A REPORT

ON

“EQUITY RESEARCH AND EVALUATE THE STOCK AND

INVESTMENT POTENTIAL OF LISTED COMPANIES IN
INDIA”

By

(Nishant Garg)

18BSP3559

(Bridge Group Solutions)

REPORT

ON
 “EQUITY RESEARCH AND EVALUATE THE STOCK AND
INVESTMENT POTENTIAL OF LISTED COMPANIES IN
INDIA”

By

(Nishant Garg)

(18BSP3559)

(Bridge Group Solutions)

A report submitted in partial fulfilment of the requirements of

PGPM Program Of

IBS Gurgaon

Date of Submission: 15-04-2019

DECLARATION
I hereby declare that the report titled “EQUITY RESEARCH AND EVALUATE THE
STOCK AND INVESTMENT POTENTIAL OF LISTED COMPANIES IN INDIA”
submitted to the IBS Gurgaon is a record of an original work done by me under the guidance
of Prof. Akshita Arora and the report is submitted as partial fulfilment of the requirement of
PGPM programme of IBS Gurgaon. The results embodied in this thesis have not been
submitted to any other University or Institute for the award of any degree or diploma.

Signature: ___________
Name: Nishant Garg
Enrolment Number. 18BSP3559
 ACKNOWLEDGMENT
The internship opportunity I had with Bridge Group Solutions was a great chance for learning
and professional development. Therefore, I consider myself as a very lucky individual as I
was provided with an opportunity to be a part of it. I am also grateful for having a chance to
meet so many wonderful people and professionals who led me though this internship period.

Bearing in mind previous I am using this opportunity to express my deepest gratitude and
special thanks to the MD of Bridge Group Solutions who in spite of being extraordinarily
busy with her/his duties, took time out to hear, guide and keep me on the correct path and
allowing me to carry out my project at their esteemed organization and extending during the
training.

I express my deepest thanks to Mr. Kashish Jerath, Training Head for taking part in useful
decision & giving necessary advices and guidance and arranged all facilities to make life
easier. I choose this moment to acknowledge his/her contribution gratefully.

It is my radiant sentiment to place on record my best regards, deepest sense of gratitude to

faculty guide Ms. Akshita Arora for their careful and precious guidance which were
extremely valuable for my study both theoretically and practically.

I perceive as this opportunity as a big milestone in my career development. I will strive to use
gained skills and knowledge in the best possible way, and I will continue to work on their
improvement, in order to attain desired career objectives. Hope to continue cooperation with
all of you in the future,
Sincerely,

Nishant Garg

Date:19-05-2019

TABLE OF CONTENTS
Abstract
Objectives of the report
Research Methodology and Design
SAMPLE DESIGN
Background Of the companies
Introduction

 What is Equity?
 What are equity shares?

 Indian Equity Market

 Who should make an equity investment?

 Why to invest in Equity Shares?

COMPANY PROFILE

VISION STATEMENT

MISSION

VALUE

MY LEARNINGS
MODULE 1(Sales to the Customers - B2C)

WHAT ARE MUTUAL FUNDS?

ADVANTAGES OF MUTUAL FUND

CHALLENGES

 What is equity research

 How is equity research done?

 Industry research

 Management overview
 Historical
 Valuation
 Recommendations

Abstract
The main aim of the undergone Summer Internship Program is to make the students
experience the work culture and the procedures of the Corporate World. This Summer
Internship Program consists of the involvement of the students in company as intern and
understands the facets of the company as well as to make the project on the work done by
the students in the Company allotted to them for the Internship in various domains like
Marketing, Marketing research, HR, Finance, Operations etc.
My project “Equity Research, Evaluate the stock and investment potential of listed
companies in India and Outlook of financial market” is a project in which I’m trying to
understand the financial market, equity research and investment potential of listed companies
in India.
During the past days in the company I have worked on two different verticals of company

Bridge Group Solutions: I worked in this vertical for almost 30 days where, the company
provided with the brief knowledge of the insurance sector, various products, its tie up
company and the products we were supposed to pitch in market (Indiafirst Life
Mahajeevan plan, Traditional plan and Star Health Life insurance). The pitch in process
was aimed to make us understand the mentality of people who are willing to negotiate for
the insurance, the various questions they ask. It is through this I understood the huge
variability in the behavior of insurers and the need to understand and link correct product to
correct group of people.

Portfolio Management Services: This is the second vertical of the company and we are
working on the portfolio management services of our company and meanwhile, I will be
researching on below the marketing strategies of the various companies. For 15 days we will
be briefed with the importance of “Mutual Funds and Equity” and how to do it. Post which
we will be visiting the various companies and introducing our company and service we
provide, upon which the company if interested will revert back to us. Meanwhile I will be
asking certain marketing executives about the Below the Line strategies accepted by their
respective companies and get the prepared questionnaire filled by them and like this, I will be
working on my project correspondently.

