Adithya RAj Ballal CIA-2
Adithya RAj Ballal CIA-2
Adithya RAj Ballal CIA-2
Introduction
Fundamental analysis in stock market terms involves evaluating a company's financial health
and performance by examining various factors related to its business operations, industry,
and economic environment. The key components of fundamental analysis:
Financial Statements: Start by analysing a company's financial statements, which include the
balance sheet, income statement, and cash flow statement. These documents provide
detailed information about the company's assets, liabilities, revenue, expenses, and cash
flows over a specific period.
Revenue and Earnings: Assess the company's revenue growth and earnings performance
over time. Look for consistent revenue growth and increasing profitability, as these are
indicators of a healthy business.
Profitability Ratios: Calculate and analyse profitability ratios such as gross profit margin,
operating profit margin, and net profit margin. These ratios help evaluate how efficiently the
company is generating profits from its operations.
Financial Health: Evaluate the company's financial health by examining its liquidity, solvency,
and leverage ratios. Liquidity ratios, such as the current ratio and quick ratio, assess the
company's ability to meet short-term obligations. Solvency ratios, like the debt-to-equity
ratio, measure the company's long-term debt obligations relative to its equity. Leverage
ratios indicate the extent to which the company is using debt to finance its operations.
Valuation Metrics: Determine whether the stock is undervalued or overvalued by comparing
its current market price to various valuation metrics such as price-to-earnings (P/E) ratio,
price-to-book (P/B) ratio, and price-to-sales (P/S) ratio. These ratios help investors assess
whether a stock is trading at a reasonable price relative to its earnings, book value, or
revenue.
Dividend Policy: Consider the company's dividend policy and dividend history, especially if
you are interested in income investing. Analyse the dividend yield, payout ratio, and
dividend growth rate to assess the sustainability and attractiveness of the dividends.
Industry and Market Analysis: Understand the company's industry dynamics, competitive
position, and market trends. Evaluate factors such as market share, competitive advantage,
barriers to entry, technological advancements, regulatory environment, and macroeconomic
conditions that could impact the company's future growth prospects.
Management Quality: Assess the quality and competence of the company's management
team. Look for transparency, integrity, strategic vision, and past performance in executing
business strategies.
Brief of companies:
2. Gujara 551 34. 3799 - 31. - 24. 68. 0. 22. 10. 60. 154.
t Gas .95 39 5.71 40 22 31.5 19 84 0 11 40 89 54
.5 0 2
2
4. Nestle 253 81. 2439 17 135 25.8 10 96. 0. 11. 33. 62. 341.
India 0.0 20 36.5 .0 .09 6 8.1 42 1 11 52 76 50
5 9 2 8 1
5. Wipro 533 24. 2788 - 17. - 15. 54 0. 10. 31. 72. 1791
.75 66 81.2 11 70 0.56 87 8.2 2 68 67 90 7.50
0 .7 1 6
5
57. - 17.7 - 12 0. 10. 72. 3834.
533 8 4862 11. 31.5 20. 9.9 1 89 31. 9 01
Media .75 0.96 75 03 7 8 67
n: 5
Co.
Interpretation.
We are using the return the company produces to its shareholders, The number of equity
shares also plays an important as it shows us how much diluted the shares are and the
returns we will receive on the shares. Another factor is promoter Holdings shows us whether
the company is aligning with promoters and the direction the company is moving forward.
WE can conclude from the above take the Ranking is as follows:
1. Nestle India LTD
2. Wipro
3. Adani Wilmar LTD
4. Gujarat Gas
5. Alok Industries.
Part-B
S. Name CM P/ Mar Qtr RO Prof RO No D Sa 1Yr Pro Debt
N PR E Cap Pro CE it E . eb les ret m. Rs.C
o. s. Rs. fit % gro % Eq t / Va urn Hol r.
Cr. Var wth . E r % d.
% % Sh q 5Y %
ar rs
es %
PY
Cr.
5. Nestle 253 81 244 17. 135. 25. 10 96. 0. 11. 33. 62. 341.
India 5.0 .3 413. 02 09 86 8.1 42 11 11 52 76 50
0 7 85 8
7. Remed 679 25 137 29 102. 400 70. 2.0 0. 32 166 1.1 1.18
ium .85 .9 0.52 14. 61 .19 98 2 05 9.2 5.1 1
Life 1 47 1 1