76 - Arun Rathod Blackbook CR

EQUITY ANALYSIS OF IT (INFORMATION TECHNOLOGY) SECTOR
A Project Submitted to
University of Mumbai for partial completion of the degree of
Bachelor of Management Studies
Under the Faculty of Commerce
By
ARUN SURESH RATHOD
Roll no. 76
Under the Guidance of
MS. HARSHA HARDASANI
Smt. M.M.K. College of Commerce & Economics
Bandra (W), Mumbai – 400050, India.
Submitted as on April 2022

EQUITY ANALYSIS OF IT (INFORMATION TECHNOLOGY) SECTOR
A Project Submitted to
University of Mumbai for partial completion of the degree of
Bachelor of Management Studies
Under the Faculty of Commerce
By
ARUN SURESH RATHOD
Roll no. 76
Under the Guidance of
Submitted as on April 2022

CERTIFICATE
This is to certify that Mr ARUN SURESH RATHOD Roll no.76 has worked and duly
completed his Project Work for the degree of Bachelor of Management Studies under the
Faculty of Commerce in the subject of FINANCE and his project is entitled, “EQUITY
ANALYSIS OF IT (INFORMATION TECHNOLOGY) SECTOR” under my supervision.
I further certify that the entire work has been done by the learner under my guidance and
that no part of it has been submitted previously for any Degree or Diploma of any
University.
It is her/his own work and facts reported by her/his personal findings and investigations.
Project Guide/ Internal Examiner
Date of Submission:
DECLARATION BY LEARNER
I the undersigned Mr. ARUN SURESH RATHOD here by, declare that the work
embodied in this project work titled “EQUITY ANALYSIS OF IT (INFORMATION
TECHNOLOGY) SECTOR” forms my own contribution in research work carried out
under the guidance of MS. HARSHA HARDASANI is a result of my own research work
and has not been previously submitted to any other University for any other Degree/
Diploma to this or any other University.
Wherever reference has been made to previous works of others, it has been clearly
indicated as such and included in the bibliography.
I, here by further declare that all information of this document has been obtained and
presented in accordance with academic rules and ethical conduct.
ARUN SURESH RATHOD
Certified by
MS. HARSHA HARDASANI SIGNATURE OF PRINCIPAL

ACKNOWLEDGEMENT
To list who all have helped me is difficult because they are so numerous and the depth is
so enormous.
I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.
I take this opportunity to thank Smt. M.M.K. College of Commerce & Economics along
with the University of Mumbai for giving me an opportunity to do this project.
I would like to thank my Principal, DR. CA. Kishore Peshori, for providing the necessary
facilities required for completion of this project.
I take this opportunity to thank our Coordinator, DR. Sheetal Chaddha, for her moral
support and guidance.
I would also like to express my sincere gratitude towards my Project Guide MS. Harsha
Hardasani whose guidance and care made the project successful.
I would like to thank my College Library, for having provided various reference books
and magazines related to my project.
Lastly, I would like to thank each and every person who directly or indirectly helped me in
the completion of the project especially my Parents and Peers who supported me
throughout the project.
Name – ARUN SURESH RATHOD
TYBMS DIV- B, Roll No. 76

EXECUTIVE SUMMARY
This report is based on the research on IT sector in respect to equity and potential growth. To research on
IT sector many factors come into picture such as Economy condition of the country, effect of world
circumstance on Indian market. Global factors that are driving market like fed rate hike, Brexit.
For fundamental analysis of stock, research on Economy, Industry and Company is required whereas for
technical analysis of stock, past market data of price and volume is required.
In this project I have taken fundamental analysis to analyse the 7 IT sector stocks. From this project I
learnt many things that how the ratios are calculated and on that basis we get the conclusions about a
particular stock whether to invest it in or not. Fundamental analysis is better than Technical analysis as
per my point of view because through fundamentals we can invest for long term rather than short term.
Table of Contents:
Pg
Chapter No. Particulars No.
INTRODUCTION
1
1.1] Top players in Indian IT sector
1.2] Definition of equity market
1.3] Indian IT sector (History & Role)
1.4] Contribution of information technology in Indian economy 1-10
1.5] Impact of IT sector
1.6] Future of information technology
1.7] Meaning of Equity, fundamental analysis & technical analysis
1.8] Swot analysis of the industry

Research Methodology
2 2.1] Objective of the Study
2.2] Hypothesis
2.3] Scope of the study
2.4] Need of the study

11-13
2.5] Research Design
2.6] Limitations
2.7] Sources of data
2.8] Sample size
3 Literature review 14-15

4 (A) Industrial Profile and Company Profile
4.1] Introduction
4.2] IT sectors an Overview
4.3] Sector/ Structure market Size

16-31
4.4] Growth of Indian IT Sector
4.5] Scope of IT Sector
4.6] Stock Exchanges in India
4.7] Profile of Top 7 IT Companies
(B) Data Interpretation and Data Analysis
5.1] Financial Analysis
5.2] Ratio Analysis
5.3] Analysis of top 7 IT sector industry
1.) Data Analysis of Tata Consultancy Services (TCS)
2.) Data Analysis of Wipro 32-

63
3.) Data Analysis of Infosys
4.) Data Analysis of Tech Mahindra
5.) Data Analysis of HCL Technologies
6.) Data Analysis of Larsen & Toubro Infotech
7.) Data Analysis of Redington (India) Limited

5 Conclusion
64-65
Bibliography
CHAPTER 1: INTRODUCTION
India is a developing country. Nowadays many people are interested to invest in financial markets
especially on equities to get high returns, and to save tax in honest ways.
Equities are playing a major role in contribution of capital to the business from the beginning. Since the
introduction of shares concept, large number of investors are showing interest to invest in stock market.
The price of a security represents a consensus. It is a price at which one person agrees to buy and another
agrees to sell. The price at which an investor is willing to buy or sell primarily depends on his expectations.
If the investor expects the security’s price to rise in future, he will buy it whereas if he expects the price to
fall in future, he will sell it. These simple statements are the cause of a major challenge in forecasting
security prices, because they refer to human expectations.
INVESTOR v/s TRADER:
People can make money in equity market by investing or trading or both. However, to avoid disappointment
of losing money, customers should make very prudent and informed decisions.
“Investors” put their money into stocks for a long term. This is under the principle that over time, the
underlying investment will increase in value, and the investment will be profitable.
On the other hand
“Traders” take a proactive approach to their investing. They follow or predict a trend in the stock and use
strategies like buy-low, sell-high and make profits.
Though there is really no right or wrong type of stock trading, it is necessary for investors to identify which
type of trading is right for them. They can make a great amount of money either way however, they must
consider their time frame, risk and how much work you want to put into it.
While traders can make more money much faster, they are required to do more work and
monitoring than the typical investor. Determine what type of trader you want to be, and make sure that the
people you take guidance from have the same goals as you.
1.
1.1] Top Players in Indian IT sector:
No. Name of the company Share price
1. TCS 3736
2. WIPRO 572
3. INFOSYS 1736
4. TECH MAHINDRA 1479
5. HCL TECHNOLOGIES 1100
6. L&T INFOTECH 4693
7. REDINGTON (INDIA) LTD 162
1.2] Definition of Equity Market:
An Equity market is a market in which shares of companies are issued and traded, either through exchanges
or over-the-counter markets. Also known as the stock market, it is one of the most vital areas of a market
economy.
2.
1.3] INDIAN IT SECTOR (HISTORY & ROLE):
The information technology sector can be broadly classified into:
(A) IT Software: These companies help in developing and implementation of different software for their
clients worldwide. These Software could be for documentation, security services, banking software’s
etc.
(B) ITES Business Processing Outsourcing: Major corporations across the world outsources their back
office operations to some companies. E.g. Employee payroll for a US company’s global workforce is
maintained by an Indian BPO. Slowly the definition is expanding to Human resources, accounting,
logistics, legal processes etc.
(C) IT- Hardware and peripherals: The stuff which can be actually seen or touched, and would likely
break if we threw it out, is hardware. This would include laptops, desktops, storage devices, networking
devices, LCD, printers etc.
(D) IT-Education: This segment provides training for employment in the other segments. This would
include companies providing various certification courses, like Java, Oracle etc. These companies also
provide training for employees in corporate sector. Recently some companies have also expanded this
service to cater to schools and colleges.
HISTORY OF INDIAN IT SECTOR:
Information technology (IT) industry is one of the fastest growing industries. Indian IT industry has built
up valuable brand equity for itself in the global markets. IT industry in India comprises of software industry
and information technology enabled services ITES which also includes business process outsourcing (BPO)
industry. India is considered as pioneer in software development and a favourable destination for IT enabled
services.
The origin of IT industry in India can be traced to 1974, when the main frame manufacturer, Burroughs,
asked its India sales agent, Tata consultancy services to export programmers for installing system software
for a US client. The IT industry originated under unfavourable conditions. Local markets were absent and
government policy toward private enterprise was hostile. The industry was begun by Bombay-based
conglomerates which entered the business by supplying programmers to global IT firms located overseas.
3.
Today, Indian IT companies such as Tata consultancy services (TCS), Wipro, Infosys, HCL etc. all are
renowned in the global market for their IT prowess.
Some of the major factors which played a key role in India’s emergence as key global IT player are:
1. Indian education system
2. High quality Human resource
3. Competitive Costs
4. Infrastructure scenario
Role of IT Industry:
The IT industry can serve as a medium of e-governance, as it assures easy accessibility to information. The
use of information technology in the service sector improves operational efficiency and adds to
transparency. It also serves as a medium of skill formation.
1. Economies of scale for the information technology industries are high. The marginal cost of each unit
of additional software or hardware is insignificant compared to the value addition that results from it.
2. Unlike other common industries, the IT industry is knowledge based.
3. Efficient utilization of skilled labour forces in in the sector can help an economy achieve a rapid pace
of economic growth.
4. The IT industry helps many other sectors in the growth process of the economy including the services
and manufacturing sectors.
4.
1.4] Contribution of IT (information technology) sector in Indian economy:
The growth in the service sector in India has been led by IT-ITES sector, contributing substantially to
increase in GDP, employment and exports. The sector has increased its contribution to India’s GDP from
1.2% in FY1998 to 8% in FY2020. The IT and BPM industry’s revenue is estimated at US$194 billion in
FY2021, an increase of 2.3% YoY. The domestic revenue of IT industry is estimated at US$45 billion and
export revenue is estimated at US$150 billion in FY2021.
The contribution of India’s IT industry to economic progress has been quite significant. The rapidly
growing socio-economic infrastructure has proved to be of great use in supporting the growth of Indian
information technology industry.
The emergence of Indian information technology sector has brought about sea changes in the Indian job
market. The IT sector of India offers a host of opportunities of employment. With IT biggies like Infosys,
Cognizant, Wipro, Tata Consultancy Services (TCS), Accenture and several other IT firms operating in
some of the major Indian cities, there is no scarcity of job opportunities for the Indian software
professionals. The IT enabled sector of India absorbs a large number of graduates from general stream in
the BPO and KPO firms. All these have solved unemployment problem of India to a great extent.
1.5] Impact of IT sector:
A) Impact on Society:
A society can also refer specifically to any group of people, other animals and the interactions within the
group. It starts from a small neighbourhood to a global community as such. Religion, ethnicity, interests,
political opinions or other relating factors may help form a group of family.
B) Common Traditions:
In the context to this report it is helpful to highlight a difference between “traditions” and
“activities/interests”. Tradition can be defined as the following: “An inherited established, or customary
pattern of thought, action, or behaviour (as a religious practice or social custom). Cultural continuity in
social attitudes, customs and institutions.”
5.
C) Cultural continuity:
Social attitudes have changed in that citizens of a society now expect the various elements of that society
to be better informed than previously. They also expect to be able to access more information about a
specific product, service or organization so that they can make informed decisions with regard to their
interactions with that entity.
D) Institutions:
The word institution can incorporate a wide variety of organizations. For the purposes of this report
institutions will examine:
1. Governments
2. Commercial business
3. News and media organizations
4. Educational organizations
The focus is on how information technology development has improved the processes by which these
institutions accomplish their tasks or goals.
E) Governments:
The government of a nation is comprised of many varied institutions. However, developments in