Objectives of The Report

 To provide an overview of the Listed companies and analysing the stocks of that
sector.
 To study about some of the major players in Indian economy which has good
investment prospects.
 To identify the growth drivers of the Listed companies.
  To identify the top line and bottom-line of the companies in Indian economy and the
factors that affect them.
 To justify the current investment in the chosen securities.
 To understand the movement and performance of stocks.
 To recommend increase/decrease of investment in a particular security.
 The main objective of project is to do fundamental analysis of Listed companies.
 To study the present scenario of companies through its net interest income and net
interest margin

This report will help the investors to know about the current growth prospects of Indian
economy and Listed companies. They will get to understand various factors affecting these
companies and their impact on their growth. This report will help them in
comparing the above mentioned four companies and their estimated future share prices, so
that they can invest in better options.

Research Methodology and Design

 The project is on equity research analysis of the top four listed companies in India.
Hence study has to be done on the basis of information and news available about the
sectors i.e. secondary data by various modes. This research has completed by doing
Fundamental analysis and Technical analysis of the companies.
 Secondary data was collected from the internet, company websites. However, the
main source of information is Annual Report issued by the companies and also
quarterly reports of the current year showing their performances in current market
scenario.
  Firstly, data was analysed on the basis of the top listed companies. Its performance
was seen in relation with the Indian economy was monitored and then specific stocks
were chosen to be invested in depending upon the fundamentals of the company
stocks. These stocks were individually analysed and then measured whether it would
give maximum returns if invested in.
 The research on the companies in those sectors is explained in the later part of the
report.
 Though, Primary data collection for preparing this project was not possible due to
time and money constraints. Thus, secondary data collection was been used.
 While preparing this project, daily stock market prices where been tracked and also
the annual reports of the company analysed were taken into consideration for
evaluation of company performance.
 Company websites were a major source for collecting the annual reports of the
company.
 Internet was a major source of information while preparing the project as most of the
data collected was gathered from various websites.
The knowledge thus gained from preliminary study forms the basis for future detailed
descriptive research. In the exploratory study, the various technical indicators that are
important for analysing stock were actually identified and important ones short were listed.

SAMPLE DESIGN
The sample of the stocks for the purpose of collecting primary and 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 stock chosen.

LIMITATIONS OF THE STUDY:

 This study has been conducted purely to understand equity analysis for investors.
 The study is restricted to three companies based on Fundamental Analysis.
  The study is limited to the companies having equities.
 Detailed study of the topic was not possible due to limited size of the project.
 There was a constraint with regard to time allocation for the research study.
 Suggestions and conclusions are based on the data of five years.

Background Of the companies

Reliance Industries Limited (RIL)

Reliance Industries is India's largest private sector company on all major financial
parameters. In 2004, Reliance Industries (RIL) became the first Indian private sector
organisation to be listed in the Fortune Global 500 list. The company operates world-class
manufacturing facilities across the country at Allahabad, Barabanki, Dahej, Hazira,
Hoshiarpur, Jamnagar, Nagothane, Nagpur, Naroda, Patalganga, Silvassa and Vadodara. 

Reliance Industries' activities span hydrocarbon exploration and production, petroleum

refining and marketing, petrochemicals, retail and telecommunications. The petrochemicals
segment includes production and marketing operations of petrochemical products. The
refining segment includes production and marketing operations of the petroleum products.
The oil and gas segment includes exploration, development and production of crude oil and
natural gas. The other segment of the company includes textile, retail business and special
economic zone (SEZ) development. 

In the year 1966 the RIL was founded by Shri Dhirubhai H.Ambani, it was started as a small
textile manufacturer unit. In May 8, 1973 RIL was incorporated and conformed their name as
RIL in the year 1985. Over the years, the company has transformed their business from
manufacturing of textiles products into a petrochemical major. 
Tata Consultancy Services Ltd is a leading global IT services, consulting and business
solutions organization. The company offers a range of IT services, outsourcing and business
solutions. They also offer IT infrastructure services, business process outsourcing services,
engineering and industrial services, global consulting and asset leveraged solutions. Their
segments include banking, financial services and insurance; manufacturing; retail and
distribution, and telecom. 

The company is a part of Tata Group, one of India's most respected business conglomerates
and most respected brands. They are headquartered in Mumbai. They are having 142 offices
in 42 countries as well as 105 delivery centres in 20 countries. The company shares are listed
on the National Stock Exchange and Bombay Stock Exchange of India.

Tata Consultancy Services Ltd was incorporated in the year 1968. Tata Sons Ltd established
the company as division to service their electronic data processing (EDP) requirements and
provide management consulting services. In the year 1971, they started their first
international assignment. The company pioneered the global delivery model for IT services
with their first offshore client in 1974.

