How to Analysis company 2

8/14/2019 How to Analysis company 2

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FUNDAMENTALFUNDAMENTAL&&

TECHNICAL ANALYSISTECHNICAL ANALYSIS


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ANALYSISANALYSIS

ANALYSIS

FUNDAMENTAL TECHNICAL


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FUNDAMENTAL

MACROECONOMIC INDUSTRY COMPANY


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Company SnapshotCompany Snapshot

Industry : TelecommunicationIndustry : Telecommunication

serviceservice

Sector : Mobile Services,Sector : Mobile Services,

Broadband &Broadband &Telephone ServicesTelephone Services

Scrip Symbol (NSE) : BHARTIARTLScrip Symbol (NSE) : BHARTIARTL

Scrip Number (BSE) : 532454Scrip Number (BSE) : 532454

Recent Stock Price : 756.30Recent Stock Price : 756.30

52 wk High (NSE) : 1,184.2052 wk High (NSE) : 1,184.20

52 wk Low (BSE) : 651.0052 wk Low (BSE) : 651.00


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MACROECONOMICMACROECONOMIC

GDPGDP

InflationInflation

Per Capita IncomePer Capita Income

Infrastructure FacilityInfrastructure Facility

SavingsSavings

MonsoonsMonsoons

Political EquationsPolitical Equations


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INDUSTRY ANALYSISINDUSTRY ANALYSISOPERATOROPERATOR SUBSCRIBER BASESUBSCRIBER BASE

(Mn.)(Mn.)

MARKET SHAREMARKET SHARE

(%)(%)

Bharti AirtelBharti Airtel 62.062.0 24.724.7

R.Com.R.Com. 45.845.8 18.218.2

Bsnl+MtnlBsnl+Mtnl 39.539.5 15.715.7

VodafoneVodafone 44.144.1 17.617.6Idea CellularIdea Cellular 24.024.0 9.69.6

TTSLTTSL 19.719.7 7.97.9

AircelAircel 10.610.6 4.24.2SpiceSpice

CommunicationCommunication4.24.2 1.71.7

BPLBPL 1.31.3 0.50.5

TOTALTOTAL 251.2251.2 100100


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COMPANY RATIOSCOMPANY RATIOS

YearYear

EndEndMar 08Mar 08 Mar 07Mar 07 Mar 06Mar 06

CurrentCurrentratioratio

0.530.53 0.460.46 0.460.46

1. Current ratio = Current AssetCurrent Liability

2. Debt-Equity Ratio: Debt

Equity

YearYear

EndEndMar 08Mar 08 Mar 07Mar 07 Mar 06Mar 06

DebtDebt

equityequity

0.380.38 0.540.54 0.830.83


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3 Return on capital employed (ROCE) = Earning before Interest and Tax

Capital Employed

YR EndYR End Mar 08Mar 08 Mar 07Mar 07 Mar 06Mar 06

ROCEROCE 34.8834.88 34.0334.03 22.5522.55

4 Earning per share (EPS) = Net profit after Tax Pref. dividend

No. of equity shares

YR EndYR End Mar 08Mar 08 Mar 07Mar 07 Mar 06Mar 06

EPSEPS 32.9032.90 21.2721.27 10.6210.62


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5 Price earning ratio (P/E) = Market price per share

EPS

Yr EndedYr Ended Mar 08Mar 08 Mar 07Mar 07 Mar 06Mar 06

PE RatioPE Ratio 21.9221.92 35.8835.88 38.8738.87

6 Return on Equity capital (ROE) = NPAT- Pref. share dividend

Equity share capital


ROEROE 39.5339.53 43.0443.04 31.8231.82


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7 Share Holders Equity Ratio = Share Holder Equity

Total assets


ShareShare

Equity RatioEquity Ratio75.44%75.44% 68.24%68.24% 60.45%60.45%

8 Capital Gearing Ratio = Fixed Interest funds

Equity share Fund


CGRCGR 32.55%32.55% 46.53%46.53% 65.40%65.40%


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9 Book Value = Paid up Equity Cap + Reserve and surplus

