Akash Kajale-1212

PROJECT REPORT ON
(FUNDAMENTAL ANALYSIS OF POWER SECTOR)
IN
(FINOABILITY)
SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENT OF
MASTER OF MANAGEMENT STUDIES
BY
AKASH ASHOKRAO KAJALE
ROLL NO 2021084
MMS-II (SEM III)
YEAR 2021 - 2023
LALA LAJPATRAI INSTITUTE OF MANAGEMENT

MAHALAXMI, MUMBAI – 400034
PROJECT REPORT ON
(FUNDAMENTAL ANALYSIS OF POWER SECTOR)
IN
(FINOABILITY)
SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENT OF
MASTER OF MANAGEMENT STUDIES
BY
ROLL NO 2021084
MMS-II (SEM III)
YEAR 2021- 2023
LALA LAJPATRAI INSTITUTE OF MANAGEMENT

MAHALAXMI, MUMBAI - 400034
SUMMER INTERNSHIP PROJECT
SUBMITTED BY
ROLL NO 2021084
MMS-II (SEM III)
YEAR 2021- 2023

CERTIFICATE
This is to certify that the project work titled ―Fundamental Analysis Of Power
Sector‖ is a summer internship work carried out by Mr. Akash Ashokrao Kajale
The project was completed for ―Finoability―, under the guidance of (Piyush
Agrawal)
I further certify that the said work has not been submitted in the part or in full, to any
other University.
Date: 9th JANUARY, 2023
Prof. Vikas Sharma Dr. C. Satyanarayana

Project Mentor Director
DECLARATION
I, Mr. Akash Ashokrao Kajale , student of Lala Lajpatrai Institute of Management of

MMS II (Semester III) hereby declare that I have completed the summer internship
project on Fundamental Analysis of Power Sector with Finoability in the Academic
year 2021 - 2023. The information submitted is true & original to the best of my
knowledge.
Akash Ashokrao Kajale

ACKNOWLEDGEMENT
At the outset of this project, I would like to express my profound thanks to a few
people without whose help, completion of this project would not have been possible.
First and foremost, I would like to express sincere thanks to Finoability for giving me
this opportunity to work with them.
The list is endless but to name a few special people, I would like to thank Piyush
Agrawal sir for being extremely supportive and guiding me throughout my internship
and giving me constant motivation and expert advice.
I would also like to thank the entire Finance Department for providing me their
precious time and making this internship a successful learning experience.
I am very grateful to Dr. C. Satyanarayana, Director of Lala Lajpat Rai Institute of

Management, for giving me the opportunity to do this project in Finoability .
I would also like to thank Prof. Vikas Sharma for being an excellent mentor and
helping me whenever I approached her.
Last but not the least; I take pride in thanking my parents Mr. Ashokrao Kajale &
Mrs. Alka Kajale , siblings and friends for their much valued support.
EXECUTIVE SUMMARY
This project report is about the ―fundamental analysis in Power sector‖. Fundamental Analysis
have been adopted as the methodologies to analyze the sector.
Valuation is done as a part of Fundamental Analysis and certain stocks are chosen as the ―Value
Picks ‖ and certain stocks as ― Growth Picks ‖.
The Value Picks have been chosen as those stocks which are undervalued and have shown a
growth in Earnings per Share (EPS) on a Year on Year (YOY) basis.
Some overvalued stocks have been chosen as Growth Picks which have the P/E Growth ratio
(PEG Ratio) as positive and less than or equal to 1.
Further, using some financial ratios which are important to the Power sector, the value picks and
growth picks have been ranked. According to the ranks, funds have been allocated to these
selected stocks.
Ratios like current ratio, Quick ratio, Debt equity ratio, Interest coverage ratio, Net profitmargin
& ROE.
Finally, a portfolio consisting of the selected Power sector stocks is created and the Net Asset
Value (NAV) of the portfolio is calculated. Performance of the entire portfolio is analyzed with
respect to the BSE index (which acts as a benchmark) on daily basis to see if the portfolio of the
Power sector stocks beat the benchmark of BSE index.
It will be helpful for investors who are looking for an investment in Power sector companies. On
these basis we select the stock to invest for long period of time.
INDEX
SR. CONTENT PAGE NO.

NO.
1 INTRODUCTION
1.1 About Power Sector 1
1.2 About Company 3
2 Introduction To Equity Market 5
3 OBJECTIVES
3.1 To Understand Fundamental Analysis 8
3.2 To Understand Equity Valuation 11
3.3 Scope of study 12
3.4 Industry Analysis 12
4 Research Methodology 15
5 Fundamental Analysis Of Sector
5.1 Collection of Data . 17
5.2 Valuation of Stocks 44
5.3 Selection Of Stocks 45
6 Ranking of the stocks 46
7 Allocation Of Funds 53
8 Data Analysis Interpretation & Findings 54
9 Recommendation 55
10 Conclusion 56
11 Reference 57
Stock Exchanges in India –
The stock market is full of a plethora of terms that we often hear. Just like Sensex and Nifty, bull or bear
market, stock market crash, etc., another commonly heard term that turns out to be a financial jargon for
many, is the stock exchange. The stock exchange is like an organized marketplace that works as a
facilitator of these transactions and enables the buying and selling of shares and other securities.
To be precise, it is a platform that helps to conduct the trading of financial instruments like stocks and
derivatives. Activities in the stock exchange are governed by SEBI (Securities Exchange Board of India)
in India. Trading activities in the stock market include brokering, issuing of shares by companies, etc.
There is no obligation for the stocks to be issued by the stock exchanges itself, nor there is any need to
trade any stocks on the exchange. Such a trading is called off exchange or over the counter trading. Bonds
and Derivatives are usually traded usually in this way. Stock Exchanges are also a major part of Global
Securities market. It also serves as an economic function in providing liquidity to the shareholders with
providing efficient means of disposing the shares.
The Stock Exchanges tracks the flow of orders for each stock and if the flow of supply and demand that
establishes price of the stock. Depending on the type of brokerage account, one would be able to see the
price action.
For example, if the stock‘s bidding price is 50 rupees this means an investor is telling the stock exchange
that they are willing to buy a said stock at 50 rupees. At the same time, you may see an asking price of say
51 rupees, meaning another investor is wiling to sell the stock at 51 rupees. The difference between these
two bid prices is known as the bid-ask spread.
Calcutta
Stock
Bombay Exchange
Stock National
Exchange Stock
Exchange
Metropolitan Operating
Stock Stock
Exchange of Exchanges Multi
India Ltd. Commodities
(MSE) Exchange
National
Commodity
& Indian
Derivatives International
Exchange Exchange
Ltd.
(NCDEX)
National Stock Exchange –
National Stock Exchange of India Limited (NSE) is the leading stock exchange of India, located in
Mumbai. It is the world‘s largest derivatives exchange in 2021 by number of contracts traded based on the
statistics maintained by Futures Industry Association (FIA), a derivatives trade body. NSE is ranked 4th
in the world in cash equities by number of trades as per the statistics maintained by the World Federation
of Exchanges (WFE) for the calendar year 2021.
National Stock Exchange has a total market capitalization of more than US$3.4 trillion, making it the
world's 10th-largest stock exchange as of August 2021.
NSE's flagship index, the NIFTY 50, a 50-stock index is used extensively by investors in India and
around the world as a barometer of the Indian capital market. The NIFTY 50 index was launched in 1996
by NSE.[5] However, Vaidyanathan (2016) estimates that only about 4% of the Indian economy / GDP is
derived from the stock exchanges in India.
Calcutta Stock Exchange –
The Calcutta Stock Exchange (CSE), located at the Lyons Range, Kolkata, and is the oldest government
owned stock exchange in Asia. It was founded on 1 December 1863 by sixteen of Calcutta's leading
stockbrokers, beginning its work in rented premises at 11 Strand Road. Since 2013, there has been no
trading on the CSE trading platform. The Calcutta Stock Exchange Ltd was granted permanent recognition
by the Government of India with effect from 14 April 1980, under the relevant provisions of the Securities
Contracts (Regulation) Act, 1956. The Bombay Stock Exchange (BSE) has made a strategic investment in
the Calcutta Stock Exchange, acquiring 5% of its shares.
Bombay Stock Exchange –

Bombay Stock Exchange also known as BSE is an Indian Stock Exchange located at Dalal Street in
Mumbai. It was established in 1875 by a cotton merchant named Premchand Roychand, a Jain
businessman. It the eldest stock exchange in Asia and tenth oldest stock exchange in the world. It is the
8th largest stock exchange in overall market capitalisation with more than 276.13 lakh crore as off
January 2022.
BSE index from 1990 to 2020
BSE is Asia's first and the Fastest Stock Exchange in world with the speed of 6 microseconds and one of
India's leading exchange groups. In 2013, BSE upgraded its technology platform to Bolt Plus, which is
based on the business architecture of global giant Deutsche.
Multi Commodities Exchange –
Multi Commodities exchange also known as MCX, was among the top global commodity exchange in
the terms of number of contracts in future trade. MCX launched MCX India Commodity Indices series in
December 20, 2019 which was the best global practices set by International Organization of Securities
Exchange. These series consist of Composite, Base, Metals etc. MCX received regulatory approval for
launching future contracts on Bullion and Base Metal Indices.
India International Exchange –

The India International Exchange Limited (India INX) is India's first international stock exchange and it
is the subsidiary of Bombay Stock Exchange. It is in Gujrat.
The trading operations began on 16th January 2017 and since then it operates EUREX T7, which is an
advance technology platform. It is one of the fastest exchanges in the world and operates 22 hours a day
and six days a week. Its daily turnover volume crosses ₹74,509 crores.
National Commodity & Derivatives Exchange Ltd. (NCDEX) –