In the year 1981, the company set up India's first IT R&D division, the Tata Research Design
and Development Centre at Pune. In the year 1985, they set up their first client-dedicated
offshore development centre for Compaq (then Tandem). In the year 1989, they delivered an
electronic depository and trading system called SECOM for SIS SegaInterSettle, Switzerland.
HDFC Bank Ltd is one of India's premier banks. Headquartered in Mumbai, HDFC Bank is a
new generation private sector bank providing a wide range of banking services covering
commercial and investment banking on the wholesale side and transactional/branch banking
on the retail side. As of 30 September 2017, the bank's distribution network was at 4,729
branches and 12,259 ATMs across 2,669 cities and towns. HDFC Bank also has one overseas
wholesale banking branch in Bahrain, a branch in Hong Kong and two representative offices
in UAE and Kenya. The Bank has two subsidiary companies, namely HDFC Securities Ltd
and HDB Financial Services Ltd.

The Bank has three primary business segments, namely banking, wholesale banking and
treasury. The retail banking segment serves retail customers through a branch network and
other delivery channels. This segment raises deposits from customers and makes loans and
provides other services with the help of specialist product groups to such customers. The
wholesale banking segment provides loans, non-fund facilities and transaction services to
corporate, public sector units, government bodies, financial institutions and medium-scale
enterprises. The treasury segment includes net interest earnings on investments portfolio of
the Bank.

The Bank's ATM network can be accessed by all domestic and international
Visa/MasterCard, Visa Electron/Maestro, Plus/Cirrus and American Express Credit/Charge
cardholders. The Bank's shares are listed on the Bombay Stock Exchange Limited and The
National Stock Exchange of India Ltd. The Bank's American Depository Shares (ADS) are
listed on the New York Stock Exchange (NYSE) and the Bank's Global Depository Receipts
(GDRs) are listed on Luxembourg Stock Exchange.
Hindustan Unilever (HINDUSTAN UNILEVER) is India's largest fast-moving consumer
goods company, with leadership in Home & Personal Care Products and Foods & Beverages.
HINDUSTAN UNILEVER's brands, spread across 20 distinct consumer categories, touch the
lives of two out of three Indians. In the summer of 1888, visitors to the Kolkata harbour
noticed crates full of Sunlight soap bars, embossed with the words 'Made in England by
Lever Brothers'. With it, began an era of marketing branded Fast Moving Consumer Goods
(FMCG). Soon after followed Lifebuoy in 1895 and other famous brands like Pears, Lux and
Vim. Vanaspati was launched in 1918 and the famous Dalda brand came to the market in
1937.

In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing
Company, followed by Lever Brothers India Limited (1933) and United Traders Limited
(1935). These three companies merged to form HINDUSTAN UNILEVER in November
1956; HINDUSTAN UNILEVER offered 10% of its equity to the Indian public, being the
first among the foreign subsidiaries to do so. Unilever now holds 52.10% equity in the
company. The rest of the shareholding is distributed among about 360,675 individual
shareholders and financial institutions.
Introduction

1. What is Equity?
Equity is typically referred to as shareholder equity (also known as shareholders' equity)
which represents the amount of money that would be returned to a company’s shareholders if
all of the assets were liquidated and all of the company's debt was paid off.
Equity is found on a company's balance sheet and is one of the most common financial
metrics employed by analysts to assess the financial health of a company. Shareholder equity
can also represent the book value of a company.

1.2. What are equity shares?

An equity share, commonly referred to as ordinary share also represents the form of
fractional or part ownership in which a shareholder, as a fractional owner, undertakes the
maximum entrepreneurial risk associated with a business venture. The holders of such shares
are members of the company and have voting rights.

1.3. Indian Equity Market

Most of the trading in the Indian stock market takes place on its two stock exchanges: the
Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The BSE has been
in existence since 1875. The NSE, on the other hand, was founded in 1992 and started trading
in 1994. However, both exchanges follow the same trading mechanism, trading hours,
settlement process, etc. At the last count, the BSE had more than 5,000 listed firms, whereas
the rival NSE had about 1,600. Out of all the listed firms on the BSE, only about 500 firms
constitute more than 90% of its market capitalization; the rest of the crowd consists of highly
illiquid shares.

Almost all the significant firms of India are listed on both the exchanges. NSE enjoys a
dominant share in spot trading, with about 70% of the market share, as of 2009, and almost a
complete monopoly in derivatives trading, with about a 98% share in this market, also as of
2009. Both exchanges compete for the order flow that leads to reduced costs, market
efficiency and innovation. The presence of arbitrageurs keeps the prices on the two stock
exchanges within a very tight range.
1.4. Who should make an equity investment?
The first characteristic that an ideal equity investor has is an ability and willingness to take
risk. Without risk tolerance in at least moderate levels, equity investment cannot be made or
held successfully. Thus, the concept that says risk-averse investors should opt for fixed
returns investments instead of an equity investment such as an equity mutual fund. The next
important characteristic is an ability to stay invested for the long term. Novice investors tend
to panic easily and the volatile nature of equity investments can lead to substantial swings in
value of equity investments over the short term. This short-term volatility does even out in
due course but that can happen only if the investor stays invested in the long term ideally five
years or more. These two are probably the most important features that an equity investor
should possess but having understanding of how markets work and help from a good
financial advisor can definitely improve chances of making a successful investment.