No of Shares

Yr EndedYr Ended Mar 08Mar 08 Mar o7Mar o7 Mar 06Mar 06

Book ValueBook Value 106.34106.34 60.1960.19 38.7138.71


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Airtel BusinessAirtel Business

Mobile ServicesMobile Services

Broadband & Telephone ServicesBroadband & Telephone Services

Enterprise Services - CarriersEnterprise Services - Carriers Enterprise Services CorporateEnterprise Services Corporate


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Major Agreement & AllianceMajor Agreement & Alliance

WithWith

MicrosoftMicrosoft

GoogleGoogle NokiaNokia

IBMIBM


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Threat & Opportunities Threat & Opportunities

OPPORTUNITIESOPPORTUNITIES

A strong economy and a growing marketA strong economy and a growing market

New technologiesNew technologies

Strong strategic partnershipsStrong strategic partnerships

TREATTREAT

Increased Competitions


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TECHNICAL ANALYSISTECHNICAL ANALYSIS

Technical analysisTechnical analysis is a financial marketsis a financial markets

technique that has ability to forecast the futuretechnique that has ability to forecast the future

direction of security prices through the study ofdirection of security prices through the study of

past market data, primarily price and volumepast market data, primarily price and volume

Technical Analysis deals with probabilities,Technical Analysis deals with probabilities,

never certainties.never certainties.


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Basic AssumptionsBasic Assumptions

The market discounts everything.The market discounts everything.

-- Technical analysts believe that the company's fundamentals, along with broaderTechnical analysts believe that the company's fundamentals, along with broadereconomic factors and market psychology, are all priced into the stock,economic factors and market psychology, are all priced into the stock,

Price moves in trends.Price moves in trends.- Price will tend to move in the direction of past movement.- Price will tend to move in the direction of past movement.

History tends to repeat itself.History tends to repeat itself.

-- people will continue to make the same mistake they had made in past.people will continue to make the same mistake they had made in past.


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SIMPLE ANALOGYSIMPLE ANALOGY

In a shopping mall, a fundamental analystIn a shopping mall, a fundamental analystwould go to each store, study the productwould go to each store, study the product

that was being sold, and then decidethat was being sold, and then decide

whether to buy it or not. Where as , awhether to buy it or not. Where as , atechnical analyst would sit on a bench intechnical analyst would sit on a bench in

the mall and watch people go into thethe mall and watch people go into the

stores. Disregarding the intrinsic value ofstores. Disregarding the intrinsic value ofthe products in the store, his or herthe products in the store, his or her

decision would be based on the patternsdecision would be based on the patterns

or activity of people going into each storeor activity of people going into each store


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Candle SticksCandle Sticks

A price chart that displays the high, low, open, and closeA price chart that displays the high, low, open, and close

for a security each day over a specified period of time.for a security each day over a specified period of time.

Originated in Japan.Originated in Japan.

It is used to identify price pattern.It is used to identify price pattern.


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Moving AveragesMoving Averages An indicator frequently showing the average value of a security'sAn indicator frequently showing the average value of a security's

price over a set period.price over a set period.

Moving averages are used to emphasize the direction of a trend andMoving averages are used to emphasize the direction of a trend and

to smooth out price and volume fluctuations, or "noise", that canto smooth out price and volume fluctuations, or "noise", that can

confuse interpretationconfuse interpretation

upward momentum is confirmed when a short-term average (e.g.15-upward momentum is confirmed when a short-term average (e.g.15-

day) crosses above a longer-term average (e.g. 50-day). Downwardday) crosses above a longer-term average (e.g. 50-day). Downward

momentum is confirmed when a short-term average crosses belowmomentum is confirmed when a short-term average crosses below

a long-term average.a long-term average.


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Fundamental V/S TechnicalFundamental V/S Technical

Charts vs. Financial StatementsCharts vs. Financial Statements

Time HorizonTime Horizon

Trading Versus InvestingTrading Versus Investing


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CONCLUSIONCONCLUSION

Technical analysis and FundamentalTechnical analysis and Fundamental

analysis are Opposite poles of investing.analysis are Opposite poles of investing.

But if both technical & fundamentalBut if both technical & fundamental

Analysis are used together Wisely a greatAnalysis are used together Wisely a great

success can be experience.success can be experience.

How to Analysis company 2

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