À


À
À   
Finance and investment industry is a fairly broad ranging group of institutions that
provide various financial services. Examples of such institutions include commercial banks,
merchant (or investment) banks, insurance companies, brokerage firms, asset managers, and an
assortment of other institutions. Services provided range from money management for private
individuals to debt and equity underwriting for corporations to insurance of policies, and many
other services. In today¶s global markets, this industry is the engine of the global economy,
enabling corporations and governments to grow and expand.
The financial service industry includes firms that are engaged in activities such as
investing, lending, insurance, securities trading and securities insurance. This is not an
exhaustive list, but these companies can be characterized as being in one or more of the
following lines of business.
ÿ àanking
ÿ Insurance
ÿ Securities brokerage
ÿ Investment banking
ÿ Securities trading
ÿ Investment management or money management
ÿ Securities analysis
ÿ Financial planning

2     À 

 ‘lobalization and foreign direct investment form an integral part of all the developed as
well as developing economies. In fact, the growth of the underdeveloped economies is also
dependent on these key factors. These components equip any nations with new skills, new items
and provide smooth access to market and technology. Today, every nation across the globe is
looking for foreign and overseas investors. Whether it¶s India or china. Everyone wants foreign
investments.

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 According to recent trends, India is only second to china in the league of favorite
investment destinations. India is considered the 2nd highest foreign employer in the United
Kingdom after the United States.

‘     

 Along with India, the others who are participating in the race of investment among the
developing economies are china, Singapore, Malaysia, Russia, and àrazil.

À  
 A stock market or equity market is a public entity for the trading of company stock
(shares) and derivatives at an agreed price; these are securities listed on a stock exchange as well
as those only traded privately. Stock markets refer to a market place where investors can buy and
sell stocks. The price at which each buying and selling transaction takes is determined by the
market forces (i.e. demand and supply for a particular stock).
The Indian Equity market is divided in to two parts Primary market - where the share is
first issued in the form of IPO (Initial Public Offering) and secondary market is the place where
after issuing the share it is listed on exchange and share is traded on exchange where shares can
be bought and sold. In India mainly there are two exchanges -NSE (National Stock Exchange)
àSE-àombay Stock Exchange. The àSE is the oldest exchange in India(started in 1875).NSE
started operation on 1994.àefore 2000, shares were held in Physical form àut the main difficulty
with Physical shares is method of transaction which is open outcry system and process is not
transparent to investor also. Physical shares were prone to duplication and fraud. So in 2000 NSE
introduced the electronic screen based trading system, further with the introduction of
Dematerializations (Conversion of physical share in to electronic form) and depository (where
the electronic form of share is kept) which revolutionized the Indian Stock market. Currently
there are mainly two Depository (DP) -NSDL and CDSL and these Depositories are like bank of
share. Individual/Firm can deal through àroker (who is registered and having membership in
Exchanges and Depository) for buying and selling securities. Today NSE outpaced àSE in
volume of trade. Then what is the purpose of stock market? Stock market serves the company by
providing company the finance for long term needs and by providing an opportunity to the
investors to park their savings in corporate world and in turn to give their hand in Nation's
development.

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 To buy the shares, investor has to open a trading and demat account. So investor has to
approach a broker/sub broker who has member ship in Exchange (where the share is listed
mainly NSE and àSE) and depository(where share is kept in Demat form-Electronic
form[mainly CDSL and NSDL).
SENSEX and NIFTY are Index of àSE and NSE àlue chip share. SENSEX consist of 30
share and NIFTY 50 share (of top most companies) Index is the barometer of stock exchange
forex. In NSE there are about 1350 listed companies. INDEX is constructed by taking top
companies across different sector in different weightage and INDEX movement will reflect the
overall movement of market. So if NIFTY or SENSEX is up we can generally assume market is
up (does not mean all shares are up) and vice versa. Now there are index in some sectors which
can catch the movement of that sector like CNXIT-IT sector, àANKNIFTY-àanking sector etc.
‘eneral purpose of Stock Market is for Investment but bulk of activities done in market is day
trading. Day trading means àUYIN‘/SELLIN‘ of shares and offsetting the position on same
day. Day traders serves the purpose of bringing the liquidity to market and they help the market
movement and more than 80% of the volume from market is coming from day trading.
Introduction of derivative market had made the day trading to grow more. The main tool
for Stock market investment/trading are Fundamental analysis -which studies about the
fundamental of companies and economy and Technical Analysis-which studies the market by
analyzing the past movement of share and market.

    
Financial products are investment avenues and if matched properly with investor needs
and risk profile, can serve the primary need to beat inflation and generate adequate returns after
adjusting for risk. In recent years, post liberalization of financial services industry, diverse
financial products have been introduced such as variety of open-ended and close-ended equity
and debt mutual fund schemes, life and non-life insurance schemes - ULIPs, Pension plans, PMS
schemes focusing on customized investment in stocks and corporate bonds/debentures.

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 2  
À
The IIFL (India Info line) group, comprising the holding company, India Infoline Ltd
(NSE: INDIAINFO, àSE: 532636) and its subsidiaries, is one of the leading players in the
Indian financial services space. IIFL offers advice and execution platform for the entire range of
financial services covering products ranging from Equities and derivatives, Commodities,
Wealth management, Asset management, Insurance, Fixed deposits, Loans, Investment àanking,
goi bonds and other small savings instruments. IIFL recently received an in-principle approval
for Securities Trading and Clearing memberships from Singapore Exchange (S‘X) paving the
way for IIFL to become the first Indian brokerage to get a membership of the S‘X. IIFL also
received membership of the Colombo Stock Exchange becoming the first foreign broker to enter
Sri Lanka. IIFL owns and manages the website, www.indiainfoline.com, which is one of India¶s
leading online destinations for personal finance, stock markets, economy and business.

IIFL has been awarded the µàest àroker, India¶ by Finance Asia and the µMost improved
brokerage, India¶ in the Asia Money polls. India Infoline was also adjudged as µFastest ‘rowing
Equity àroking House - Large firms¶ by Dun & àradstreet. A forerunner in the field of equity
research, IIFL¶s research is acknowledged by none other than Forbes as µàest of the Web¶ and
µ«a must read for investors in Asia¶. Our research is available not just over the Internet but also
on international wire services like àloomberg, Thomson First Call and Internet Securities where
it is amongst one of the most read Indian brokers.

A network of over 2,500 business locations spread over more than 500 cities and towns
across India facilitates the smooth acquisition and servicing of a large customer base. All our
offices are connected with the corporate office in Mumbai with cutting edge networking
technology. The group caters to a customer base of about a million customers, over a variety of
mediums viz. online, over the phone and at our branches.