National Commodity and Derivatives Exchange is one of the top commodity exchanges in India and is
based on the value and the number of contracts. It is second to MCX which focuses on energy and metals.
Many financial institutions have their stake in NCDEX. NSE is one of the significant shareholders.
Metropolitan Stock Exchange of India Ltd. (MSE) –
Metropolitan Stock Exchange of India Limited (MSE) is a government owned stock exchange recognized
by Securities and Exchange Board of India (SEBI) under Section 4 of Securities Contracts (Regulation)
Act, 1956. It comes under the ownership of Ministry of Finance, under the Government of India. The
major shareholders here are top public sector banks, domestic financial institution and private sector
banks.
Some of these shareholders are State Bank of India, Union Bank of India, UCO Bank, Canara Bank,
Punjab National Bank, Indian Overseas Bank, Indian Bank, Bank of India, Bank of Baroda.
Fundamental Analysis of Power Sector
INTRODUCTION
1.1 INTRODUCTION OF POWER SECTOR
Power is among the most critical component of infrastructure, crucial for the economic growth and
welfare of nations. The existence and development of adequate infrastructure is essential for
sustained growth of the Indian economy.
India‘s power sector is one of the most diversified in the world. Sources of power generation
range from conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear power
to viable non-conventional sources such as wind, solar, and agricultural and domestic waste.
Electricity demand in the country has increased rapidly and is expected to rise further in the
years to come. In order to meet the increasing demand for electricity in the country, massive
addition to the installed generating capacity is required.
In May 2018, India ranked fourth in the Asia Pacific region out of 25 nations on an index that
measured their overall power. India was ranked fourth in wind power, fifth in solar power and fifth in
renewable power installed capacity as of 2018. India ranked sixth in the list of countries to make
significant investments in clean energy at US$ 90 billion. India is the only country among the G20
nations that is on track to achieve the targets under the Paris Agreement.
Indian power sector is undergoing a significant change that has redefined the industry outlook.
Sustained economic growth continues to drive electricity demand in India. The Government of
India‘s focus on attaining ‗Power for all‘ has accelerated capacity addition in the country. At the
same time, the competitive intensity is increasing at both the market and supply sides (fuel, logistics,
finances, and manpower).
By 2022, solar energy is estimated to contribute 114 GW, followed by 67 GW from wind power and
15 GW from biomass and hydropower. The target for renewable energy has been increased to 227
GW by 2022.
Total installed capacity of power stations in India stood at 379.13 GW as of February 2021.
Electricity production reached 1,252.61 billion units (BU) in FY20.
1
POWER SECTOR IN INDIA
There are three primary segments in the electricity sector: generation, transmission and distribution.
Generation is the process of producing power using different fuels and is carried out in generating
stations (generation plants). Transmission utilities carry bulk power from the generation plants to the
distribution substations through a grid and at high voltages. Distribution utilities supply electricity
from the substations to individual consumers through a distribution network. Distribution is the retail
stage and operates at lower voltages..
Generation
In India, various sources of energy are used to generate power. These include coal, natural gas,
hydro, nuclear, and renewable (includes solar, wind, small hydro, biomass). As on December 2018,
the power generation capacity of the country is at 349 GW.4 In the last two decades, India‘s
generation capacity has increased considerably. This increase is attributed to the delicensing of power
generation in 2003, which enabled unrestricted participation of private sector companies. Today,
private utilities generate 46% of the power in the country, followed by state utilities (30%), and
central generating utilities (24%)
Transmission
Transmission is carried out primarily by central and state companies and largely remains a
government controlled activity. The transmission segment was separated from the central generation
agency in 1989 and Power Grid Corporation of India (Powergrid) was set up. Powergrid is
responsible for the planning, implementation, operation and maintenance of inter-state transmission
system, and the operation of national and regional power grids. The Electricity Act, 2003 allows for
open access which enables consumers to buy power from any power generating plant through non-
discriminatory access to transmission and distribution lines, in 0% 20% 40% 60% 80% 100%
Australia Brazil Canada China France Germany Japan Korea Russia South Africa United Kingdon
United States India Coal Hydro Gas Nuclear Oil Others 5 a manner specified by the respective
state/state regulator. The National Load Despatch Centre (NLDC) manages the scheduling and
dispatch of electricity over inter-regional links in accordance with grid standards, and monitors the
national transmission grid. It is also the nodal agency providing transmission access to the power
2
exchanges. The Regional Load Despatch Centres (RLDCs) manage the operation of the power
system grid in the respective regions. India‘s transmission lines have grown at an average annual rate
of 6.5% between 2007 and 2019 (till March 2019); substation capacity has grown during the same
period at 11.2%.10,11 Interregional transmission capacity has grown from 14 GW in 2007 to 95 GW
till January 2019.
Distribution
Distribution includes maintenance of the distribution network and retail supply of electricity to the
consumers. It is mostly carried out by state-owned distribution companies (discoms). However, in
cities such as Delhi, Mumbai, Ahmedabad, and Kolkata, private entities own the distribution
business. Discoms (or distribution licensees) purchase power from generation companies through
power purchase agreements (PPAs), and supply it to their consumers (in the area of distribution).
One of the key issues with the power sector currently is the poor financial situation of state discoms.
This has been affecting their ability to buy power for supply, and the ability to invest in improving
the distribution infrastructure. Consequently, this impacts the quality of electricity that consumers
receive.
Power consumption India‘s per capita power consumption was 1,149 kWh as on March 31,
2018. 13 This consumption has increased at an average annual rate of 4.6% since 1990. However, it
is much lower as compared to several other countries. Across different categories, the consumption
by the agriculture sector in India is higher as compared to other countries. On the other hand, in
India, the consumption by the commercial sector is lower as compared to other countries.
3
1.2 INTRODUCTION OF THE COMPANY

As an independent Finance company, we make all our recommendations based solely on how it best
serves your near and long-term goals. By teaching you about the Financial Market and our principled
approach, you can feel confident in your ability to make sound decisions that will benefit you and
your family in the long run. That‘s why our approach is fundamentally different. By combining
emotional and intelligence quotient – EQ and IQ – we can help you build a more secure financial
future
COMPANY NAME FINOABILITY PRIVATE LIMITED
Ownership Type Private
Category Company limited by Shares
4
2. INTRODUCTION TO EQUITY MARKET
A stock market, equity market or share market is the aggregation of buyers and sellers (a loose
network of economic transactions, not a physical facility or discrete entity) of stocks (also called
shares), which represent ownership claims on businesses; these may include securities listed on
a public stock exchange, as well as stock that is only traded privately. Examples of the latter
include shares of private companies which are sold to investors through equity crowd funding
platforms. Stock exchanges list shares of common equity as well as other security types, e.g.,
corporate bonds and convertible bonds.
Stock market:
Stock market is a collection of exchanges and markets where regular activity of buying, selling
and issuance of shares of public companies take place.
Though it is called a equity market or stock market and primarily known for trading stocks/
equities, and other securities like- corporate bonds, ETFs (exchange traded funds) and
derivatives based on stocks, commodities are also traded in stock market.
Indian Stock Exchange:
Indian Stock Exchange is the oldest stock market in Asia. There are 2 stock exchanges in India:
 Bombay Stock Exchange (BSE)
 National Stock Exchange (NSE)
BSE: It is located in Dalal Street, Mumbai. It was established in 1875 and is Asia‘s
first stock exchange.
The BSE became the first stock exchange to be recognized by the Indian Government under the
Securities Contracts Regulation Act. In 1986, it developed S&P BSE Sensex index, giving the
BSE a means to measure the overall performance of the exchange.
In 2000, the BSE used this index to open its derivatives market, trading S&P BSE SENSEX
futures contracts. It consists of top 30 companies.
5
NSE: In April 1992, the Bombay stock Exchange (BSE) crashed due to Harshad Mehta
Scam. So, Finance Minister urged the need of other stock exchange in competition to BSE.He
told Indian Development Bank (IDB) to take the project and create other stock exchange. Thus,
in November 1992, National Stock Exchange (NSE), the first electronically traded stock
exchange in India established.
 Approaches To Investing:
Strategies
Fundamenta
Technical Analysis Index Method
l analysis
6
 Fundamental Analysis: Fundamental analysis refers to analysing companies by their

financial statements found in SEC filings, business trends, general economic
conditions, etc.
 Technical Analysis: Technical analysis studies price actions in markets through the
use of charts and quantitative techniques to attempt to forecast price trends
regardless of the company's financial prospects.
 Index Method: Additionally, many choose to invest via the index method. In this
method, one holds a weighted or unweighted portfolio consisting of the entire stock
market or some segment of the stock market (such as the S&P 500 or Wilshire 5000).
The principal aim of this strategy is to maximize diversification, minimize taxes from
too frequent trading, and ride the general trend of the stock market.
7
OBJECTIVES
3.1 TO UNDERSTAND THE FUNDAMENTAL ANALYSIS

Introduction to Fundamental Analysis –
It is a method used to evaluate a security on the basis of its intrinsic value by examining related
economic, financial and other qualitative and quantitative factors.
Fundamental analysis is about using real data to evaluate a security's value. Although most
analysts use fundamental analysis to value stocks, this method of valuation can be used for just
about any type of security. It assumes that over the long term, a stock price will reflect the
company's intrinsic value.
A Fundamental analyst attempts to study everything that can affect the security's value,
including macroeconomic factors (like the overall economy and industry conditions) and
company-specific factors (like financial condition and management).
An investor, for instance can perform fundamental analysis on a bond's value by looking at
economic factors, such as interest rates and the overall state of the economy, and information
about the bond issuer, such as potential changes in credit ratings. For assessing stocks, this
method uses revenues, earnings, future growth, return on equity, profit margins and other data to
determine a company's underlying value and potential for future growth.
It is critical for an investor to separate the daily short-term noise in the stock prices and
concentrate on the underlying business performance. Over the long term, the stock prices of a
fundamentally strong company tend to appreciate, thereby creating wealth for its investors.
The end goal of performing fundamental analysis is to produce a value that an investor can compare
with the security's current price, with the aim of figuring out what sort of position to take with that
security (Undervalued = buy, Overvalued = sell).
Growth is also considered as an important factor in the fundamental analysis because if the
security does not grow or if there is a negative growth (loss making company) then irrespective
of whether it is an overvalued or undervalued security, there is no point in analysing it further
8
for fundamental analysis. In case of stocks, Undervalued stocks can be considered for further
analysis only if they grow Year on Year. The undervalued securities with positive Year on Year
growth are considered as ‗Value Picks‘. Overvalued stocks can be considered for further
analysis only if their PEG ratio (also known as Price to EPS growth ratio) lies between 0 and 1
including those having PEG ratio near or equal to 1. Such overvalued stocks are known as
‗Growth picks‘
Fundamental analysts focus on the underlying business of the company being evaluated and
specifically look at quantitative measures such as:
• Revenues
• Earnings
• Assets
• Debts
These financial measures are often combined to produce fundamental or financial ratios that
analysts can use to compare the company they are analysing to:
• Other companies in the same industry