1.5. Why to invest in Equity Shares?

Equity shares are one of the best long-term investments in the financial market place. They
tend to outperform government bonds, corporate bonds, property and many other types of
asset. Share prices can go down as well as up so buying shares is not without risk, but over
the long term, they can generate good returns. If you want to double your money in a year,
for example, buying shares is not the best way to do it. But if you want to invest for ten or 20
years, shares may be a rewarding investment.

Shares are designed to provide investors with two types of return, annual income and long-
term capital growth.

Most shares offer income in the form of dividends. Dividends can be seen as a reward for
shareholders. They are paid when a company is profitable and has cash in the bank after it has
satisfied all its obligations. In most cases, the more profitable a company is, the higher the
dividend payments. If a company is making substantial amounts of money and making
significant dividend payments, it is usually considered a good investment so the share price
rises.

Investors may buy shares specifically for income. Many companies generate substantial
amounts of cash every year. They may use some of that money for general corporate
purposes, such as paying rent and wage bills, and they may use some of the money to invest
in equipment, research and development. But a proportion of that money may be paid to
investors as a dividend. As dividends are usually paid out once a year, they can provide
investors with a regular income.

Companies that pay generous dividends are known as income stocks.

Some companies have heavy investment programmes so they plough their profits back into the
business. These companies are often at an early stage of their development and they are keen to
expand and grow. They are known as growth businesses and, if their plans succeed, their share price
will increase substantially.
2. COMPANY PROFILE
Bridge Group Solutions (BGS) is an emerging leader in the highly unorganized and
diversified Financial Sector and aims to provide best investment solutions to the customers
and also establish its footprint in this sector, with its strong research capabilities and a robust
team of Expert, BGS provide solutions that will stand straight in each test. BGS is here not
just to build a customer base but to leave a legacy behind in the minds of our customers.
Bridge group Solutions help our customers foresee upcoming risks and help them reduce it
and at the same time maximise returns and take well planned and calculated investment
decisions through a well-trained team and its in-depth analysis and extensive research. Bridge
Group Solutions is promoted by a group of like-minded young professionals having deep
knowledge in providing investment solutions and consulting. BGS passionately driven by our
Vision of “being the Top Investment Solution Provider and a Trusted Brand”

2.1 VISION STATEMENT

“Most people don't plan to fail; they fail to plan" - John L. Beckley "
Our vision as a firm focuses to help our customers and communities realize their dreams by
anticipating, understanding and meeting financial needs"

2.2. MISSION
As a firm, BGS strive to provide financial peace of mind by delivering tailored objective
advice designed to give clients the confidence to pursue their own passion, dreams and
talents. We help our customers in financial and investment planning.

1.3. VALUE
INTEGRITY: Provide professional services with integrity.
OBJECTIVITY: Provide professional services with objectively.
COMPETENCE: Maintain the knowledge and skill necessary to provide professional
services.
PROFESSIONALISM: Act in a manner that demonstrates exemplary professional conduct.
MY LEARNINGS
Our internship has been divided into 2 Modules, based on which we are working. The first
module included sales to the customers which had to be completed within the given time
period. Currently we are working on the second module which includes training on the
Mutual Funds and further providing Portfolio Services to the companies.
MODULE 1(Sales to the Customers - B2C)
• The first module started with training program which went on for 2 weeks. We were given
training about insurance policies of India First Life Insurance, Aditya Birla Health Insurance
and Maxlife Insurance. We were provided time period to work on field for making sale,
experiencing the field strategy and mould our learning on project titles. We spent around a 15
Days on field work, post which we were called back and assigned work on different verticals
of company.
• The minimum target to be achieved was worth Rs.50, 000, which was to be achieved
within the time period allotted. The time period allotted was from 4th March’19 till 15th
March’19. Further the amount was to be deposited in the company to the undersigned
Company Guide.
• The product sold was MahaJeevan Plan of India First. The pitching of almost 30 clients
was done and out of them two were converted. The two clients thus applied for the policies
worth “Rs25,900” & “Rs27, 000”, which in all made “Rs 52,900”, hence completing my
target for the first module.

The Client Generation Process thus included certain steps such as

1. Pitching of Clients (Calling and References)
2. Briefing the clients regarding the Investment Plans
3. Closing the sale by collecting the cheque or cash from the clients and also finishing the
form filling procedure.

MODULE 2
• Under this first we were gone through the basic understandings of the Mutual Funds.

