction of Buildings & Factories, Heavy Civil
Infrastructure, Transportation Infrastructure, Power transmission &
Distribution Infrastructure, Water & Effluent Treatment plants, Metallurgical
& Material Handling Infrastructure and Smart World & Communication
Infrastructure.

Buildings & Factories :

L&T's buildings and factories (B&F) business undertakes

construction projects such as commercial buildings and airports, residential
buildings, and factories.[16] Its track record includes, 400 high-rise towers,
11 airports, 53 IT parks, 17 automobile plants, 28 cement plants and 45
hospitals. [17] L&T offered to oversee the design and construction of Ram
Mandir, Ayodhya free of cost and is the contractor of the project.

Heavy Civil Infrastructure:

L&T's Heavy Civil Infrastructure (HCI) business undertakes

projects in the areas of hydel power, tunnels, nuclear power, special bridges,
metros, ports, harbours and defence installations. Its track record includes
231 km of metro rail corridors, 19.5 km of monorail corridors, 8,315 MW of
hydropower projects and 8,080 MW of nuclear power projects.
50
Transportation Infrastructure:

L&T's Transportation Infrastructure (TI) business undertakes

projects such as roads, runways, elevated corridors, railways, etc. Its track
record includes 13,500 lane km of highways, 7.49 million sq.m of runways
and 3,260 tkm (track kilometer) of railway tracks.

Power Transmission and Distribution:

L&T's Power Transmission and Distribution (PT&D) business

undertakes projects involving the construction of substations, utility power
distribution systems, transmission lines and optic fibre cabling projects. It
executes projects in the renewable space, such as utility scale, microgrids
and energy storage.

Water & Effluent Treatment:

L&T's Water & Effluent Treatment (WET) business undertakes

projects involving water supply and distribution, wastewater treatment,
industrial and large water systems and smart water infrastructure.

Minerals & Metals Strategic Business Group:

L&T also undertakes projects in the ferrous and non-ferrous

sectors, i.e. iron and steel, aluminium, copper, zinc, lead and mineral   
beneficiation plants.

Renewable Energy - L&T Solar:

51
 L&T develops concentrated solar power and solar photovoltaic
technologies (grid-connected, rooftop and microgrid). It designs and builds
solar power plants. L&T Solar, a subsidiary , undertakes energy projects. In
April 2012, L&T commissioned India's largest solar photovoltaic power
plant (40 MWp) owned by Reliance Power at Jaisalmer, Rajasthan from
concept to commissioning in 129 days.

EPC Projects:

L&T undertakes projects on an engineering, procurement and

construction basis. Installation is often part of the package. This includes
hydrocarbon engineering, power and power development.

Hydrocarbon Engineering:

L&T Hydocarbon Engineering Limited, provides engineering,

procurement, fabrication, construction, installation and project management
services for onshore and offshore hydrocarbon projects worldwide.

L&T Power:

L&T Power has set up an organisation focused on coal-based, gas-

based and nuclear power projects.L&T has formed two joint ventures with 
Mitsubishi Heavy Industries, Japan to manufacture super critical boilers and
steam turbine generators.

Manufacturing:

This subdivision includes Defence equipment & systems, Heavy

Engineering, Construction, Mining & Industrial Machinery, Industrial
Valves and Electrical & Automation Systems.

52
Defence & Aerospace:

L&T is one of India's largest developers and suppliers of defence

equipment and systems, with over 30 years of experience in this space.[40] It
offers design-to-delivery solutions[buzzword] for land, sea and air
defence. The company also offers specialised turnkey defence construction
services, infrastructure and modernization of facilities.

L&T Realty:

L&T Realty is the real estate development arm of Larsen & Toubro.

The company operates in Western and Southern India, constructing
residential, corporate office, retail, leisure and entertainment properties with
35 million sq ft under various stages of development.

L&T Metro Rail Hyderabad Limited:

The company is a subsidiary of L&T Infrastructure Development

Projects Ltd., an infrastructure development arm of Larsen & Toubro
Ltd.Larsen and Toubro Limited was awarded the Hyderabad Metro Rail
Project by Government of Telangana. L&T incorporated a Special Purpose
Vehicle - L&T Metro Rail (Hyderabad) Limited to implement the Project on
Design, Built, Finance Operate and Transfer (DBFOT) basis.

L&T Finance:

Larsen & Toubro financial services is a subsidiary which was

incorporated as a non-banking financial company in November 1994.

L&T Mutual Fund:

53
 L&T Mutual Fund is the mutual fund company of the L&T Group.
Its average assets under management (AuM) as of May 2019 is 73,936.68
crore.

AWARDS & ACHIEVEMENTS:

⮚ L&T ranked 2nd in Top 25 EPC Contractors 2022 in the Middle

East List by Oil & Gas Middle East

⮚ L&T ranked 4th in the 2021 LinkedIn Top Companies list, India

⮚ In 2021, L&T won the Innovation in Onboarding at the OLX

People HR Excellence awards by The Economic Times HRWorld

⮚ L&T Hydrocarbon won the Federation of Indian Petroleum

Industry (FIPI) ‘Engineering Procurement Construction (EPC) -
Company of the Year’ Award for 2020.

⮚ In 1997, the Bengaluru Works division was awarded the "Best of

all" Rajiv Gandhi National Quality Award.

⮚ In 2013, L&T Power received 'Golden Peacock National Quality

Award – 2012' at the 23rd World Congress on 'Leadership &
Quality of Governance'.

⮚ L&T ranked at No.22 among World’s Best Employers and No.1 in

India by Forbes for 2018.

54
55