• The overall market
• Previous periods result for the same company
Analysts use a variety of ratios to compare the two companies or the stocks of the two companies
like Net Income margin, ROE, Debt to Equity ratio, etc. The ratios used for comparison vary from
sector to sector.
9
Advantages of Fundamental Analysis
• It uses sound mathematical and statistical principles to produce ratios so that there is no
room for personal bias.
• The markets are usually driven by fundamental factors over the long term. Fundamental
analysis can look at long-term economic, demographic, technologic or consumer trends.
• By determining an intrinsic value, fundamental analysts can determine appropriate buy
prices that represent 'good value'.
• Research into fundamentals provides the investor with a better understanding of the
company and its business.
Disadvantages of Fundamental Analysis
• Fundamental analysis can be hard work and be overly complicated. Given the time
and difficulty constraints, it may be difficult to get an edge
• In the short term, markets will not always move in the same direction as
fundamental value meaning that often short-term momentum will override the
fundamentals
• Six monthly issuing of financial information may mean a company's fundamentals

have Significantly changed and means a time lag for investment decisions. This
applies especially to a lack of opportunity to react quickly to exit stocks
• Fundamental analysis for future estimated value can only be based on assumptions
so a best- and worst-case valuation model may need to be considered.
• No valuation model can take into account any unexpected negative economic,
political or legislative changes.
• Another important point to consider is that most information considered in

fundamental analysis comes from the company itself and assumptions is providing
accurate and true information have to be made that the company
10
3.2 To Understand Equity Valuation Of Inventory
The main purpose of equity valuation is to estimate a value for a firm or its security. A
key assumption of any fundamental value technique is that the value of the security (in
this case an equity or a stock) is driven by the fundamentals of the firm‘s underlying
business at the end of the day. There are three primary equity valuation models:
the discounted cash flow (DCF) approach, the cost approach, and the comparable (or
comparable) approach. The comparable model is a relative valuation approach.
The basic premise of the comparable approach is that an equity‘s value should bear some
resemblance to other equities in a similar class. For a stock, this can simply be
determined by comparing a firm to its key rivals, or at least those rivals that operate
similar businesses.1 Discrepancies in the value between similar firms could spell
opportunity. The hope is that it means the equity is undervalued and can be bought and
held until the value increases. The opposite could hold true, which could present an
opportunity for shorting the stock or positioning one‘s portfolio to profit from a decline in
its price.
Types of Comparable Models

There are two primary comparable approaches. The first is the most common and looks at market
comparables for a firm and its peers. Common market multiples include the following: enterprise-
value-to-sales (EV/S), enterprise multiple, price-to-earnings (P/E), price-to-book (P/B), and price- to-
free-cash-flow (P/FCF).
To get a better indication of how a firm compares to rivals, analysts can also look at how its margin
levels compare. For instance, an activist investor could make the argument that a company with
averages below peers is ripe for a turnaround and subsequent increase in value should improvements
occur. The second comparable approach looks at market transactions where similar firms, or at
least similar divisions, have been bought out or acquired by other rivals, private equity firms, or
other classes of large, deep-pocketed investors. Using this approach, an investor can get a feel for
the value of the equity. Combined with using market statistics to compare a firm to key rivals,
multiples can be estimated to come to a reasonable estimate of the value for a firm.
11
3.3SCOPE OF THE STUDY
The scope of the study is confined only to five representative companies and one respective
industry. The security analysis starts from broad environmental factors to the industry,
which influences the share price and finally analyzing the company‘s potentiality by
considering possible risks associated with securities. Since share price of the company is
empirically found to depend up to 50% on the performance of the industry and the
economy, studying those related field provide insights for selecting the securities.
3.4 Industrial Analysis of Power Sector
India is the third-largest producer and second-largest consumer of electricity in the world, with an
installed power capacity of 383.37 GW, as of May 2021. Electricity production reached 1,252.61
billion units (BU) in FY20. India was ranked fifth in wind power, fifth in solar power and fourth in
renewable power installed capacity, as of 2019. India‘s rank jumped to 22 in 2019 from 137 in 2014
on World Bank‘s Ease of Doing Business - "Getting Electricity" rankings.
For 2020-21, electricity generation target from conventional sources was fixed at 1,330 BU,
comprising 1,138.533 BU of thermal energy; hydro energy (140.357 BU) and nuclear (43.880 BU);
and 7.230 BU was imported from Bhutan.
According to data from the Ministry of Power, India's power consumption increased 1.83% in
September to 114.49 billion units (BU), indicating a slow recovery.
Renewable energy is fast emerging as a major source of power in India. The Government of India has
set a target to install 227 GW of renewable energy capacity by FY22. As of June 2019, the
Government launched US$ 5 billion of transmission-line tenders in phases and has set a target of 175
GW by 2022. As of September 30, 2021, the total installed capacity of renewable power was 101.53
GW, accounting for 26.11% of the total installed capacity.
In FY22 (until September 2021), the total thermal installed capacity in the country stood at 234.02
GW. Installed capacity of renewable, hydro and nuclear energy totalled 101.53 GW, 46.51 GW and
6.78 GW, respectively. The Government plans to double the share of installed electricity generation
capacity of renewable energy to 40% by 2030. India has also raised the solar power generation
capacity addition target by five times to 114 GW by 2022. The Government is preparing a 'rent a
12
roof' policy for supporting its target of generating 40 GW of power through solar rooftop projects by
2022. The peak power demand in the country stood at 196.77 GW in FY22 (until August 2021).
All India PLF of thermal power plants (excluding gas-based power plants) stood at 56.73% in July
2021, compared with 53.09% in July 2020.
All the states and union territories were on board to fulfil the Government‘s vision of ensuring 24x7
affordable and quality power for all by March 2019. India achieved 100% household electrification
by March 31, 2019, as envisaged under the Saubhagya scheme. More than 26.2 million households
have been electrified under Saubhagya scheme.
Under the Union Budget 2021-22, the government has allocated Rs. 15,322 crore (US$ 2.11 billion)
for the Ministry of Power and Rs. 5,753 crore (US$ 794.53 million) for the Ministry of New and
Renewable Energy. Under the Union Budget 2021-22, the government has allocated Rs. 300 crore
(US$ 41.42 million) to increase capacity of the Green Energy Corridor Project, along with Rs. 1,100
crore (US$ 151.90 million) for wind and Rs. 2,369.13 crore (US$ 327.15 million) for solar power
projects. The Union Budget 2021-22 has allocated Rs. 5,300 crore (US$ 731.75 million) to the
Integrated Power Development Scheme (IDPS) and Rs. 3,600 crore (US$ 497.03 million) towards
the Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY).
In the current decade (2020-2029), the Indian electricity sector is likely to witness a major
transformation with respect to demand growth, energy mix and market operations.
The Cabinet Committee on Economic Affairs (CCEA) has approved commercial coal mining for
private sector and the methodology of allocating coal mines via auction and allotment, thereby
prioritising transparency, ease of doing business and ensuring the use of natural resources for
national development.
India aims to reduce emissions intensity of its gross domestic product (GDP) by 33% to 35% by 2030
from 2005 levels and increase the share of non-fossil fuels to 40% of the total electricity generation
capacity.
Total FDI inflow in the power sector reached US$ 15.36 billion between April 2000 to June 2021,
accounting for 3% of the total FDI inflow in India.
In October 2021, the NTPC was awarded a contract to set up a 325MW solar power project in
Madhya Pradesh.
In October 2021, Tata Power won a 250MW solar power project by Maharashtra State Power
Generation Corporation and a 330MW solar projects in Madhya Pradesh.
On September 29, 2021, NTPC Renewable Energy ltd (REL), a 100% subsidiary of NTPC ltd, signed
its first green term loan agreement with Bank of India for Rs. 500 crore (US$ 67.28 million) at a
13
competitive rate and a tenor of 15 years for its 470 MW solar projects in Rajasthan and 200 MW
solar projects in Gujarat.
In September 2021, Adani Group announced to invest US$ 20 billion over the next 10 years in
renewable energy generation and component manufacturing.
In September 2021, Bharat Heavy Electricals Limited (BHEL) successfully commissioned India‘s
largest floating Solar PV plant. Located at NTPC Simhadri in Andhra Pradesh, the 25 MW floating
SPV project covers an area of 100 acres.
In September 2021, the Government of the United Kingdom announced that it will invest US$ 1.2
billion through public and private investments in green projects and renewable energy in India to
support the latter‘s target of 450 GW of renewable energy by 2030.
14
4. RESEARCH METHODOLOGY
Methodology is an essential part of research to find answer to research objectives and initiate
the same. Therefore, it figures as the important part of any study. This focuses on the design and
research method utilised in the study. In addition, procedure followed to collect, process and
analysis data is presented.
Sources of Data:
Data was collected based on source.

