ANALYSIS 0F ST0CKS F0R

INTRABAY TRABINu
S0BNITTEB BY: ASTBA PALIWAL

Roll No:8



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RATIO ANALYSIS
RETURN PER UNIT RISK
It measures the return that a stock will generate per unit risk. It is a very crude measure and as
such has many inherent deIects.

COMPANY RETURN PER UNIT RISK
AXIS BANK 4.8078
SBI BANK 2.6546
DABUR 1.1217
M&M -1.0343
HINDUSTAN ZINC 10.3670
SUN PHARMA -4.9738

COEFFICIENT OF VARIATION
It measures the amount oI risk taken per unit return. The coeIIicient oI variation allows you to
determine how much volatility (risk) you are assuming in comparison to the amount oI return
you can expect Irom your investment. So the lower the ratio oI standard deviation to mean
return, the better is your risk-return tradeoII. From this it can be seen that the CV oI M&M and
Sun Pharma are the lowest and will introduce lowest volatility Ior the same amount oI return.

COMPANY COEFFICIENT OF VARIANCE
AXIS BANK 0.2079
SBI BANK 0.3766
DABUR 0.8915
M&M -0.9669
HINDUSTAN ZINC 0.0964
SUN PHARMA -0.2011




SHARPE RATIO
The Sharpe ratio is a risk-adjusted measure oI return that is used to evaluate the perIormance oI a
portIolio. The ratio helps to make the perIormance oI one portIolio comparable to that oI another
portIolio by making an adjustment Ior risk. It's broken down into just three components: asset
return, risk-Iree return and standard deviation oI return. AIter calculating the excess return, it's
divided by the standard deviation oI the risky asset to get its Sharpe ratio. The idea oI the ratio is
to see how much additional return you are receiving Ior the additional volatility oI holding the
risky asset over a risk-Iree asset - the higher the better.

COMPANY SHARP RATIO
AXIS BANK 3.8803
SBI BANK 1.6786
DABUR -0.0116
M&M -1.5945
HINDUSTAN ZINC 9.3187
SUN PHARMA -6.6615

Since among the companies I have seen the Sharpe ratio oI Axis Bank and Hindustan Zinc is the
highest, investment in these companies will generate a return which is higher than the return
generated by investing in other companies at the same commensurate risk.

UTILITY
Since in CAPM the basic assumption is that all investors are homogeneous in their risk appetite
it does not reIlect the actual market conditions. So to include the risk Iactor oI individual investor
utility is calculated. On the basis oI the risk aversion index that an individual investor has a
measure is calculated to give a better picture about the riskiness oI that portIolio. Utility basically
gives a clearer picture about the risk return model taking into account the individual`s risk
tolerance. The stocks which have the highest utility is the one in which money is to be invested.
Here also Axis Bank and Hindustan Zinc have the highest utility (taking a risk aversion index oI
3).

COMPANY UTILITY
AXIS BANK 0.3006
SBI BANK 0.1554
DABUR 0.05447
M&M -0.12596
HINDUSTAN ZINC 0.5804
SUN PHARMA -0.17623

CAPITAL ADEQUACY RATIO
It is a measure oI a bank's capital. It is expressed as a percentage oI a bank's risk weighted credit
exposures. This ratio is used to protect depositors and promote the stability and eIIiciency oI
Iinancial systems around the world. Two types oI capital are measured: tier one capital, which
can absorb losses without a bank being required to cease trading, and tier two capital, which can
absorb losses in the event oI a winding-up and so provides a lesser degree oI protection to
depositors. The higher the CAR is the better the Iinancial stability oI that bank and higher is the
shock absorbing capabilities oI that bank. From the past 5 years data it can be seen that the CAR
oI both AXIS bank and SBI has been good and as such they are good stock to invest in as Iar as
company Iinancials are concerned.

