manzoor project

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CONTENTS

Chapter 1

Need And Importance of the projectObjectives of the studyData and methodologyPeriod of the studyLimitations of the study

Chapter 2: Fundamental Analysis A Conceptual Overview

Economic Analysis

Industry Analysis

Company Analysis

Chapter 3: Organisation Profile of Mideast pvt ltd investments ltd

Introduction of mideast investmentsOverviewStock BrokerageEquity researchNRI placement and related services

Chapter 4: Theoretical Aspect of StudyMarket/Economic AnalysisIndustry AnalysisIndustry life cycleIndia Inflation rateMajor Player in cement industry

Chapter 5: Company ProfileACC CEMENT

ULTRATECH CEMENT

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AMBUJA CEMENT

BINANI CEMENT

INDIA CEMENT

SWOT ANALYSIS OF EACH COMPANY

Chapter 6:

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Acknowledgement

I would like to thank and praise the Almighty without whose grace and bestows without which

nothing would have happened. I am greatly indebted to my parents for their invaluable

encouragement, support guidance for building self-confidence in me at every step in my career.

I express my Gratitude to Mr. Chairman of MIDEAST INVESTMENT PVT LTD for

providing me an Opportunity to undertake this project work. My special thanks to General

Manager of Finance who guided and provided me

With valuable information during the project tenure. I would like to thank our principal Prof. Mr.

MASOOD AHMED for giving me this opportunity to take the project in FINANCE.

I would like to thank Prof. , for helping me in getting this project.

I also sincerely pay my gratitude to Mr. MATEEN AHMED SIDDIQUI, Faculty of Finance,

Deccan School of Management for his immense guidance & encouragement and support

throughout the project.

I will fail in my duty if I dont mention my friends who have encourage me And help me in

completing my project.

(MANZOOR ALI KHAN)

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CHAPTER- 1

FUNDAMENTAL

ANALYSIS

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INTRODUCTION

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NEED AND IMPORTANCE OF THE PROJECT :

Fundamental analysis involves analyzing the characteristics of a company in order to estimate its

value. A method of evaluating a security by attempting to measures its intrinsic value by examining relatedeconomic, financial and other qualitative and quantitative factors. Fundamental analysts attempt to studyeverything that can affect the securitys value, including macroeconomic factor (like the financial conditionmanagement of companies).

Fundamental analysis is about using real data to evaluate a securitys value. Altought most analysisuses fundamental analysis to value stocks, this method of valuation can be used for just about any type ofsecurity.

Fundamental analysis really just studies in an attempt to determine what, or tend, will continue in thefuture.

In other words, fundamental analysis attempt to understand the emotion in the marked by studying thecomponents. If you understand the benefit and limitations of fundamental analysis, it can give you a new setof tools or skills that will enable you to be a better trader or investors.

Investors use this form of analysis at the beginning points for their decision making. Investors use thefundamental analysis in making decision about whether to buy or sell stock. The only things that matters is asecuritys past trading data and what information this data can provide about where the security might movein the future. There is the belief that without fundamental analysis it would be near impossible to understandor predict where the market is heading, and to act upon anything other than instinct. But many times all

analysis proved wrong and market sentiments become the real winner. So its not advisable to completelydepend on the analysis investors should give all the factor equal importance.

OBJECTIVES OF THE STUDY:

The main objectives of the study are to analyze and interpret the market conditions and the nextcrucial trend will follow in the near future. Fundamental analysis is about using real data to evaluate asecuritys value. Although most analysis to value stocks, this method of valuation can be used for just aboutany type of security, more, specifically, the present study is under taken with the following objectives:

Is the companys revenue growing?

Is it actually making a profit?

Is it in a strong enough position to beat out its competitors in the future?

Is it able to repay its debts?

DATA AND METHODOLOGY:

The study is mainly based on secondary data is taken from the annual report of variouscomponents and books and trade journals maintained by the companies. Mid east investments are mainly intrading of securities.

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Period of the study:

Analysis has been done on 5 year financial results of 4 companies DR REDDYS LAB, CIPLA,

RANBAXY, AUROBINDO PHARMA, for the year march 2006 to march 2010 has been taken.

Limitations of the study:

It is argued that fundamental analysis same as technical analysis cannot predict what the share priceis going to do. We humans are the only ones that make the predictions and fundamental analysis is purely

and simply a way of studying companies performance in past expecting that it may follow the same trend.

The first reason why you should carefully look at the balance sheet is the delay. When the companyreleases his balance sheet, its already old news and the structure could have changed drastically. Even if thecompanies have to follow the general accounting guide lines and are controlled for that, the balance sheet isanything else that the position during the last day of the quarter (or the year) and some companies do somecleaning of their balances sheet to make them look as good as possible.

As the companies have to follow the accounting guidelines and because the balance sheet is anythingelse but historical records, its possible that some of the assets are under or over estimated these estimationsare linked to the valuation method used by the companies.

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FUNDAMENTAL ANALYSIS

A CONCEPTUAL OVERVIEW

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Fundamental analysisrefers to the study of the core underlying elements that influencethe economy of a particular entity. It is a method of study that attempts to predict price action and markettrends by analyzing economic indicators, government policy and societal factors (to name just a fewelements) within a business cycle framework.

I. ECONOMIC ANALYSIS:

POLITICO-ECONOMIC ANALYSIS:No industry or company can exist in isolation. It may have splendid managers and a tremendous product.However, its sales and its costs are affected by factors, some of which are beyond its control - the worldeconomy, price inflation, taxes and a host of others. It is important, therefore, to have an appreciation of thepolitico-economic factors that affect an industry and a company.

The political equation

A stable political environment is necessary for steady, balanced growth. If a country is ruled by a stable

government which takes decisions for the long-term development of the country, industry and companieswill prosper.

Foreign Exchange Reserves

A country needs foreign exchange reserves to meet its commitments, pay for its imports and service foreigndebts.

Foreign Exchange Risk

This is a real risk and one must be cognizant of the effect of a revaluation or devaluation of the currencyeither in the home country or in the country the company deals in.

Restrictive Practices

Restrictive practices or cartels imposed by countries can affect companies and industries.crystallizing the exposure.

Foreign Debt and the Balance of Trade

Foreign debt, especially if it is very large, can be a tremendous burden on an economy. India pays around $5 billion a year in principal repayments and interest payments.

InflationInflation has an enormous effect in the economy. Within the country it erodes purchasing power. As a

consequence, demand falls. If the rate of inflation in the country from which a company imports is high thenthe cost of production in that country will automatically go up.

The Threat of Nationalization

The threat of nationalization is a real threat in many countries the fear that a company may becomenationalized.

Interest Rates

A low interest rate stimulates investment and industry. Conversely, high interest rates result in higher cost ofproduction and lower consumption.

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Taxation

The level of taxation in a country has a direct effect on the economy. If tax rates are low, people have moredisposable income.

Government Policy

Government policy has a direct impact on the economy. A government that is perceived to be proindustrywill attract investment.

THE ECONOMIC CYCLE:

It affects investment decisions, employment, demand and the profitability of companies.

The four stages of an economic cycle are:

DepressionRecoveryBoomRecession

Depression

At the time of depression, demand is low and falling. Inflation is high and so are interest rates. Companies,crippled by high borrowing and falling sales, are forced to curtail production, close down plants built attimes of higher demand, and let workers go.

Recovery

During this phase, the economy begins to recover. Investment begins anew and the demand grows.Companies begin to post profits. Conspicuous spending begins once again.

Boom

In the boom phase, demand reaches an all time high. Investment is also high. Interest rates are low.Gradually as time goes on, supply begins to exceed the demand. Prices that had been rising begin to stabilizeand even fall. There is an increase in demand. Then as the boom period matures prices begin to rise again.

Recession

The economy slowly begins to downturn. Demand starts falling.. Interest rates and inflation are high.Companies start finding it difficult to sell their goods. The economy slowly begins to downturn.

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II. INDUSTRY ANALYSIS

The importance of industry analysis is now dawning on the Indian investor as never before.

Cycle

The first step in industry is to determine the cycle it is in, or the stage of maturity of the industry. Allindustries evolve through the following stages:

1. Entrepreneurial, sunrise or nascent stage2. Expansion or growth stage3. Stabilization, stagnation or maturity stage, and4. Decline or sunset stage to properly establish itself. In the early days, it may actually make losses.