 Secondary Data
Secondary Data:
Secondary Data refers to data that was collected by someone other than the user. Secondary data
analysis can save time that would otherwise be spent collecting data, and particularly in the case
of quantitative data can provide larger and high – quality database that would be unfeasible for
any individual researcher to collect on their own. The sources of secondarydata are annual
reports, browsing internet and through money control app.
 It includes data gathered from the annual reports of the various companies coming
under Power sector.
 Information is collected from the official websites, money control app and by doing
sectoral analysis using different methods
Types Of Financial Statement Adopted:
 Balance Sheet
 Income Statement
 It includes data gathered from the annual reports of the various companies coming
under power sector.
15
5. Fundamental Analysis of Power Sector
For conducting fundamental analysis for the stocks in Power Sector, we have taken into
consideration top 6 performing stock. Table below shows the stocks of the companies which
have top 6 market capitalization. (As on 22 JULY 2021)
Sr Name of the Company Price Market Cap (In Cr)

No.
1 IEX 139.10 12500.49
2. TATA POWER 205.40 65632.27
3 POWER GRID CORP 208.20 145228.93
4 NTPC 169.00 163873.66
5 SJVN 34.50 13557.79
6 TORRENT POWER 480.85 23110.46
16
5.1 DATA COLLECTION
About Companies
IEX – INDIAN ENERGY EXCHANGE
The Indian Energy Exchange (IEX) is an Indian electronic system based power trading
exchange regulated by the Central Electricity Regulatory Commission (CERC). IEX started
its operations on June 27, 2008.[2] Indian Energy Exchange pioneered the development of
power trading in India and provides an electronic platform to the various participants in
power market, comprising State Electricity Boards, Power producers, Power Traders and
Open Access Consumers (both Industrial & Commercial).
IEX is one of the two operational Power Exchanges in India. Ever since its incorporation, it
has held an influential market share. IEX operates a day-ahead market based on closed
auctions with double-sided bidding and uniform pricing;[3] it has over 3,800 registered clients,
over 300 private generators and more than 3,300 industrial electricity consumers.
Indian Energy Exchange is India‘s premier energy marketplace, providing a nationwide
automated trading platform for the physical delivery of electricity, renewables, and
certificates. More recently, IEX has pioneered cross border electricity trade expanding its
power market beyond India in an endeavour to create an integrated South Asian Power
Market. IEX is powered by state-of-the-art, intuitive and customer centric technology,
enabling efficient price discovery and facilitating the ease of power procurement.
IEX has a robust ecosystem of 6,800+ participants locatedacross 29 States and 5 Union
Territories comprising of 55+ distribution utilities and 500+ conventional generators. It also
has a strong base of 4400+ commercial and industrial consumers representing industries such
as such as metal, food processing, textile, cement, ceramic, chemicals, automobiles,
information technology industries, institutional, housing, and real estate, and commercial
entities.
The Exchange has ISO Certifications for quality management, Information security
management and environmental management since August 2016 and is approved and
regulated by the Central Electricity Regulatory Commission and has been operating since 27
June 2008.
The Exchange is a publicly listed company with NSE and BSE since October 2017.
17
FINANCIAL REPORTS OF THE COMPANY - IEX
PROFIT & LOSS ACCOUNT
Mar-18 Mar-19 Mar-20 Mar-21 Mar-22
Sales - 199 230 254 257 317
Sales Growth % 17.07% 16.01% 10.25% 1.16% 23.37%
Expenses - 55 46 51 53 58
Manufacturing Cost % 0.70% 0.67% 0.91% 0.68% 0.43%
Employee Cost % 8.03% 10.70% 9.92% 12.86% 12.58%
Other Cost % 19.05% 8.40% 9.34% 6.90% 5.18%
Operating Profit 143 185 203 204 259
OPM % 72% 80% 80% 80% 82%
Other Income 34 26 40 40 40
Interest 0 0 1 2 2
Depreciation 3 10 10 15 16
Profit before tax 174 200 232 228 282
Tax % 35% 34% 29% 22% 24%
Net Profit 114 132 165 178 213
18
Cash Flow
Cash from Operating Activity - 206 131 138 128 304
Profit from operations 144 185 203 206 264
Receivables 1 0 -46 46 -3
Payables 0 -1 38 -73 115
Other WC items 122 -2 2 -2 -7
Working capital changes 123 -2 -5 -29 105
Interest paid 0 0 0 0 0
Direct taxes -61 -52 -60 -49 -65
Exceptional CF items 0 0 0 0 0
Cash from Investing Activity - -21 -33 -62 -5 -194
Fixed assets purchased -1 -120 -4 -5 -16
Fixed assets sold 0 0 0 0 0
Investments purchased -78 0 -107 -1 -163
Investments sold 0 71 0 0 0
Investment income 0 0 0 0 0
Interest received 13 3 8 2 2
Dividends received 3 0 0 0 0
Other investing items 42 13 41 0 -17
Cash from Financing Activity - -109 -126 -78 -161 -77
Proceeds from shares 0 1 2 1 2
Proceeds from borrowings 0 0 0 0 0
Repayment of borrowings 0 0 0 0 0
Interest paid fin 0 0 0 -1 -2
Dividends paid -90 -105 -66 -75 -75
Financial liabilities 0 0 0 -2 -3
Other financing items -19 -22 -14 -84 0
Net Cash Flow 76 -29 -2 -38 33
19
BALANCE SHEET
Mar-18 Mar-19 Mar-20 Mar-21 Mar-
22
Share Capital - 30 30 30 30 30
Preference Capital 1.52 0 0 0 0
Equity Capital 28.61 30.16 30.19 29.83 29.85
Reserves 245 249 334 352 491
Borrowings 0 0 0 14 12
Other Liabilities - 280 295 342 272 394
Trade Payables 172 85 134 76 165
Advance from Customers 0 0 0 1 5
Other liability items 108 210 208 195 225
Total Liabilities 554 574 706 668 927
Fixed Assets - 8 119 111 119 115
Building 2 3 3 3 5
Equipments 0 1 1 1 1
Computers 3 4 4 8 9
Furniture n fittings 2 2 2 2 2
Vehicles 1 2 2 2 3
Intangible Assets 0 0 0 0 0
Other fixed assets 4 122 123 141 144
Accumulated Depreciation 3 13 23 38 49
CWIP 1 1 1 1 6
Investments 383 268 475 514 710
Other Assets - 162 186 118 35 96
Trade receivables 0 0 46 0 3
Cash Equivalents 128 114 68 27 77
Loans n Advances 5 69 3 6 13
Other asset items 28 3 2 1 2
Total Assets 554 574 706 668 927
20
Tata Power Company Limited
Tata Power Company Limited is an Indian electric utility company based in Mumbai,
Maharashtra, India and is part of the Tata Group. The core business of the company is to
generate, transmit and distribute electricity. With an installed electricity generation capacity
of 10,577 MW, it is India's largest integrated power company. Tata Power has been ranked
3rd in 2017 Responsible Business Rankings developed by IIM Udaipur. In February 2017,
Tata Power became the first Indian company to ship over 1 GW solar modules.
Tata Power is one of India's largest integrated power companies, present across the entire
power value chain of conventional & renewable energy, power services and next-generation
customer solutions including solar rooftop, EV charging stations and home automation.
Formerly known as Tata Electric, Tata Power has pioneered technology adoption in the utility
sector with many firsts to its credit including setting up India's first hydroelectric power
station in 1915.
Tata Power, together with its subsidiaries & joint entities, has 12772 MW of generation
capacity where 30% comes from clean and green sources. They look to shape the future
through our green initiatives. From energy-saving power services, to making India EV ready
with multi-city EV charging stations and being India's #1 rooftop solar provider, Tata Power
is continuously delivering green technology for the smart consumer.
With over a century of contributing to nation building, technology leadership, customer care,
world-class safety processes and leading sustainability initiatives, Tata Power is 'lighting up
lives' for generations to come.
21
Sustainability
Sustainability being a core philosophy, Tata Power leads the industry in clean and sustainable
solutions for customers and the community.
Clean energy generation

Pioneering hydropower generation in India in 1915 with the first hydro station at Khopoli in
1915, Tata Power today has 30% of clean energy generation in its portfolio including solar
and wind generation. They aim to grow this to 40-50% in the next few years.
Next-generation customer solutions

Tata Power established Mumbai‘s first set of Electric Vehicle charging stations in Mumbai.
Now present in Mumbai, Delhi and Hyderabad, they provide charging solutions making India
EV Ready.
Tata Solar is present across the renewables value chain, from solar manufacturing to
customer rooftop solutions. Being India's #1 rooftop solar provider, Tata Power is
continuously delivering green technology for the smart consumer.
22
Financial statement of the company - Tata power Company

limited
PROFIT & LOSS
Sales - 27,588 26,840 29,881 29,136 32,468
Sales Growth % -6.46% -2.71% 11.33% -2.49% 11.43%
Expenses - 22,114 24,545 26,811 23,847 26,587
Material Cost % 0% 0% 0% 0% 0%
Manufacturing Cost 71% 69% 70% 66% 70%

%
Employee Cost % 5% 6% 5% 5% 7%
Other Cost % 4% 17% 14% 11% 5%
Operating Profit 5,473 2,295 3,070 5,289 5,881
OPM % 20% 9% 10% 18% 18%
Other Income 1,297 6,586 7,186 3,796 2,815
Interest 3,365 3,761 4,170 4,494 4,010
Depreciation 1,956 2,346 2,393 2,634 2,745
Profit before tax 1,450 2,773 3,693 1,958 1,941
Tax % 24% 6% 29% 33% 26%
Net Profit 897 2,408 2,356 1,017 1,127
23
CASH FLOW