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#     $% 
The India Infoline groups were founded in 1995 by Mr. Nirmal Jain (Chairman and
Managing Director) as an independent business research and information provider. Then
gradually evolved into a one-stop financial services solutions provider. The Strong management
team comprises competent and dedicated professionals.
Now they are a pan-India financial services organization across 1,361 businesses Locations
and a presence in 428 cities. Their global footprint extends across geographies with offices in
New York, Singapore and Dubai. We are listed on the àombay Stock Exchange (àSE) and the
National Stock Exchange (NSE).
They now offer a wide range of services and products comprising broking (retail and
institutional equities and commodities), wealth management, credit and finance, Insurance, asset
management and investment banking. The India Infoline group registered with the àSE and the
NSE for securities trading, MCX, NCDEX and D‘CX for commodities trading, CDSL and
NSDL as depository participants. We are registered as a Category I merchant banker and are a
SEàI registered portfolio manager. We also received the FII license in IIFL Inc. IIFL Securities
Pvt Ltd received approval from the Monetary Authority of Singapore to carry out corporate
advisory and dealing in securities operations. Two subsidiaries India Infoline Investment
Services and Moneyline Credit Limited are registered with RàI as non-deposit taking non-
banking financial services companies. India info- line Housing Finance Ltd, the housing finance
arm, is registered with the National Housing àank.
India Infoline originally incorporated on October 18, 1995 as PROàITY RESEARCH AND
SERVICES PVT LTD. at Mumbai under the Companies Act,1956 with Registration No.
1193797.and became a public limited company on April 28,2000. The name of the Company
was changed to India Infoline.com Limited on May 23, 2000 and later to India Infoline Limited
on March 23, 2001. It is the first Company in India to foray into the online distribution of Mutual
Funds.           


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[  $ 
India infoline is a wealth management company. It is one stock shop for all investment
needs for the Indian retail investors, from advice to execution online as well as offline.

They deal with equity trading, all investment for products, tax saving, investment insurance
plan etc. from advice to execution in financial services.

Commodities
Informat
ion and Mutual funds Execution
advice and
Insurance service
Equities

o &   

& 

³Our vision is to be the most respected company in the financial services space"

 

³To become a full-edged financial services company known for its quality of ad-
vice, personalized services and cutting edge technology"

'  

(Our values emphasize integrity, transparency, commitment to Excellence and team work.´


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ü )$ 
India Infoline is a one-stop financial services shop, most respected for quality of its
advice, personalized service and cutting-edge technology.

"

IIFL is a member of àSE and NSE registered with NSDL and CDSL as a depository
participant and provides broking services in the cash, derivatives and currency segments, online
and offline. IIFL is a dominant player in the retail as well as institutional segments of the market.
It recently became the first Indian broker to get a membership of the Colombo Stock Exchange
and is also the first Indian broker to have received an in-principle approval for membership of
the Singapore Stock Exchange. IIFL¶s Trader Terminal, its proprietary trading platform, is
widely acknowledged as one of the best available for retail investors. Investors opt for IIFL
given its unique combination of superior Service, cutting-edge proprietary Technology, Advice
powered by world-acclaimed research and its unparalleled Reach owing to its over 2500 business
locations across over 500 cities in India.

IIFL received the à 1 broker grading (highest grading) from CRISIL. The assigned
grading reflects an effective external interface, robust systems framework and strong risk
management. The grading also reflects IIFL¶s healthy regulatory compliance track record and
adequate credit risk profile.

IIFL¶s analyst team won Zee àusiness¶ µIndia¶s best market analysts awards ± 2009¶ for
being the best in the Oil and ‘as and Commodities sectors and a finalist in the àanking and IT
sectors. IIFL has rapidly emerged as one of the premier institutional equities houses in India with
a team of over 25 research analysts, a full-fledged sales and trading team coupled with an
experienced investment banking team.

2

 IIFL offers commodities trading to its customers wide its membership of the MCX and
the NCDEX. Our domain knowledge and data based on in depth research of complex paradigms
of commodity kinetics, offers our customers a unique insight into behavioral patterns of these

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markets. Our customers are ideally positioned to make informed investment decisions with a
high probability of success.

2 $  

IIFL offers a wide array of secured loan products. Currently, secured loans (mortgage
loans, margin funding, loans against shares) comprise 94% of the loan book. The Company has
discontinued its unsecured products. It has robust credit processes and collections mechanism
resulting in overall NPAs of less than 1%. The Company has deployed proprietary loan-
processing software to enable stringent credit checks while ensuring fast application processing.
Recently the company has also launched Loans against ‘old.

À  

IIFL entered the insurance distribution business in 2000 as ICICI Prudential Life
Insurance Co. Ltd¶s corporate agent. Later, it became an Insurance broker in October 2008 in
line with its strategy to have an µopen architecture¶ model. The Company now distributes
products of major insurance companies through its subsidiary India Infoline Insurance àrokers
Ltd. Customers can choose from a wide bouquet of products from several insurance companies
including Max New York Life Insurance, MetLife, Reliance Life Insurance, àajaj Allianz Life,
àirla Sunlife, Life Insurance Corporation, Kotak Life Insurance and others.

* %   

IIFL offers private wealth advisory services to high-net-worth individuals (HNI) and
corporate clients under the µIIFL Private Wealth¶ brand. IIFL Private Wealth is managed by a
qualified team of MàAs from IIMs and premier institutes with relevant industry experience. The
team advises clients across asset classes like sovereign and quasi-sovereign debt, corporate and
collateralised debt, direct equity, ETFs and mutual funds, third party PMS, derivative strategies,
real estate and private equity. It has developed innovative products structured on the fixed
income side.

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À  #  

IIFL¶s investment banking division was launched in 2006. The business leverages upon its
strength of research and placement capabilities of the institutional and retail sales teams. Our
experienced investment banking team possesses the skill-set to manage all kinds of investment
banking transactions. Our close interaction with investors as well as corporate helps us
understands and offer tailor-made solutions to fulfill requirements. The Company possesses
strong placement capabilities across institutional, HNI and retail investors. In FY10, the team
advised and managed more than 10 transactions including four IPOs and four ualified
Institutions Placements

Î $ 
The company provides its services through a network of 758 business locations including
607 branches and 151 franchisees in 346 cities in India. The company¶s key area of operations
includes India, Singapore, New York, Srilanka, and Dubai. The company is headquartered in
Mumbai, India.
%+À À $  ,-Î,   2 .,$$*

/ %0,‘  12,34o  +15

3[[244--Î566 
  :
.315
3[[2[47Î6üÎ
À 8 %$$Î%$ ,2
,
3%  , 8 3 -66 6-
,  316oo2
üü6645Îü)ü66- 4Î
[
 À 
À  À $       - Registered with the àSE and the NSE for
securities trading (cash and derivatives segment), with MCX/SX and NSE for currency
derivatives segment, with MCX, NCDEX and D‘CX for commodities trading and with
CDSL and NSDL as depository participants. It also registered as a Category I merchant
banker and as a portfolio manager with SEàI.
 0
ÀÀ
À . - Regulated by the Financial Industry Regulatory Authority (for àroker Dealer)
and by the Securities & Exchange Commission (for RIA). It is also a SEàI-registered FII.

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À  À $   2
22 - àroking member of the Dubai ‘old and
Commodities Exchange (D‘CX).
   
ÀÀ
2  12 - Received in-principle membership of the Colombo
Stock Exchange.
  
ÀÀ
    ± Capital Market Services license issued by the Monetary
Authority of Singapore and received inprinciple approval for the membership of
Singapore Stock Exchange as Trading and Clearing member.
ÀÀ
2  ± Exempt Financial Advisor regulated by the Monetary Authority
of Singapore.

4  0 % 
a. promoter¶s share
b. institutional investor share
c. foreign instructional investor¶s share
d. share of retail investor
e. government¶s share
f. others
Promoters and their promoter together hold 36.35% of post issue equity shares. as a result
of their shareholding they will have the ability to influence most matters, which require the
approval of our share holders.