information technology have helped governments to improve their service to their citizens information
technology has also had a major impact on the defence capabilities of governments. This covers both
governments capacity to wage war and their intelligence gathering capability. Advances in weapons
technology and weapons design have increased the effectiveness of various governments armed forces.
1.6) Future of information technology:
It (information technology) will continue to gain momentum; telecom and wireless will follow the trend.
The immense expansion in networking technologies is expected to continue into the next decade also. IT
will bring about a drastic improvement in the quality of life as it impacts application domains and global
competitiveness. Technologies that are emerging are Data Warehousing and Data Mining. They involve
collecting data to find patterns and testing hypothesis in normal research. Software services that are being
used in outsourcing will go a long way.
1.7) Meaning of Equity:
Equity is the ownership interest of investors in a business firm. Investors can own equity shares in a firm
in the form of common stock. Equity ownership in the firm means that the original business owner no
longer owns 100% of the firm but shares ownership with others. On a company’s balance sheet, equity is
represented by the common stock and paid-in capital.
6.
Equity Analysis:
Equity analysis is a researching and analysing equities, or stocks. These stocks trade on various stock markets
such as BSE, NSE, New York stock Exchange and NASDAQ, AMEX or foreign stock markets. Equity
analysts are usually employed by financial firms that have equity research departments made up of numerous
analysts, each of which focusses on being an expert on a particular industry. There are numerous industries
within 10 sectors. Those 10 sectors are consumer discretionary, consumer staples, energies, industrials,
financials, healthcare, materials, information technologies, telecommunications and utilities sectors.
Investors purchase equity shares with two basic objectives:
1. To make capital profits by selling shares at higher prices.
2. To earn dividend income.
These two factors are affected by lots of factors. An investor has to carefully understand and analyse
these factors. There are basically two approaches two study prices and valuation. i.e. fundamental
analysis and technical analysis.
Valuation of equity:
The methods used to analyse securities and marker investment decision falls under two very broad
categories:
➢ Fundamental analysis
➢ Technical analysis
Fundamental Analysis:
Fundamental analysis (in finance & accounting) is a analysis of business’s financial statements, health and
competitors and market. It also considers the overall state of the economy, interest rates, production, earnings,
employment, GDP, housing, manufacturing and management.
Fundamental analysis is a method of forecasting the future price movements of a financial instrument based
on economic, political, environmental and other relevant factors and statistics that will affect the basic supply
and demand of whatever underlies the financial instrument. Fundamental analysis is the cornerstone of
investing. Fundamental analysis is really a logical and systematic approach to estimating the future dividends
and share price.
Fundamental analysis is, in other words, a detailed analysis of the fundamental factors affecting the
performance of companies.
7.
Fundamental analysis involves 3 steps
1. Economic analysis
2. Industry analysis
3. Company analysis
1. Economic analysis:
The performance of a company depends on the performance of the economy. If the economy is
booming, income rises, demand for goods increases and hence the industries and companies in general
trend to be prosperous. On the other if the economy is in recession, the performance of the companies
will be generally bad.
Some of the key economic variables that an investor must monitor as a part o0f his fundamental
analysis.:
• Growth rates of national income
• Inflation
• Interest rates
• Exchange rates
• Infrastructure
• Monsoon
• Economic and political stability
2. Industrial analysis:
An industry is a group of firms that have similar technological structure of production and produce
similar products and industrial analysis is a type of business research that focusses on the status of an
industry or an industrial sector.
The industrial life cycle theory is generally attributed to Julius Grodensky. The life cycle of the
industry is separated into four well defined stages.
A. Pioneering stage
B. Rapid growth stage
C. Maturity and stabilization usage
D. Decline stage
3. Company analysis:
Company analysis is the final stage of the fundamental analysis. Company analysis deals with the
estimation of return and risk of individual shares. This calls for information. In company analysis the
analysts tries to forecast the future earnings of the company because there is a strong evidence that
earnings have a direct and powerful effect upon share prices.
8.
The level, trend and stability earnings of a company, however depends upon a number of factors
concerning the operation of a company.
a. Financial statements
b. Analysis of financial statements
c. Leverage ratios and profitability ratios
d. Assessment of risk
Technical analysis:
In finance, technical analysis is a security analysis forecasting the direction of the prices through the study
of past market data, predominantly price and volume. Behavioural economics and quantitative analysis
incorporate substantial aspects of technical analysis, which being a part of active management. Technical
analysis is a tool employed to evaluate the securities by analysing statistics generated by market activity.
A technical analysts believe that the share prices are determined by the demand and supply forces operating
in the market. These demand and supply forces in turn are influenced by a number of fundamental factors
as well as certain psychological or emotional factors. Thus, technical analysis is really a study of past or
historical price and volume movements so as to predict the future stock price behaviour.
Basic principle of technical analysis:
1. The market value of a security is related to demand and supply factors operation in the market.
2. There are both rational and irrational factors which surround the supply and demand factors of a
security.
3. Security prices behave in a manner that their movement is continuous in a particular direction for some
length of time.
4. Trends in stock prices have been seen to change when there is a shift in the demand and supply factors.
5. The shifts in demand and supply can be detected through charts prepared specially to show market
action.
6. Patterns are used by analysis to make forecasts about the movement of prices in future.
9.
1.8] SWOT analysis of IT industry:
SWOT analysis refers to Strength, Weakness, Opportunity & Threat for an industry.
Every investor should carry out a SWOT analysis for the chosen industry
Strengths Weakness
• Highly skilled human resource • Absence of practical knowledge

• Low wage structure • Dearth of suitable candidates
• Quality of work • Less research and development
• Initiatives taken by the government • Contribution of IT sector to India’s GDP
• Many global players have set up is still rather small
operations in India like Microsoft, Oracle, • Employee salaries in IT sector are
Adobe, etc. increasing tremendously. Low wages benefit will
• Following quality standards such as ISO soon come to an end.
9000, SEI, CMM, etc.
• English speaking professionals
• Cost competitiveness
• Quality telecommunications
infrastructure
Opportunities Threats
• High quality IT education market • Lack of data security systems
• Increasing number of working age people • Countries like China and Philippines with
• India’s well developed soft infrastructure qualified workforce making efforts to overcome
• Upcoming international players in the English language barrier
market • IT development concentrated in few cities
only
10.
CHAPTER 2. RESEARCH METHODOLOGY
2.1] Objectives of the study:
The objectives of this project is to deeply analyse our Indian IT sector for investment purpose by
monitoring the growth rate and performance on the basis of historical data. The main objectives of the
project study are:
1. To analyse the financial health of the selected IT company’s stock.
2. To examine the growth of IT sector in Indian capital market.
3. To prepare comparative study of top IT companies.
4. The primary objective of Equity research is to analyse earnings persistence.
5. To find out potentiality of selected companies through current ratios.
6. To check company’s performance on the basis of historical data.
7. To study and examine the relevance of fundamental analysis in investment decision making process.
8. To analyse which company is giving best returns to the shareholders.
11.
2.2] Scope of the study:
The scope of the study is identified and during the study is conducted. The project is
based on tools like fundamental analysis and ratio analysis. Further, the study is based on
information of last five years.
A) The analysis is made by taking into consideration seven companies i.e. TCS, Wipro, Infosys,
HCL technologies, Tech Mahindra, L&T infotech & Redington India ltd.
B) The scope of the study is limited from a period of five years.
C) The scope is limited to only the fundamental analysis of the chosen stocks.
2.3] Need of the study:
To start any business capital plays an important role. Capital can be acquired in two ways by
issuing shares or by taking debt from financial institutions or borrowing money from financial institutions.
The owners of the company have to pay regular interest and principal amount at the end. Stock is ownership
in a company, with each share of stock representing a tiny piece of ownership. The more shares a person
own, the more of the company he owns.
The shares he owned, the more dividends he earns when the company makes a profit. In the financial world
ownership is called “Equity”.
Advantages of selling stock:

• A company can raise more capital than it could borrow.
• A company does not have to make periodic interest payments to creditors.
• A company does not have to make principal payments stock/shares play a major role in
acquiring capital to the business in return investors are paid dividends to the shares they
own.
The role of equity analysis is to provide information to the market.
12.
2.4] Limitations:
A) This study has been conducted purely to understand Equity analysis for investors.
B) The study is restricted to seven companies based on fundamental analysis.
C) The study is limited to the companies having Equities.
D) Suggestions and conclusions are based on the limited data of five years.
E) The future is uncertain.
2.5] Research methodology:
Research design or research methodology is the procedure of collecting, analysing and interpreting the data
to diagnose the problem and react to the opportunity in such a way where the costs can be minimized and
the desired level of accuracy can be achieved to arrive at a particular conclusion.
The sample of the stocks for the purpose of collecting secondary data has been selected on the basis of
random sampling. The stocks are chosen in an unbiased manner and each stock is chosen independent of
the other stocks chosen. The stocks are chosen from the IT sector.
The sample size for the number of stocks is taken as 7 for fundamental analysis of stocks as fundamental
analysis is very exhaustive an requires detailed study.
2.6] Sources of data:
Sources of data may be classified into primary and secondary sources. Primary sources are original sources
from which the researcher directly collects data from the customer.
Secondary data has been collected from various sources to analyse the fundamentals. The secondary data
are collected from the BSE, NSE, moneycontrol.com, articles, magazines, journals and various websites,
etc.
Research method:
The descriptive method is used for the study.
2.7] Sample size:
For the study seven IT companies are selected which are listed under Indian stock market.
13.
CHAPTER 3. LITERATURE REVIEW
Dow theory Trends:

The ideas of Charles Dow, the first editor of the Wall Street journal, from the basis of technical
analysis. The Dow theory is a method of interpreting and signaling changes in the stock market
direction based on the monitoring of the Dow jones industrial and transportation averages. Dow created
the industrial average, of top blue chip stocks, and a second average of top railroad stocks (now the
transport average). He believed that the behaviour of the averages reflected the hopes and fears of the
entire market. The behaviour patterns that he observed applied to markets throughout the world.
Baumol 1965:
In this paper researcher ascertains the importance of contribution to a better understanding of the
performance of the stock market. His book represents a synthesis of past research and current thinking
on the subject. It analyses in considerable detail both the short run and long run price equilibrating
process and points out important departures from the competitive ideal and the implications of these
departures to stock market efficiency. Besides Baumol offers his own hypothesis on the pricing of
securities, and he sheds new light on the overall efficiency of the stock market as a mechanism for
allocating nation’s capital resources.
Bhatia 1970:
In this researcher has made an evaluative study of the “New issue market (NIM)” for the period 1958-
1973. The role of the financial institutions in the NIM has been described and evaluated. The study
shows that a new class of middle – income individual investors has emerged as an important supplier
of the risk capital.
The growth of joint stock companies played an important role in the development of new issue market.
Besides the government also passed various legislations to protect the interests of the investors. Of the
various institutions involved in the organization of the NIM, stock exchanges are the most important,
because they provide a continuous market for issued securities.
Gupta 1972:
In this researcher he has studied about the working of stock exchanges in India and has given a number
of suggestions to improve its working. The study highlights the need to regulate the volume of
speculation so as to serve the needs of liquidity and price continuity. It suggests the enlistment of
corporate securities in more than one stock exchange at the same time to improve liquidity. The study
also wishes the cost of issues to be low, in order to protect small investors.
Rohatgi 1973:
The research explains that the basic function of the stock market is to provide ready marketability or
liquidity to holdings of securities. The ideal stock market is one that can provide instantaneous and
unlimited liquidity. But it is reasonable to assume that a prudent long term investor in equities would
provide for his immediate cash needs. This is in agreement with the three motives of liquidity
preference. If so, one would expect not “instant” liquidity, but moderate liquidity. It will be
unreasonable for any investor to suppose that his equity holdings are as good as cash.
14.
Mc Kinnon & Shaw 1973:
This study investigated the advocate liberalization of financial market. Study argues the state
intervention in setting interest rates and quantitative measures of resource allocation adversely affect,
not only allocative efficiency but also depress the aggregate saving rate in less developed economies.
Khan 1976:
This study of researcher examines the role, and the cost of raising funds from the market. The study
goes on to suggest appropriate measures to enable the NIM to play a part in consonance with the
requirements of the planned growth industry. The core of the study deals with the new issues and
company finance, the structure of underwriting, and the cost of capital. The study has important policy
implications in terms of its relevance to the national economy. In the process of industrialization, a
developed NIM would be instrumental in forging an organic link between the collection and
distribution of industrial capital.
Gujarathi 1981:
This study of researcher answers the question of the risk- adjusted return in the issue market. It is a
significant work in the field of new issues in India. The difficulty of estimating the risk (beta) of newly
issued securities forced gujarathi to use complicated methodology for arriving at the risk adjusted
return. His conclusion is that investors in the new issue market in 1970’s earned & extra normal return
of nearly 2 percent per month.
Cho 1986:
This study of researcher argues the financial market liberalization may remain, incomplete without an
efficient market for equity capital as a means of spreading risk and reward.
Mayer 1992:
This research has examined using company balance sheet data, found that internal resources finance
bulk of corporate investment in major OECD countries and the roll of the stock market is very limited.
Dowen, R.J. (2001):

This study of researcher extends the Abarbanell and Bushee (1997,1998) research on topic
“fundamental information and monetary policy: The implications for earnings and earning forecasts”
by including new information developed in finance related literature as additional signals in the form
of dividend yield, firm size book to market value of equity ratio. Monetary policy is also identified as
variable that may from the relationship. This is based on the belief that the monetary policies influences
equity returns. Similar results were found. Monetary policy relates both to the observed level of signals
and level of earnings change. However, monetary policy does not alter the degree to which future
earnings are predictable from publicly available information.
15.
CHAPTER 4: (A) INDUSTRY PROFILE AND COMPANY PROFILE
4.1 Introduction:
The computer system design related service industry is among the economy’s largest and fastest
sources of employment growth. With increased investments in the sector and rapid adoption of technology
by enterprises in the country, the IT BPM industry is on a positive hiring trajectory and is expected to add
3.75 lakh new jobs to reach a head count of 48.5 lakh in 20221-2022.
The Indian IT sector is growing rapidly and it has already made its presence felt in all parts of the
world. IT has a major role in strengthening the economic and technical foundations of India. Indian
professionals are setting up examples of their proficiency in IT, in India as well as abroad.
4.2 IT sectors & overview:

The computer system design and related services industry is among the economy’s largest and
fastest sources of employment growth.
What exactly does IT sector covers?
Anything involved with software, computers network, intranets, web sites, servers, databases and
telecommunications falls under the under the umbrella of IT sector. IT is the technology that helps the
company to store, process and flow data within the organization.
This sector ultimately serves other sectors like banking, manufacturing, telecom, hotels, hospitals, etc to
improve their efficiency and increase their revenues via customer satisfaction.
The information technology sector can be broadly classified into:
1. IT software:
These companies help in developing and implementation of different software for their
clients worldwide. These Software could be for documentation, security services, banking
software etc. It can further be classified into information services (IS) outsourcing, packaged
software support and installation, system integration, processing services, hardware support
and installation and IT training and education.
2. Engineering services:
Include industrial design, mechanical design, electronic system design (including chip/
board and embedded software design), design validation testing, industrialization and
prototyping.
3. IT enabled services:
These are services that use telecom networks or the internet. For example: Remote
maintenance, Back Office operations, Data processing, Call centres, Business processing
outsourcing, etc.
4. E- Business:
(Electronic business) is carrying out business on the Internet; it includes buying and selling,
serving customers and collaborating with business partners.
16.
IT: Success Factors:
Increasing number of skilled professionals in IT. The demographic factor show
Approximately 60 % of the population of India lies in the age group of 15-60. More of the
population of India lies below the age of 25. So, in the future the number of working people
is going to be more than the number of dependents.
The Indian IT industry:

The information technology IT sector in India holds the distinction of advancing the
country into the new age economy. Perceptible is the transformation since liberalization-
India today is the world leader in information technology and business outsourcing.
Global giants like Microsoft, SAP, Oracle, and Lenovo have already established their
captive centres in India. These companies recognize the advantage India offers and the
fact that it is among the fastest growing IT markets in the Asia – Pacific region.
4.3 Sector/ Structure market size:

The Indian information technology industry has played a key role in putting India in the
global map. Thanks to the success of the IT industry, India is now a power to reckon
with.
India’s IT growth in the world is primarily dominated by IT software and services such as Custom
Application Development and Maintenance (CADM), System integration, IT consulting, Application
management, Infrastructure Management Services, Software Testing, Service Oriented Architecture and
Web Services.
17.
Top players in Indian IT sector/industry:
Major IT companies:
SR NO. COMPANY
1. TCS
2. INFOSYS
3. WIPRO
4. HP
5. IBM
6. SATYAM
7. HCL
8. TECH MAHINDRA
9. MICROSOFT
10. DELL
11. CISCO
12. LENOVO
13. PATNI
14. REDINGTON INDIA LTD
15. LARSEN & TOUBRO
18.
Nature of competition:
Nature of competition is an essential factor that determines the demand for a particular project, its
profitability and the price of concerned company scripts. The company’s ability to withstand with the local
as well as the multinational competition counts much. If two many firms are present in the organized sector,
the competition would be severe. The competition would lead to a decline in the price of the product. The
investor before investing in the script of a company should analyse the market share of the particular
company’s product and should compare it with the top five companies.
Key negatives and positives for the Indian IT industry:
Positives Negatives
Growth in IT spending Rupee appreciation
Opening up of new geographics like Europe Anticipated slowdown in the US economy
Strong volume growth Wage inflation
Increase in offshore spending Higher attrition rate
M&A to increase reach clients and offerings Lack of proper infrastructure
4.4 Growth of Indian IT sector:

India’s IT industry has recorded phenomenal growth over the last decade. The growth of
India’s IT sector has brought about many positive changes in the Indian economy. The
purchasing power of a larger section of Indian population have increased dramatically.
The increase in the purchasing power of common people has propelled the growth rate
of the other sectors in the economy as well.
India is now a home to a number of tech giants. The operations of IT firms like Wipro,
Infosys, Accenture, Capgemini, Tata Consultancy Services & many more in different
locations of India have changed the entire scenario of the Indian job market. The ITES
sector has also come up to complement the growth of Indian IT industry.
19.
Outsourcing:
Outsourcing is the business practice of hiring a party outside a company to perform services or create goods
that were traditionally performed in-house by the company's own employees and staff. Outsourcing is a
practice usually undertaken by companies as a cost-cutting measure. India’s prized resource is its readily
available technical work force. India has the second largest English-speaking professionals in the world
second only to the US.
Domestic market:
A domestic market, also referred to as an internal market or domestic trading, is the supply and demand of
goods, services, and securities within a single country. In domestic trading, a firm faces only one set of
competitive, economic, and market issues and essentially must deal with only one set of customers, although
the company may have several segments in a market. The term is also used to refer to the customers of a single
business who live in the country where the business operates. India’s domestic market has also become a force
to reckon with, as the existing IT infrastructure evolves both in terms of technology and depth of penetration.
India’ demand for IT services products has bolstered growth in the domestic sector with deal sizes going up
remarkably and contracts worth million up for grabs.
Market segments and their products:

The exchange (NSE) provides trading in four different segments- Wholesale debt market,
Capital market, Futures and Options and Currency Derivative segments as mentioned below.
A) Wholesale debt market (WDM) segment:
This segment at NSE connected its operations in June 1994. It provides the trading platform for wide
range of debt securities which includes State and Central Government securities, T-Bills, PSU bonds,
Corporate bonds, Commercial papers, Certificate of deposits, etc.
B) Capital market (CM) segment:
This segment at NSE connected its operations in November 1994. It offers a fully automated screen
based trading system, known as the national exchange for Automated trading (NEAT) system. Various
types of securities e.g. equity shares, warrants, debentures, etc are traded on this system.
C) Futures and Options (F&O) segment:

This segment provides trading in derivatives instruments like index futures, index options, stock
options, stock futures and commenced its operations at NSE in June 2000
D) Currency derivatives segment (CDS) segment:
This segment at NSE commenced its operations on August 29, 2008, with the launch of currency
futures trading in trading in US dollar Indian rupee (USD-INR). Trading in other currency pairs like
EURO-INR, Pound sterling INR and Japanese YEN-INR was further made available for trading in
February 2010, Interest rate futures was another product made available for trading on this segment
with effect from August 31, 2009.
20.
Equity Investment:
Why should one invest in equities in particular?
When a person buys a share of a company he becomes the shareholder or part owner of that
company for that one share he bought from the company. Equities have the potential to increase in
value overtime. Research studies have proved that the equity returns have outperformed the returns of
most other forms investment in the long term. Investors buy equity shares or equity based mutual funds
because equities are considered the most rewarding. Research studies have proved that investments in
some shares with a longer tenure of investment have yielded for superior returns than any other
investments. Equities are high risk investments. Though higher the risk higher the potential returns,
high risk also indicates that investor stand to lose some or all his investment amount if prices more
unfavourably. One needs to study equity market stocks in which investments are being made carefully
before investing.
Return on equities in India:
Over the past 20 years nifty 50 TRI has given 14.18% CAGR returns. Dividend is a percentage of the face
value of a share that a company return to its shareholders from its annual profits. Compared to most other
forms of investments, investing in equity shares offers the highest rate of return, if invested over a longer
duration.
4.5 Scope of IT industry:
The IT industry has great scope for people as it provides employment to technical and non-
technical graduates and has the capability to generate huge foreign exchange inflow for India.
India exports software and services to approximately 95 countries in the world. By outsourcing
to India many countries get benefits in terms labour costs and business processes. Also the Indian
companies are broadening the range of services being provided to the customers, which is
resulting in more off shoring. Talent acquisitions and development and retention initiatives taken
by the companies have brought down the employee attrition rates, thereby providing more
stability to the employees and increasing job commitment.
Many financial institutions are providing funds for the expansion of IT and ITES business. In
order to support IT and ITES, the Indian government is also taking many steps. For example:
a) The government is trying to reduce the international communication costs.

b) It is providing infrastructure support through organization such as software technology
parks. All these factors collectively create a number of opportunities in the IT sector.
4.6 Stock exchanges in India:
Stock exchanges are an organized marketplace, either corporation or mutual organization, where
members of the organization gather to trade company stocks or other securities. The members
may act either as agents for their customers, or as their principles for their own accounts. As per
the Securities Contract Regulation Act 1956, a stock exchange is an association, organization or
body of individuals whether incorporated or not, established for the purpose of assisting,
regulating and controlling business in buying, selling and dealing in securities.
21.
Stock exchanges facilitate for the issue and redemption of securities and other financial
instruments including the payment of income and dividends. The record keeping is central but
trade is linked to such physical place because modern markets are computerized. The trade on
an exchange is only by members and stock broker do have a seat on the exchange.
List of stock exchanges in India:
Bombay stock exchange
National stock exchange
Over the counter exchange of India
Regional stock exchanges:

1. Ahmedabad
2. Bangalore
3. Bhubaneswar
4. Calcutta
5. Cochin
6. Coimbatore
7. Delhi
8. Guwahati
9. Hyderabad
10. Jaipur
11. Ludhiana
12. Madhya Pradesh
13. Madras
14. Magadh
15. Mangalore
16. Meerut
17. Pune
18. Saurashtra Kutch
19. Uttar Pradesh
20. Vadodara
4.7 Profile of Top 7 IT Companies:
22.
1. Profile of Tata Consultancy Services (TCS):
TCS is an Indian multinational Information Technology (IT) Services, Business

solutions and Outsourcing services. Company headquartered in Mumbai, Maharashtra
TCS is a subsidiary of Tata Group and is listed on the Bombay Stock Exchange and the
National Stock Exchange of India. It is India’s one of the most valuable companies and
it is the largest India-based IT services company.
Journey of Tata industry:
1968 to 2005
Tata Consultancy Services (TCS) was founded in the year 1968. Its early contracts included providing
punched card services to sister company TISCO now Tata steel, working on an Inter-branch reconciliation
system for the central bank of India, and providing bureau services to Unit Trust of India.
In 1975, TCS conducted its first campus interviews, held at IISC, Bangalore. The recruits comprised 12
Indian institutes of Technology Graduates and three IISC graduates, who became the first TCS employees
to a formal graduate trainee programme.
In 1979, TCS delivered an electronic depository an trading system called SECOM for the Swiss company
called SIS Sega Inter Settle. TCS followed this up with system X for the Canadian Depository system and
automating the Johannesburg Stock Exchange. TCS associated with a Swiss partner, TKS Teknosoft, which
it later acquired.
In 1980, TCS established India's first dedicated software research and development centre, the Tata
Research Development and Design Centre (TRDDC) in Pune. In 1981, it established India's first client-
dedicated Offshore Development Centre, set up for clients Tandem. TCS later (1993) partnered with Canada-
based software factory Integrity Software Corp, which TCS later acquired.
In anticipation of the Y2K bug and the launch of a unified European currency (Euro), Tata Consultancy
Services created the factory model for Y2K conversion and developed Software tools which automated the
conversion process and enabled third-party developer and client implementation. Towards the end of 1999,
TCS decided to offer Decision Support System (DSS) in the domestic market under its Corporate Vice
President and Transformation Head Subbu Iyer.
2005-2021
On 25 August 2004, TCS became a public listed company.
In 2005, TCS became the first India based IT services company to enter the bioinformatics market. In 2006, it
designed an ERP system India Railway Catering and Tourism. By 2008, its e-business activities were
generating over US$500 million in annual revenues.
TCS entered the small and medium enterprises market for the first time in 2011, with cloud -based
offerings. On the last trading day of 2011, it overtook RIL to achieve the highest market capitalisation of
any India -based company. In the 2011–12 fiscal year, TCS achieved annual revenues of over US$10 billion
for the first time.
23.
In May 2013, TCS was awarded a six-year contract worth over ₹11 billion (US$150 million) to provide
services to the Indian Department of posts. In 2013, the firm moved from the 13th position to 10th position in
the League of top 10 global IT services companies and in July 2014, it became the first Indian Company with
over ₹5 trillion (equivalent to ₹6.8 trillion or US$90 billion in 2020) market capitalisation.
In Jan 2015, TCS ends RIL's 23-year run as India's most profitable firm.
TCS announced its FY19 Q3 results posting 24 per cent year-on-year (YoY) rise in profit at ₹81.05
billion (equivalent to ₹86 billion or US$1.1 billion in 2020). The stock plunged 2.5 per global cent intra-day
as brokerages cut price target.
TCS received the 2019 American Business Awards from Four Stevies.
On 8 October 2020, TCS surpassed Accenture in market capitalisation to become the world's most-valuable
IT company with a market cap of $144.73 billion. On 25 January 2021, TCS again
surpassed Accenture briefly, in market capitalisation to become the world's most-valuable IT company with a
market cap of $170 billion.] The same day, TCS became India's most valuable company, surpassing Reliance
industries with a market cap of ₹12.55 trillion (US$170 billion). In 2021 Tata is also one of the largest job
provider in India hiring 43,000 individuals in H1 FY22.
TCS is the market leader in IT sector in India and other major companies like Wipro, Infosys, Accenture
and IBM are the major market share in the economy. The revenue of TCS is now 1.67 lakh crores (USD $22
billion) INR is more than other major companies.
Type Public (BSE: 532540)

Subsidiary of Tata Group
Founded 1968
Headquarters Mumbai, India
Area served Worldwide
Key people Ratan Tata
Natarajan Chandrasekaran (Current Chairman)
Rajesh Gopinathan (Managing Director & CEO)
Industry Software Services
Products TCS banes
Digital Certification Products
Healthcare Management Systems
IT Consulting
IT services
Outsourcing
BPO
Software Product
24.
2. Profile of Wipro:
Wipro ltd formerly Western India Products Ltd is an Information Technology (IT) consulting and
outsourcing service company located in Bangalore, Karnataka, India. Wipro is the second largest IT
services company in India. Its subsidiary, Wipro Enterprises Ltd, offers consumer care, lighting, healthcare
and infrastructure engineering. Part of Wipro Ltd, the $6.98 billion conglomerate and global leader in
technology enabled solutions, the company leverages on the parent’s philosophy ‘Applying Thought’ to
enable business results by being a transformation catalyst.
Wipro Infotech is the leading manufacturer of the computer hardware and provider of IT services in India
and the Middle East region.
Wipro’s vast IT services portfolio includes consulting, systems integration, application development
and maintenance, technology infrastructure services, package implementation & R&D services among
others. As of 2021, the revenue of Wipro Ltd is account to 75000 crores (USD 10 billion).
Founded 1945
Founder M.H. Premji
Headquarters Bangalore, Karnataka, India
Key people Rishad Premji (Executive Chairman)
Azim Premji (Former Chairman)
S.A Sudarshan
Industry IT services
Services IT consulting
BPO
25.
Services Product Engineering Solutions
Technology Infrastructure Services
Revenue 75000 crores (USD 10 billion)
Employees 231,671 (2021)
Website www.wipro.com
3. Profile of Infosys:
Infosys Limited is an Indian multinational information technology company that provides business
consulting, information technology and outsourcing services. The company was founded in Pune and is
headquartered in Bangalore Infosys is the second-largest Indian IT company after TCS by 2020 revenue
figures and the 602nd largest public company in the world according to Forbes Global 2000 ranking.
Infosys has a global footprint with 69 offices and 87 development centres in US, India, China, Australia,
Japan, Middle East, UK, Germany, France, Switzerland, Netherlands, Poland, Canada and many other
countries. Infosys has a total of 2,59,619 employees generally known as “Infoscions” as of 2021.
Infosys takes pride in building strategic long term client relationships. Infosys give back to the community
through the Infosys foundation that funds education and learning.