Cash from Operating Activity - 7,014 6,364 4,574 7,375 8,458
Profit from operations 5,958 6,007 6,895 7,310 7,651
Receivables -52 715 -1,649 -97 -1,104
Inventory -205 -147 -85 -21 -93
Payables 1,108 86 -43 -797 1,710
Loans Advances 54 -32 22 -5 23
Operating investments 147 37 117 -136 158
Deposits 0 0 0 0 0
Other WC items 584 299 -177 1,729 561
Working capital changes 1,636 958 -1,815 674 1,254
Direct taxes -580 -602 -506 -609 -447
Exceptional CF items 0 0 0 0 0
Cash from Investing Activity - -7,373 -1,512 -272 -493 993
Fixed assets purchased -3,322 -3,560 -3,576 -2,226 -3,336
Fixed assets sold 16 56 43 36 1,549
Investments purchased -39,462 -20,055 -20,777 -921 -80
Investments sold 38,913 20,948 23,444 578 1,349
Dividends received 517 1,002 309 1,895 1,846
Investment in group cos -26 -106 0 0 0
Redemption n Cancelation of 185 57 0 0 0
Shares
Acquisition of companies 0 0 0 0 0
Inter corporate deposits 90 -50 84 0 5
Other investing items -4,393 73 62 -20 -501
Cash from Financing Activity - 937 -4,726 -5,184 -5,110 -7,603
Proceeds from shares 157 85 97 100 3,151
Proceeds from debentures 0 0 0 0 0
Proceeds from borrowings 22,243 34,330 45,714 7,188 5,602
Repayment of borrowings -17,282 -33,893 -46,355 -7,295 -11,576
Interest paid fin -3,264 -4,570 -3,976 -4,002 -3,731
Dividends paid -415 -417 -410 -501 -526
Other financing items -501 -261 -253 -270 -171
Net Cash Flow 579 126 -883 1,773 1,848
24
BALANCE SHEET

Share Capital - 270 516 270 270 320
Preference Capital 0 245 0 0 0
Equity Capital 270 270 270 270 320
Reserves 12,944 14,629 16,535 17,796 20,503
Borrowings 48,815 48,344 48,506 51,936 46,708
Other Liabilities - 20,799 18,648 18,762 19,672 31,137
Non controlling int 1,869 2,015 2,167 2,332 2,927
Trade Payables 5,529 5,610 5,481 5,095 7,120
Advance from 413 559 485 782 1,209
Customers
Other liability items 12,989 10,463 10,629 11,462 19,881
Total Liabilities 82,829 81,892 84,073 89,674 98,667
Fixed Assets - 46,595 44,656 44,305 47,666 51,889
Land 1,079 974 1,032 2,071 2,178
Building 2,792 2,906 2,938 3,058 3,258
Plant Machinery 44,014 43,914 44,924 47,425 48,568
Equipments 5,317 5,812 6,364 6,967 11,501
Railway sidings 96 99 103 104 598
Vehicles 220 250 245 235 228
Intangible Assets 1,768 1,666 1,654 1,646 1,800
Other fixed assets 4,211 4,265 4,233 5,441 5,602
Accumulated 13,040 15,352 17,308 19,398 21,976
Depreciation
CWIP 2,178 1,653 2,576 1,612 3,600
Investments 11,873 12,429 13,542 14,535 13,149
Other Assets - 22,184 23,154 23,651 25,861 30,029
Inventories 1,600 1,623 1,706 1,752 1,885
Trade receivables 3,832 2,789 4,445 4,426 5,001
Cash Equivalents 954 1,186 787 2,094 6,113
Loans n Advances 10,447 14,863 13,886 15,574 11,232
Other asset items 5,350 2,693 2,825 2,015 5,799
Total Assets 82,829 81,892 84,073 89,674 98,667
25
Power Grid Corporation of India Limited
Power Grid Corporation of India Limited is an Indian statutory corporation under

the jurisdiction of Ministry of Power, Government of India and is headquartered
in Gurugram, India and engaged mainly in transmission of bulk power across different states
of India. Power Grid transmits about 50% of the total power generated in India on its
transmission network. It is also certified for PAS 99:.
The Power Grid Corporation of India Limited was incorporated on 23 October 1989 under
the Companies Act, 1956 with an authorized share capital of Rs. 5,000 Crore (subsequently
enhanced to Rs. 10,000 Crore in Financial Year (FY) 2007–08) as a public limited company,
wholly owned by the Government of India with 51.34% stake in the company as on 31
December 2020 and as principal electric power transmission company for the country.
Its original name was the "National Power Transmission Corporation Limited", was charged
with planning, executing, owning, operating and maintaining high-voltage transmission
systems in the country. On 8 November 1990, the firm received its Certificate for
Commencement of Business. Their name was subsequently changed to Power Grid
Corporation of India Limited, on 23 October 1992.
Power Grid management started functioning in August 1991 and subsequently took over
transmission assets from National Thermal Power (NTPC), National Hydroelectric Power
Corporation (NHPC)], North Eastern Electric Power Corporation
Limited (NEEPCO), Neyveli Lignite Corporation (NLC), and other compamies such as NPC,
THDC, SJVNL . in a phased manner ; it commenced commercial operation in January
1993.[3] It also took over the operation of existing Regional Load Despatch Centers (RLDCs)
26
from the Central Electricity Authority (CEA), in a phased manner from 1994 to 1996, which
have been upgraded and modernized with Unified Load Despatch and Communication
(ULDC) schemes. The National Load Despatch Centre (NLDC) was established in 2009 for
overall coordination at the national level. Later the company had diversified into the telecom
sector for efficient use of its spare telecommunication capacity of unified load dispatch center
(ULDC) schemes and also leverage on its country-wide transmission infrastructure.
According to its mandate, the corporation, apart from providing a transmission system for
evacuation of central sector power, is also responsible for the establishment and operation of
regional and national power grids to facilitate the transfer of power within and across the
Regions with reliability, security, and economy on sound commercial principles. Based on its
performance, the firm was recognized as a Mini-Ratna Category-I Public Sector Undertaking
in October 1998. It was conferred with the status of "Navratna" by the Government of India
in May 2008 and "Maharatna" status in October 2019.
27
Financial Statement of the Company – Power Grid Corp
PROFIT & LOSS
Sales - 25,697 29,954 35,059 37,744 39,640
Sales Growth % 24.43% 16.56% 17.04% 7.66% 5.02%
Expenses - 3,247 3,993 8,140 4,858 4,659
Employee Cost % 7.44% 7.18% 6.56% 6.49% 6.56%
Other Cost % 1.68% 2.81% 13.15% 3.12% 2.02%
OPM % 87% 87% 77% 87% 88%
Other Income 933 4,065 1,505 2,820 694
Interest 6,204 7,324 8,737 9,509 8,135
Depreciation 7,722 9,231 10,541 11,607 12,039
Tax % 21% 39% -10% 24% 22%
Net Profit 7,451 8,204 10,034 11,059 12,036
28
CASH FLOW

Receivables -395 -524 -1,379 -291 1,298
Inventory -197 -163 -182 -181 36
Loans Advances 0 0 0 0 0
Other WC items 910 -931 -3,881 906 -3,839
Working capital changes 319 -1,618 -5,443 434 -2,505
Direct taxes -1,871 -2,259 -2,281 -2,569 -2,186
Cash from Investing Activity - -23,836 -25,701 -18,727 -10,733 -9,153
Capital WIP 0 0 0 0 0
Investments purchased -204 -100 -15 -18 0
Investment in group cos 0 0 -27 -100 -33
Acquisition of companies 0 0 0 0 -308
Other investing items 196 475 3,618 516 360
Cash from Financing Activity - 3,959 1,285 -2,431 -18,806 -20,521
Dividends paid -1,313 -3,034 -4,515 -4,426 -6,822
Other financing items -279 -625 -940 -918 0
Net Cash Flow 1,698 -1,707 2,113 1,199 -362
29
BALANCE SHEET

Share Capital - 5,232 5,232 5,232 5,232 5,232
Equity Capital 5,232 5,232 5,232 5,232 5,232
Reserves 44,634 49,194 53,857 59,464 64,704
Borrowings 118,988 131,503 146,376 148,270 143,210
Trade Payables 414 240 365 227 187
Advance from Customers 2,496 2,570 3,581 4,088 3,611
Fixed Assets - 137,678 156,198 172,740 181,112 183,726
Land 2,341 2,540 2,331 2,890 2,925
Building 1,467 1,976 2,781 2,515 3,255
Plant Machinery 146,098 172,966 199,112 218,826 231,755
Equipments 295 391 492 602 660
Computers 74 92 111 165 244
Vehicles 3 3 3 3 3
Intangible Assets 1,369 1,576 1,995 2,097 2,153
Other fixed assets 135 144 153 158 187
Accumulated Depreciation 14,284 23,693 34,475 46,431 57,772
CWIP 38,264 37,669 37,631 35,177 24,838
Investments 1,165 1,224 1,296 1,431 1,486
Other Assets - 18,555 30,264 35,713 38,951 45,718
Inventories 924 1,088 1,270 1,451 1,385
Cash Equivalents 3,354 2,189 4,337 5,454 5,359
Loans n Advances 12,505 6,410 15,128 16,036 26,308
Other asset items -1,360 16,937 10,250 10,968 8,991
Total Assets 195,662 225,354 247,380 256,671 255,768
30
NTPC - National Thermal Power Corporation Limited
NTPC Limited, formerly known as National Thermal Power Corporation Limited, is an

Indian statutory corporation. It engaged in generation of electricity and allied activities. It is
a statutory corporation incorporated under the Companies Act 1956 and is under
the jurisdiction of Ministry of Power, Government of India. The headquarters of the company
is situated at New Delhi. NTPC's core function is the generation and distribution of electricity
to State Electricity Boards in India. The body also undertakes consultancy and turnkey
project contracts that involve engineering, project management, construction management,
and operation and management of power plants.
The body has also ventured into oil and gas exploration and coal mining activities. It is the
largest power company in India with an electric power generating capacity of 62,086 MW
. Although the company has approx. 16% of the total national capacity, it contributes to over
25% of total power generation due to its focus on operating its power plants at higher
efficiency levels (approx. 80.2% against the national PLF rate of 64.5%).NTPC currently
produces 25 billion units of electricity per month.
NTPC currently operates 55 power stations (24 Coal, 7 combined cycle gas/liquid fuel, 2
Hydro, 1 Wind, and 11 solar projects). Further, it has 9 coal and 1 gas station, owned by joint
ventures or subsidiaries.
It was founded by Government of India in 1975, which now holds 54.74% of its equity shares
on 30 June 2016 (after divestment of its stake in 2004, 2010, 2013, 2014, 2016, & 2017)
In May 2010, NTPC was conferred Maharatna status by the Union Government of India, one
of the only four companies to be awarded this status. It is ranked 400th in the Forbes Global
2000 for 2016.
31
Financial statement of the company
PROFIT & LOSS
Sales - 82,042 88,083 100,287 109,464 111,531
Sales Growth % 11.78% 7.36% 13.85% 9.15% 1.89%
Expenses - 60,445 65,598 77,576 77,863 77,484
Manufacturing Cost % 67% 67% 66% 64% 62%
Other Cost % 0% 1% 5% 2% 2%
OPM % 26% 26% 23% 29% 31%
Other Income 1,592 5,576 2,818 8,194 5,017
Interest 3,753 4,447 5,605 8,189 9,224
Depreciation 6,010 7,460 8,669 10,356 12,450
Tax % 20% 35% -25% 44% 14%
Net Profit 10,720 10,544 13,737 11,600 14,635
32
CASH FLOW

