• To ascertain the return both firm wise and industry wise as a whole
• To Know the risk factor in the firm and Industry as a whole
• To know the fluctuations of the security prices of the selected firms.
• To compare Industry index with BSE-200 Index in various aspects.
SCOPE OF THE STUDY: –
This scope of Project Report On Security Analysis A Study On Selected Industries MBA Project study is limited to few selected industries. Those are Pharmaceutical, Information Technologies, Automobile, & Banking Industry.
In those industries, only some are selected. They are 6companies each from pharmaceutical, I.T., Automobile industry and 12 companies from banking industry.
This study is analysis of previous twelve months (Jan-06 to Dec-06) data relating to prices of shares in Bombay Stock Exchange only.
LIMITATIONS OF STUDY: –
• This study is limited to some selected industries
(Pharmaceutical, Banking, Information technologies &Automobile)
• Dividend is not considered in the calculation of Return. Price change is only taken into consideration.
• Situations in stock market are always subject to change.
ASSUMPTIONS OF THE STUDY:
• This study assumes than an investor purchases the share at the beginning of the month and he sells the share at the end of the month.
• Investors make the decision on the basis of previous returns and risks that are unsystematic risks.
• For calculating the returns of each industry this study assumes that the indexes are taken in to consideration.
• The investors give preference to the securities that have given positive returns previously.
After analyzing the selected companies from selected industries, this study concludes returns, Unsystematic Risk, fluctuations in the share prices and co-efficient of variations for the selected companies from the selected industries.
In the area of Banking Industry, it can be concluded that Only Four Banks from selected twelve banks are noted High average return than the overall banking industry average return (Calculated on the basis of BANKEX) for the period of study. In case of less average return noted by eight banks in that four banks are noted negative average returns for the period. According to the BANKEX, the average return of the banking industry shows 3.09 % average return for twelve months of study.
In the area of Automobile industry, only three companies was noted more average return than the industry return (Calculated on the basis of the auto index maintaining by BSE) from the selected six companies. Remaining three companies were noted less than average returns. Hero Honda motors confined a negative return, as the average return for the period of previous twelve months of the automobile industry was 2.18%.
In the area of I.T. Industry, it can be concluded that only three companies were registered positive average returns from the selected six companies. In the reaming ones HCL was expressed the high negative return in the selected companies as -3.57%. The average return of the I.T. Industry was 2.84% for the twelve months period.
In the area of Pharma Industry, it can be concluded that four companies were registered positive average returns from the selected six companies. In the reaming ones HCL was expressed the negative return in the selected companies as –2.31%.The average return of the I.T. Industry was 1.67%for the twelve months period.
In the case of unsystematic risk I.T.Industry was moving with the lowest risk as 5.45% than the other industries. And the BSE200 returns were moving with the high variability (S.D.) as 57.31%than the other industries.
To know the fluctuations in the prices of the shares of selected companies in the selected industries, this study constructed index in the simple average method. To construct index this take only selected companies.
The index points of BANKING INDUSTRY moved from around 90.54 to137.22 and as such the fluctuations not that much high. But in the month of June there is a drastic change in index points reached the level of 91.78. The highest points 137.22 were noted the month of December 2006. This is industry follows the trend. It means it has increased to one level and decreased. Again increased, can be expecting the downward trend in the next future. We can apply the trend analysis for this industry.
The index points of Automobiles industry moved from around 100 to 125.63.Index points were increased up to April and reached highest level of points as 125.63. Then after the index points were decreased till July and then the index were moved in upward trend till September. In the last three months there was not that much change in the points.
The Index points of I.T. Industry are moved around from 80.74 to 107.26. The points are not maintaining a trend. These industry index points are moving upward and downward. There are not that much fluctuation in the index points. These points reached in the month of December 2006 at higher level of 107.26 and noted lower level in the month of August at 80.74.
The index points of Pharmaceutical Industry moved around from 89.98to112.05.The index points of this industry are fluctuating highly but not in the higher rate. These points are increasing and decreasing every month. This industry’s points were ended with104.28 in last month. Investor cannot assume the trend of this industry. In this industry the index points are not following the trend. They are fluctuating without any trend. Reached lowest level in the month of May and higher level in the month of February.
This study recommended some companies and industries on the basis of coefficient of variation. In the case of industries investor better to go for IT industry followed by Banking Industry and if he want to diversify the risk he can go for automobile industry then last preference shall given to Pharmaceutical Industry.
In the case of companies investor wants to invest in more industries and don’t want to give preference for the specific industry. The investor needs to give the preference to the companies on the basis of coefficient of variation. First rank will be Mahindra and Mahindra from Auto industry and next HDFC from Banking Industry. Then give the preference to UTI, NIIT , ICICI, Aurobindo, SBI, TATA, WIPRO, and so on.
Download Project Report On SECURITY ANALYSIS A STUDY ON SELECTED INDUSTRIES MBA Project