Founded July 2, 1981
Founders Ashok Arora
N.R Narayan Murthy
Nandan Nilekani
Gopal Krishnan
K Dinesh
26.
Headquarter Bangalore, India
Key people Sahil Parekh (Current CEO)
Narayan Murthy
Industry Software Services
Products IT services
Revenue 1 lakh crore INR
Website www.infosys.com
4. Profile of Tech Mahindra:

Tech Mahindra Ltd is an Indian provider of Information Technology (IT), networking technology solutions
and business support services (BPO) to the global telecommunications industry. Tech Mahindra is a part
of Mahindra Group conglomerate with headquartered at Pune, India.
Its activity spread across a broad spectrum, including Business Support Systems (BSS), Operation Support
System (OSS), Network Design & Industry, Next Generation Networks, Mobility Solution, Security
consulting and testing.

(NSE: TECHIM)
Industry IT services, IT consulting
Founded 1986
Headquarters Pune, India
Key people C.P Gurnani (CEO)
Services IT, Business consulting and Outsourcing Services
Parent Mahindra Group
27.
Revenue 38642 crore (USD 5.1 billion)
Website www.techmahindra.com
5. Profile of HCL Technologies:
HCL Technologies is an Indian multinational information technology (IT) services and consulting company
headquartered in Noida, Uttar Pradesh, India. It is a subsidiary of HCL Enterprise. Originally a research &
development division of HCL, it emerged as an independent company in 1991 when HCL entered into the
software services business. The company has offices in 50 countries including United Kingdom, United States,
France, and Germany with a worldwide network of R&D, "innovation labs" and "delivery centres", over
187,000 employees and its customers include 250 of the Fortune 500 and 650 of the Global 2,000 companies.
It operates across sectors including aerospace and defence, automotive, banking, capital markets, chemical
and process industries, energy and utilities, healthcare, hi-tech, industrial manufacturing, consumer goods,
insurance, life sciences, manufacturing, media and entertainment, mining and natural resources, oil and gas,
retail, telecom, and travel, transportation, logistics & hospitality.
HCL Technologies is on the Forbes Global 2000 list. It is among the top 20 largest publicly traded companies
in India with a market capitalisation of $50 billion as of September 2021. As of July 2020, the company, along
with its subsidiaries, had a consolidated annual revenue of Rs 71,265 crore (US$10 billion).
28.
Founded November 12, 1991
Industry IT services, IT consulting
Founders Shiv Nadir

Vineet Nayar
Key people C Vijayakumar (CEO)
Services IT, Business Consulting and Outsourcing
Revenue 1,118 crores USD
Website www.hcltech.com
6. Profile of Larsen & Toubro Infotech limited:
Larsen & Toubro Infotech Limited (LTI) is an Indian multinational information technology services
and consulting company based in Mumbai, India. In 2017, NASSCOM ranked LTI as the sixth-largest Indian
IT services company in terms of export revenues. It was among the top 15 IT service providers globally in
2017, according to the Everest Group's PEAK Matrix for IT service providers.
29.
It employs standards of the Software Engineering Institute's (SEI) Capability Maturity Model Integration
(CMMI) and is a Maturity Level 5 assessed organization.
Founded as L&T Information Technology Ltd in December 1996, LTI is a wholly owned subsidiary of Larsen
& Toubro (L&T). During 2001–2002 the company's name was changed from L&T Information Technology
Limited to Larsen & Toubro Infotech Limited and in the same year the company achieved the assessed level
of SEI Level 5. L&T Infotech dropped the word 'Infotech' from its name to reflect the changed business
environment and rebranded itself as 'LTI' with a tag line of 'Let's Solve' in May 2017.

(NSE:LT)
Industry Conglomerate
Founded Mumbai, India (1938)
Founders Henning Holck Larse
Soren Kristian Toubro
Headquarters L&T Ballard Estate
Vadodara, Gujarat, India
Key people Sanjay Jalona (CEO)
S.M Subramaniam
Products Construction
Heavy Equipment
Electrical Equipment
Power
Ship Building
Financial Services
IT services
Revenue 12,644 crores INR
Website www.larsentoubro.com
30.
7. Profile of Redington India Limited:
Redington (India) Limited is a supply chain logistics. The company distributes information technology (IT)
products and mobile handsets and accessories and provides logistics, supply chain management and support
services.
An integrated supply chain provider Redington India Limited was incorporated on 2nd May 1961. Being the
second largest distributer of IT products in India the company and through all its subsidiaries distributes
products from over 220 leading manufacturers services over 39800 channel partners in India. It is engaged in
distribution of information technology (IT) mobility and other technology products besides supply chain
solutions and after sales services.

Founded 2 May, 1961
Founders R. Srinivasan
R. Jayachandran
Key people Mr. Raj Shankar (MD)
Headquarters Tamil Nadu
Products Computer Hardware, IT Products
Sector Technology
Industry Tech hardware & semiconductors
Sub industry Technology Hardware
Employees 1545
Revenue 500 crores INR
Website www.redingtongroup.com
31.
CHAPTER 4: (B) DATA INTERPRETATION AND ANALYSIS
5.1 Financial Analysis:
The best source of financial information about a company is its own financial statements. This is
a primary source of information for evaluating the investment prospects in the particular company’s stocks.
Financial statement analysis is a study of company’s financial statement from various viewpoints. The
statement gives the historical and current information about the company’s operations. Historical financial
statements help to predict the future and the current information aids to analyse the present status of a company.
The two main statements used in the analysis are Balance sheet and Profit and loss account:
The Balance sheet is one of the financial statements that companies every year for their shareholders. It is like
a financial snapshot, the company’s financial situation at a moment in time. It is prepared at the year end,
listing the company’s current assets and liabilities. It helps to study the capital structure of the company. It is
better for the investor to avoid a company with excessive debt component in capital structure.
From the Balance sheet, liquidity position of the company can also be assessed with the information on
current assets and liabilities.
5.2 Ratio analysis:
Ratio is a relationship between two figures expressed mathematically. Financial ratios provide numerical
relationship between two relevant financial data. Financial ratios are calculated from the Balance sheet and
Profit and loss account. The relationship can be either expressed in percent or as quotient. Ratios summarize
the data for easy understanding, comparison and interpretations.
Ratios for investment purposes can be classified into profitability ratios, turnover ratios, and leverage ratios.
Profitability ratios are the most popular ratios since investors prefer to measure the present profit performance
and use this information to forecast the future strength of the company.
The most often used profitability ratios are return on assets, price earning multipliers, price to book value,
price to cash flow, price to sales, dividend yield, return on equity, present value of cash flows and profit
margins.
a.) Return on Assets:

ROA is computed as the product of the net profit margin and the total asset turnover ratios.
ROA = (Net profit/ Total income) x (Total income/ Total Assets)
This ratio indicates the firm’s strategic success.
32.
Companies can have two strategies: cost leadership, or product differentiation. ROA should be rising
or keeping pace with company’s competitors if the company is successfully pursuing either of these strategies
but how ROA rises will depend on the company’s strategy. ROA should rise with a successful cost leadership
strategy because the company’s increasing operating efficiency.
b.) Return on Investment:

ROI is the return on capital invested in business i.e. if an investment Rs 1 crore in men, machines, land
and material is made to generate Rs 25 lakhs of net profit, then the ROI is 25%. The computation of
ROI is as follows:
ROI = (Net profit/ Equity Investments X 100)
As the ratio reveals how well the resources of a firm are being used, higher the ratio, better are
the results. The return shareholders investment should be compared with the return of other similar
firms in the same industry. The inter firm comparison of this ratio determines whether the investment
in the firm attractive or not as the investors would like to invest only where the return is higher.
c.) Return on Equity:
Return on equity (ROE) is a measure of financial performance calculated by dividing net income by
shareholders' equity. Because shareholders' equity is equal to a company’s assets minus its debt, ROE
is considered the return on assets. ROE is considered a gauge of a corporation's profitability and how
efficient it is in generating profits.
ROE = (Net profit to owners/ Shareholders Equity)
• Return on equity (ROE) is the measure of a company's net income divided by its shareholders' equity.
• ROE is a gauge of a corporation's profitability and how efficiently it generates those profits.
• An ROE is considered satisfactory based on industry standards, though a ratio near the long-term
average of the S&P 500 of around 14% is typically considered acceptable.
d.) Earnings per share:
Earnings per share (EPS) is calculated as a company's profit divided by the outstanding shares of its
common stock. The resulting number serves as an indicator of a company's profitability. It is common
for a company to report EPS that is adjusted for extraordinary items and potential share dilution.
EPS = (Net Profit/No. of Equity Shares)
The higher the company’s EPS, the more profitable it is considered to be.
33.
e.) Dividend per share:
DPS is the number of declared dividends issued by a company for every ordinary share outstanding.
It is the number of dividends each shareholder of a company receives on a per-share basis. Ordinary shares,
or common shares, are the basic voting shares of a corporation. Shareholders are usually allowed one vote
per share and do not have any predetermined dividend amounts.
Dividends per share is calculated by dividing the total number of dividends paid out by a company
(including interim dividends) over a period of time, by the number of shares outstanding. A company's DPS
is often derived using the dividend paid in the most recent quarter, which is also used to calculate the dividend
yield.
DPS can be calculated using the formula:
DPS = (Total dividends payment/number of shares outstanding)
f.) Dividend Payout Ratio:
The dividend payout ratio is the ratio of the total amount of dividends paid out to shareholders relative
to the net income of the company. It is the percentage of earnings paid to shareholders via dividends.
The amount that is not paid to shareholders is retained by the company to pay off debt or to reinvest
in core operations. It is sometimes simply referred to as simply the payout ratio.
Payout ratio = (Dividend per share/ Earnings per share) *100
The percentage of payout ratio can also be used to complete the percentage of retained earnings.
g.) Dividend Yield:
The dividend yield, expressed as a percentage, is a financial ratio (dividend/price) that shows how much
a company pays out in dividends each year relative to its stock price.
The reciprocal of the dividend yield is the price/dividend ratio.
Dividend Yield = (Dividend per share/Market per share) *100
• The dividend yield—displayed as a percentage—is the amount of money a company pays