➢ WHAT ARE MUTUAL FUNDS?

• A mutual fund is a professionally managed investment fund that pools money from many
investors to purchase securities. These investors may be retail or institutional in nature.
Mutual funds have advantages and disadvantages compared to direct investing in individual
securities. The primary advantages of mutual funds are that they provide economies of scale,
a higher level of diversification, they provide liquidity, and they are managed by professional
investors. Primary structures of mutual funds include open-end funds, unit investment trusts,
and closed-end funds.

➢ ADVANTAGES OF MUTUAL FUND

• Not to spend much time in the market.
• Diversified Portfolio
• Regular Investment
• Maintenance of liquidity (easily converted to cash when required)
• Risk can be distributed.

➢ CHALLENGES
• Mutual Funds are subjected to market Risks.

The structure of Mutual Funds is as follows

SPONSOR

AMCS TRUST MUTUAL FUND TRUSTEE

PUBLIC INVEST RETURN

In all there are 41 Mutual Fund Companies.
I learned that these mutual fund Companies have been categorized by SEBI as follows
Less than 1000cr Micro Cap

Smaller than 8844cr Small Cap

In between 8844cr and 29264cr Mid Cap

Larger than 29264cr Larger Cap

➢ There are total three types of mutual funds available in market those are:
• EQUITY- MUTUAL FUND: These are those types of mutual fund in which fund manager
invests more than or equal to 65% of fund avail with him in equity shares (ownership funds)
and rest in debentures. These mutual funds for those who wants to invest in mutual for long
period.
• DEBT-MUTUAL FUND: These are those type of mutual funds in which funds manager
invest 65% of fund available in the debenture instruments and rest in the equity shares. These
mutual funds are preferred for those who wants to Invest in mutual funds for short period of
time like for 1 year.
• BALANCED-MUTUAL FUND: These are those mutual funds in which fund manager
keeps the ratio of equity and debenture equal. That’s why it is called balanced mutual fund.
These funds are suggested for those have low risk appetite.
What is equity research
Equity research professionals are responsible for producing analysis, recommendations, and
reports on investment opportunities that investment banks, institutions, or their clients may be
interested in.  The Equity Research Division is a group of analysts and associates at an
investment banking (sell side), an institution (buy side), or an independent organization.

The main purpose of equity research is to provide investors with detailed financial analysis
and recommendations on whether to buy, hold, or sell a particular investment. Banks often
use equity research as a way of “supporting” their investment banking and sales &
trading clients, by providing timely, high-quality information and analysis.

How is equity research done?

The main work in equity research is producing reports.  Ranging from quick updates or “flash
reports” to in-depth, “initiating coverage” reports, the job of an equity research associate or
analyst is to constantly be publishing.
Working in equity research can be compared to what it’s like to be a university student. 
There are lots of “assignments” or “papers” due with fairly regular deadlines, such as when a
company releases quarterly results or announces something.

The contents of an equity research report typically include:

1. Industry research (competitors, trends, etc.)

2. Management overview and commentary
3. Historical financial results
4. Forecasting
5. Valuation
6. Recommendations

So, on the basis of these six aspects we will analyse the equity of the four companies we have
chosen.
Industry research

In this section of an equity research report, there will be lots of information on trends and
competition in the industry.  This is where frameworks like Porters Five Forces analysis can
come in handy to ensure that you’ve covered all the dynamics in the industry, including
politics, economics, social trends, and technological innovation, to name a few.

Reliance
Threat of Substitutes: LOW
 The very few substitutes available are of high quality but are way more expensive.
Bargaining Power of Suppliers: LOW

 The number of suppliers in the industry in which Reliance industries operates is lot
compared to the buyers. Therefore, the bargaining power of suppliers are low.
 The product that these suppliers provide are fairly standardised, less differentiated and
have low switching costs. This makes it easier for buyers like Reliance Industries to
switch suppliers.
Competitive Rivalry: LOW

 The number of competitors in the industry in which Reliance Industries operates are
very few. Most of these are also large in size. This means that firms in the industry
will not make moves without being unnoticed.
 This makes the rivalry among existing firms a weaker force within the industry.
Bargaining Power of Buyers: LOW

 The product differentiation within the industry is high, which means that the buyers
are not able to find alternative firms producing a particular product.
 The quality of the products is important to the buyers, and these buyers make frequent
purchases. This means that the buyers in the industry are less price sensitive.
Threat of New Entrants: LOW

       The capital requirement in the industry are high therefore making it difficult for
new entrance to setup business as high expenditure is incurred.
       the economies of scale are fairly difficult to achieve in the industry in which
Reliance industries operates.
TATA CONSULTANCY SERVICES
Threat of Substitutes: MEDIUM
 Indian companies need to continuously innovate to have an edge over other
international suppliers.
Bargaining Power of Suppliers: LOW

 Knowledgeable human resource is the largest requirement for the IT sector.