- 29 $ 
Indian financial market has many leaders providing best of their financial services. this
includes the public as well as private organizations. Even the nationalized banks have started
different financial services to compete with the players of the private sector. The competitors are
like:
u KARVY FINANCIAL SERVICES
u àAJAJ CAPITAL
u ‘EOJIT

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 u IN‘ VYSYA
u INDIA àULLS
All these cover almost the whole financial market of India providing services like mutual
funds, company deposit, insurance policies, etc.
àajaj capital is third amongst all the leaders with a 28% share and is growing with a
steady peace. it is difficult for the service providers to compete in the market when the àajaj
capital is on the top of the list.

7 À $ $ 

ÿ online trading software
ÿ surveillance and risk management
ÿ client administration
ÿ back office software
ÿ communication link and VSAT network
ÿ networking and hardware
ÿ security

5 %  0

M Company won the golden mouse award in India Internet World 2000 for the best finance
site.
M In may 2001, IIFL website was included in the top 200 best of the web list by Forbes
‘lobal under the Asia investing category.
M IIFL research is also disseminated electronically through àloomberg, investext, first
call/Thomson financial and internet securities.
M India infoline was the first company to offer many of the services in the country
transaction services include mutual funds, personal loans and online broking.
%  [6653[6
6
M Revenues grew 28.1% from Rs. 8.8 bn in 2008-09 to Rs. 11.2 bn in 2009-10
M EàIDTA grew 49.6% from Rs. 2.9 bn in 2008-09 to Rs. 4.4 bn in 2009-10
M Profit after tax grew 60.2% from Rs. 1.4 bn in 2008-09 to Rs. 2.3 bn in 2009-10
M Increased average daily trading volumes during the year to Rs. 35 billion, up 57% on a
year-on year basis.

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 M Sole book-running lead manager for Cox & Kings (Rs. 6.1 bn) and Talwalkars (Rs. 744.4
mn)
M Scaled up Wealth management business with assets under advice have crossed Rs. 50 bn
M Financing book grew to Rs. 16.3 bn
M Received an in-principle approval for securities trading and clearing membership from
the Singapore Exchange for IIFL Securities Pvt Ltd, our Singapore-based subsidiary.
M Conducted our first ‘lobal Investors¶ Conference ± µEnterprising India¶ ± in Mumbai,
drawing the participation of more than 450 fund managers, more than 70 corporate as
well as world-renowned economists and thought leaders.
M Changed ‘roup identity from India Infoline to IIFL.
M àought out the stake of a private equity partner in the Credit and finance and Insurance
distribution businesses

01[6653[6
62

Rated by Ô
in 2009 among the Received à 1 broker grading from

country¶s top three brokerages CRISIL, reflecting a superior quality of
operations and services

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 Awarded at the µIndia¶s best market
Chairman Nirmal Jain ranked second analysts awards ± 2009¶ by Zee
among µIndia¶s Most Valuable CEOs¶ àusiness for being the best in the µOil
by à
 
in November 2009 and ‘as¶ and µCommodities¶ sectors and
finalists in the µàanking¶ and µIT¶ sectors

10. Workflow model

A 0$ 0 consists of a sequence of connected steps. It is a depiction of a sequence of
operations, declared as work of a person, a group of persons, an organization of staff, or one or
more simple or complex mechanisms. Workflow may be seen as any abstraction of real work.
For control purposes, workflow may be a view on real work under a chosen aspect, thus serving
as a virtual representation of actual work.
The work flow model is used to describe the trading, clearing, and settlement process of
equities trading in the market. It is also known as end to end model which is given below.

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 Collecting leads from different servers

(Kiosks, Events, Web)

Contacting the leads

(Via Telephone, Mail, Direct)

Explaining the features of products

Low Cost, Upfront, àrokerage)


Explaining him / her about the essential documents

 (Identity Proof, Address Proof, Pan Card 


Providing him the Demat Account kit

(Contains Security Token, Manual Cd, Pin and User Id 

 Facilitate with the demo trading

 (Have to use security token in Internet)


Connecting with a franchisee for further trading





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2 9$ 0% 

The asset base will continue to grow at an annual rate of about 30% to 35% over the next
few years, as the investor¶s shift their assets from banks and other traditional avenues. Some of
the older public and private sector players will either close shop or be broken over.

Actual results may differ materially from those suggested by the forward looking
statements due to risks or uncertainties associated with our expectations with respect to, but not
limited to, our ability to successfully implement our strategy, our growth and expansion,
technological changes, our exposure to market risks, general economic and political conditions in
India which have an impact on our business activities or investments, the monetary and interest
policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange
rates, equity prices or other rates or prices, the performance of the financial markets in India and
globally, changes in domestic and foreign laws, regulations and taxes and changes in competition
in the industry.

All forward looking statements are subject to risks, uncertainties and assumptions about
us that could cause actual results to differ materially from those contemplated by the relevant
forward-looking statement. Important factors that could cause actual results to differ materially
from our expectations include but are not limited to:

1. ‘eneral economic and business conditions in India;

2. Our ability to successfully implement our growth strategy and expansion plans;
3. Our ability to respond to technological changes;
4. Changes in laws and regulations relating to the industry in which we operate;
5. Changes in political and social conditions in India;
6. Our ability to successfully launch the new products;

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 28 9-
* 8
 The 7-S frame work was developed by the consultants at the Mckensey Company, a very
well known management consultancy firm in U.S.A, towards the end of 1970¶s to diagnose the
cause of organizational problems and to formulate programmes for improvement developed the
7-S frame work.
The Mckensey 7-S model involves seven interdependent factors which are categorized as
either hard or soft elements:
³Hard´ elements are easier to define or to identify, and management can directly
influence them.
³Soft´ elements on other hand, can be more difficult to describe, and are less tangible and
more influenced by culture. However, these soft elements are as important as the hard elements.
/   $  
Strategy Shared valve
Structure Skills
System Style
Staff

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 + the plan devised to maintain and build competitive advantage over the competition.
+the way the organization is structured and who reports to whom.
+ the daily activities and procedures that staff members engaged in to, to get the job
done.
% : called ³super ordinate goals´ when the model was first developed, these are the
core values of the company that are evidenced in the corporate culture and the general work
ethic.
 : the style of leadership adopted.

$$+the employees and their general capabilities.

 +the actual skills and competencies of the employees working for the company.

Placing the shared values in the middle of the model emphasizes that these valves are
central to the development of all the other critical elements. The company¶s strategy, structure,
system, style, staff, and skill all stem from why the organization was originally created, and what
it stands for. The original vision of the company was formed from the values of the creator. As
the valves change, so do all the other elements.

 
 A strategy is a plan of action designed to achieve a particular goal. Strategy refers to the
systematic action and allocation of resources to achieve the companies aim, the integrated vision
and direction of the company as well as the manner, which it drives, articulate, communicates
and implements that vision and direction. It can also be defined as the choice of direction and
action that the company adopts to achieve its objectives in a competitive situation.
As per the vision and mission statement of the company, the main strategy of India
infoline is to gain competitive advantage over the rivals not by letting the others down but by
taking its own standards to a higher level through better services and customer satisfaction. Their
strategic goal is to excel in its service with integrity, diligence and transparency in satisfying the
customers¶ investment needs and to build itself as the trusted and a world class financial service
provider.