COMPANY MAR`11 MAR`10 MAR`09 MAR`08 MAR`07
AXIS BANK 12.65 15.8 13.69 13.73 11.57
SBI BANK 11.98 13.39 14.25 13.47 12.34

CURRENT RATIO
The ratio is mainly used to give an idea oI the company's ability to pay back its short-term
liabilities (debt and payables) with its short-term assets (cash, inventory, receivables). The higher
the current ratio, the more capable the company is oI paying its obligations. A ratio under 1
suggests that the company would be unable to pay oII its obligations iI they came due at that
point. While this shows the company is not in good Iinancial health, it does not necessarily mean
that it will go bankrupt - as there are many ways to access Iinancing - but it is deIinitely not a
good sign. For the past 5 years Iinancial data it can be seen that the current ratio oI Sun Pharma,
Dabur and Hindustan Zinc are all either above 1 or close to 1 and are steadily growing. This is
assign that the company Iinancials are well managed and are good Ior investing.

COMPANY MAR`11 MAR`10 MAR`09 MAR`08 MAR`07
DABUR 0.99 0.93 1.19 0.91 0.97
M&M 0.86 1.11 0.9 0.86 1.31
HINDUSTAN ZINC 3.01 0.95 2.41 1.99 1.31
SUN PHARMA 1.94 2.17 1.81 2.62 2.65

PROFIT MARGIN
A ratio oI proIitability calculated as net income divided by revenues, or net proIits divided by
sales. It measures how much out oI every dollar oI sales a company actually keeps in earnings.
ProIit margin is very useIul when comparing companies in similar industries. A higher proIit
margin indicates a more proIitable company that has better control over its costs compared to its
competitors.

COMPANY MAR`11 MAR`10 MAR`09 MAR`08 MAR`07
AXIS BANK 17.2 16.1 13.31 12.22 12.01
SBI BANK 8.55 10.54 12.03 11.65 10.12
DABUR 14.27 15.03 15.44 15.06 13.88
M&M 11.14 11.08 6.25 9.45 9.3
HINDUSTAN ZINC 45.13 46.5 41.83 52.16 51.28
SUN PHARMA 14.98 18.97 14.58 16.43 17.45

RETURN ON ASSETS
An indicator oI how proIitable a company is relative to its total assets. ROA gives an idea as to
how eIIicient management is at using its assets to generate earnings. Calculated by dividing a
company's annual earnings by its total assets, ROA is displayed as a percentage. ROA tells you
what earnings were generated Irom invested capital (assets). ROA Ior public companies can vary
substantially and will be highly dependent on the industry. This is why when using ROA as a
comparative measure, it is best to compare it against a company's previous ROA numbers or the
ROA oI a similar company.
COMPANY MAR`11 MAR`10 MAR`09 MAR`08 MAR`07
AXIS BANK 462.77 395.99 284.5 245.13 120.8
SBI BANK 1,023.40 1,038.76 912.73 776.48 594.69
DABUR 5.85 8.6 8.43 5.95 4.44
M&M 174.85 137.95 191.45 180.87 147.98
HINDUSTAN ZINC 53.33 428.94 339.8 280.41 180.51
SUN PHARMA 82.25 73.55 55.86 48.2 41.52

RETURN ON EQUITY/ ADJUSTED RETURN ON NETWORTH
OI all the Iundamental ratios that investors look at, one oI the most important is return on equity.
It's a basic test oI how eIIectively a company's management uses investors' money - ROE shows
whether management is growing the company's value at an acceptable rate. A higher ROE
indicates higher proIitability to the shareholders.
COMPANY MAR`11 MAR`10 MAR`09 MAR`08 MAR`07
AXIS BANK 17.87 15.69 17.85 12.38 19.45
SBI BANK 12.74 13.91 15.74 13.7 14.47
DABUR 45.21 56.29 48.65 59.99 63.32
M&M 24.33 26.23 18.49 20.61 27.28
HINDUSTAN ZINC 21.75 22.01 18.08 33.89 56.6
SUN PHARMA 14.25 17.57 23.17 16.85 19.61