Large supply of this human resource, at low cost is available from around the
world.
 A lot of matured education and training is easily available, as there existents
many competitive suppliers.
Competitive Rivalry: HIGH
 No huge capital investment is required to start a new company, leading to very
large number of small and medium size companies
 It is becoming increasingly difficult for players to differentiate; which has led
to a decrease in margins
Bargaining Power of Buyers: MEDIUM

 The buyers have many options to choose from and can clearly articulate their
needs.
 The Indian IT sector has large number of players. However, the bigger
companies also enjoy the advantage of switching cost.
Threat of New Entrants: HIGH
 Setup cost is almost negligible. Further the government policies also promote
the entrepreneur’s by building software technology park.
 Many venture capitalists are ready to fund new IT start-ups.
HDFC
 Threat of Substitutes: HIGH
 When a new product or service meets a similar customer needs in different ways,
industry profitability suffers. For example, services like Dropbox and Google Drive
are substitute to storage hardware drives. The threat of a substitute product or service
is high if it offers a value proposition that is uniquely different from present offerings
of the industry.
 Bargaining Power of Suppliers: MEDIUM TO HIGH
 All most all the companies in the Foreign Regional Banks industry buy their raw
material from numerous suppliers. Suppliers in dominant position can decrease the
margins HDFC Bank Limited can earn in the market. Powerful suppliers in Financial
sector use their negotiating power to extract higher prices from the firms in Foreign
Regional Banks field. The overall impact of higher supplier bargaining power is that it
lowers the overall profitability of Foreign Regional Banks.
 Competitive Rivalry: HIGH
 If the rivalry among the existing players in an industry is intense then it will drive
down prices and decrease the overall profitability of the industry. HDFC Bank
Limited operates in a very competitive Foreign Regional Banks industry. This
competition does take toll on the overall long-term profitability of the organization.
 Bargaining Power of Buyers: HIGH
 Buyers are often a demanding lot. They want to buy the best offerings available by
paying the minimum price as possible. This put pressure on HDFC Bank Limited
profitability in the long run. The smaller and more powerful the customer base is of
HDFC Bank Limited the higher the bargaining power of the customers and higher
their ability to seek increasing discounts and offers.
 Threat of New Entrants: MEDIUM TO HIGH
 New entrants in Foreign Regional Banks brings innovation, new ways of doing things
and put pressure on HDFC Bank Limited through lower pricing strategy,
reducing costs, and providing new value propositions to the customers. HDFC Bank
Limited has to manage all these challenges and build effective barriers to safeguard its
competitive edge.

HINDUSTAN UNILEVER
Threat of Substitutes: LOW

 Low substitute available.

 Low performance to price ratio of substitute.
 Bargaining Power of Suppliers: MEDIUM
 Moderate population of suppliers.
 Moderate overall supply.
 Competitive Rivalry: HIGH
 There are many firms operating in the consumer goods industry.
 Low switching costs
 Bargaining Power of Buyers: HIGH
 Low switching cost
 High quality of information about consumer goods.
 Threat of New Entrants: LOW
 High economies of scale.
 High cost of brand development.
Management overview
Reliance industries
Adil Zainulbhai Independent Director

Alok Agarwal Chief Financial Officer

Arundhati Bhattacharya Independent Director

Ashok Misra Independent Director

Dipak C Jain Independent Director

Hital R Meswani Executive Director

K Sethuraman Secretary

Mansingh L Bhakta Independent Director

Mukesh D Ambani CEO

Mukesh D Ambani Chairman & Managing Director

Nikhil R Meswani Executive Director

Nita M Ambani Non Exe.Non Ind.Director

P M S Prasad Executive Director

Pawan Kumar Kapil Executive Director

Raghunath A Mashelkar Independent Director

Raminder Singh Gujral Independent Director

Savithri Parekh Jt. Co. Secreatary & Compliance Officer

Shumeet Banerji Independent Director

Srikanth Venkatachari Jt. Chief Financial Officer

Yogendra P Trivedi Independent Director

TATA CONSULTANCY SERVICES
N. Chandrasekaran Chairman

Aman Mehta Director

Dr. Ron Sommer Director

Hanne Birgitte Breinbjerg Sorensen Director

Don Callahan Director

OP Bhatt Director

Aarthi Subramanian Director

Dr. Pradeep Kumar Khosla Director

Keki M. Mistry Director

Rajesh Gopinathan Chief Executive Officer and Managing
Director
N Ganapathy Subramaniam Chief Operating Officer and Executive
Director
HDFC bank
Name Designation