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The element of our strategy includes:
ÿ ³one stop shop´ form advice to transaction
ÿ multichannel delivery model
ÿ expand our retail net work
ÿ leverage our content advantage for value added offering
ÿ acquisition and takeover


 The daily activities and procedures that staff members engage in to get job done. System
comprises of the main system that run the organization like the finance or the human resource
systems.
They manage the risk associated with their broking operations through use of internally
developed credit algorithms implemented through fully automated risk management software
and selective direct monitoring of certain operating parameters. Their automated risk
management procedures rely primarily on internally developed risk management system and
systems provided by their vendors.
They have developed a team of customer relationship managers across India to handle
key customer accounts. These people are experienced in financial service and have undergone in-
house training. This allows them to offer unbiased advice on not only equities but also on other
investment products like mutual funds and insurance. Apart from advice, they are trained to
customer queries as they ensure that the customer has a single point contact with us.


 àusiness needs to be organized in a specific form of shape that is generally referred as
organizational structure. Organizations are structured in a variety of ways, dependent on their
objectives and culture. The structure of the company often dictates the way it operates and
performs.

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  : 
2% ;   


 
/3%   
 &  
.

/%

/3 

8 %%%

/3)2  

%#%% 
%%  % %

/
;À   /2 &3# 

   %  &    %

/3 0 &3;À    &3%

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/3# $$

8 %

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%À    ! 


8 %%
%À   

   8  8   %

           

    ,  $8 

     

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% 
 Shared values are the core values of the company that are evidenced in the corporate
culture and the general work ethics. The valves of India infoline are its core foundation for its
excellence in its day to day business operations which drives it towards the success. They are:
§ Integrity
§ Transparency
§ Commitment to excellence
§ Team work.

 
Style of leadership refers to the manner in which an individual uses his or her talent,
valves, knowledge, judgment, and attitudes to lead and relate to others. Styles express the
person¶s character. Style is the leadership approaches of top management and the organization¶s
overall operating approach; also the way in which the organizations employees present
themselves to the outside world, to suppliers and customers.
The company follows a top-down style of management where in the top level managers
would give instructions and the same is followed the lower levels. However, at India infoline
they have a very pleasant and cooperative culture where everyone¶s ideas are respected and
considered. All are participative when it comes to working at the office so as to reach the targets
and meet the organizational goals jointly in the least possible time.

$$
 Organizations are made up of people and it¶s the people who makes the real differences
to the success of the organization in the increasingly knowledge based society. The importance
of human resource as thus got the central position in the strategy of the organization, away from
the traditional model of capital and land.
The people working in India infoline have technical skills that are required for the day to
day operations in the company. They believe that key to their continued growth lies in
unleashing the entrepreneurial energy of their employees. People are highly driven and work
hard towards increasing India infoline¶s brand and market share across product line.

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 Skills deals with the strongest skills,, actual skills and competencies of the employees
working for the company and how they are monitored. A skill is the ability, knowledge,
undertaking, and judgment to accomplish a task. Skills may be defined as what the company
does best; the distinctive capabilities and competencies that reside in the organization.
India Infoline has variety of skills in carrying out business. The company has its
distinctive competency in providing excellent investment service and known for its strong and
long standing relationship with investors, other companies and its clients.
The company also has potential and proficient, technical and fundamental analysis who
help to analyze the market carefully and correctly before any investment. The dealers at India
Infoline are also well qualified and fully trained. Thus, the skills which are the dominant
capabilities and core competencies possessed by the organization are very much in parallel to
organizational strategy, structure, systems, and the culture.












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 *   
 SWOT Analysis is a strategic planning tool used to evaluate the strengths, weaknesses,
opportunities, and threats for a business entity. It involves specifying the objective of the
business venture or project and identifying the internal and external factors that are favorable and
unfavorable to achieving that objective. The technique is credited to Albert Humphrey, who led a
research project at Stanford University in the 1960s and 1970s using data from fortune
500companies.
 %UAttributes of the organization which are helpful to achieve the objective.
* : Attributes of the organization which are harmful to achieve the objective
 : External conditions which are helpful to achieve the objective.
%+ External conditions which could damage the business performance.

 %
M 2! 
It understands the dreams, needs, aspirations, concerns and resources are unique and this
is reacted in every move they do for the sake of individual customer. This is the greatest
value it provide online trading products like Smart Invest and Smart Trade.
M .
India Infoline Ltd brings within the customers reach their institutional expertise and the
ability to effectively combine an invaluable understanding of the financial markets, with
an intention of building a long-term partnership.
M 33%$ %   
India Infoline Ltd gives all the types of services and products an individual investor can
dream and think off. All the financial products and services are under one-roof.
M   <
 The teams of expert investment advisors customize plans to suit the needs of investors.
M . %
India Infoline Ltd makes sure that they are always accessible to customers through a host
of mediums. A customer can contact them either through website or through their
branches and channel partners of more than 300 offices across India.

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 M #  
 India Info line Ltd as such is a well known brand in industry.
M 2 
 It charges less brokerage compared to its competitors.

* 
M . 
Some of the products like Smart Trade are quite expensive. An annual charge for Smart
Trade is Rs. 3000.
M 
 Tedious procedures and delays in processing the data and documents of new customers.
M
  $
It has tie-ups with only 5 banks for online fund transfer, where as other competitors have
more tie-ups.
M  
 High attrition rates in trainees category.
M  $$
Some offers of the company like Advance Subscription Plan with a deposit of Rs.50,000
to avail low brokerage charges. The low brokerage charges will be effective for the
clients for a minimum turnover of Rs. 50 Core p.a.

 
M Indian economy seems to be out of recession. This is the right time for inventers to re-
enter the market. The company should adopt some strategies to increase the business
through existing clients.
M The increasing number of management graduates helps to get sales force at trainee levels
at less salaries or commission basis. It reduces the salaries and extra expenses of the
company. The company can tie up with reputed à Schools for trainees.
M Huge untapped market in rural areas and towns of India can be concentrated to increase
the business.
M Many a banks are offering fund transfer services. The company can increase the tie-ups
for fund transfers to attract customers of different banks.

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%
M Stiff competition from existing players in the market, threat of new entrants which has
lead to cut throat competition in terms of brokerage charges and exposure.
M Increasing awareness of mutual funds and ULIPs created by Domestic Institutional
Investors has reduced the direct investment in to stock market to some extent. This
automatically reduces the business of stock brokers.
M Changing economic scenario in India and changes in government policies will have great
impact on the revenue of this company
M Many a investors burnt their figures during the bearish market conditions which has
turned many a trading accounts inoperative.