TheEntrepreneurial or Nascent Stage

At the first stage, the industry is new and it can take some time for it to properly establish itself.

The Expansion or Growth Stage

Once the industry has established itself it enters a growth stage. As the industry grows, many newcompanies enter the industry.

The Stabilization or Maturity Stage

After the halcyon days of growth, an industry matures and stabilizes. Rewards are low and so too is the risk.Growth is moderate. Though sales may increase, they do so at a slower rate than before. Products are more

standardized and less innovative and there are several competitors.

The Decline or Sunset Stage

Finally, the industry declines. This occurs when its products are no longer popular. This may be on accountof several factors such as a change in social habits The film and video industries.

1. BARRIER TO ENTRY

New entrants increase the capacity in an industry and the inflow of funds. The question that arises is howeasy is it to enter an industry ?There are some barriers to entry:

a) Economies of scale

b) Product differentiationc) Capital requirement

d) Switching costs

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e) Access to distribution channels

f) Cost disadvantages independent of scale

g) Government policy

h) Expected retaliation

j) International cartels

2. THE THREAT OF SUBSTITUTIONNew inventions are always taking place and new and better products replace existing ones. An industry thatcan be replaced by substitutes or is threatened by substitutes is normally an industry one must be careful ofinvesting in. An industry where this occurs constantly is the packaging industry -bottles replaced by cans,cans replaced by plastic bottles, and the like. To ward off the threat of substitution, companies often have tospend large sums of money in advertising and promotion.

3. BARGAINING POWER OF THE BUYERS

In an industry where buyers have control, i.e. in a buyer's market, buyers are constantly forcing prices down,demanding better services or higher quality and this often erodes profitability. The factors one should checkare whether:

a) A particular buyer buys most of the products (large purchase volumes). If such buyers withdraw theirpatronage, they can destroy an industry. They can also force prices down.b) Buyers can play one company against another to bring prices down.

4. BARGAINING POWER FOR THE SUPPLIERS

An industry unduly controlled by its suppliers is also under threat. This occurs when:a) The suppliers have a monopoly, or if there are few suppliers.b) Suppliers control an essential.c) Demand for the product exceeds.d) The supplier supplies to various industries.e) The switching costs are high.f) The supplier's product does not have a substitute.g) The supplier's product is an important input for the buyer's.h) The buyer is not important to the supplier.i) The supplier's product is unique.

5. RIVALRY AMOUNG COMPETITORS

Rivalry among competitors can cause an industry great harm. This occurs mainly by price cuts, heavyadvertising, additional high cost services or offers, and the like. This rivalry occurs mainly when:

a) There are many competitors and supply exceeds demand. Companies resort to price cuts and advertiseheavily in order to attract customers for their goods.b) The industry growth is slow and companies are competing with each other for a greater market share.c) The economy is in a recession and companies cut the price of their products and offer better service tostimulate demand.d) There is lack of differentiation between the product of one company and that of another. In such cases,the buyer makes his choice on the basis of price or service.e) In some industries economies of scale will necessitate large additions to existing capacities in a company.The increase in production could result in over capacity & price cutting.f) Competitors may have very different strategies in selling their goods and in competing they may becontinuously trying to stay ahead .

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III. COMPANY ANALYSIS:

At the final stage of fundamental analysis, the investor analyzes the company. This analysis has two thrusts:How has the company performed vis--vis other similar companies and

How has the company performed in comparison to earlier yearsIt is imperative that one completes the politico economic analysis and the industry analysis before acompany is analyzed because the company's performance at a period of time is to an extent a reflection ofthe economy, the political situation and the industry. What does one look at when analyzing a company?The different issues regarding a company that should be examined are:The ManagementThe CompanyThe Annual ReportRatios Cash flow

THE MANAGEMENT:

The single most important factor one should consider when investing in a company and one often neverconsidered is its management.In India management can be broadlydivided in two types:Family Management

x Professional Management

THE COMPANY:

An aspect not necessarily examined during an analysis of fundamentals is the company. A company mayhave made losses consecutively for two years or more and one may not wish to touch its shares - yet it maybe a good company and worth purchasing into. There are several factors one should look at.

1. How a company is perceived by its competitors?

One of the key factors to ascertain is how a company is perceived by its competitors. It is held in highregard. Its management may be known for its maturity, vision, competence and aggressiveness. Theinvestor must ascertain the reason and then determine whetherthe reason will continue into the foreseeable future.

2. Whether the company is the market leader in its products or in its segment

Another aspect that should be ascertained is whether the company is the market leader in its products or inits segment. When you invest in market leaders, the risk is less. Theshares of market leaders do not fall as quickly as those of other companies. There is a magic to their namethat would make individuals prefer to buy their products as opposed to others.

3. Company Policies

The policy a company follows is also important. What is its plans for growth? What is its vision? Everycompany has a life. If it is allowed to live a normal life it will grow upto a point and then begin to level outand eventually die. It is at the point of leveling out that it must be given new life. This can give it renewedvigour and a new lease of life.

4. Labour Relations

Labour relations are extremely important. A company that has motivated, industrious work force has highproductivity and practically no disruption of work. On the other hand, a company that has bad industrialrelations will lose several hundred mandays as a consequence of strikes and go slows.

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5. Where the company is located and where its factories are?

One must also consider where the companies Plants and Factories are located..

THE ANNUAL REPORT:

The primary and most important source of information about a company is its Annual Report. By law, this isprepared every year and distributed to the shareholders. Annual Reports are usually very well presented. Atremendous amount of data is given about the performance of a company over a period of time.The Annual Report is broken down into the following specific parts:A) The Director's Report,B) The Auditor's Report,C) The Financial Statements, andD) The Schedules and Notes to the Accounts.

A. The Directors ReportThe Directors Report is a report submitted by the directors of a company to its shareholders, advising themof the performance of the company under their stewardship.1. It enunciates the opinion of the directors on the state of the economy and the political situation vis--visthe company.2. Explains the performance and the financial results of the company in the period under review. This is anextremely important part. The results and operations of the various separate divisions are usually detailedand investors can determine the reasons for their good or bad performance.3. The Directors Report details the company's plans for modernization, expansion and diversification.Without these, a company will remain static and eventually decline.4. Discusses the profit earned in the period under review and the dividend. Recommended by the directors.This paragraph should normally be read with some skepticism, as the directors will always argue that theperformance was satisfactory. If adverse economic conditions are usually at fault.5. Elaborates on the directors' views of the company's prospects in the future.6. Discusses plans for new acquisition and investments. An investor must intelligently evaluate the issuesraised in a Directors Report. Industry conditions and the management's knowledge of the business must beconsidered.

B. The Auditor's Report

The auditor represents the shareholders and it is his duty to report to the shareholders and the general publicon the stewardship of the company by its directors. Auditors are required to report whether the financial

statements presented do, in fact, present a true and fair view of the state of the company. Investors mustremember that the auditors are their representatives and that they are required by law to point out if thefinancial statements are not true and fair..

C. Financial Statements

The published financial statements of a company in an Annual Report consist of its Balance Sheet as at theend of the accounting period detailing the financing condition of the company at that date, and the Profit andLoss Account or Income Statement summarizing the activities of the company for the accounting period.

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BALANCE SHEETThe Balance Sheet details the financial position of a company on a particular date; of the company's assets(that which the company owns), and liabilities (that which the companyowes), grouped logically under specific heads. It must however, be noted that the Balance Sheet details thefinancial position on a particular day and that the position can be materially different on the next day or the

day after.

SOURCES OF FUNDS

SHAREHOLDERS FUNDS

SHARE CAPITAL

(i) Private Placement(ii) Public Issueiii) Rights issuesRESERVES

i) Capital Reservesii) Revenue Reserves

LOAN FUNDSi) Secured loans:ii) Unsecured loansFIXED ASSETS

INVESTMENTS

STOCK OR INVENTORIES

i) Raw materialsii) Work in progressiii) Finished goodsCASH AND BANK BALANCES

LOANS AND ADVANCES

PROFIT AND LOSS ACCOUNT

The Profit and Loss account summarizes the activities of a company during an accounting period which maybe a month, a quarter, six months, a year or longer, and the result achieved by the company. It details theincome earned by the company, its cost and the resulting profit or loss. It is, in effect, the performanceappraisal not only of the company but also of its management- its competence, foresight and ability to lead.