Abhay Aima Group Head

Aditya Dhananjai Kumat Senior Manager

Aditya Puri CEO

Aditya Puri Managing Director

Ankush Pitale Executive Vice President

Arup Kumar Rakshit Senior Executive Vice President

Cheshta Chopra Sharma Vice President

Kaizad Bharucha Executive Director

Keki Mistry Director

Malay Patel Director

MD Ranganath Addnl. & Ind.Director

Nitish Nagori Executive Vice President

Pratap Luthra Deputy VicePresident

Rajesh Kumar Rathanchand Group Head

Ravi Narayan Group Head

Samrat Bose Senior Vice President

Sanjay Dongre Exe. Vice President (Legal) & Co. Secretary

Sanjay Dongre Secretary

Sashidhar Jagdishan Chief Financial Officer

Shyamala Gopinath Chairperson

Silvestre Anthony Pereira Vice President

Srikanth Nadhamuni Director

Sudesh Puthran Executive Vice President

Umesh Chandra Sarangi Director

Vitthal Mangesh Kulkarni Senior Vice President

HINDUSTAN UNILEVER
Name Designation

Aditya Narayan Independent Director

B P Biddappa Executive Director - HR

Dev Bajpai Co. Secretary & Compl. Officer

Dev Bajpai Secretary

Dev Bajpai Executive Director

Geetu Verma Executive Director

Kalpana Morparia Independent Director

Leo Puri Independent Director

O P Bhatt Independent Director

Pradeep Banerjee Executive Director

Priya Nair Executive Director

S Ramadorai Independent Director

Sandeep Kohli Executive Director

Sanjiv Mehta CEO

Sanjiv Mehta Managing Director & CEO

Sanjiv Misra Independent Director

Srinandan Sundaram Executive Director

Srinivas Phatak Executive Director & CFO

Sudhir Sitapati Executive Director

Historical
Reliance

 Over the last few years we can see that the share prices of Reliance Industries have been
increasing.
 From the year 2017 to 2018 we can see that there was a sudden increase in the prices of
the shares.
 In the span of 5 years the prices of the share have gone from 448.38 to 1340.70.

TATA CONSULTANCY SERVICES

  The prices of shares of Tata Consulting Services have been going up and down for the last
few years.
 the price fluctuation can be seen almost every year, with the prices going up in the years
2015, 2018 & 2019. While the prices have gone down in the year 2016 & 2017.
 The prices were 1090.00 and now after 5 years are 2082, which is almost the double.

HDFC bank
 There can be observed a stagnant growth of the prices of shares.
 Shares have had a jump in the year 2017 to 2018.
 The shares started at 666.75 in the year 2014 and are currently at 2405.10 in the year 2019
HINDUSTAN UNILEVER

 The shares have been growing in the recent years, but in the year 2017 there was a slight
decrease in the prices of the shares.
 The year 2017 to 2018 had witnessed a jump of more than 500.
 The shares had been at 570.00 in the year 2014 and at present are at 1766.15.

 When looking at all the 4 companies at a glance we see that except Tata Consulting Services,
all other companies have had a steady growth from 2014 to 2019.
 When compared we can clearly see that reliance as the leading company in many aspects.
 Tata Consulting Services, even after not having a consistent share price is a reliable company
by just seeing at its performance.
Valuation
Reliance

 As compared to its peer companies Reliance has much higher market capital.
 We can also see that Return on equity is less than the Indian oil corp.
 But price to earning is way more than its peer companies.

TATA CONSULTANCY SERVICES

 As we can see that TATA CONSULTANCY SERVICES has the largest market capital in
comparison.
 TATA CONSULTANCY SERVICES also has the best Return on equity to its peer companies.
 Price to earning is also best of TATA CONSULTANCY SERVICES to its peer companies.
HDFC Bank

 HDFC poses the largest market capital in comparison to its peer companies.
 But HDFC Return on asset is less than Kotak Mahindra bank but greater than Sbi.
 Price to earning is also lowest in comparison to its peer companies.

HINDUSTAN UNILEVER

Hindustan Unilever has the highest market capital in comparison to its peer companies.

Return on equity is highest of HINDUSTAN UNILEVER in comparison to its peer

companies.

 Price to earning is also highest of the HINDUSTAN UNILEVER.

Recommendations
Reliance

 Above is the last 10 years Price vs Book Value Graph for Reliance Industries. As you
can see that though the book value has increased gradually, the price of reliance has
moved upwards only recently while for last 10 years, it has remained largely stagnant.

As seen in the above graph, the debt equity ratio of Reliance has been hovering around 0.6,
which is just a bit high.

As can be seen in the above graph, the current ratio of Reliance has been constantly falling
for last 4–5 years, and at present it is 0.68 which is low.
This means that the company does not have ample liquidity to run its operations. This is a
worrying sign.

As can be seen from the above graph, the Return on Equity for Reliance has been low for
quite some time. This is probably the reason for stagnant price has well.

EPS Growth

Last 10 yr EPS Growth: 10.65%

Last 5 Yr EPS Growth: 7.69%

Therefore we can see that the EPS Growth has also been mediocre.