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  À

À  2À 
#  %
1  2
 %  o
6o [6
6 o
6o [665
 2


   
%% =
    
Share Capital A 570,429,550 566,800,000
Share Application Money 4,021,350 -
Reserves and Surplus à 10,506,695,485 9,801,314,902
Equity Share Warrants C O 11,081,146,385 113,700,000 10,481,814,902
 
 
Secured Loans D 11,672,560 17,044,854
Unsecured Loans E 4,965,829,409 4,977,501,969 1,031,242 18,076,096
 
4,6Î7,4ü7,oÎü
6,ü55,756,557
À2À 
   




.1À    F
À   2
‘ross àlock 1,088,334,787 1,436,768,398
Less : Accumulated (606,325,123) (449,446,945)
depreciation and
amortisation
Net àlock 482,009,664 987,321,453
Capital-Work-In-Progress 17,511,161 499,520,825 45,134,564 1,032,456,017
À   ‘ 11,042,244,111 8,693,123,758
Deferred Tax Assets 96,396,623 38,154,037
2 ,   H
 
Sundry Debtors 5,775,030,452 1,035,288,204
Cash and àank àalances 5,618,364,349 4,302,493,074
Stock On Hand 537,590,262 5,609,032
Loans and Advances 5,070,671,411 2,405,913,981

-,66
,4Î4,ü-ü -,-ü5,o6ü,[5

Less : Current Liabilities & I
Provisions
Current Liabilities 10,258,096,541 5,526,753,387
Provisions 2,323,073,138 1,486,393,718

[,Î7
,
45,4-5 -,6
o,
ü-,
6Î
2   ü,ü[6,ü74,-5Î -o4,
Î-,
74
   
4,6Î7,4ü7,oÎü 
6,ü55,756,557


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$   
1  2
 %  [6653[6
6 [6673665
À 2 
Equity brokerage & 6,125,493,009 4,516,852,265
related income
Mutual Funds 146,687,721 87,827,926
distribution,etc
Merchant banking income 387,731,280 23,262,564
Other income J 321,998,621 293,362,605
4,57
,5
6,4o
 ü,5[
,o6Î,o46
>
À
Direct cost K 1,463,955,099 683,582,429
Employee cost L 1,641,491,422 1,434,218,601
Administration & other M 1,122,287,419 954,676,174
expense
Interest 102,456,419 78,456,609
Depreciation & F 318,646,716 255,613,981
amortization
ü,4ü7,7o-,6-Î o,ü64,Îü-,-5ü
$$. [,ooo,6-o,ÎÎ4 
,Î
ü,-Î-,Î44
+ $ 831,593,975 480,757,044
. 
- Current
- Deferred tax (58,242,586) (12,260,101)
- Fringe benefit tax - 10,341,846
- Short/(Excess) Provision 39,558,672 (22,335,012)
of Income Tax
$$.
,Î[6,
4o,ü5Î
,6Î7,[Îo,-75
$$.$
,Î[6,
4o,ü5Î
,6Î7,[Îo,-75
   
 
Dividend
- Interim Dividend 851,982,000 794,488,993
Dividend distribution tax 144,794,341 135,023,404
Transfer to ‘eneral 152,016,352 105,825,379
Reserve
àalance of Profit brought 1,252,058,659 1,229,142,646
forward from previous
year
#  $$
,[Î[,6Î7,4Î5
$0
,4[o,ü[5,ü4

Earning Per Share-àasic 5.36 3.71
-Diluted 4.49 3.48
Face Value Per Share 2 2





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  À ‘>À 2
ÿ Had an opportunity to watch live dealings and trading procedures in stock market.
ÿ ‘ot an idea, about the way to behave and respond to the problems and situation
handling in an organization.
ÿ Learned business etiquettes
ÿ Had a deep study about the stock market behave and was able to make analysis and
interpretations.
ÿ Came to know about India info line¶s position among its competitors.
ÿ Learned the applications of theoretical aspect in practical world.
ÿ Learned how to motivate customers in the investment avenues.
ÿ Came to know the applicability of secondary data and prime data.
ÿ Created awareness of various financial products.
ÿ Learned the trading and settlement procedures of commodity markets.
ÿ Learned to correlate the stock along with the index.
ÿ Learned how an index is an indicator, which shows various fluctuations in stock market.
ÿ Noticed performance of different sectors on a specified duration.
ÿ Was curious to know the future and compare the predictions with the live market.





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‘ À 
2À 
Pharmaceutical Industry in India is one of the largest and most advanced among the
developing countries. It provides employment to millions and ensures that essential drugs at
affordable prices are available to the vast population of India. Indian Pharmaceutical Industry has
attained wide ranging capabilities in the complex field of drug manufacture and technology.
From simple pain killers to sophisticated antibiotics and complex cardiac compounds, almost
every type of drug is now made indigenously.
Indian Pharma Industry is playing a key role in promoting and sustaining development in
the vital field of medicines. Around 70% of the country's demand for bulk drugs, drug
intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals and vaccines are
met by Indian pharmaceutical industry. A number of Indian pharmaceutical companies adhere to
highest quality standards and are approved by regulatory authorities in USA and UK.
Indian Pharma Industry is playing a key role in promoting and sustaining development in
the vital field of medicines. Around 70% of the country's demand for bulk drugs, drug
intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals and vaccines is
met by Indian pharmaceutical industry. A number of Indian pharmaceutical companies adhere to
highest quality standards and are approved by regulatory authorities in USA and UK.
The future of Indian pharmaceutical sector looks extremely positive. Indian pharma
companies are vying for the branded generic drug space to register their global presence. Several
Indian pharmaceutical companies have acquired companies in the US and Europe and many
others are raising funds to do so. For example, Ranbaxy acquired Romania's Terapia, Ethimed
NV of àelgium and ‘SK's generic business Allen Spa in Italy. Dr Reddy's acquired ‘erman
generic drug maker àetapharm. Companies like ‘len mark Pharma, Lupin, Aurobindo and
Jubilant Organosys are on the lookout for lucrative acquisitions.




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c



 !"
#

!

 "$

Dr. REDDYǯS LABORATORIES Ltd:-

Dr. Reddy¶s Laboratories Ltdtrading as Dr. Reddy's, founded in 1984 by Dr. K. Anji Reddy,
has become India¶s biggest pharmaceutical company. Dr. Anji Reddy had worked in the
publicly-owned Indian Drugs and Pharmaceuticals Ltd. Reddy's manufactures and markets a
wide range of pharmaceuticals in India and overseas. The company has more than 190
medications ready for patients to take, 60 active pharmaceutical ingredients for drug
manufacture, diagnostic kits, critical care and biotechnology products.

CIPLA:-

CIPLA (Chemical, Industrial & Pharmaceutical Laboratories) was established by Khwaja

Abdul Hamied in 1935 who gave it an upstart giving access to his intellectual property rights in
drug formulations and manufacture. It is one of the oldest pharmaceutical companies in India. It
is India¶s second largest pharmaceutical firm and has recently displaced ‘laxo SmithKline in its
upward journey. CIPLA is a leading player in manufacture of anti-infective, anti-asthmatic
formulations, steroids and hormones. In 1968, it became the first Indian company to manufacture
Ampicillin in collaboration with the National Chemical Laboratory, it synthesized 2 anti-cancer
drugs Vinblastine and Vincristine in the year 1983 from the Rose, ö
  .Later in the year
1993, and it pioneered the manufacture of the anti-retroviral drug zidovudine in association with
the Indian Institute of Chemical Technology.

LUPIN PHARMACEUTICALS Ltd:-

Lupin Pharmaceuticals, Inc. is the U.S. wholly owned subsidiary of Lupin Limited,
which is among the top six pharmaceutical companies in India. Through our sales and marketing
headquarters in àaltimore, MD, Lupin Pharmaceuticals, Inc. is dedicated to delivering high-
quality, branded and generic medications trusted by healthcare professionals and patients across
geographies.

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 Lupin Limited, headquartered in Mumbai, India, is strongly research focused. It has a
program for developing New Chemical Entities. The company has a state-of-the-art R&D center
in Pune and is a leading global player in Anti-Tà, Cephalosporin¶s (anti-infective) and
cardiovascular drugs (ACE-inhibitors and cholestrol reducing agents) and has a notable presence
in the areas of diabetes, anti-inflammatory and respiratory therapy. They are building on their
parent company¶s strengths of vertical integration in discovery research, process chemistry,
active pharmaceutical ingredient production, formulation development and regulatory filings.
Lupin. Pharmaceuticals, Inc. is committed to achieving its vision and mission of becoming an
innovation led transnational pharmaceutical company.