RATIOS:

Ratios express mathematically the relationship between performance figures and/or assets/liabilities in a

form that can be easily understood and interpreted.No single ratio tells the complete story

Ratios can be broken down into four broad categories:

(A) Profit and Loss Ratios

These show the relationship between two items or groups of items in a profit and loss account or incomestatement. The more common of these ratios are:1. Sales to cost of goods sold.2. Selling expenses to sales.3. Net profit to sales and4. Gross profit to sales.

(B) Balance Sheet Ratios

These deal with the relationship in the balance sheet such as :1. Shareholders equity to borrowed funds.

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2. Current assets to current liabilities.3. Liabilities to net worth.4. Debt to assets and5. Liabilities to assets.

(C) Balance Sheet and Profit and Loss Account Ratios.

These relate an item on the balance sheet to another in the profit and loss account such as:1. Earnings to shareholder's funds.2. Net income to assets employed.3. Sales to stock.4. Sales to debtors and5. Cost of goods sold to creditors.

(D) Financial Statements and Market Ratios

These are normally known as market ratios and are arrived at by relative financial figures to market prices:

1. Market value to earnings and2. Book value to market value.(a) Market value(b) Earnings(c) Profitability(d) Liquidity(e) Leverage(f) Debt Service Capacity(g) Asset Management/Efficiency(h) Margins.

The major ratios that are considered:(i) Market value(ii) Price- earnings ratio(iii) Market-to-book ratio(iv) Earnings(v) Earning per share(vi) Dividend per share(vii) Dividend payout ratio(viii) Leverage ratios(ix) Return on investments/total assets

CASH FLOW:

A statement of sources and uses begins with the profit for the year to which are added the increases inliability accounts (sources) and from which are reduced the increases inasset accounts (uses). The net result shows whether there has been an excess or deficit of funds and how thiswas financed. Investors must examine a company's cash flow as it reveals exactly where the money camefrom how it was utilized. Investors must be concerned if a company is financing either its inventories orpaying dividends from borrowings without real growth as that shows deterioration.

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CHAPTER 2

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INTRODUCTION

COMPANY

A leading stock brokerage house and Asset & Wealth Management company, provides investment and

wealth management service to institutional, high net worth, NRIs and retail investors and their advisors. It

is located in # 6-2-30/C, Parbat, Lakdi-ka-pool, Saifabad and Hyderabad-INDIA.

It was established in 1996, the managing Directors are Mr. Zaheer Uddin Ali Khan, Mr. Ehasanuddin, and

Mr. Sunil C Kapadia. Employees work force of 20 holding back office, securities operations, marketing and

administration with clear division in their ranks and right men assigned right job.

OVERVIEW

MIDEAST INVESTMENT has significant volumes in the both the segments of equity and derivatives with

Bombay Stock and National Stock Exchanges aggregating Rs. 10000 corers per annum. The advantages of

the company having more than 1000 ready customer base that will help us in reach out to the people with

trust they have in us over a decade. The company under stand customer need very well as already enjoying

highest customer satisfaction in services which is the key area.

The company does better than anyone else the unique or lowest-cost resources have access to have tied up

with leading daily publication house by which the add pending will be considerable low targeting twin cities

clients. The company reaches NRI community with help ofWWW.Siasat.Com and WWW.ideas-gulf.Com.

STOCK BROKERAGE

The companys managers have over 1000 man-hours of ringside broking experience, which is being utilized

to hilt by fully computerized VAST access at its Hyderabad office. MIDEAST a corporate member of the

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National Stock Exchange of India limited, which is Indias largest exchange transacting over US $68 billion

(Rs. 2,38,000Cr)annually.

EQUITY RESEARCH

Based on fundamental and technical strengths of Indian corporations and the market environment

MIDEAST provides consultancy for investments. MIDEAST assists individuals and institutions maximize

their earnings through stock market investment & Mutual Fund as other financial instruments scientifically

through their portfolio management services.

NRI PLACEMENT AND RELATED SERVICES

The analysis of opportunities for NRIs the primary and secondary market is focus area of MIDEAST

investments with the boom in the stock market, evaluation of companies to invest become critical

particularly for NRIs for trading in these markets. Hence MIDEAST provides the services.

MIDEAST is stock broking company. mideast comes under retail arm of MIDEAST

INVESTMENT Pvt. Ltd. offers World-class facilities for buying and selling Shares on BSE and NSE,

Demat Services(DP)Derivatives(F&O). SSKI group also comprises of Institutional broking and Corporate

Finance. Mideast does not claim expertise in too many things.

mideast's expertise lies in stocks and that's what he talks about with authority. So when he says that

investing in stocks should not be confused with trading in stocks or a portfolio-based strategy is better than

betting on a single horse, it is something that is spoken with years of focused learning and experience in the

stock markets. And these beliefs are reflected in everything mideast does for you!

CURRENT POSITION

VISION

To empower the investor with quality advice and superior service to help him take better investment

decisions. We believe that our growth depends on client satisfaction.

MISSION

To provide the best customer service and product innovation tuned to diverse needs of clientele

Continuous up-gradation with changing technology, while maintaining human values.

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Respond to progressive globalization and achieving international standard.

Efficiency and effectiveness built on ethical practices.

CORE VALUE

Customer satisfaction through

Providing quality service effectively and efficiently

Smile, it enhances your face value is a service quality stressed on periodic customer

service Audits

Maximization of stakeholder value

Success through Teamwork, integrity and People

CHANGING TREND

Remember the time when you left orders with your broker in the morning and received a confirmation fax late

in the evening?

You wondered whether you had acquired the shares at the best possible price for the day. Today, the picture is

different. Imagine a scenario where you log on to your account, get the live quotes of scripts you are

interested in, get advise from experts and research reports on your investment choice and then just click the

mouse to place your order, pay the amount due (which automatically gets debited into your account with the

on line brokerage firm), get your account statement, and the delivery of your shares into your Demat account.

All this through just one click of a mouse. Seems like a dream? But with online trading this has become a reality.

A few seconds later, you get the confirmation on your screen. And after the trade settlement, your bank and DP

accounts will reflect the changes accordingly.

The speed of transaction, confidentiality about the prices and ease of settlement in the paperless mode

should be good reasons for retail investors to jump on to the Net. All they need is a PC, a modem, a subscription

to an ISP, an account with a bank (which has a web presence) and a depository account. And they can choose

from a plethora of e-trading web sites.

So, finally the changing trend is known as E-trading which really means Buying and selling securities via the

Internet or other electronic means such as wireless access, touch-tone telephones, and other new technologies with

online trading. In most cases customers access a brokerage firm's Web Site through their regular Internet Service

Provider. Once there, customers may consult information provided on the Web Site and log into their accounts to

place orders and monitor account activity"

Ensures convenience in trading experience:

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mideasts trading services are designed to offer an easy, hassle free trading experience, whether trading is

done daily or occasionally. The customer will be entitled to a host of value added services, in the investment

process depending on his investing style and frequency. and offers a suite of products and services,

providing the customer with a multi-channel access to the stock markets.

It gives advice based on extensive research to its customers and provides them with relevant and

updated information to help him make informed about his investment decisions.

mideast offers its customers the convenience of a broker-DP.

It helps the customer meet his pay-in obligations on time thereby reducing the possibility of auctions.

The company believes in flexibility and therefore allows accepting late instructions without any extra

charge. And execute the instruction immediately on receiving it and thereafter the customer can view his

updated account statement on Internet.

Mideast Depository Services offers demat services to individual and corporate investors. It has a

team of professionals and the latest technological expertise dedicated exclusively to their demat department.

A customer can avail of Demat \ Remat, Repurchase, Pledge, Transmission facilities at any of the Share

khan branches and business partners outlets.

Research Team

Share khan has a team of dedicated analysts who have years of working experience in the industries that

they track, and a proven track record in using their knowledge of the investment science to deliver results.

PORTFOLIO MANAGEMENT SYSTEM

With the Mideast Team Managing Your Portfolio, you can be assured that your investments are in

safe hands!

We follow a multi-disciplined approach incorporating quantitative analysis, fundamental analysis and

technical analysis. This multi-pronged approach enables us to provide risk-controlled returns for you.