shareholders for owning a share of its stock divided by its current stock price.
• Mature companies are the most likely to pay dividends.
34.
h.) Price Earnings (PE) Ratio:
The price-to-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current
share price relative to its earnings per share (EPS). The price-to-earnings ratio is also sometimes
known as the price multiple or the earnings multiple.
P/E ratios are used by investors and analysts to determine the relative value of a company's shares in
an apples-to-apples comparison. It can also be used to compare a company against its own historical
record or to compare aggregate markets against one another or over time.
PE Ratio = (Market price per share/ Earnings per share)
Many investors prefer to buy the company’s shares at low P/E ratio since the general interpretation in
the market is undervaluing the share and there will be a correction in the market price sooner or later.
i.) Debt/Equity Ratio:
The debt-to-equity (D/E) ratio is used to evaluate a company’s financial leverage and is calculated by
dividing a company’s total liabilities by its shareholder equity. The D/E ratio is an important metric
used in corporate finance. It is a measure of the degree to which a company is financing its operations
through debt versus wholly owned funds. More specifically, it reflects the ability of shareholder equity
to cover all outstanding debts in the event of a business downturn.
The debt-to-equity ratio is a particular type of gearing ratio.
Debt to Equity Ratio = (Loan funds/ Equity Shareholders Funds)
Debt to equity ratio is used to measure the claims of outsiders and the owners against the firm’s assets.
5.3 Analysis of top 7 IT sector companies:

1. Data analysis of TATA CONSULTANCY SERVICES (TCS):
Dividend:
Tata consultancy services being a major IT sector company had earlier announced
interim dividend of Rs 7 per equity share in the first quarter, and Rs 7 per equity share in the
second quarter and Rs 7 per equity share in the third quarter. Altogether, the IT major has so
far announced interim dividend of Rs 21 per equity share so far. The record date for the third
quarter dividend was 20th January 2022, so as the third interim dividend was paid on 7th
February 2022 to their equity shareholders. TCS- India’s largest software services company
earlier in December 2021 reported 12.36% rise in their consolidated net profit to Rs 9769
crores for the third quarter.
35.
Data analysis of Tata Consultancy Services:
1. Debt to Equity Ratio = loan funds/ Equity Shareholders Funds
2. EPS = Earnings Available to Equity shareholders/ No. of Equity shares
3. Current Ratio = Current assets/ Current Liabilities
4. P/E Ratio = Market price per share/ Earnings price per share
1. Debt to Equity Ratio = Loan funds/ Equity Shareholders Funds
Year 2021 2020 2019 2018 2017

Debt to 0.07 0.03 0.00 0.00 0.00
Equity
Ratio
DEBT-EQUITY RATIO OF TCS

0.09
0.08
0.07
Debt-Equity Ratio
0.06
0.05
0.04
0.07
0.03
0.02
0.03
0.01
0 0 0 0
2017 2018 2019 2020 2021
Year
1.1
Graph no 1.1 showing Debt-Equity Ratio of TCS
Analysis:
The researcher saw that debt-equity ratio for the year 17-19 was low i.e. 0 and for the year 20-21 it
was high 0.03 and 0.07 respectively.
36.
Interpretation:
Debt- Equity Ratio of TCS was low for the first three years i.e. from 2017-2019 it was 0.00. A mild
increase in the debt-equity ratio can be seen in the above table or graphical representation for the year
2020-2021. A high debt/equity ratio generally means that the company has been aggressive in
financing its growth with debt. This can result in volatile earnings as a result of the additional interest
expense.
2. EPS = Earnings Available to Equity shareholders/ No. of Equity shares
For the year 2017 the EPS was 120.04 in Rs
Year 2021 2020 2019 2018 2017

EPS 82.78 88.64 79.34 131.15 120.04
EPS OF TCS
200
180
160
140
120
EPS in Rs
100
80
120.04 131.15
60
79.34 88.64 82.78
40
20
0
2017 2018 2019 2020 2021
Year
1.2
Graph no. 1.2 showing EPS in Rs of TCS
Analysis:
From the above graph we can see that the EPS of Tata consultancy services (TCS), has been increased
rapidly in the past five years from 2017-2021 with an increase of 20.96 in the year 2021.
37.
Interpretation:
As the EPS of the company is having an increase of Rs 20.96 from the year 2017-2021 because of some
factors, which is still a positive sign of this company.
3. Current Ratio = Current Assets/ Current Liabilities
Year 2021 2020 2019 2018 2017

Current 2.92 3.30 4.18 4.85 6.40
Ratio
CURRENT RATIO OF TCS
10
9
8
7
Current Ratio
6
5
4
6.4
3 4.85
4.18
2 3.3 2.92
1
0
2017 2018 2019 2020 2021
Year
1.3
Graph 1.3 showing Current Ratio of TCS
Analysis:
The above table shows the current ratio of TCS which is 6.40 in the year 2017 and it decreased in 5 years.
The current ratio decreased to 2.92 for the year 2021. As you can see in the graph there can be seen a sharp
in current ratio year by year.
Interpretation:
The higher the current ratio, the more capable is the company in paying of its obligations. A ratio under 1
suggests that the company would be unable to pay of its obligations if they came due at that point. So the
current ratio of TCS shows that the company have more current assets than current liabilities. As the graph
shows they have the potential to pay its obligations so short-term solvency for TCS is strong.
38.
4. P/E Ratio = Market price per share/ Earnings per share
For the year 2017 the P/E ratio was 8.17
Year 2021 2020 2019 2018 2017

P/E 40.85 37.47 11.11 43.36 8.17
P/E RATIO OF TCS
100
90
80
70
60
P/E Ratio
50
40
30
43.36 37.47 40.85
20
10 8.17 11.11
0
2017 2018 2019 2020 2021
Year
1.4
Graph 1.4 showing P/E Ratio of TCS
Analysis:
From the above table it can be seen that the P/E has a slight increase in the period of 5
years with being the highest P/E ratio in the year 2018 and second highest being in the
year 2021.
Interpretation:
Researcher sees that there was a lot of ups and downs in P/E Ratio of the company
from 2017-2021.
39.
2. Data analysis of Wipro:
1. Debt to Equity Ratio = Loan Funds/ Equity Shareholders funds
2. EPS = Earnings available for Equity Shareholders/ No of Equity Shares
4. P/E ratio = Market per share/ Earnings per share
1. Debt to Equity Ratio = Loan Funds/ Equity Shareholders funds
Year 2021 2020 2019 2018 2017

Debt- 0.13 0.11 0.10 0.11 0.13
Equity
Ratio
DEBT-EQUITY RATIO OF WIPRO
0.2
0.18
0.16
0.14
0.12
Debt-Equity Ratio
0.1
0.08
0.13 0.13
0.06 0.11 0.1 0.11
0.04
0.02
0
2017 2018 2019 2020 2021
Year
2.1
Graph 2.1 showing Debt-Equity Ratio of Wipro
Analysis:
From the above table researcher has observed that the debt equity ratio of Wipro in 2017 was 0.13 and for
the next 3 years after 2017 it started to decline slightly, but reached the same numbers as of 2017 in the
year 2021 i.e. 0.13.
40.
Interpretation:
From the above graph it can be seen that there was decline in the increment after 2017-2020 and further
reached to its same position as of 2017 in the year 2021.
2. EPS = Earnings available for Equity Shareholders/ No of equity sharers
For the year ended 2017 EPS was 33.61 in Rs
Year 2021 2020 2019 2018 2017

EPS 17.81 14.88 12.67 16.26 33.61
EPS OF WIPRO
100
90
80
70
60
EPS
50
40
30
20 33.61
10 16.26 12.67 14.88 17.81
0
2017 2018 2019 2020 2021
Year
2.2
Graph 2.2 showing EPS of Wipro
Analysis:
The above table shows that the EPS of Wipro is 33.61 in the year 2017, from the next year it had sharp
decline of 16.26 in the year 2018 and it had a slight increase in the year 2021.
41.
Interpretation:
From the above graph shown above it can be said that there is decrement in EPS in the
year 2018 but after it had a slight increase in the year 2021.
Year 2021 2020 2019 2018 2017

Current 2.50 2.78 2.96 2.86 3.52
Ratio
CURRENT RATIO OF WIPRO
5
4.5
4
3.5
Current Ratio
3
2.5
2 3.52
1.5 2.86 2.96 2.78 2.5
1
0.5
0
2017 2018 2019 2020 2021
Year
2.3
Graph 2.3 showing current ratio of Wipro
Analysis:
From the table it analysed that current ratio of the company was decreased from 3.52 to 2.5 in the period
of 5 years from 2017-2021.
Interpretation:
Graph shows that the company does not have that much potential to pay its obligations as they have good
current ratio but it should be more than ratio 2:1 and here ratio has a slight decline in the period of 5 years.
42.
For the year 2017 P/E ratio was 26.80
Year 2021 2020 2019 2018 2017

P/E Ratio 30.40 20.36 15.63 25.20 26.80
P/E RATIO OF WIPRO
50
45
40
35
30
P/E Ratio
25
20
30.4
15 26.8 25.2
20.36
10 15.63
5
0
2017 2018 2019 2020 2021
Year
2.4
Graph 2.4 showing P/E Ratio of Wipro
Analysis:
The table shows that P/E Ratio which was decreased in the year 2019 increased much higher than
2017 in the year 2021 with 30.4 being the highest of all P/E ratio.
Interpretation:
Research shows that there was sharp decline from 26.8 to 20.36 in 4 years and it stabilizes last at
30.40 in the year 2021. Since having high P/E ratio which was not a good sign for investors to invest
in it, as higher the P/E ratio the more you are paying for each dollar of earning. This makes a high P/E
ratio bad for investors, strictly from a price to earnings perspective.
43.
3. Data analysis of Infosys:
1. Debt-Equity ratio = Loan Funds/ Equity Shareholders Funds

2. EPS = Earnings Available for Equity Shareholders/ No of equity shares
3. P/E Ratio = Market price per share/ Earnings per Share
1. Debt-Equity ratio = Loan Funds/ Equity Shareholders Funds
Year 2021 2020 2019 2018 2017
Debt-Equity 0.00 0.00 0.00 0.00 0.00