SUN PHARMACEUTICALS Ltd:-

Sun Pharmaceuticeuticals is an international pharmaceutical company based in Mumbai,
India. It makes many generic and brand name drugs that are distributed in the United States,
Europe, Asia and worldwide. Sun manufactures both pharmaceuticals and active pharmaceutical
ingredients (API), in essence, ingredients to be used in finished pharmaceutical products. Its
products are in several therapeutic areas, including psychiatry, neurology, cardiology,
diabetology, gastroenterology, respiratory, and orthopedics.
Established in 1983, Sun Pharma was a start-up company with five products. Since 1996,
Sun has grown largely through a combination of internal growth, and acquisition of other
pharmaceutical companies. For example, it bought US-based Caraco Pharm Labs, and ICN
Hungary.

DIVIS LABORATORIES Ltd:-

Established in the year 1990, with Research & Development as its prime fundamental,
Divis Laboratories focused on developing new processes for the production of Active Pharma
Ingredients (APIs) & Intermediates. The company in a matter of short time expanded its breadth
of operations to provide complete turnkey solutions to the domestic Indian pharmaceutical
industry.
A Vision to excel to maintain leadership in custom synthesis of APIs and Intermediates
for health care and life sciences industry and to be one of the top companies¶ world-wide in the
domain. To develop generic APIs for the late life cycle needs of the Industry.

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/ #+3
 The performance of the Indian pharmaceutical industries is evaluated by Fundamental
and Technical analysis. Fundamental analysis of the business involves analyzing its financial
statements and health, its management and competitive advantages, its competitor and markets.
Technical analysis is a process of identifying trend reveals at an earlier stage to formulate the
buying and selling strategy. The study based on secondary data collected from the business
journals, companies¶ websites, books and internet.
The following are the companies of the pharmaceutical industry of which the study is
been held:-

¦ Dr. Reddy¶s Laboratories

¦ Cipla ltd
¦ Sun Pharmaceuticals ltd
¦ Lupin pharmaceuticals.ltd
¦ Divis laboratories ltd

#:2À&
/
+3
¦ To know the financial status of the companies in the Pharmaceutical industry.
¦ To know the performance Indian pharmaceutical industry
¦ To know the growth prospects of the Indian pharmaceutical industry

2 
/


¦ The scope of the study is confined only to five representative companies and their
respective industry.

¦ Different charts and diagrams are used to show the relationship between the company
performance and its price.

¦ The analysis is made based on the available data considering it is connect and accurate

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2//
 ‘+3

 %+
The study was made through literature collected from the secondary data which available
through different media¶s which are as follows.

ÿ Internet
ÿ Annual reports of companies
ÿ News papers
ÿ Journals
ÿ Text books
ÿ Websites
ÿ NCFM books

ÀÀÀ 
/
+3
¦ All the data collected are secondary, there is no primary data
¦ The time confined for the study is limited which does not enable make the
comprehensive study.

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 2 2
* 8, À

À À 


  À+3

ECONOMIC ANALYSIS:-
 The level of economic activity has an impact on investment in many ways. If the
economy grows rapidly, the industry can also be expected to show rapid growth vice versa.
When the level of economic activity is low, stock prices are low and when the level of economic
activity is high, stock prices are high reflecting the prosperous outlook for sales and profits of the
firms. The analysis of macroeconomic is essential to understand the behavior of the stock prices.

INDUSTRY ANALYSIS:-

An industry is a group of firms that have similar technological structure of production

and produce similar products. some other factors also they are following.

¦ ‘rowth of the Industry

¦ Structure of the Industry
¦ Nature of the Product
¦ Demand of the Product
¦ Competition
¦ ‘overnment policy
¦ Research and Developments
¦ SWOT Analysis

FINANCIAL ANALYSIS THROU‘H RATIOS:-

Financial ratio provides numerical relationship between two relevant financial data.
Financial ratios are calculated from the balance sheet and profit and loss account. The
relationship either expressed as a percent or as a quotient.

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 Ratios summaries the data for easy understanding, comparison and interpretation. Financial
ratios may be divided into three groups. They are following.

1.Liquidity Ratios:-
Liquidity means the ability to meet its short term obligations. Current ratio and acid test
ratios are the most popular ratios used to analyse the liquidity. The liquidity ratio indicates the
liquidity in a rough fashion and the adequacy of the working capital.

Current Ratio = Current Assets

Current Liability

Acid Test Ratio = Current Assets ± Inventories

Current Liability

2.Profitability Ratios:-
Profitability ratios relate the firms profit with factors that generate the profits. The
investor is very particular in knowing net profits to sales, net profit to total assets and net profit
to equity. The profitability measure the overall efficiency of the firm.

Net Profit Margin Ratio = PAT

Sales

This ratio indicates the net profit per rupee of sales revenue.

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 Operating profit margin ratio= EàIT

Sales

The operating profit margin ratio is a measure of overall operating efficiency, incorporating all
of the expenses of ordinary, daily business activity.

Return on Assets = Net Income

Total Assets

The return of assets measures the overall efficiency of capital invested in business.

o Valuation of shares:-

The shareholders are interested in assessing the value of the share depends on the
performance of the firm and the market factors. The performance of the firm in turn depends on a
host of factors. Hence, the valuation of ratio provides a comprehensive measure of the
performance itself. Some of the valuation ratios are following.

Earning per share:- Earning after tax

No of shares outstanding

According to the model earning per share is affected by the some of the factors they are
utilization assets of the company, margin of sales, effective cost of the borrowed funds, debt-
equity ratio, equity base of the company and effective tax paid by the company.

Pay out Ratios:- Dividend per share

Earning per share

Dividend payout ratio is the fraction of net income a firm pays to its stockholders in dividends

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Price Earning Ratios:- Market price per share

Earning per share

One of the most common financial parameters used in the stock market is the price
earning ratio. It related the share price with earning per share. The P/E ratio is the multiplying
factor that the market is willing to offer to the company¶s future earnings.

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2/ À2 À
It is a process of identifying trend reveals at an earlier stage to formulate the buying and
selling strategy. With the help of several indicators they analyse the relationship between price-
volume and supply ±demand for the overall market and the individual stock. Volume is favorable
on the upswing that is the number of shares traded dwindles.

Assumptions:-
¦ The market value of the scrip is determined by the interaction of supply and demands.
¦ The market discounts everything. The price of the security quoted represents the hopes, fears
and inside information received by the market players.
¦ The market always moves in trend true to the stock market. In the rising market investors
psychology has up beats and they purchase the shares in greater volume, driving the prices
higher. At the same time, in the down trend they may be very eager to get out of the market
by selling them and thus plunging the share price further. The market technicians assume that
past prices predict the future.

HISTORY OF TECHNICAL ANALYSIS:-

The technical analysis is based on the doctrine given by Charles. H. Dow in 1084, in
the wall of street journal. He wrote series of articles in the Wall Street Journal. A. J. Nelson,
close friend of Charles Dow formalized the Dow Theory of the economic forecasting. The
analyst used charts of individual stocks and moving averages in the early 1920¶s. Later on, with
the aid of calculators, sophisticated technique came to vogue.

