How To Analysis Company 2

FUNDAMENTAL & TECHNICAL ANALYSIS

ANALYSIS ANALYSIS

FUNDAMENTAL

TECHNICAL

FUNDAMENTAL

MACROECONOMIC

INDUSTRY

COMPANY

Company Snapshot  Industry

: Telecommunication service  Sector : Mobile Services, Broadband & Telephone Services  Scrip Symbol (NSE) : BHARTIARTL Scrip Number (BSE) : 532454  Recent Stock Price : 756.30  52 wk High (NSE) : 1,184.20  52 wk Low (BSE) : 651.00

MACROECONOMIC       

GDP Inflation Per Capita Income Infrastructure Facility Savings Monsoons Political Equations

INDUSTRY ANALYSIS OPERATOR

SUBSCRIBER BASE (Mn.)

MARKET SHARE (%)

Bharti Airtel

62.0 45.8 39.5 44.1 24.0 19.7 10.6 4.2

24.7 18.2 15.7 17.6 9.6 7.9 4.2 1.7

1.3 251.2

0.5 100

R.Com. Bsnl+Mtnl Vodafone Idea Cellular TTSL Aircel Spice Communication BPL

TOTAL

COMPANY RATIOS 1. Current ratio =

Current Asset Current Liability

Year Mar 08 Mar 07 Mar 06 End Current 0.53 0.46 0.46 ratio 2. Debt-Equity Ratio: Debt Equity

Year End Debt equity

Mar 08 Mar 07 Mar 06 0.38

0.54

0.83

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

YR End

Mar 08

Mar 07

Mar 06

ROCE

34.88

34.03

22.55

4 Earning per share (EPS) = Net profit after Tax – Pref. dividend No. of equity shares

YR End EPS

Mar 08 Mar 07

Mar 06

32.90

10.62

21.27

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

Yr Ended Mar 08 Mar 07 Mar 06 PE Ratio

21.92

35.88

38.87

6 Return on Equity capital (ROE) = NPAT- Pref. share dividend Equity share capital Yr Ended Mar 08 Mar 07 Mar 06 ROE

39.53

43.04

31.82

7 Share Holders Equity Ratio = Share Holder Equity

Yr Ended

Mar 08

Share 75.44% Equity Ratio

Total assets

Mar 07

Mar 06

68.24%

60.45%

8 Capital Gearing Ratio = Fixed Interest funds Equity share Fund Yr Ended

Mar 08 Mar 07

Mar 06

CGR

32.55% 46.53%

65.40%

9 Book Value = Paid up Equity Cap + Reserve and surplus No of Shares Yr Ended

Mar 08

Mar o7 Mar 06

Book Value

106.34

60.19

38.71

Airtel Business  Mobile Services  Broadband & Telephone Services  Enterprise Services - Carriers  Enterprise Services – Corporate

Major Agreement & Alliance With  Microsoft  Google  Nokia  IBM

Threat & Opportunities OPPORTUNITIES  A strong economy and a growing market  New technologies  Strong strategic partnerships TREAT  Increased Competitions

TECHNICAL ANALYSIS

 Technical analysis is a financial markets technique that has ability to forecast the future direction of security prices through the study of past market data, primarily price and volume

 Technical Analysis deals with probabilities, never certainties.

Basic Assumptions  The market discounts everything. - Technical analysts believe that the company's fundamentals, along with broader economic factors and market psychology, are all priced into the stock,

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

 History tends to repeat itself. -

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

SIMPLE ANALOGY

 In a shopping mall, a fundamental analyst would go to each store, study the product that was being sold, and then decide whether to buy it or not. Where as , a technical analyst would sit on a bench in the mall and watch people go into the stores. Disregarding the intrinsic value of the products in the store, his or her decision would be based on the patterns or activity of people going into each store

Candle Sticks  A price chart that displays the high, low, open, and close for a security each day over a specified period of time.  Originated in Japan.  It is used to identify price pattern.

Moving Averages  An indicator frequently showing the average value of a security's price over a set period.  Moving averages are used to emphasize the direction of a trend and to smooth out price and volume fluctuations, or "noise", that can confuse interpretation  upward momentum is confirmed when a short-term average (e.g.15day) crosses above a longer-term average (e.g. 50-day). Downward momentum is confirmed when a short-term average crosses below a long-term average.

Fundamental V/S Technical  Charts vs. Financial Statements  Time Horizon  Trading Versus Investing

CONCLUSION  Technical analysis and Fundamental analysis are Opposite poles of investing. But if both technical & fundamental Analysis are used together Wisely a great success can be experience.