D/E RATIO
The Debt to Equity Ratio measures how much money a bank should saIely be able to borrow
over long periods oI time. Generally, any bank that has a debt to equity ratio oI over 40 to 50
should be looked at more careIully to make sure there are no liquidity problems.
COMPANY MAR`11 MAR`10 MAR`09 MAR`08 MAR`07
AXIS BANK 9.96 8.81 11.49 9.99 17.28
SBI BANK 14.37 12.19 12.81 10.96 13.92
DABUR 0.23 0.14 0.19 0.03 0.05
M&M 0.23 0.37 0.77 0.6 0.46
HINDUSTAN ZINC -- 0 0 -- --
SUN PHARMA 0.07 -- 0.22 0.15 0.04

Since both Axis Bank and SBI have kept their D/E ratio below 15 it can be seen that have not
taken excess risk in leveraging their capital structure.
SKEWNESS
It is an indicator used in distribution analysis as a sign oI asymmetry and deviation Irom a
normal distribution.
Skewness ~ 0 - Right skewed distribution - most values are concentrated on leIt oI the mean,
with extreme values to the right.
Skewness 0 - LeIt skewed distribution - most values are concentrated on the right oI the mean,
with extreme values to the leIt.
Skewness 0 - mean median, the distribution is symmetrical around the mean.
Negatively skewed distributions have a long leIt tail which Ior investors can mean a greater
chance oI extremely negative outcomes. Positive skew would mean Irequent small negative
outcomes, and extremely bad scenarios are not as likely.
COMPANY SKEWNESS
AXIS BANK 0.2243
SBI BANK 0.9772
DABUR -5.2473
M&M 6.1908
HINDUSTAN ZINC 0.0588
SUN PHARMA -0.0556
So except Ior Dabur & Sun Pharma all the other stocks have a positive skewness and so have less
chance oI extremely negative outcomes.
KURTOSIS
It is an indicator used in distribution analysis as a sign oI Ilattening or "peakedness" oI a
distribution.
Kurtosis ~ 3 - Leptokurtic distribution, sharper than a normal distribution, with values
concentrated around the mean and thicker tails. This means high probability Ior extreme values.
Kurtosis 3 - Platykurtic distribution, Ilatter than a normal distribution with a wider peak. The
probability Ior extreme values is less than Ior a normal distribution, and the values are wider
spread around the mean.
Kurtosis 3 - Mesokurtic distribution - normal distribution Ior example.

COMPANY SKEWNESS
AXIS BANK 1.3440
SBI BANK 4.6999
DABUR 49.7483
M&M 52.2637
HINDUSTAN ZINC -0.3174
SUN PHARMA 1.3521

From the table it can be seen that the kurtosis value oI SBI, Dabur and M&M is more than 3 i.e.
it is leptokurtic which increases the probability oI extreme values. The other stocks have a
platykurtic distribution which makes them more stable with prices Iluctuation near the mean
values.
AXIS BANK
From the graph it can
be seen that the prices
are decreasing where as
volume is stagnant so
there is possibility to
having an increasing
trend in coming time
because the company
has strong Iinancial
condition as shown by
the ROA, ROE and
Capital adequacy ratio.

SBI
As at present the graph
shows decrease in
prices. The price is
below both the EMAs
and MACD line also
below the signal line
but the volume is
stable so there is a
possibility oI reversal
in prices.


DABUR
Dabur India Ltd is a very
good company Ior
investment and its graph
shows its buying position
now as the prices are
decreasing and volume
also decreasing so there is
a down trend but volume
started getting stagnant
that means there will be
reversal. The EMA lines
are above the prices so there is a possibility oI price increase in the Iuture.
M&M
The stock prices are on an
increasing trend and the
MACD is below the
signal line. The volumes
are also growing which
will lead to Iurther price
increase and will support
the continuation oI this
trend Ior some time.




HINDUSTAN ZINC

The price is below
both the EMA lines
which indicate that the
stock is underpriced.
The MACD is below
the signal line and
volumes are getting
low which indicates
that there might be a
reversal in the current
prices oI the stock and
stock prices will go up.
SUN PHARMA
The stock prices are
almost in sync with the
EMA lines and MACD is
slightly below the signal
line. The volumes are
growing so demand Ior
this stock will push
prices higher. The stock
prices will be expected to
hold and as such due to
high intraday spread this
stock is a good one Ior
intraday trades.