Ratio
DEBT-EQUITY RATIO OF INFOSYS
0.1
0.09
0.08
Debt-Equity Ratio
0.07
0.06
0.05
0.04
0.03
0.02
0.01
0 0 0 0 0
0
2017 2018 2019 2020 2021
Year
3.1
Graph 3.1 showing Debt-Equity Ratio of Infosys
Analysis:
As we can see the debt-equity ratio of Infosys is 0 from 2017-2021, which means that company is not
much interested in financing through debt.
Interpretation:
Research shows that the debt-equity ratio being zero for the 5 years which often means the business hasn’t
relied on borrowing to finance operations.
44.
2. EPS = Earnings Available for Equity Shareholders/ No of Equity shares
Year 2021 2020 2019 2018 2017
EPS 42.37 36.34 33.66 71.28 60.16
EPS OF INFOSYS
100
90
80
70
60
EPS
50
40 71.28
60.16
30
36.34 42.37
20 33.66
10
0
2017 2018 2019 2020 2021
Year
3.2
Graph 3.2 showing the EPS of Infosys
Analysis:
From the above table it can be seen that EPS was the highest in the year 2018 and lowest in the year 2019
but ended up in the lowest value as compared to that of previous years with 42.37 being the EPS for the year
2021.
45.
Interpretation:
EPS was increasing sharply from 2017-2018 by 11.12 and then suddenly it started to decline sharply from
71.28 to 42.37 which is not a positive sign for now currently for the growth of the company as well for the
investors.
For the year ended 2017 P/E ratio was 14.42
Year 2021 2020 2019 2018 2017
P/E 30.11 20.18 19.11 18.75 14.42
P/E RATIO OF INFOSYS
100
90
80
70
60
P/E Ratio
50
40
30
20 30.11
14.42 18.75 19.11 20.18
10
0
2017 2018 2019 2020 2021
Year
3.3
Graph 3.3 showing P/E ratio of Infosys
Analysis:
From the above table it is analysed that in 2017 was 14.42 and then after it increased to 18.75
and in next it again slightly increased and there started an increase in the P/E ratio of the
company in the year 2021 where P/E ratio accounted to 30.11.
46.
Interpretation:
P/E Ratio was consistently increasing continuously from 14.42 to 30.11 in the period of five
years from 2017-2021.
Year 2021 2020 2019 2018 2017
Current 2.74 2.88 3.00 3.78 4.05

Ratio
CURRENT RATIO OF INFOSYS
10
9
8
7
Current Ratio
6
5
4
3
4.05 3.78
2 3 2.88 2.74
1
0
2017 2018 2019 2020 2021
Year
3.4
Graph 3.4 showing Current Ratio of Infosys
Analysis:
Above table shows that the current ratio started to decline sharply in the period of five years
from 2017-2021 which is again not a positive sign but still they can pay their obligations as
the current ratio of Infosys didn’t fall below 1.
Interpretation:
According to the researcher company shows a good potential as they have more than ideal
ratio 2:1 in last 5 years being current ratio declined in the past five years to 2.74 in 2021.
47.
4. Data analysis of Tech Mahindra:
1. Debt to Equity Ratio = Loan Funds/ Equity Shareholders Funds
2. EPS = Earnings Available for Equity Shareholders/ No of Equity Shares
Year 2021 2020 2019 2018 2017
Debt-Equity 0.00 0.00 0.00 0.01 0.01

Ratio
DEBT-EQUITY RATIO OF TECH MAHINDRA
0.09
0.08
0.07
Debt-Equity Ratio
0.06
0.05
0.04
0.03
0.02
0.01 0.01 0.01
0 0 0
0
2017 2018 2019 2020 2021
Year
4.1
Graph 4.1 showing Debt-Equity ratio of Tech Mahindra
Analysis:
The above table shows that the debt-equity ratio of Tech Mahindra has been decreased in the
past 5 years from 0.01 to 0.00 in the year 2017-2021 respectively.
Interpretation:
Above table shows that the debt-equity ratio of the company’s performance was getting good
and better from 2019-2021, as the company stopped financing in debt which is again a positive
sign for the company.
48.
2. EPS = Earnings Available for Equity Shareholder/ No of Equity shares
For the year ended 2017 the EPS was 31.37 in Rs
Year 2021 2020 2019 2018 2017
EPS 43.76 46.89 44.58 40.84 31.37
EPS OF TECH MAHINDRA
100
90
80
70
60
EPS
50
40
30
44.58 46.89 43.76
40.84
20 31.37
10
0
2017 2018 2019 2020 2021
Year
4.2
Graph 4.2 showing EPS of Tech Mahindra
Analysis:
As from the above table you can see that the EPS of Tech Mahindra has been increasing from
31.37 to 43.76 in the past five years from 2017-2021 which is again a positive aspect for the
company.
Interpretation:
Above graph shows EPS of Tech Mahindra that has given good returns to shareholders and
performed well in 2020 after that it has decreased slightly to 43.76 in the year 2021.
49.
3. Current ratio = Current Assets/ Current Liabilities
Year 2021 2020 2019 2018 2017
Current 3.36 3.16 2.28 2.85 2.80

Ratio
CURRENT RATIO OF TECH MAHINDRA
5
4.5
4
3.5
Current Ratio
3
2.5
2 3.36
3.16
1.5 2.8 2.85
2.28
1
0.5
0
2017 2018 2019 2020 2021
Year
4.3
Graph 4.3 showing current ratio of Tech Mahindra
Analysis:
As seen in the above table that the current ratio of the company has been increasing from 2.8 to 3.36 in the
past five years which is again a positive sign for the company.
Interpretation:
In the above graph we can see that there is an increase in current ratio in the past five years which means
having a current ratio 2:1 is one of the positive indicators for the company as this makes easy for the
company to pay its obligations.
50.
Year 2021 2020 2019 2018 2017
P/E Ratio 27.4 15 1.98 1.83 1.38
P/E RATIO OF TECH MAHINDRA
50
45
40
35
30
P/E Ratio
25
20
15 27.4
10 15
5
1.38 1.83 1.98
0
2017 2018 2019 2020 2021
Year
4.4
Graph 4.4 showing P/E ratio of Tech Mahindra
Analysis:
In the above table we can see that P/E ratio of the company has been increased in the past five
years from 1.38 to 27.4 from the year 2017-2021 which is a negative sign for the investors to
invest in it.
Interpretation:
From the above graph we can see an increase in the P/E ratio in the year 2021 which is not
the right time to invest in this stock as per the researcher as some factors affects it
fundamentals too.
51.
5. Data Analysis of HCL Technologies:
Year 2021 2020 2019 2018 2017
Debt- 0.00 0.00 0.00 0.00 0.00

Equity
Ratio
DEBT-EQUITY RATIO OF HCL TECHNOLOGIES
0.09
0.08
0.07
Debt-Equity Ratio
0.06
0.05
0.04
0.03
0.02
0.01
0 0 0 0 0
0
2017 2018 2019 2020 2021
Year
5.1
Graph 5.1 showing debt-equity ratio of HCL Technologies
Analysis:
As you can see in the above table the Debt-Equity ratio of HCL Technologies is for all the 5
years which is again a positive approach from the company’s and investors point of view.
52.
Interpretation:
In the above graph, the debt-equity ratio being zero from 2017-2021 which means the
company is not much interested to raise its finance through debt.
Year 2021 2020 2019 2018 2017
EPS 32.22 33.06 59.69 52.54 48.18
EPS OF HCL TECHNOLOGIES
100
90
80
70
60
EPS
50
40
59.69
30 48.18 52.54
20 33.06 32.22
10
0
2017 2018 2019 2020 2021
Year
5.2
Graph 5.2 showing EPS of HCL Technologies
Analysis:
From the above table we can see that the EPS of HCl Technologies has been decreased in the period of five
years from 48.18 in 2017 to 32.22 in 2021 which is quiet a negative sign for the company.
53.
Interpretation:
As the EPS is decreasing in 2021 after having an increase for the year 2019 which can be seen from the
above graph. As per the analysis higher the EPS its better for the investors.
3. P/E ratio = Market price per share/ Earnings per share
Year 2021 2020 2019 2018 2017
P/E Ratio 27.06 15 2.44 2.66 2.62
P/E RATIO OF HCL TECHNOLOGIES
30
25
20
P/E Ratio
15 27.06
10
15
5
2.62 2.66 2.44
0
2017 2018 2019 2020 2021
Year
5.3
Graph 5.3 showing P/E Ratio of HCL Technologies
Analysis:
As from the above graph you can see that the P/E ratio of HCL Technologies has been increased in the
period of 5 years from 2.62 to 27.06 which is not a good sign for investors.
Interpretation:
The above table and graph show that there is an increase in the P/E ratio of the company which is not
good from the perspective of investors.
54.
Year 2021 2020 2019 2018 2017

Current 2.77 1.69 2.93 3.29 3.06
Ratio
CURRENT RATIO OF HCL TECHNOLOGIES
3.5
2.5
P/E Ratio
2
3.29
3.06 2.93
1.5 2.77
1 1.69
0.5
0
2017 2018 2019 2020 2021
Year
5.4
Graph 5.4 showing current ratio of HCL Technologies
Analysis:
The current ratio of HCL Technologies is quite good which is above 2:1 in each year except for the
year 2020 which is 1.69 below 2:1.
Interpretation:
As from the above table we can see that there is a slight decline in the current ratio of HCL
Technologies in the period of 5 years from 2017-2021 still makes it easy for them to pay their
obligations as their current ratio is above 2:1. Higher the current ratio better is the company.
55.
6. Data Analysis of Larsen & Toubro Infotech:
Year 2021 2020 2019 2018 2017
Debt- 0.39 0.49 0.24 0.20 0.21