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Right from choosing the combination of stocks most suitable for you based on your risk

appetite to monitoring their movements and discussing them with you at special events.

RESEARCH BASED ADVICE

Every investors needs and goals are different. To meet these needs, mideast provides a comprehensive set

of research reports, so that one can take the right investment decisions regardless of their investing

preferences! The Research and Development at , mideast is done at its Head office lakdi-ka-pul.

The R&D department Head Mr. irfan forwards all the details regarding all stocks and scripts to all the

operators through Internet. At the end of each trading day there is a Teleconference, through which the R&D

department Head MR. irfan talks with each operators and discusses about each days closing position and

shows their predictions about next days opening position. The quarries regarding stock positions and other

relevant matter of the operators is being solved through teleconference.

The research team of MIDEAST made up of highly experienced people from diverse field. These all experts

provides :

In-depth analysis of the markets

Analysis Before, During (live market updates) and After market timings

Special sector tracking reports sent regularly

SWOT ANALYSIS

During this training at mideast, we had come to know the Strengths-Weaknesses-Opportunities-Threats for

the company and it is very useful for a company to analyze them. Therefore, the SWOT analysis is presented

here and the suggestions for maintaining strengths and removing weaknesses are explained.

Strengths:

Well-maintained infrastructure.

Dedicated, Intelligent and Loyal staff.

Lowest brokerage and other charges w.r.t. Competitors.

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The best investment advice correct up to 70-90 % through dedicated

research and reports.

Wide product range to enable the clients to choose the best alternative.

A positive image in the existing clients.

Weaknesses:

Less awareness in the market.

Time consuming process for account opening, resolving the problems of the customers, etc.

Opportunities:

Slope of stock market towards delivery based transaction.

Large potential market for delivery and intra-day transactions.

Open interest of the people to enter in stock market for investing.

Attract the customers who are dissatisfied with other broker & DPs.

An indirect opportunity generated by the market from its bullishness.

Large untapped market in the Hyderabad district of Andhra Pradesh.

Threats:

Decreasing rates of brokerage in the market.

Increasing competition against other brokers & DPs

Poor marketing activities for making the company known among the customers.

A threat of loosing clients for any kind of weakness of the company.

Loosing the untapped market with the entry of the competitors.

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CHAPTER 3

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THEORETICAL ASPECTS OF

STUDY

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I FUNDAMENTAL ANALYSIS OF STOCKS

Basically fundamental analysis is covered in 3 parts :

1. Market/ economy analysis

2. Industry Analysis

3. Company Analysis

I Market/ Economy Analysis

It covers the macro economy analysis and the various macro economic factors on the national level likeGDP, Monetary policies of India, Fiscal Policies and Inflation and money supply etc.

GDP

India's economy grew 8.2% compared to the same period a year earlier between October and December,government data showed on March 1.

Quarterly GDP at factor cost at constant (2004-05) prices for Q3 of 2010-11 is estimated at Rs. 12,61,664crore, as against Rs. 11,66,145 crore in Q3 of 2009-10, showing a growth rate of 8.2 per cent over thecorresponding quarter of previous year.

The economic activities which registered significant growth in Q3 of 2010-11 over Q3 of 2009-10 are:agriculture, forestry & fishing at 8.9 per cent, construction at 8.0 percent, trade, hotels, transport andcommunication at 9.4 per cent, and financing, insurance, real estate and business services at 11.2 per cent.The growth rate in mining& quarrying, manufacturing and community, social and personal services isestimated at 6.0 per cent, 5.6 per cent and 4.8 per cent respectively in this period.

According to the second advance estimates of production of crops released on 9.2.2011 by the Departmentof Agriculture and Cooperation (DAC), which has been used in compiling the estimate of GDP fromagriculture in Q3 of 2010-11, production of rice, coarse cereals and pulses during the Kharif season of 2010-11 is estimated to have increased by 5.6 per cent, 28.2 percent and 52.8 percent, respectively over thecorresponding season in the previous agriculture year. Among the commercial crops, the production ofoilseeds and sugarcane is estimated to have increased by 15.8 per cent and 15.2 per cent, respectively duringthe Kharif season of 2010-11, while the production of cotton is expected to grow by 40.0 per cent during theagriculture year 2010-11. However, horticultural crops and livestock products are expected to grow at 5.6per cent and 4.7 per cent, respectively during 2010-11.

According to the latest estimates available on the Index of Industrial Production (IIP), the index of mining,

manufacturing and electricity, registered growth rates of 5.8 per cent, 5.1 per cent and 6.5 per cent,respectively in Q3 of 2010-11, as compared to the growth rates of 10.3 per cent, 14.4 per cent and 3.8 percent in these sectors in Q3 of 2009-10. In the mining sector, production of coal, crude oil and natural gasregistered growth rates of 1.5 per cent, 15.5 per cent and 3.7 percent in Q3 of 2010-11, as against the growthrates of 4.6 per cent, (-)0.9 percent and 50 per cent in Q3 of 2009-10.

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Among the services sectors, the key indicators of railways, namely, the net tonne kilometers and passengerkilometers have shown growth rates of 4.0 per cent and 6.2 per cent, respectively in Q3 of 2010-11, asagainst the growth rates of 12.5 per cent and 6.7 per cent, in the corresponding period of previous year. Inthe transport and communication sectors, the production of commercial vehicles, cargo handled at majorports, cargo handled by the civil aviation and the total stock of telephone connections (including WLL and

cellular) registered growth rates of 22.1 per cent, 0.86 per cent, 12.2 per cent and 40.0 per cent, respectivelyin Q3 of 2010-11 over Q3 of 2009-10. The key indicators of banking, namely, aggregate bank deposits andbank credits have shown growth rates of 18.8 per cent and 27.9 per cent, respectively during April-December, 2010-11 over the corresponding period in 2009-10.

Strengths of India today are:

A well diversified industrial base which profits from self-reliance in all core industries .A large &

sophisticated financial architecture - The robust capital Markets today have over 9000 listed companies and

boast of a massive Market capitalization.

A healthy GDP composition with agriculture contributing 22%, Industry 22% and services, which have gone

strength to strength, accounting. For 56% of the GDP an acknowledged strength in knowledge driven

industries like Information technology, biotechnology, entertainment Software etc

India has Over 3 million scientific & technical manpower, Over 0.6 million S&T post graduates, Over 0.7

million graduate engineers, Over 3500 doctorates in sciences every year.

Assuming trend growth in agriculture under normal monsoon conditions and barring domestic or external

shocks, the Reserve Bank in its Annual Policy Statement for 2007-08 (April 2007) placed real GDP growth,

for policy purposes, in the range of 7.5-8.0 per cent during 2008-09. Growth prospects are, however, subject

to a number of downside risks. The risks emanating from the global economy are: potential escalation and

volatility in international crude oil prices, firming up of overall inflationary pressures and expectations, and

a hardening of international interest rates along with the withdrawal of monetary accommodation.

Indias demographic advantage In contrast to developed Countries, India will have a younger population

for the next 50 years. Hence India would be the hub for R&D.

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INDIA INFLATION RATE

The inflation rate in India was last reported at 9.3 percent in January of 2011. From 1969until 2010, the average inflation rate in India was 7.99 percent reaching an historical

high of 34.68 percent in September of 1974 and a record low of -11.31 percent in Mayof 1976. Inflation rate refers to a general rise in prices measured against a standard levelof purchasing power. The most well known measures of Inflation are the CPI whichmeasures consumer prices, and the GDP deflator, which measures inflation in the wholeof the domestic economy. This page includes: India Inflation Rate chart, historical dataand news.

Country Interest Rate Growth Rate Inflation Rate Jobless Rate Current Account Exchange Rate

India 5.50% 8.90% 9.47% 8.00% -16 45.3300

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2011 9.30

2010 16.22 14.86 14.86 13.33 13.91 13.73 11.25 9.88 9.82 9.70 8.33 9.47

2009 10.45 9.63 8.03 8.70 8.63 9.29 11.89 11.72 11.64 11.49 13.51 14.97

2008 5.51 5.47 7.87 7.81 7.75 7.69 8.33 9.02 9.77 10.45 10.45 9.7

II INDUSTRY ANALYSIS

Indian Cement Industry: Break-even Cushion to anchor fall in cement prices ..