Receivables -640 186 -1,907 -7,087 1,806
Inventory 804 813 -1,665 -2,310 2,032
Payables 657 2,085 502 1,524 -24
Other WC items -1,029 -8,906 -4,418 2,502 -2,985
Working capital changes -207 -5,823 -7,488 -5,370 829
Direct taxes -2,626 1,926 -3,465 -3,321 -3,068
Cash from Investing Activity - -24,480 -20,678 -24,063 -29,628 -21,034
Investments purchased 0 0 0 0 -500
Interest received 169 243 52 1,046 4,187
Invest in subsidiaries 0 0 0 0 0
Investment in group cos -1,200 -1,153 -123 -765 -119
Acquisition of companies 0 0 -1,689 0 0
Other investing items 390 -1,150 -779 -11,851 -1,329
Cash from Financing Activity - 3,138 1,028 4,927 6,004 -11,049
Dividends paid -3,595 -4,040 -5,461 -3,133 -5,778
Financial liabilities -13 -7 -9 -79 -57
Other financing items -732 -832 -1,193 -642 -2,764
Net Cash Flow -1,176 19 -451 266 360
33
BALANCE SHEET

Share Capital - 8,245 8,245 9,895 9,895 9,697
Equity Capital 8,245 8,245 9,895 9,895 9,697
Reserves 89,593 95,318 101,462 108,945 116,042
Borrowings 113,773 130,049 173,058 202,984 212,451
Non controlling int 803 948 2,908 3,317 3,524
Trade Payables 5,573 6,708 8,614 10,109 8,726
Fixed Assets - 104,532 128,245 150,985 187,803 203,245
Land 12,610 12,260 8,719 8,760 9,009
Building 8,509 10,689 13,721 16,871 19,597
Plant Machinery 86,626 114,939 141,076 178,428 208,674
Equipments 466 598 853 1,047 1,187
Computers 276 324 424 430 501
Furniture n fittings 827 1,058 1,429 2,617 3,103
Railway sidings 758 1,461 1,653 3,255 3,359
Vehicles 14 15 3 90 143
Other fixed assets 6,798 7,273 21,300 24,996 27,554
Accumulated Depreciation 12,556 20,575 38,397 49,076 70,302
CWIP 86,896 83,386 118,397 98,508 97,506
Investments 7,614 8,876 8,132 9,307 10,589
Other Assets - 49,560 61,985 69,409 81,951 86,760
Inventories 6,690 6,271 8,513 11,319 10,020
Loans n Advances 19,739 21,889 36,349 35,206 41,105
Other asset items 10,866 20,626 9,250 11,898 13,530
Total Assets 248,601 282,492 346,923 377,569 398,100
34
SJVN - Satluj Jal Vidyut Nigam
SJVN incorporated on May 24, 1988 under the Indian Companies Act, 1956, as amended (the
Companies Act) as a private limited company under the name of Nathpa Jhakri Power
Corporation Private Limited with the Registrar of Companies, Punjab, Himachal Pradesh and
Chandigarh.
The company is into hydroelectric power generation originally established as a joint venture
between the government and the state government of Himachal Pradesh to develop and
operate the Nathpa Jhakri Hydro Power Station (NJHPS). Based on the information published
by the CEA, the NJHPS is currently the largest operation providing hydroelectric power
generation facility in India based on installed capacity, with an aggregate generation capacity
of 1,500 MW and is located on the Sutlej River in the state of Himachal Pradesh.
The NJHPS is currently the only hydroelectric power project in operation. Through the
construction and operation of the NJHPS, the company has gained experience in the design,
development, construction and operation of hydroelectric projects, and the execution and
management of all aspects of such projects from the initial stages of concept to
commissioning, operation and maintenance of such projects.
The company is currently constructing the Rampur Project, which is expected to be a 412
MW hydroelectric power generation facility located downstream from the NJHPS. The
Rampur Project is currently projected to be completed and commissioned in 2013. Also, it
has been awarded the rights to develop and operate two hydroelectric projects with an
expected aggregate generation capacity of 825 MW by the state government of Himachal
Pradesh (in each of which the company is expected to have a 51% participation interest).
35
SJVN has also entered into memoranda of understanding with the state government of
Uttarakhand for three hydroelectric projects with an expected aggregate generation capacity
of 363 MW. It has further agreed to participate in a joint venture with NHPC Limited and the
state government of Manipur for the development and operation of a 1,500 MW hydroelectric
power project to be located in Manipur.
It has also diversified the operations to target hydroelectric power projects available outside
India, and has been awarded the rights to construct and operate on a build, own, operate and
transfer (BOOT) basis, a 900 MW hydroelectric power project to be located in the
Sankhuwasabha district of Nepal, through participating in a competitive tender held by the
Nepalese government. Through these projects, it expects to increase its total installed power
generation capacity by approximately 3,588 MW.
FINANCIAL STATEMENT OF THE COMPANY
PROFIT & LOSS
Sales - 2,679 2,228 2,645 2,703 2,485
Sales Growth % 7.43% -16.82% 18.67% 2.20% -8.04%
Expenses - 480 524 606 590 619
Employee Cost % 9.53% 11.98% 11.97% 11.42% 12.77%
Other Cost % 5.48% 7.99% 7.18% 7.06% 8.37%
OPM % 82% 76% 77% 78% 75%
Other Income 411 409 397 587 754
Interest 55 101 251 344 42
Depreciation 680 365 390 384 393
Tax % 18% 26% 24% 21% 25%
Net Profit 1,541 1,225 1,363 1,567 1,646
36
CASH FLOW

Receivables 381 336 -487 15 117
Inventory 0 -11 6 -5 -7
Payables 10 -1 -1 16 3
Other WC items 80 -112 -236 -250 -292
Working capital changes 470 212 -719 -224 -179
Direct taxes -357 -371 -414 -467 -301
Cash from Investing Activity - -1,199 15 -34 -95 -1,145
Fixed assets purchased 0 -349 -774 -1,269 -2,066
Investment in group cos -52 -29 -38 -29 -26
Other investing items -1,465 89 524 920 774
Cash from Financing Activity - -1,621 -2,272 -1,107 -1,345 -1,105
Proceeds from borrowings 0 0 0 106 183
Repayment of borrowings 0 0 -205 -219 -239
Interest paid fin -84 -84 -96 -107 -140
Dividends paid -1,125 -993 -668 -922 -904
Other financing items -412 -1,195 -137 -190 0
Net Cash Flow -444 -616 -123 273 -267
37
BALANCE SHEET
Share Capital - 4,137 3,930 3,930 3,930 3,930
Equity Capital 4,137 3,930 3,930 3,930 3,930
Reserves 7,353 6,770 7,316 8,121 8,861
Borrowings 2,416 2,231 2,155 2,238 2,174
Trade Payables 27 26 24 40 45
Fixed Assets - 8,425 8,087 8,142 8,051 8,007
Land 594.27 595.3 601.51 640.89 740.91
Building 1,191.12 1,217.20 1,377.34 1,443.12 1,637.28
Plant Machinery 2,563.87 2,603.23 2,871.85 3,010.93 3,011.34
Equipments 30.62 33.42 34.76 38.43 39.8
Computers 6.51 7.55 10 12.49 15
Furniture n fittings 44.31 48.18 55.26 73.9 78.41
Vehicles 3.4 5.46 6.53 31.3 32.07
Other fixed assets 5,352.32 5,304.40 5,302.56 5,312.53 5,353.19
Accumulated Depreciation 1,361.62 1,727.77 2,117.88 2,512.44 2,900.97
CWIP 661 944 1,303 2,265 4,298
Investments 90 120 160 195 222
Other Assets - 6,216 5,239 5,368 5,444 4,946
Inventories 40 51 45 50 56
Trade receivables 613 289 277 744 522
Loans n Advances 862 848 1,325 1,259 1,537
Other asset items 382 437 754 1,056 1,525
Total Assets 15,392 14,391 14,974 15,955 17,473
38
TORRENT POWER
Torrent Power is one of the leading brands in the Indian power sector, promoted by the Rs.
21500 Crore Torrent Group – committed to its mission of transforming life by serving two of
the most critical needs - healthcare and power. It is an integrated power utility and is one of
the largest private sector players in India having interests in power generation, transmission,
distribution and manufacturing and supply of power cables.
Torrent Power foresaw the prospects in the power sector much before the liberalization, when
it took-over and successfully turned around an ailing power cable company Mahendra
Electricals, renaming it as ‗Torrent Cables Ltd.‘ (now merged with Torrent Power Limited
w.e.f. 1st April, 2014). The high points of Torrent‘s foray into power however were the
acquisitions of two of the India‘s oldest utilities – The Surat Electricity Company Ltd and
The Ahmedabad Electricity Company Ltd. Torrent turned them into first rate power utilities,
in terms of operational efficiencies and reliability of power supply.
Torrent ranks amongst the best run power utilities in the country with highly efficient
generation assets. It has a portfolio of coal based, gas based and renewable power plants with
an aggregate generation capacity of 3879 MW. The gas based plants of the Company possess
greater environmental value with state of the art technology and in-built efficiency enhancing
design features.
The Company distributes power to over 3.65 million customers annually in its distribution
areas of Ahmedabad, Gandhinagar, Surat and Dahej SEZ and Dholera SIR (Gujarat), in
Bhiwandi, Shil, Mumbra and Kalwa (Maharashtra) and in Agra (Uttar Pradesh). The T&D
loss in license areas of the Company is amongst the lowest in the country. The Company
offers highly personalized and innovative customer services that incorporate various
convenience features.
Torrent Power created history by entering into the country‘s first distribution franchisee
agreement with Maharashtra State Electricity Distribution Company Limited for Bhiwandi
Circle in December 2006. In 2009 it was awarded the distribution franchise for Agra in Uttar
Pradesh. The significant reduction in AT&C losses in both Bhiwandi and Agra is a testimony
of Company‘s operational efficiency. During FY 19 the Company was awarded distribution
license for Dholera Special Investment Region (Gujarat) and distribution franchise for Shil,
Mumbra & Kalwa (SMK) area (Maharashtra)
39
From establishing a prominent presence in the generation sector through thermal and
renewable generation - to creating a link to the distribution utilities through an effective
transmission network - to reaching the end consumer with uninterrupted power supply and
24X7 customer care initiatives through its distribution network, Torrent Power has proven its
mettle as an integrated power utility.
The Company is likewise committed to the cause of social service and is repeatedly
channelizing a part of its resources and activities, such that it positively affects the society.
As a part of its CSR initiatives, the Company makes concentrated efforts in the fields of
Community Healthcare, Sanitation & Hygiene, Education & Knowledge Enhancement and
Social Care & Concern.
Financial statement of the company
PROFIT & LOSS