So to summarize:

 Reliance has debt equity ratio of 0.67 and the debt has been consistent.
 Current Ratio is falling and is currently less than 1. This is a worrying sign.
 Profit Growth Rate and Return on Equity have been mediocre.
 So, overall from above points, I think it should be possible for you to analyse whether
Reliance Industries is a good stock to invest in.
 While Investing for long term, you should emphasize on the safety of your investment
, growth potential and Current Valuations.
TATA CONSULTANCY SERVICES
Investment rationale by the brokerage- 
In-line revenue, margins missed the mark: Tata Consultancy Services (TATA
CONSULTANCY SERVICES) delivered in-line revenue performance during Q3FY2019E,
while operating margins missed our estimates. Despite a seasonally weak quarter, TATA
CONSULTANCY SERVICES delivered constant currency (CC) revenue growth of 1.8 per
cent QoQ and 12.1 per cent YoY (highest in the past 14 quarters). 

Digital growth acceleration continues, growth accelerated in key markets and verticals Digital
revenue growth remained strong at 52.7 per cent YoY in Q3FY2019 compared to 60 per cent
YoY in Q1FY2019. Digital business contributed 31 per cent to the total revenue (vs. 28 per
cent in Q2FY2019) in Q3FY2019. 

Demand commentary remains strong: Management remains confident of delivering

double-digit revenue growth in FY2019 on account of strong revenue growth in 9MFY2019,
increasing IT spending in BFSI, retail along with markets such as Europe and robust deal
wins in Q3FY2019.
Maintain Buy with a target price of Rs 2,400: We have fine-tuned our earnings estimates
for FY2019E/FY2020E/FY20121E on account of margin miss during the quarter. However,
we remain positive on the revenue growth momentum of TATA CONSULTANCY
SERVICES in FY2020E, given acceleration in deal wins with increasing TCVs (driven by
BFSI deal wins), strong digital growth (>50 per cent YoY in the past two quarters) and
acceleration in BFSI (management cited double-digit exit growth rate).  
HDFC bank
HDFC Bank Ltd. key Products/Revenue Segments include Interest & Discount on Advances & Bills
which contributed Rs 62661.79 Crore to Sales Value (78.09 % of Total Sales), Income From
Investment which contributed Rs 16222.37 Crore to Sales Value (20.21 % of Total Sales), Interest
which contributed Rs 833.31 Crore to Sales Value (1.03 % of Total Sales) and Interest On Balances
with RBI and Other Inter-Bank Funds which contributed Rs 523.88 Crore to Sales Value (0.65 % of
Total Sales)for the year ending 31-Mar-2018.
The Bank has reported a Gross Non Performing Assets (Gross NPAs) of Rs 11224.16 Crore (1.36 %
of total assets) and Net Non Performing Assets (Net NPAs) of Rs 3214.52 Crore (.39% of total
assets).
For the quarter ended 31-03-2019, the company has reported a Standalone Interest Income of Rs
21019.49 Crore, up 3.51 % from last quarter Interest Income of Rs 20306.29 Crore and up 26.14 %
from last year same quarter Interest Income of Rs 16663.37 Crore. The bank has reported net profit
after tax of Rs 5885.12 Crore in latest quarter.
HDFC Bank is currently trading at a P/B multiple of 3.8x/3.4x on FY20E/FY21E
book value and we expect the premium valuation of the bank to continue on back
of its high ROE, superior asset quality metrics and strong retail franchisee which
supports high margin lending opportunities along with benefits of low funding
costs. We apply a P/B multiple of 4.5x to the FY20 adj. BVPS of INR 601 to arrive at
a target price of INR 2683 per share, an upside of 17% over the CMP. Accordingly,
we reiterate our BUY rating.
HINDUSTAN UNILEVER
We cut our EPS estimates for FY20-21 by 4.4-5.7% due to 1) likely impact of moderation in
demand in 1HFY20 2) lower margin expansion of 80bps over FY19-21 versus 360bps over
FY17-19 and 3) 100bps higher tax rate. Although 4Q volume growth has moderated to 7%,
we believe that it is temporary given expectations of normal monsoons and benefit of PM
Kisan Yojana to farmers in due course. We remain positive on HUVR given 1) sustained
Premiumisation in Home Care, 2) success in naturals led by Lever Ayush, Indulekha and
variants across brands 3) strong growth in emerging categories (premium laundry, hand wash,
Liquid dish wash, Hair conditioner, Face-wash and Green tea) 4) synergy gains from
acquisition of Glaxo Consumer healthcare in distribution and costs and 5) gains from supply
chain, data analytics and efficient inventory management.
We estimate pro-forma EPS (including GSK acquisition) of Rs38.2 for FY21 and value the
stock at 46x thus arriving at target price of Rs1764. We expect back ended returns given
lifetime high valuations. Hold.