The Indian cement industry has witnessed a phenomenal capacity addition to the tune of about 52 mn tonnesin the last two financial years which accounted for about 24% of the industrys capacity of 218 mn tonnes at

the end of FY09. In the last two financial years, the cement industry has registered a double-digit growth incapacity addition compared to moderate growth of 3-7% registered during period FY 03-07. As a result,industrys capacity utilisation rate which showed a rising trend upto FY07, has dropped to a level of 83% inFY09.

In FY09, the GDP growth slowed down to 6.7% compared to the 9% growth reported in FY08. However,cement consumption growth in FY09 at 8.4% has been able to maintain its multiplier factor with GDPgrowth at 1.25 times.

In FY09, all the regions except the Western and the Northern region have outperformed the industry inconsumption growth. The Eastern region continued its buoyant performance and registered the highestcement consumption growth of 11.3% on yoy basis. The Southern and Central regions also reportedimpressive double-digit growth of 10.4% in cement consumption. But, the Northern region has registeredthe lowest growth in the cement demand on yoy basis. Comparatively, poor demand growth registered bythe Western region was on account of high base of the last year and also slightly subdued demand.

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With focus on capacity addition, many small/medium players have been able to capture more market shareand consolidate their position in the industry in the last two years. Market share of top five individualcompanies taken together show a decline to a level of 44.3% in FY09 from 46.3% in FY08.

Eventhough the utilisation rate dropped, average cement prices in FY09 rose by about 5% on yoy basis. But,the growth in cement prices remained slightly subdued compared to 21% and 14%, registered in FY07 and

FY08, respectively. On the regional front, prices in the Southern region were firm and ruling consistently atthe highest level amongst all the regions in FY09. However, due to slowdown in the cement offtake andrelatively low operating rate, prices in the Northern region remained at the lowest levels compared to otherregions.

In FY09, the cement industry witnessed a fall in profitability. Eventhough, average realisation for theindustry increased by about 4% on yoy basis, cost of production has increased by 18.5% on yoy basis.Power and fuel cost for many cement companies increased in FY09 mainly on account of substantialincrease in coal prices. As a result, the operating profit margin of the industry dropped by about 8-9% inFY09. Also, higher interest rates and depreciation provided on expanded capacities took its toll on the netprofit margin of the industry which witnessed a decline by about 5% in FY09.

Going forward, cement companies would be benefited by their focus on captive power generation whichwould help them to reduce power & fuel cost. With reduction in coal prices, CARE Research has estimatedthat per tonne power & fuel cost of the industry will decline by about 12% in FY10 on yoy basis.

CARE Research has estimated that break-even cushion (defined as the ratio of overall capacity utilisationrate of the industry to the utilisation rate at the breakeven point in a particular year) of the industry hasnotably increased to 2.4 times in FY09 compared to an average level of 1.1 times in the period FY 02-05.With comfortable break-even cushion value, the cement industry is in better position to operate at lowerutilisation rate and avoid substantial price cuts. CARE Research does not foresee a notable drop in average

realisation of the industry in FY10.

CARE Research has estimated the domestic cement demand to grow at a CAGR of about 8.8% in the nexttwo years. Cement demand in the next year would largely be driven by low-cost housing segment in rural &semi-urban regions and governments focus on infrastructure development in the country.

The level of consolidation in the cement industry had slowed down in the last couple of years. However, oneanalysis suggests that the Net Present Value (NPV) of a Greenfield plant is still higher than the NPV of anacquired unit, leading us to the conclusion that further consolidation in the industry is still away.

The report elucidates facts on the Indian Cement industry, supplemented by the latest statistics. The report is

divided into two sections. Section I mainly covers performance of the industry in the last financial year andalso analysis of past five years data. Section II covers information on some technical aspects about theproduct and basics of the cement industry alongwith exhaustive database. Following are the few points withare emphasised to accomplish the report:

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INDUSTRY LIFE CYCLE:

The Indian pharmaceutical industry is one of the fast growing sectors of the Indian economy and has made

rapid strides over the years. From being an import dependent industry in the 1950s, the industry has

achieved self-sufficiency and gained global recognition as a producer of low cost high quality bulk drugs

and formulations. Leading Indian companies have developed infrastructure in over 60 countries including

developed markets like US and Europe. In the recent past, several pharmaceutical companies have

demonstrated that they possess the ability to engage in commercially viable research and development

activities and become significant players in the international market.

Major Players: DR. REDDYS, CIPLA, RANBAXY, BIOCON,

AND NICHOLAS PIRAMAL.

Opportunities and Threats

t is often said that the pharma sector has no cyclical factor attached to it. Irrespective of whether theeconomy is in a downturn or in an upturn, the general belief is that demand for drugs is likely to growsteadily over the long-term. True in some sense. But are there risks? This article gives a perspective of theIndian pharma industry by carrying out a SWOT analysis (Strength, Weakness, Opportunity, Threat).

Before we start the analysis lets look a little back in the industrys last six years performance. The Industryis a largely fragmented and highly competitive with a large number of players having interest in it. Thefollowing chart shows the breakup of the growth (YoY) of Indian pharmaceutical industry in last six years

.

*Volume growth of existing products

The SWOT analysis of the industry reveals the position of the Indian pharma industry in respect to itsinternal and external environment.

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Strengths:

1. Indian with a population of over a billion is a largely untapped market. In fact the penetration ofmodern medicine is less than 30% in India. To put things in perspective, per capita expenditure onhealth care in India is US$ 93 while the same for countries like Brazil is US$ 453 and MalaysiaUS$189.

2. The growth of middle class in the country has resulted in fast changing lifestyles in urban and tosome extent rural centers. This opens a huge market for lifestyle drugs, which has a very lowcontribution in the Indian markets.

3. Indian manufacturers are one of the lowest cost producers of drugs in the world. With a scalablelabor force, Indian manufactures can produce drugs at 40% to 50% of the cost to the rest of theworld. In some cases, this cost is as low as 90%.

4. Indian pharmaceutical industry posses excellent chemistry and process reengineering skills. Thisadds to the competitive advantage of the Indian companies. The strength in chemistry skill help

Indian companies to develop processes, which are cost effective.

Weakness:

1. The Indian pharma companies are marred by the price regulation. Over a period of time, thisregulation has reduced the pricing ability of companies. The NPPA (National Pharma PricingAuthority), which is the authority to decide the various pricing parameters, sets prices of differentdrugs, which leads to lower profitability for the companies. The companies, which are lowest costproducers, are at advantage while those who cannot produce have either to stop production or bearlosses.

2. Indian pharma sector has been marred by lack of product patent, which prevents global pharmacompanies to introduce new drugs in the country and discourages innovation and drug discovery. Butthis has provided an upper hand to the Indian pharma companies.

3. Indian pharma market is one of the least penetrated in the world. However, growth has been slow tocome by. As a result, Indian majors are relying on exports for growth. To put things in toperspective, India accounts for almost 16% of the world population while the total size of industry isjust 1% of the global pharma industry.

4. Due to very low barriers to entry, Indian pharma industry is highly fragmented with about 300 largemanufacturing units and about 18,000 small units spread across the country. This makes Indian

pharma market increasingly competitive. The industry witnesses price competition, which reducesthe growth of the industry in value term. To put things in perspective, in the year 2003, the industryactually grew by 10.4% but due to price competition, the growth in value terms was 8.2% (pricesactually declined by 2.2%)

Opportunities

1. The migration into a product patent based regime is likely to transform industry fortunes in the longterm. The new patent product regime will bring with it new innovative drugs. This will increase theprofitability of MNC pharma companies and will force domestic pharma companies to focus more onR&D. This migration could result in consolidation as well. Very small players may not be able to

cope up with the challenging environment and may succumb to giants.

2. Large number of drugs going off-patent in Europe and in the US between 2005 to 2009 offers a bigopportunity for the Indian companies to capture this market. Since generic drugs are commodities by

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nature, Indian producers have the competitive advantage, as they are the lowest cost producers ofdrugs in the world.

3. Opening up of health insurance sector and the expected growth in per capita income are key growthdrivers from a long-term perspective. This leads to the expansion of healthcare industry of whichpharma industry is an integral part.