Sales - 9,960 11,512 13,151 13,641 12,173
Sales Growth % -14.73% 15.59% 14.24% 3.72% -10.76%
Expenses - 7,487 8,364 9,934 10,045 8,695
Manufacturing Cost % 70% 67% 70% 66% 64%
Other Cost % 0% 0% 0% 2% 2%
OPM % 25% 27% 24% 26% 29%
Other Income 179 232 172 -862 130
Interest 1,058 848 899 955 776
Depreciation 1,006 1,132 1,227 1,304 1,280
Profit before tax 587 1,401 1,264 475 1,552
Tax % 27% 32% 28% -148% 16%

Net Profit 429 942 899 1,174 1,291
40
CASH FLOW

Cash from Operating 2,356 2,764 2,425 3,610 2,988
Activity -
Receivables 68 -165 -121 -115 -210
Inventory 51 -86 -172 29 148
Payables -169 -33 178 209 -66
Loans Advances -19 -14 1 -2 -16
Deposits 0 0 0 0 0
Other WC items 78 205 -359 -21 -111
Working capital changes 9 -92 -473 101 -255
Direct taxes -106 -320 -286 -298 -256
Cash from Investing -2,122 -2,418 -1,828 -1,129 -910
Activity -
Investments purchased -159 -184 -80 -2 -2
Investment in group cos 0 0 0 0 0
Inter corporate deposits 0 0 0 25 -100
Other investing items 344 -13 -31 -128 92
Cash from Financing -674 -311 -617 -2,506 -2,061
Activity -
Proceeds from borrowings 1,649 988 2,060 2,041 1,600
Repayment of borrowings -1,401 -456 -1,642 -2,895 -2,693
Interest paid fin -1,033 -829 -908 -864 -809
Dividends paid -2 -108 -293 -968 -269
Other financing items 113 94 166 186 116
Net Cash Flow -440 34 -20 -25 16
41
BALANCE SHEET
Share Capital - 481 481 481 481 481
Equity Capital 481 481 481 481 481
Reserves 6,411 7,239 8,490 8,673 9,704
Borrowings 8,768 9,298 9,715 8,908 7,817
Non controlling int 29 36 37 36 36
Trade Payables 734 659 810 1,038 975
Fixed Assets + 16,804 17,871 18,014 17,569 17,326
CWIP 332 393 359 568 838
Investments 671 873 914 724 466
Other Assets - 2,986 3,453 5,263 4,743 4,885
Inventories 369 455 627 598 450
Trade receivables 975 1,130 1,230 1,280 1,420
Cash Equivalents 269 318 328 280 202
Loans n Advances 1,245 850 2,460 3,683 4,089
Other asset items 127 700 618 -1,099 -1,277
Total Assets 20,793 22,589 24,550 23,603 23,514
42
STAGES FOR DOING SECTORAL FUNDAMENTAL ANALYSIS
43
5.2 Valuation of stocks
The P/E ratio of each stock is then compared with the sectorial P/E ratio to determine
whether the stock is Undervalued or Overvalued.
For instance, if P/E ratio of a stock is lesser than the sectorial P/E ratio then that stock is
considered as an Undervalued stock on the other hand if the P/E ratio of a stock is
greater than the sectorial P/E ratio then that stock is considered as an Overvalued stock. (
As shown in Table below).
The Long-Term Price Target (LTPT) is then determined by multiplying the average
sector P/E with the stock EPS. All the Undervalued stocks are considered as ‗Value
Picks‘.
SR. Name Of The Company PE Ratio

NO
1. IEX 61.2
2. TATA POWER 60.7
3. POWER GRID CORP 9.48
4. NTPC 7.41
5. SJVN 5.85
6. TORRENT POWER 18
Average 27.10
44
5.3 Selection of Stocks

After the selection of Undervalued and overvalued stock, the next step is to analyze the
Overvalued and undervalued stocks. For determining the Growth Picks, P/E Growth
value (PEG value) is calculated for each Overvalued stock by dividing P/E ratio of each
of these stocks by the percentage change in earnings per share Year on Year and the
stocks with positive PEG values and less than or equal to 1 are selected as Growth Picks.
The Overvalued stocks with negative PEG values or with PEG values greater than 1 are
rejected. For determining the value pick first identifying topline and bottom line of the
stock, ones for with both are decreasing for two consecutive year are rejected and the
remaining ones are further analyzed.
Growth Picks and Value pick have been determined as shown in the Table below.
Overvalued stock: -
SELECT
PE PEG
NAME /
RATIO RATIO
REJECT
Tata
60.7 0.26 Select
Power
IEX 61.2 3.73 Reject
Undervalued stock: -
PE PROFIT AFTER
NAME RATIO REVENUE/SALES TAX SELECT/REJECT
power grid 9.48 increase increase select
ntpc 7.41 increase increase select
torrent
power 18 increase increase select
sjvn 5.85 increase increase select
45
6. Ranking of Selected Stocks

Stocks are selected initially on the basis P/E ratio and then by comparing 6
ratios.
1. Current Ratio Rank 1

2. Quick Ratio Rank 2
3. Debt to Equity Ratio Rank 3
4. Interest Coverage Ratio Rank 4
5. Net Profit Margin Rank 5
6. Return on Equity
Current Ratio:
The current ratio is a liquidity ratio that measures a company‘s ability to pay short-term
obligations or those due within one year. It tells investors and analysts how a company can
maximize the current assets on its balance sheet to satisfy its current debt and other payables.
A current ratio that is in line with the industry average or slightly higher is generally
considered acceptable. A current ratio that is lower than the industry average may indicate a
higher risk of distress or default. Similarly, if a company has a very high current ratio
compared with its peer group, it indicates that management may not be using its assets
efficiently.
The current ratio is called current because, unlike some other liquidity ratios, it incorporates
all current assets and current liabilities. The current ratio is sometimes called the working
capital ratio.
Power Grid corp 0.83
NTPC 0.8
Torrent Power 1.16
SJVN 1.55
tata power 1.09
46
Quick Ratio:
The quick ratio is an indicator of a company‘s short-term liquidity position and measures a
company‘s ability to meet its short-term obligations with its most liquid assets.
Since it indicates the company‘s ability to instantly use its near-cash assets (assets that can be
converted quickly to cash) to pay down its current liabilities, it is also called the acid test
ratio. An "acid test" is a slang term for a quick test designed to produce instant results.
The quick ratio measures the dollar amount of liquid assets available against the amount of
current liabilities of a company. Liquid assets are those current assets that can be quickly
converted into cash with minimal impact on the price received in the open market, while
current liabilities are a company's debts or obligations that are due to be paid to creditors
within one year.
A result of 1 is considered to be the normal quick ratio. It indicates that the company is fully
equipped with exactly enough assets to be instantly liquidated to pay off its current liabilities.
A company that has a quick ratio of less than 1 may not be able to fully pay off its current
liabilities in the short term, while a company having a quick ratio higher than 1 can instantly
get rid of its current liabilities.
NAME Quick Ratio
NTPC 0.66
Torrent Power 1.04
SJVN 1.52
tata power 0.98
47
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.
Given that the D/E ratio measures a company‘s debt relative to the value of its net assets, it is
most often used to gauge the extent to which a company is taking on debt as a means of
leveraging its assets. A high D/E ratio is often associated with high risk; it means that a
company has been aggressive in financing its growth with debt.
If a lot of debt is used to finance growth, a company could potentially generate more earnings
than it would have without that financing. If leverage increases earnings by a greater amount
than the debt‘s cost (interest), then shareholders should expect to benefit. However, if the cost
of debt financing outweighs the increased income generated, share values may decline. The
cost of debt can vary with market conditions. Thus, unprofitable borrowing may not be
apparent at first.
Changes in long-term debt and assets tend to have the greatest impact on the D/E ratio
because they tend to be larger accounts compared to short-term debt and short-term assets. If
investors want to evaluate a company‘s short-term leverage and its ability to meet debt
obligations that must be paid over a year or less, they can use other ratios.
NAME Debt To Eqity
NTPC 1.57
Torrent Power 0.77
SJVN 0.15
tata power 2.24
48
Interest Coverage Ratio:
The interest coverage ratio is a debt and profitability ratio used to determine how easily a
company can pay interest on its outstanding debt. The interest coverage ratio is calculated by
dividing a company's earnings before interest and taxes (EBIT) by its interest expense during
a given period.
The interest coverage ratio is sometimes called the times interest earned (TIE) ratio. Lenders,
investors, and creditors often use this formula to determine a company's riskiness relative to
its current debt or for future borrowing.
Staying above water with interest payments is a critical and ongoing concern for any
company. As soon as a company struggles with its obligations, it may have to borrow further
or dip into its cash reserve, which is much better used to invest in capital assets or for
emergencies.
While looking at a single interest coverage ratio may reveal a good deal about a company‘s
current financial position, analysing interest coverage ratios over time will often give a much
clearer picture of a company‘s position and trajectory.
Looking at a company's interest coverage ratios on a quarterly basis for, say, the past five
years, lets investors know whether the ratio is improving, declining, or has remained stable
and provides a great assessment of a company‘s short-term financial health.
Moreover, the desirability of any particular level of this ratio is in the eye of the beholder to
an extent. Some banks or potential bond buyers may be comfortable with a less desirable
ratio in exchange for charging the company a higher interest rate on their debt.
NAME Interest
Coverage
NTPC 3.05
Torrent Power 2.99
SJVN 868.67
tata power 1.26
49
Net Profit Margin:
The net profit margin, or simply net margin, measures how much net income or profit is
generated as a percentage of revenue. It is the ratio of net profits to revenues for a company
or business segment. Net profit margin is typically expressed as a percentage but can also be
represented in decimal form. The net profit margin illustrates how much of each dollar in
revenue collected by a company translates into profit.
Investors can assess if a company's management is generating enough profit from its sales
and whether operating costs and overhead costs are being contained. For example, a company
can have growing revenue, but if its operating costs are increasing at a faster rate than
revenue, its net profit margin will shrink. Ideally, investors want to see a track record of
expanding margins, meaning that the net profit margin is rising over time.
Most publicly traded companies report their net profit margins both quarterly during earnings
releases and in their annual reports. Companies that can expand their net margins over time
are generally rewarded with share price growth, as share price growth is typically highly
correlated with earnings growth.
NAME Net Profit