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  À
2 À2 À
The purpose of analyze economic condition of the country in fundamental analysis to asses
the general economic situation both within the country and inter nationally. The economy is like
the tide and the various industry groups and individual companies are like boats. When economy
expands most industry groups and companies benefits and grows. When the economy decline,
most sectors and companies usually suffer. The stock market does not operate in a vacuum it is
an integral part of the whole economy of a country, more so in a free economy that of United
States and to some extent in mixed economy like ours.
%$ 0  $0%%%    0%  
$     +
¦ ‘ross Domestic Product
¦ Savings and Investments
¦ Inflation
¦ àudget

¦ 
%
c %$
‘DP indicates the growth rate of economy. ‘DP represents the aggregate value of the goods
and service produced in the economy. ‘DP consists of personnel consumption expenditure,
gross private domestic investment and government expenditure on goods and services and net
export of goods and services.

The   $ À  is the eleventh largest in the world by nominal ‘DP and the fourth
largest by purchasing power parity (PPP). The country's per capita ‘DP (PPP) is $3,290 (IMF,
127th) in 2010. Following strong economic reforms from the socialist inspired economy of a
post-independence Indian nation, the country began to develop a fast-paced economic growth,
as free market principles were initiated in 1990 for international competition and foreign
investment.] Economists predict that by 2020, India will be among the leading economies of the
world. India's top five trade partners are UAE, China, USA, Saudi Arabia and ‘ermany.

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 The ‘ross Domestic Product (‘DP) in India expanded 8.90 percent in the third quarter of
2010 over the previous quarter. From 2004 until 2010, India's average quarterly ‘DP ‘rowth
was 8.40 percent reaching an historical high of 10.10 percent in September of 2006 and a record
low of 5.50 percent in December of 2004. India's diverse economy encompasses traditional
village farming, modern agriculture, handicrafts, a wide range of modern industries, and a
multitude of services. Services are the major source of economic growth, accounting for more
than half of India's output with less than one third of its labor force. The economy has posted an
average growth rate of more than 7% in the decade since 1997, reducing poverty by about 10
percentage points.

India's large service industry accounts for 57.2% of the country's ‘DP while the industrial
and agricultural sector contribute 28% and 14.6% respectively. Agriculture is the predominant
occupation in India, accounting for about 52% of employment. The service sector makes up a
further 34%, and industrial sector around 14%. The labour force totals half a billion workers.

¦   À  +3

With savings rate touching 34% and investments having exceeded 36% of the ‘DP, the
country can achieve 9% growth in a sustained way. Despite the financial crisis, the economy
grew at an average pace of 8.5% between 2005-06 and 2009-10. This clearly represented
acceleration in the pace of growth and marks a distinct break from any previous five year period.
Per capita ‘DP grew by an average 7% in these five years. While growth is expected to touch
9% again in 2011-12, the constraints that may come in the way should be removed. Managing
inflation risks, particularly food grains price inflation is the biggest challenge. In the past few
days, there has been some volatility in capital markets, led by continued selling pressure from the
FIIs. While the stock market has its own mind and it takes cues from developments around the
world.
Rolling out numbers, the finance minister said ‘DP for 2009-10 has been revised up to 8 per
cent from 7.4 per cent estimated earlier and ‘DP for the previous year has been raised to 6.8 per
cent from 6.7 per cent calculated earlier. ³More importantly, both savings and investment rates
have shown a strong rebound in 2009-10 over the preceding year. This augurs well for sustaining
high growth of the economy in the medium to long term.

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 ¦ À $ 

Inflation is no stranger to the Indian economy. In fact, till the early nineties Indians were
used to double-digit inflation and its attendant consequences. àut, since the mid nineties
controlling inflation has become a priority for policy framers.
The natural fallout of this has been that we, as a nation, have become virtually intolerant
to inflation. While inflation till the early nineties was primarily caused by domestic factors
(supply usually was unable to meet demand, resulting in the classical definition of inflation of
too much money chasing too few goods), today the situation has changed significantly.
Inflation today is caused more by global rather than by domestic factors. Naturally, as the
Indian economy undergoes structural changes, the causes of domestic inflation too have
undergone tectonic changes.
Needless to emphasize, causes of today's inflation are complicated. However, it is indeed
intriguing that the policy response even to this day unfortunately has been fixated on the
traditional anti-inflation instruments of the pre-liberalization era.
Asia Pulse - Royal àank of Scotland has said inflation will be the biggest headwind for
the Indian economy in 2011 as increasing income, coupled with more government spending and
rising crude prices, will keep pressure on the price front, neutralizing Reserve àank of India
(RàI)'s efforts to contain it. Though both headline inflation and food price numbers have been
heading south since the recent months, soaring prices of some food articles like onions, tomatoes
and garlic pushed food inflation to a 10-week high of 14.44 per cent for December 18 -- an
upward march for the fifth week in row. àut this is still lower from the 21.29 per cent a year ago.
The recent Rs 3 hike in petrol price also impacted the inflation.

¦ # 
India is among the first few countries in the world to implement a broad-based counter-
cyclic policy package to respond to the negative fallout of the global slowdown. The Advance
Estimate for ‘ross Domestic Product (‘DP) growth for 2009-10 is pegged at 7.2 per cent. The
final figure is expected to be higher when the third and fourth quarter ‘DP estimates for 2009-10
become available. The growth rate in manufacturing sector in December 2009 was 18.5 per cent
± the highest in the past two decades. Pranab Mukherjee, Finance Minister is optimistic that the

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2010-11 budgets will contribute in enhancing the private investment which in turn will bring
back the economy to a 9% growth.
An analysis of the components of aggregate demand in recent years indicates that it has
been driven Predominantly by a sharp increase in domestic consumption (C) and private and
public investment (I). During the current fiscal however, private consumption has been a drag on
‘DP growth. Out of 1 percentage point decline in ‘DP growth at factor cost this fiscal, a
reduction of 0.7 percentage points is expected to come from the slowdown in private
consumption growth. In contrast, a decline of only 0.2 percentage points in ‘DP growth will
come from investment.

À À     

 
À  

¦ Number of steps taken to simplify the FDI regime.

¦ Methodology for calculation of indirect foreign investment in Indian companies has been
clearly defined.
¦ Complete liberalization of pricing and payment of technology transfer fee and trademark,
brand name and royalty payments.

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À
 À

¦ ‘0%$%À 
The industry has witnessed healthy growth in the recent past and investment in
pharmaceutical industry is continuing. The product out put also increasing and operational and
business management efficiency also seem to have improved. A surge in growth is expected to
take place between 2006 and 2010, attributable to the opportunities presented by contract
research and manufacturing sourcing (CRAMS). MNCs have a modest representation among the
top 20 companies in the Indian pharmaceutical industry. The re-introduction of the patent regime
in 2005 has forced many smaller Indian companies to exit the industry, while others have been
forced to re-evaluate existing corporate strategies.

¦ $%À 

 Pharmaceutical industry adopts high technology and produces high value added products.
The process is very complex in nature. The processes are classified into primary and secondary.
The primary process requires uninterrupted power supply, maintaining of condition under which
the molecules reacts and yield a new product, excellent manufacturing conditions and well
trained personnel. Specific plants cost less but, they risk of obsolescence. Multipurpose plants
are expensive and have no risk obsolescence but, they have the risk of cross contamination.