4. Being the lowest cost producer combined with FDA approved plants, Indian companies can becomea global outsourcing hub for pharmaceutical products.

Threats:

1. There are certain concerns over the patent regime regarding its current structure. It might be possiblethat the new government may change certain provisions of the patent act formulated by the precedinggovernment.

2. Threats from other low cost countries like China and Israel exist. However, on the quality front,

India is better placed relative to China. So, differentiation in the contract manufacturing side maywane.

3. The short-term threat for the pharma industry is the uncertainty regarding the implementation ofVAT. Though this is likely to have a negative impact in the short-term, the implications over thelong-term are positive for the industry.

III Company Analysis

Mergers and Acquisitions in Indian Pharmaceutical SectorIn the Indian pharmaceutical market there are a number of companies that have entered

into mergerandacquisition agreements in the context of the global market scenario. These companies would be

selling off the non-core business divisions like Over-the-Counter. This is expected to further the

consolidation in the mid-tier as far as the pharmaceutical industry in Europe is concerned.

The sheer number of companies acquiring parts of other companies has shown that the Indian

pharmaceutical industry is ready to be a dominant force in this scenario. In the recent times Nicholas

Piramal has taken the ownership of 17% of Biosyntech that is a major pharmaceutical packing organization

in Canada.

Torrent has got the ownership of Heumann Pharma, a general drug making company and, formerly, a

subsidiary of Pfizer. Matrix has acquired Docpharma, a major pharmaceutical company of Belgium. Sun

Pharmaceutical Industries is set to make acquisitions in pharmaceutical companies in the US and has set

aside $450 million to execute these plans. In Bengaluru, Strides Arcolab has aimed at acquiring 70 percent

in a pharmaceutical facility in Italy that is worth $10 million.

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Mergers and Acquisitions in European and Asian Pharmaceutical Sector

As per several financial experts, the mergers and acquisitions in the pharmaceutical industry of Europe and

India are meant to go on. In the Indian pharmaceutical scenario the mergers and acquisitions are supposed to

go on a medium term. Factors like the execution of new patent regimen and companies dealing in specific

pharmaceutical products are supposed to be the main driving factors behind the expected continuance of

mergers and acquisitions in the Indian pharmaceutical market.

Opportunities for Pharmaceutical Companies

There are a number of opportunities for the major pharmaceutical products and services providers in the

Indian pharmaceutical sector as the price controls have been relaxed and there have been significant changes

in the medicinal requirements of the Indians. The manufacturing base in India is also strong enough to

support the major international pharmaceutical companies from the performance perspective.

This may be said as the Indian pharmaceutical market is varied as well as economical. It is expected that in

the coming years the Indian pharmaceutical companies would be executing more mergers and acquisitions.

It is expected that the regulated pharmaceutical markets in the United States and Europe would be the main

areas of operation.

In the recent years the Indian pharmaceutical companies have been venturing into mergers and acquisitions

so that they can gain access to the big names of the international pharmaceutical scenario.

Patterns of Mergers and Acquisitions in Pharmaceutical Sector

One of the major features of the mergers and acquisitions in the pharmaceutical sector of the Asia-Pacific

region has been the integration of the local pharmaceutical companies. This has happened especially in India

and China. Acquisition has made it convenient for a number of companies to do business in various

pharmaceutical markets.

Previously the pharmaceutical markets of Europe were closed to the companies of other countries due to the

difference in language. There were also other problems for companies like the trade barriers for instance.

Figures of Mergers and Acquisitions in Pharmaceutical Sector

As per the figures of mergers and acquisitions in pharmaceutical sector, from the year 2004, there have been

more mergers and acquisitions in the pharmaceutical sector in the Asia-Pacific region compared to NorthAmerica. The combined financial value of the mergers and acquisitions in Asia-Pacific region has been

greater than North America.

One of the major merger and acquisition deals in the Asia-Pacific region in the recent years has been the

merger of Fujisawa and Yamanouchi in Japan. This deal was worth $7.9 billion. In the same period the

Asia-Pacific region has experienced the highest percentage of growth in the mergers and acquisitions in

pharmaceutical sector.

In the same period the rate of growth in the Asia-Pacific region has been 37%. In Western Europe the rate of

growth has been 11% and in North America it has been 20%. The pharmaceutical market in Eastern Europehas not experienced any increase in the rate of mergers and acquisitions.

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Mergers and Acquisitions in Global Pharmaceutical Sector

Since the year 2004 there has been an increase in the mergers and acquisitions in the global pharmaceutical

sector. This was reflective of the increase in the mergers and acquisitions in other industries at the same

period. There was 20% increase in the number of deals, which stood at 1,808. There were eight deals with

the value of more than $1 billion. This was three more than 2003.

The total financial value of the deals was $112 billion and this was an increase of 53%. However, these

figures do not include the acquisition of Aventis by Sanofi-Synthelabo that was worth $60 billion. This is

the biggest acquisition in the pharmaceutical industry after the merger of Pharmacia and Pfizer in 2002.

CHALLENGES

THE pharmaceutical industry is faced with the challenge of surviving and succeeding in an environment that

has become more complicated and uncertain, and one that is characterised by rapid developments in scienceand technology, and organisational change. From the standpoint of the pharmaceutical industry, the impetus

for change is the result of a combination of political, economic, technological and social factors; all of which

have helped redefine the dynamics of this particular industry.

Over the past number of years, the growth of the worldwide pharmaceutical industry has been slower than

the increases in Research (R) and Development (D) costs, and this has led to a cost-earnings differential that

cannot be sustained indefinitely. Firms have found it increasingly difficult to sustain historical levels of

growth principally because of two converging factors. First, the earnings of the pharmaceutical industry are

being increasingly squeezed between pricing constraints due to government policies and generic

competition; and second, through the rising costs of R and D due to increasing legislative requirements andgrowing technological sophistication. As a consequence of these pressures on pharmaceutical earnings,

combined with that of rising R and D costs, pharmaceutical firms have been forced to adopt a number of

cost containment measures in addition to those pertaining to the safety and efficacy of drugs. The need to

demonstrate 'value' to the consumer has now become imperative.

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COMPANIES PROFILES

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DR.REDDYS LABORATORIES

CORPORATE PROFILE

Established in 1984, Dr. Reddys Laboratories (NYSE: RDY) is an emerging global pharmaceuticalcompany.

As a fully integrated pharmaceutical company, our purpose is to provide affordable and innovativemedicines through our three core businesses: Pharmaceutical Services and Active Ingredients, comprising our Active Pharmaceuticals and CustomPharmaceuticals businesses;

Global Generics, which includes branded and unbranded generics; and

Proprietary Products, which includes New Chemical Entities (NCEs), Differentiated Formulations,and Generic Biopharmaceuticals.

Our products are marketed globally, with a focus on India, US, Europe and Russia. Dr. Reddys conductsNCE research in the areas of metabolic disorders, cardiovascular indications, anti-infectives and

inflammation.

Our strong portfolio of businesses, geographies and products gives us an edge in an increasingly competitiveglobal market and allows us to provide affordable medication to people across the world, regardless ofgeographic and socio-economic barriers.