Margin
NTPC 14.57
Torrent Power 10.57
SJVN 75.1
tata power 2.6
50
ROE:
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 net assets. ROE is considered a gauge of a
corporation's profitability and how efficient it is in generating profits.
ROE is expressed as a percentage and can be calculated for any company if net income and
equity are both positive numbers. Net income is calculated before dividends paid to common
shareholders and after dividends to preferred shareholders and interest to lenders.
Whether an ROE is deemed good or bad will depend on what is normal among a stock‘s
peers. For example, utilities have many assets and debt on the balance sheet compared to a
relatively small amount of net income. A normal ROE in the utility sector could be 10% or
less. A technology or retail firm with smaller balance sheet accounts relative to net income
may have normal ROE levels of 18% or more.
A good rule of thumb is to target an ROE that is equal to or just above the average for the
company's sector—those in the same business. For example, assume a company, TechCo, has
maintained a steady ROE of 18% over the past few years compared to the average of its
peers, which was 15%. An investor could conclude that TechCo‘s management is above
average at using the company‘s assets to create profits.
NAME ROE
NTPC 12.99
Torrent Power 13.26
SJVN 15.16
tata power 3.41
51
Ranking of stocks on the basis of 6 ratios
High to low High to low low to high High to low High to low High to low
NAME Current Ratio Quick Ratio Debt To Eqity Interest Coverage Net Profit Margin ROE Total Rank Final Rank
Power Grid corp 0.83 0.79 1.87 3.04 32.46 19.12 18 RANK 3
NTPC 0.8 0.66 1.57 3.05 14.57 12.99 22 RANK 4
Torrent Power 1.16 1.04 0.77 2.99 10.57 13.26 17 RANK 2
SJVN 1.55 1.52 0.15 868.67 75.1 15.16 7 RANK 1
tata power 1.09 0.98 2.24 1.26 2.6 3.41 26 RANK 5
52
7. Allocation of Funds
As a mutual fund manager, we will allocate the fund according to the ranking of
the stocks. Assumed figure – Rs.10 Crores are available for investment.
As rank One will the allocate the highest sum of money accordingly .
NAME NO. OF SHARES PRICE ASSET ALLOCATION

Power Grid corp 81,201.79 246.3 20,000,000
NTPC 126,315.79 118.75 15,000,000
Torrent Power 53,792.36 464.75 25,000,000
SJVN 1,023,890.78 29.3 30,000,000
Tata power 79,586.15 125.65 10,000,000
100,000,000
53
8. DATA ANALYSIS AND INTERPRETATION AND FINDINGS
These stocks are stable as the market cap is large and can be included in the investor‘s
portfolio. The investor has to know the qualitative and quantitative factors of the company
before investing in any stock. Investor has to know the intrinsic value of the stock by
analyzing the qualitative and quantitative factors of the company through fundamentals
before an investment decision.
The current ratio is mainly used to give an idea of a company's ability to pay back its
liabilities. The company SJVN has performed very well in decreasing and bring the ratio to
the ideal ratio followed by Torrent Power ; and that of Power Grid corp , Ntpc and Tata
power are focusing on maintaining the ratio.
Low debt-to-equity ratios may also indicate that a company is not taking advantage of the
increased profits that financial leverage may bring. SJVN is maintaining
a good amount of debt-to-equity ratio and that of power grid and Tata power is too low.
The higher the quick ratio, the better the company's liquidity position. Torrent power and
NTPC are maintaining good amount of debt-to-equity ratio and that of of power grid and
Tata power are too low. Return on Equity shows how efficiently a company can use its assets
to generate sales. Return on assets ratio higher is considered to better. The ratio that of
Colgate is very good than that of NTPC , Power Grid , Torrent power , SJVN is too
increasing but they can take opportunity and increase the ratio by using assets. Net Profit
margin is also required for a company to be able to pay for its fixed costs, such as interest on
debt, so a high margin means that a company has less financial risk than a company with a
low margin.
54
9. RECOMMENDATIONS
Before investing in a company, one should always do his/her homework regarding the
company/business the person wants to invest and also invest according to one‘s risk
capacity as it differs from person to person.
The decision to buy or sell a stock should not depend on what your friends or
relatives say. It is always prudent to invest systematically and with patience in the
right shares or funds. As the stock market is always volatile, an investor should be
ready to absorb calculated risk and decide a necessary course of action.
By diversifying a portfolio across asset classes, you can earn optimum returns with
minimumrisk. The kind and level of diversification can vary from investor to investor,
and it
can help cope up with volatility.
Future and options are less explored by the traders; many companies are not giving
call or putoptions. Strategies of options can help to gear the profit from market and
also insure to reduce the risk of loss.
55
10. Conclusion
Equity research plays a very crucial role in order to make wise investment decisions.
After having accessed your risk capacity and tolerance followed by time horizon and
intention of investment, the individual portfolio can fetch your systematic returns.
Relative valuation model is one such method for value analysis. One can use long term
and short-term technical analysis along with fundamental analysis to determine a
confirm trade signal. By calculating long term target price investor one can achieve
maximum profit and also get an idea for how much period they should hold the stock.
56
11. BIBLIOGRAPHY
www.equitymaster.com
www.investopedia.com
www.ibef.org
www.stockschart.com
www.wikipedia.com
www.oilandgasiq.com
57

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PROJECT REPORT ON

(FUNDAMENTAL ANALYSIS OF POWER SECTOR)

SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENT OF

MASTER OF MANAGEMENT STUDIES

AKASH ASHOKRAO KAJALE

MMS-II (SEM III)

YEAR 2021 - 2023

LALA LAJPATRAI INSTITUTE OF MANAGEMENT

(FUNDAMENTAL ANALYSIS OF POWER SECTOR)

SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENT OF

MASTER OF MANAGEMENT STUDIES

AKASH ASHOKRAO KAJALE

MMS-II (SEM III)

YEAR 2021- 2023

LALA LAJPATRAI INSTITUTE OF MANAGEMENT

AKASH ASHOKRAO KAJALE

MMS-II (SEM III)

YEAR 2021- 2023

Date: 9th JANUARY, 2023

Prof. Vikas Sharma Dr. C. Satyanarayana

I, Mr. Akash Ashokrao Kajale , student of Lala Lajpatrai Institute of Management of

Akash Ashokrao Kajale

I am very grateful to Dr. C. Satyanarayana, Director of Lala Lajpat Rai Institute of

SR. CONTENT PAGE NO.

1.1 About Power Sector 1

1.2 About Company 3

2 Introduction To Equity Market 5

3.1 To Understand Fundamental Analysis 8

3.2 To Understand Equity Valuation 11

3.3 Scope of study 12

3.4 Industry Analysis 12

5 Fundamental Analysis Of Sector

5.1 Collection of Data . 17

5.2 Valuation of Stocks 44

5.3 Selection Of Stocks 45

6 Ranking of the stocks 46

8 Data Analysis Interpretation & Findings 54

Calcutta Stock Exchange –

Bombay Stock Exchange –

India International Exchange –

National Commodity & Derivatives Exchange Ltd. (NCDEX) –

1.1 INTRODUCTION OF POWER SECTOR

POWER SECTOR IN INDIA

1.2 INTRODUCTION OF THE COMPANY

COMPANY NAME FINOABILITY PRIVATE LIMITED

Ownership Type Private

Category Company limited by Shares

2. INTRODUCTION TO EQUITY MARKET

Indian Stock Exchange:

 National Stock Exchange (NSE)

 Fundamental Analysis: Fundamental analysis refers to analysing companies by their

3.1 TO UNDERSTAND THE FUNDAMENTAL ANALYSIS

• Other companies in the same industry

Advantages of Fundamental Analysis

Disadvantages of Fundamental Analysis

• Six monthly issuing of financial information may mean a company's fundamentals

• Another important point to consider is that most information considered in

3.2 To Understand Equity Valuation Of Inventory