Equity
Ratio
DEBT-EQUITY RATIO OF LARSEN & TOUBRO INFOTECH
1
0.9
0.8
Debt-Equity Ratio
0.7
0.6
0.5
0.4
0.3 0.49
0.2 0.39
0.21 0.2 0.24
0.1
0
2017 2018 2019 2020 2021
Year
6.1
Graph 6.1 showing Debt-Equity Ratio of Larsen & Toubro Infotech
Analysis:
As we can see in the above table that the debt-equity ratio of L&T infotech is low in 2017 and high in 2020
and second highest in the year 2021.
56.
Interpretation:
Analysis in the above graph describes debt-equity ratio of company which is showing good performance of
company in last 5 years in a consolidated form.
2. EPS = Earnings Available to Equity Shareholders/ No of Equity Shares
For the year ended 2017 the EPS was 39 in Rs
Year 2021 2020 2019 2018 2017
EPS 80.74 47.59 53.43 38.46 39
EPS OF LARSEN & TOUBRO INFOTECH
100
90
80
70
60
EPS
50
80.74
40
30 53.43 47.59
20 39 38.46
10
0
2017 2018 2019 2020 2021
Year
6.2
Graph 6.2 showing EPS of Larsen & Toubro Infotech
Analysis:
As we can see from the above table the EPS of L&T infotech is increased tremendously in the past 5 years
from 2017-2021 which is again a positive sign for the company.
57.
Interpretation:
According to above data company is good for long term investment as EPS of the company is well in last
few years. Company has given good return to shareholders.
Year 2021 2020 2019 2018 2017
Current 1.46 1.18 1.30 1.32 1.44

Ratio
CURRENT RATIO OF LARSEN & TOUBRO INFOTECH
2
1.8
1.6
1.4
Current Ratio
1.2
1
0.8 1.44 1.46
1.32 1.3
0.6 1.18
0.4
0.2
0
2017 2018 2019 2020 2021
Year
6.3
Graph 6.3 showing Current Ratio of Larsen & Toubro Infotech
Analysis:
Above table shows that the current ratio of L&T company which was 1.44 in 2017 and it started to decline
sharply in the year 2020. The current ratio increased to 1.46 in the last year 2021.
Interpretation:
As the current ratio in the year 2021 is the highest 1.46 as compared to previous years which makes them
somehow comfortable to pay their obligations. But current ratio must be more than 2:1 because higher the
current ratio better the company it is.
58.
Year 2021 2020 2019 2018 2017
P/E Ratio 42.74 16.76 19.05 19.94 16.12
P/E RATIO OF LARSEN & TOUBRO INFOTECH
50
45
40
35
30
P/E Ratio
25
42.74
20
15
19.94 19.05
10 16.12 16.76
5
0
2017 2018 2019 2020 2021
Year
6.4
Graph 6.4 showing P/E Ratio of Larsen & Toubro Infotech
Analysis:
Above data shows that the P/E ratio of the company says that it was 16.12 in the year 2017 which is slightly
increased in the next 2 years with 19.05 in the year 2019 and then it decreased in 2020 after which it
rigorously increased in the year 2021 to 42.74.
Interpretation:
Above graph describes that the company performed worst in the year 2017 but after 5 years it increased to
42.74 in the year 2021. If P/E ratio is increasing means growth and market share of company is also
increasing. Higher P/E ratio is not much good for the investors to invest in.
59.
7. Data Analysis of Redington Limited India:
Year 2021 2020 2019 2018 2017
Debt- 0.00 0.65 0.52 0.45 0.44

Equity
Ratio
DEBT-EQUITY RATIO OF REDINGTON
1
0.9
0.8
Debt-Equity Ratio
0.7
0.6
0.5
0.4
0.65
0.3 0.52
0.44 0.45
0.2
0.1
0
0
2017 2018 2019 2020 2021
Year
7.1
Graph 7.1 showing Debt-Equity Ratio of Redington
Analysis:
From the above table it can be seen that debt-equity ratio for the year 2017 is 0.44 and increased to 0.65 in
the year 2020 with a complete decrease in the year 2021.
60.
Interpretation:
As the debt-equity ratio is lower in the year 2021 which means the company is not much interested in
financing through debt which is quiet a good move from the company in decreasing its debt.
2. EPS = Earnings Available to Equity Shareholders/ No of Equity Shares
Year 2021 2020 2019 2018 2017
EPS 6.77 12.58 3.84 4.60 5.21
EPS OF REDINGTON
50
45
40
35
30
EPS
25
20
15
10
12.58
5 5.21 4.6 3.84 6.77
0
2017 2018 2019 2020 2021
Year
7.2
Graph 7.2 showing EPS of Redington
Analysis:
As you can see in the above table the EPS of Redington is the lowest as compared to the
analysis of other companies. The EPS of Redington is the highest in the year 2020 with 12.58
and the lowest in the year 2019 which is 3.84.
61.
Interpretation:
Research shows that the EPS is 6.77 in 2021 which is quiet better than the EPS of 2017. Higher
the EPS, higher is the performance of the company.
Year 2021 2020 2019 2018 2017
Current 1.28 1.32 1.18 1.22 1.37

Ratio
CURRENT RATIO OF REDINGTON
2
1.8
1.6
1.4
1.2
Current Ratio
1
0.8 1.37
1.28 1.32 1.22
0.6 1.18
0.4
0.2
0
2017 2018 2019 2020 2021
Year
7.3
Graph 7.3 showing Current Ratio of Redington
Analysis:
From the above table we can see that the current ratio of Redington is 1.28 in the year 2017
and 1.37 in the year 2021. There is only a mild difference in between 2018-2020.
Interpretation:
The current ratio is the highest for the company in the year 2021 with 1.37. Since its Current
ratio is not more than 2:1 which makes them unable to pay their obligations. Current ratio
measures the liquidity of the company.
62.
Year 2021 2020 2019 2018 2017
P/E Ratio 10 5 7 13 9
P/E RATIO OF REDINGTON
50
45
40
35
30
P/E Ratio
25
20
15
10
13 10
5 9 7 5
0
2017 2018 2019 2020 2021
Year
7.4
Graph 7.4 showing P/E Ratio of Redington
Analysis:
From the above table we can see that the P/E ratio of Redington is 9 for the year 2017 and 10
in the last year 2021. The highest P/E ratio is 13 in the year 2018.
Interpretation:
Research shows that the P/E ratio is highest in the year 2018 with 13 and the lowest P/E ratio
is 5 in the year 2020. Lower the P/E ratio, better to invest it in.
63.
CHAPTER 5: CONCLUSION
Global recession has an effect on the growth of IT industry but it was a short-term
phenomenon. The industry is bouncing back. One factor favouring this point is that India has
become a hot destination for companies of diverse nature to invest in.
In spite of it being a tough year for all the companies across the globe, Indian market has given
good performance as compared to other companies in the world. A continuous effort at cost
cutting and improving productivity will help the companies in making reasonable profits
despite the impact of higher commodity prices and weaker rupee.
“The analysis gives an optimistic view about the industry and its growth which recommends
the investors to keep a good watch on major players to benefit in terms of returns on their
investments.”
64.
BIBLIOGRAPHY
1. A Theoretical foundation for technical analysis, “Journal of Technical Analysis, 59, 5-22, 2003
(University of Pittsburgh preprint 1994).
2. Chand Vikram K. (2006) reinventing public service delivery in India: Selected case studies, Sage
Publications ISBN 0-7619-3489-8.
3. David Keller, “Breakthroughs in Technical analysis; New Thinking from the World’s Top Minds,”
New York, Bloomberg press, 2007.
4. Economies: Brazil, Russia, China & India”, International business & economic Research Journal
volume 7, No.3 (2008), page 1-8.
5. Financial Planning Curriculum Framework” Financial Planning Standard Boards, 2011. Retrieved 7
April 2012.
6. HCL Technologies Fast Facts, Hcltech.com. Retrieved 2021-07-25.
7. Track Ibrahim Eldomity, “Can Fundamental Analysis support shareholder value in a transitional
market?” Prospective from Egypt International Business & Economics Research Journal Volume 5
Number 1, Page no 83-98, (2006).
8. Williams Jan R: Susan F. Haka, Mark S. Bettner, Joseph V. Carcello (2008). Financial & Managerial
Accounting, McGraw-Hill Irwin. P.266.
Websites Referred:
• www.moneycontrol.com
• www.nseindia.com
• www.bseindia.com
• www.economywatch.com
• www.wealthdaily.com
• www.studymode.com
• www.ibef.org
• www.macrotrends.net
65.
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EQUITY ANALYSIS OF IT (INFORMATION TECHNOLOGY) SECTOR

University of Mumbai for partial completion of the degree of

Bachelor of Management Studies

Under the Faculty of Commerce

ARUN SURESH RATHOD

Under the Guidance of

MS. HARSHA HARDASANI

Smt. M.M.K. College of Commerce & Economics

Bandra (W), Mumbai – 400050, India.

Submitted as on April 2022

University of Mumbai for partial completion of the degree of

Bachelor of Management Studies

Under the Faculty of Commerce

ARUN SURESH RATHOD

Under the Guidance of

MS. HARSHA HARDASANI

Smt. M.M.K. College of Commerce & Economics

Bandra (W), Mumbai – 400050, India.

Submitted as on April 2022

Bandra (W), Mumbai – 400050, India.

Project Guide/ Internal Examiner

MS. HARSHA HARDASANI

ARUN SURESH RATHOD

MS. HARSHA HARDASANI SIGNATURE OF PRINCIPAL

Name – ARUN SURESH RATHOD

TYBMS DIV- B, Roll No. 76

Smt. M.M.K. College of Commerce & Economics

1.2] Definition of equity market

1.3] Indian IT sector (History & Role)

1.4] Contribution of information technology in Indian economy 1-10

1.5] Impact of IT sector

1.6] Future of information technology

1.7] Meaning of Equity, fundamental analysis & technical analysis

1.8] Swot analysis of the industry

2 2.1] Objective of the Study

2.3] Scope of the study

2.4] Need of the study

2.7] Sources of data

2.8] Sample size

3 Literature review 14-15

4.2] IT sectors an Overview

4.3] Sector/ Structure market Size

4.5] Scope of IT Sector

4.6] Stock Exchanges in India

4.7] Profile of Top 7 IT Companies

(B) Data Interpretation and Data Analysis

5.1] Financial Analysis

5.2] Ratio Analysis

5.3] Analysis of top 7 IT sector industry

1.) Data Analysis of Tata Consultancy Services (TCS)

2.) Data Analysis of Wipro 32-

4.) Data Analysis of Tech Mahindra

5.) Data Analysis of HCL Technologies

6.) Data Analysis of Larsen & Toubro Infotech

7.) Data Analysis of Redington (India) Limited

INVESTOR v/s TRADER:

On the other hand

No. Name of the company Share price

4. TECH MAHINDRA 1479

5. HCL TECHNOLOGIES 1100

6. L&T INFOTECH 4693

7. REDINGTON (INDIA) LTD 162