Awards & Accolades in 2010

Scrip Awardfor Best Company in an Emerging Market

NDTV Profit Business Leadership Awards 2010Award for Business Leader in the Pharmaceutical Sector

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Yearly Results of Dr ReddysLaboratories

------------------- in Rs. Cr. -------------------

Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

Sales Turnover 1,996.80 3,738.38 3,301.98 4,197.53 4,553.21

Other Income 132.12 334.21 254.35 100.21 171.44

Total Income 2,128.92 4,072.59 3,556.33 4,297.74 4,724.65

Total Expenses 1,732.41 2,525.27 2,800.05 3,356.07 3,406.31

Operating Profit 264.39 1,213.11 501.93 841.46 1,146.90

Profit On Sale Of Assets -- -- -- -- --

Profit On Sale Of Investments -- -- -- -- --

Gain/Loss On Foreign Exchange -- -- -- -- --

VRS Adjustment -- -- -- -- --

Other Extraordinary Income/Expenses -- -- -- -- --

Total Extraordinary Income/Expenses -- -- -- -- --

Tax On Extraordinary Items -- -- -- -- --

Net Extra Ordinary Income/Expenses -- -- -- -- --

Gross Profit 396.51 1,547.32 756.28 941.67 1,318.34

Interest 21.42 47.97 10.19 18.50 11.08

PBDT 375.09 1,499.35 746.09 923.17 1,307.26

Depreciation 111.33 133.50 161.99 193.63 222.43

Depreciation On Revaluation OfAssets

-- -- -- -- --

PBT 263.76 1,365.85 584.10 729.54 1,084.83

Tax 52.64 188.99 108.88 168.65 238.75

Net Profit 211.12 1,176.86 475.22 560.89 846.08

Prior Years Income/Expenses -- -- -- -- --

Depreciation for Previous YearsWritten Back/ Provided

-- -- -- -- --

Dividend -- -- -- -- --

Dividend Tax -- -- -- -- --

Dividend (%) -- -- -- -- --

Earnings Per Share 27.53 70.08 28.26 33.30 50.11

Book Value -- -- -- -- --

Equity 38.35 83.96 84.09 84.23 84.42

Reserves 2,223.79 4,289.40 4,727.72 5,174.94 5,830.07

Face Value 5.00 5.00 5.00 5.00 5.00

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SWOT DR. REDDYS

Dr. Reddys Laboratories Ltd. formed by Dr. K. Anji Reddy in 1984, is now a global pharmaceutical

company with presence in over 115 countries worldwide. It was the first Asia-Pacific (outside-Japan)

country to be listed in NYSE in year 2001. For the fiscal year ended March 2008, consolidated revenues

reached $1.25 billion, a 23% decrease on the previous year.

SWOT Analysis

Strengths:

Wholly owned subsidiaries in US and EuropeJoint ventures in China and South Africa

Markets pharmaceutical products in 115 countries

Partnerships with global pharmaceutical companies like Novartis, NOVO Nordisk, etc.

Strong product portfolio

Manufacture and market over 250 medicines targeting a wide range of therapies

Wide range of anti-cancer drugs developed

Over 100 APIs developed

Six New Chemical Entities(NCE

Low cost base

Contributes to companys high profit margin of around 34% of sales

Partnerships with key players in the market keeps its cost base down

Research Driven & Global Talent

Expertise in developing innovative product formulations

6120 employees worldwide including 951 scientists in which 323 are dedicated towards new drug discovery

research

.

Weaknesses:

.

High amount of revenues from overseas

India - a rich source of Active Pharmaceutical Ingredients (APIs), hence major source of revenue is exports

of APIs. May loose out to western world, especially Europe, where currency is much more stable than the

Indian Rupee

Over-reliance on partnerships

In order to compete effectively in global markets, strategic partnerships required to develop products.

Lack of resources similar to US and Europe based competitors to develop a drug to marketing stage

Generic drugs smallest focus

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Smallest portion of revenues from generics at around 20%

Lack of patent legislation in India harms sales of its products

.

Opportunities:

.

Take a drug all the way to market

Take a molecule from its pipeline all the way to the market place cost-effectively market

Buy back of the integrated drug development company from ICICI Ventures and Citigroup

Domestic Generic drugs market

In another 4-6 years, many product patents obtained after the 2004 legislation will go off providing an

opportunity to the company increase its domestic footprint in Generics

.

Threats:

.

Needs to gain FDA approval for all sources and products

Products have to pass strict FDA trials before going to market, which can be costly and time consuming

This may delay the company entry to particular markets which affects revenue

Competition from US and European Companies

Based in lucrative markets e.g. Novartis, Merck & Co

Revenues running into billions which dwarfs Reddys annual turnover Litigation charges

Reddys lost the case against Pfizer for the use of generic form of Norvasc drug. Legal cost $10m and also

loss of market opportunity.

Heightened concerns about profitability of German generics business of Betapharm

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Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

Sales Turnover 2,991.93 3,572.14 4,226.81 5,270.54 5,624.91

Other Income 121.63 89.13 125.23 67.83 88.33

Total Income 3,113.56 3,661.27 4,352.04 5,338.37 5,713.24

Total Expenses 2,312.12 2,749.41 3,377.16 4,219.10 4,271.75

Operating Profit 679.81 822.73 849.65 1,051.44 1,353.16






Total Extraordinary Income/Expenses -- -- -- -- 95.00



Gross Profit 801.44 911.86 974.88 1,119.27 1,441.49

Interest 11.42 6.96 11.59 33.54 23.66

PBDT 790.02 904.90 963.29 1,085.73 1,512.83

Depreciation 80.18 104.08 132.63 175.65 187.84


-- -- -- -- --

PBT 709.84 800.82 830.66 910.08 1,324.99

Tax 102.20 140.00 130.18 142.25 243.50

Net Profit 607.64 660.82 700.48 767.83 1,081.49

Prior Years Income/Expenses -- -- -- -- --


-- -- -- -- --

Dividend -- -- -- -- --


Dividend (%) -- -- -- -- --


Book Value -- -- -- -- --

Equity 59.97 155.46 155.46 155.46 160.58

Reserves 1,913.97 -- -- -- 5,744.55

Face Value 2.00 2.00 2.00 2.00 2.00

UltraTech Cement Ltd.

SWOT ANALYSIS

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Strengths:

Cipla has a voluminous product portfolio containing more than 200 brands some of which are the leading

brands in their respective category.The company has excellent process R&D skills which are considered to be one of the best in the country.The company has an extensive distribution network.

Weaknesses

The company's margins have fallen during the last two years. The main reason for this has been an increasein the cost of raw materials.The company does not have a well defined succession plan and this could lead to leadership gap in thefuture.

Opportunities:The relaxation of DPCO will be a big boost for the company and this might improve the profit margin as55% of the company's sales are regulated by DPCO.The company has already made ANDAs (Abbreviated new drug application) in USA and it provides a greatopportunity for growth for the company.

Threats:

The entry of foreign players will pose a major threat to the company.The lack of focus on basic R&D could pose problem in post-patent regime.

STRENGTHS

Production

The company's production facilities are spread across 11 integrated plants, onewhite cement plant, 12grinding units, and 5 terminals 4 in India and one in SriLanka.High quality 17.64Mn.Ton cement production in 2009-10.production is increasingannually.

Annual production capacity of 23.10 million tones

Logistics

Can directly deals with the limestone tenders and thus the middle man do notaffect its cost.Use the local transporters which provide the efficient transportation cost.

PlantationUltratech manufacturing plant uses ultra-modern technology and importedmachinery.

Companys Unit at Kovaya is the only Unit in this sector in India to have adesalination plant. It is used formeeting the water needs of the plant and thecolony. The waste gases from the cooler are used in thedesalination plant.

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Brand PositioningThe Aditya Birla Group the eighth largest cement player in the world.

UltraTech's products include Ordinary Portland cement, Portland Pozzolanacement and Portland blastfurnace slag cement.The company exports over 2.5 million tons per annum, which is about 30 per centof the country's totalexports

WEAKNESSESS

Raw materials

Not available in all the places.Losses of raw material.

Products

High cost of branded products.

OperationsHigh Power/ Fuel costs.Required efficient maintenance for the wastes.Raw material inventory required due to perishable of raw material.

High inventory handling cost.

Human Resource

Due to openness in the organization work culture is very informal that will not suit for better management in corporate.Insufficient man power

MarketingLack of awareness program for consumers due to low promotion mix.Lack of marketing mix.

Delay in supply

OPPURTUNITIES

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With the low per capita consumption of cement in India 102 kg compared tothe global average of 260 kg(China: 429 kg, Malaysia: 529 kg and South Korea:951 kg) - and the emphasis on infrastructuredevelopment, Ultratech has ampleopportunity to ride the growth curveIt can develop new marketing area.

It can sign MOUs with government regarding supply of cement for governmentwork.Maintain the position of competition in the market.Institutional market like corporate and offices, school society complexes aregrowing in large scale, whichwill increase the requirement.People are opting for more stable structures and intensive use of cement is takingplace, even government isspending heavily on infrastructure projects. Thus, thisis the right time to fully tap these markets.As Indian core industry is also growing at rate of nearly 10% per annum it ishaving a good future

THREATS

Large number of players in cement industry makes it more competitive for ACCto carefully price its productand at the same time satisfy its dealers andcustomers.

Cheep priced brand are grabbing rapidly a large chunk of lower income customer base.Players such as Jaypee Cement, Prism Cement, and Birla cement.ACC cement areeating up considerablemarket share.Due to Indias exponential growth many new international cement companies areexpected in coming yearswhich will bring a tide of change and can start pricewar.Government intervention to adjust cement prices

Transportation cost is scaling high; bottleneck due to loading restriction.Coal prices climbing up industry players say current shortage of coal in thecountry is estimated to be over 10million tons

SUGGESTION

Adopt new technology for the production like wet process of cement manufacturing. it will reduce the costof product that will increase the profit margin and good for human health also.Proper use of waste material.

They can increase the production plant because of high growth rate of infrastructure.They can increase the production for global market.

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CONCLUSION

As India is the second largest producer of cement in the worlds many big player presents in the market afterthat ultra tech cement increases his market share due to the high growth rate of real estate.

Ambuja cement ltd

VISION:

To be the most admired and competitive company in our industry.

Mission:

Our mission create value for all

Delighted customer

Inspired employees

Enlightened partners

Energized society

Loyal shareholders

Healthy environment

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CORPORATE PROFILE:

Ambuja Cements Ltd. (ACL) is one of the leading cement manufacturing companies in India. TheCompany, initially called Gujarat Ambuja Cements Ltd., was founded by Narotam Sekhsaria in 1983 with apartner, Suresh Neotia. Sekhsarias business acumen and leadership skills put the company on a fast track togrowth. The Company commenced cement production in 1986. The global cement major Holcim acquiredmanagement control of ACL in 2006. Holcim today holds little over 46% equity in ACL. The Company iscurrently known as Ambuja Cements Ltd.

ACL has grown dynamically over the past decade. Its current cement capacity is about 25 million tonnes.The Company has five integrated cement manufacturing plants and eight cement grinding units across thecountry. ACL enjoys a reputation of being one of the most efficient cement manufacturers in the world. Itsenvironment protection measures are on par with the finest in the country. It is one of the most profitableand innovative cement companies in India. ACL is the first Indian cement manufacturers to build a captiveport with three terminals along the countrys western coastline to facilitate timely, cost effective andenvironmentally cleaner shipments of bulk cement to its customers. The Company has its own fleet of ships.

ACL has also pioneered the development of the multiple bio-mass co-fired technology for generatinggreener power in its captive plants.ACL has always met tough challenges and seized the opportunities that have come its way. It has nurturedthe same spirit of enterprise and search for cutting-edge technology with which it started. It thus continues tobe the driving force and in many ways a benchmark for the cement industry in India.

Awards & Accolades:Excellence is palpably evident in the sights and sounds of the workplace; in the signal departure from

conventional systems that have prevailed for so long in the business scenario.From the start, Ambuja Cements worked to create an atmosphere where excellence and innovation thrives. Ithas invested in people and in technology to enable it to stand out from the rest. The search for excellence isdeeply ingrained in the Ambuja Cements ethos and it shows in many awards and accolades, achievementsand recognitions received over the years.

2008'Certificate of Merit' by Rajasthan State Productivity Council, Jaipur'Gobar Times Green Schools Programme Awards' by Centre for Science and Environment (CSE) For

the Year 2008 : Ambuja Public School : Rabriyawas

2009BCT Panvel received re-certification on ISO 9001-2008, ISO 14001-2004 & OHSAS18001-2007

Ambujanagar has won 'Best Environmental Excellence in Plant Operation' National award by NCBM2009'Certificate of Appreciation' for Accident Free million man hour our worked - Gujarat Safety Council Baroda 2009

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Yearly Results of Ambuja

Cements------------------- in Rs. Cr. -------------------

Dec '06 Dec '07 Dec '08 Dec '09 Dec '10

Sales Turnover 6,268.29 5,704.84 6,281.71 7,181.48 7,517.55

Other Income 113.66 193.53 128.33 151.23 120.26

Total Income 6,381.95 5,898.37 6,410.04 7,332.71 7,637.81

Total Expenses 4,135.20 2,873.83 4,456.71 5,209.99 5,566.59

Operating Profit 2,133.09 2,831.01 1,825.00 1,971.49 1,950.96






Total Extraordinary Income/Expenses -- -- 308.33 -- 26.53



Gross Profit 2,246.75 3,024.54 1,953.33 2,122.72 2,071.22

Interest 79.03 75.85 32.06 22.43 48.69

PBDT 2,167.72 2,948.69 2,229.60 2,100.29 2,049.06

Depreciation 326.12 236.34 259.76 296.99 387.19


-- -- -- -- --

PBT 1,841.60 2,712.35 1,969.84 1,803.30 1,661.87

Tax 338.35 741.25 567.57 584.93 398.26

Net Profit 1,503.25 1,971.10 1,402.27 1,218.37 1,263.61

Prior Years Income/Expenses -- -202.00 -- -- --


-- -- -- -- --

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Dividend -- -- -- -- --


Dividend (%) -- -- -- -- --


Book Value -- -- -- -- --

Equity 303.37 304.48 304.52 304.74 305.97

Reserves 3,187.21 4,356.39 5,368.01 6,165.92 7,022.79

Face Value 2.00 2.00 2.00 2.00 2.00

SWOT ANALYSIS

Strength

Growth at approx CAGR of 9% in last 5 years

Growing Domestic cement consumption at approx CAGR of 8% in last 3 years

Highly Capital Incentive so difficult for small entrant

Not much restriction by govt.

Market consolidation taking placeWeakness

High Oil Prices, Cost of Power increase production cost

Supply exceeds Production lead to competition in price

Low Quality as compared to international standard but improving

Opportunity

High Mortgage Penetration - Low Interest Rates

Easy loan availability for housing finance Increased investments in Infrastructure Increased govt. outlay on

BHARAT NIRMAN, GOLDEN QUADRILATERAL,BRTS etc.

Threat

Further Hike in Oil Prices Use of plastic engineering in construction Sub prime market loss may affect

SUGGESTIONS & RECOMMENDATION

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Binani cement

VISION & MISSION:

To achieve leadership status in the core sector, across the world.

To employ frontline technologies to meet the highest global standards in products

and services.

To set benchmarks in manufacturing and environmental performance.

To be a customer-first, quality-obsessed, socially sensitive corporate entity.

To achieve breakthroughs in manufacturing based on intensive R&D

To ensure well-being of all our stake-holders; upholding such values as integrity,

trust, concern, empathy and commitment.

CORPORATE PROFILE:

The journey began with Binani Industries Limited (BIL), an ambitious organisation that aimed to be apioneer in all its endeavours and set benchmarks while focusing on sustainable growth. This ensured theprogress and transformation of BIL from its humble beginnings to its present day global stature.

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The Braj Binani Group traces its beginnings to 1872, when Seth Pragdas Binani, a trader in metal utensils,began an enterprise with his son Seth Mathuradas to import and export metals. This enterprise grew fromstrength to strength until 1941, which is considered a watershed year in the Groups history. It was in thisyear, Seth Govardhandas, Seth Mathuradas' son, made the bold decision to move from trading tomanufacturing.

The journey of Binani Metal Works started with a plant at Howrah. Taking on the mantle from his father,Ghanshyam Binani, the son of Seth Govardhandas, founded Binani Zinc.

The Companys inherent attributes of visioneering and continual improvement helped shift focus towardsR&D, thus modernising and expanding its capacity. It was under the dynamic leadership of Mr. Braj Binanias its Chairman that the Company truly began to explore uncharted horizons and scale new heights.

Following the restructuring of the Braj Binani Group, between 1996 and 2004, Binani Industries Limited(BIL) was founded to serve as the holding company for Binani Cement Limited, Binani Zinc Limited, GoaGlass Fibre Limited and BT Composites Limited.

Over its eventful journey, the core values of the Company have remained unchanged. The Braj BinaniGroup is still driven by the same ambition to succeed and the need for continual improvement thattransformed Seth Pragdas Binanis metal trading house into one of Indias largest business conglomerates.After establishing its footprint firmly in India, China and Dubai, the Braj Binani Group is now envisioningto explore newer global horizons. Setting its sights on emerging markets like South Africa, East Africa andMauritius, the Group is endeavouring to establish a strong network of Binani Cement presence across theglobe. The Braj Binani Groups focused continual improvement has been recognised with internationallyaccepted certifications for its various

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