¦ $%

The products of the pharmaceutical industry are broadly classified in to bulk drugs,
formulations and intravenous fluids. àulk drugs are like Ciprofloxacin, Ibuprofen, Ranitidine,
Ethanbutol, etc. The major manufacturing products are Ranbaxy, Cipla, Cadilla, Dr.Reddy¶s lab
and Lupin. Some companies manufacture formulations from bulk drugs and market them under
brands. Companies also manufacture formulations from other companies. Some of the
companies in the formulation segments are Ranbaxy, Cipla, Wockhardt, Lupin. Etc.

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 ¦
 $%

The size of the Indian pharmaceutical industry is estimated at $8,790 million. The Indian
pharmaceutical industry contributes 8 percent in volume but only 1 percent in value terms to the
global pharmaceutical sales. Of the total market, pharmaceutical formulations account for 78
percent and bulk drugs for the balance 22 percent. A study by the Indian Commission for Health
in India indicates that 56 percent of the Indian health expenditure in on drugs equivalent to
around $17.9 billion in 2004 but most of this is on traditional medicines rather than allopathic
drugs.

This highly fragmented industry has resulted in with no players controlling more than 7
percent of the retail formulation market. However, similar to the global trends, mergers and
acquisitions in the Indian pharmaceutical industry has resulted in the 10 top formulation firms
accounting for 37 percent of the retail formulation market.

¦ 2 

The industry having 2400 players within the organized sector, and around 15,000 in the
small-sector. Apart from internal competition, the industry is facing international competition
too. There is large import of bulk drug from china. The Chinese products are significant
competitors for the Indian pharmaceutical industry. Multinational Corporation like Pfizer, Abbot
Labs, Novartis also pose threat to the local producers.

¦ ‘   

The drug companies operate in a highly politicized environment. The product

development, prices, safety, and regulated by the government. The pharmaceutical industry
functions under Drug Price Control Order. The prices of drug are regulated to make them
available to the masses at affordable prices. The DPCO is issued from time to time to keep
the policy in tune with the changing demands. The patent law in India provides patent only
for process and there is no product payment. àut, with signing of ‘ATT, India is required to

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 amend the patent law. Once the product patent comes into force, the reverse engineering rout
to introduce new molecules will not be available to Indian companies.

¦ !%&
 
' 

àoth the Indian central and state governments have recognized R&D as an important
driver in the growth of their pharmaceutical businesses and conferred tax deductions for
expenses related to research and development. They have granted other concessions as well, such
as reduced interest rates for export financing and a cut in the number of drugs under price
control. ‘overnment support is not the only thing in Indian pharma¶s favor, though; companies
also have access to a highly-developed IT industry that can partner with them in new molecule
discovery.

The average sum spent by the 15 largest Indian pharmaceutical companies for Research
and Development is around 2 percent of turnover. This is drastically low and research mainly
concentrated towards the area of process development rather than on new molecular searching.


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À  2À À/ ‘/À 

 
( "
!
$

CURRENT RATIOS:

TAàLE 1.1 :- CURRENT RATIO

 [6
6 [665 [667 [66- [664

À&À
Current assets 833.02 793.10 580.72 432.12 354.64
Current 313.38 260.23 236.76 156.14 159.08
liability
2  [ 44 o 6Î [ üÎ [ -- [ [o
2À
Current assets 5483.42 4419.57 3743.98 2834.68 2292.28
Current 2524.77 1568.71 1396.86 1053.91 1006.15
liability
2  [
- [ 7[ [ 47 [ 45 [ [7

 


Current assets 3647.30 3870.40 3348.01 4028.55 2398.87
Current 1883.20 1458.10 1387.74 1254.93 798.95
liability
2 
5ü [ 4Î [ ü
 o [
 o 66
À 
Current assets 2314.31 1803.71 1727.95 1475.53 1314.17
Current 747.99 914.57 546.65 422.07 339.12
liability
2  [ 55
5- o
4 o ü5 o 77
 /2À2
Current assets 1694.04 2743.66 2911.62 2191.8 2259.95
Current 730.93 1038.44 1108.52 352.93 395.0
liability
2  [ o[ [ 4ü [ 4o 4 [
 Î -


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CHART1.1 :- CURRENT RATIO




 


 








 





INTERPRETATION
Here the current ratio of the companies almost equal in those five companies except in
2006 & 2007 Sun Pharmaceutical shows high current ratio position, but the last two years the
company current ratios favorable.

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 UICK RATIOS:

TAàLE 1.2 :- UICK RATIO

 [6
6 [665 [667 [66- [664

À&À
uick assets 351.64 394.04 303.9 221.33 170.77
Current 313.38 260.23 236.76 156.14 159.08
liability
' 

[
Î[
[7
ü[
6-
2À
uick assets 2839.55 2826.25 2623.49 1856.0 1335.29
Current 2524.77 1568.71 1396.80 1053.91 1006.15
liability
'

[
76
77
-4
oo

 


uick assets 2728.6 3112.6 2326.6 3500.06 1559.1
Current 1883.20 1458.10 1357.74 1254.93 798.95
liability
'
üÎ [
o
-
 [ -5
5Î
À 
uick assets 1600.61 1087.83 1102.10 1073.46 1003.8
Current 774.99 914.57 546.65 422.07 339.12
liability
' [ 6-

5 [ 6[ [ Îü [ 54
 /2À2
uick assets 1114.08 2251.09 2415.96 2129.25 1994.02
Current 730.93 103.44 1108.52 352.93 395.80
liability
'
Î[ [
- [
7 4 6o Î 6ü

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CHART 1.2:- UICK RATIO





 


 







 





INTERPRETATIONS

Here the quick ratios of the five pharmaceutical companies are almost
equal except 2006 & 2007 Sun Pharmaceutical shows high current ratio position.

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 # c!

"
!


NET PROFIT MAR‘IN RATIOS:-

TAàLE 2.1 :- NET PROFIT MAR‘IN RATIO
 [6
6 [665 [667 [66- [664

À&À
PAT 345.09 458.42 372.63 193.51 71.60
Sales 929.28 1191.11 1033.22 754.40 381.46
$ o-
ü o7 ü5 o4 46 [Î 4Î
7 --
  1?2
2À
PAT 1038.09 1006.37 631.42 633.13 533.42
Sales 5359.52 4960.60 3997.90 3438.24 2891.36
$
5 o- [6 [5
Î -5
7 ü

7 üÎ
  1?2

 


PAT 773.40 598.40 433.08 1207.48 206.36
Sales 4469.80 4158.90 3365.20 3955.66 2005.85
$
4 ü

ü oü
[ 5 o6 Î[
6 [5
  1?2
À 
PAT 648.93 416.97 443.38 302.06 182.72
Sales 3632.19 2899.15 2523.63 1962.96 1596.54
$
- 7-
ü o7
- Î-
Î o-

üü
  1?2
 /2À2
PAT 929.45 1238.92 1000.51 571.93 428.21
Sales 2522.75 3866.45 3151.92 2243.18 1680.34
$ o4 7ü o[ 6ü o
-ü [Î ü5 [Î ü7
  1?2

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CHART 2.1:- NET PROFIT MAR‘IN RATIO










 










  



 





INTERPRETATION
Here net profit margin ratio indicates that the net profit per rupee of sales
revenue. Above five companies making adequate profit last five years. Comparing five years for
the last three years Divis and Sunpharma shows good net profit margin.

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OPERATIN‘ PROFIT MAR‘IN RATIO

TAàLE 2.2:- OPERATIN‘ PROFIT MAR‘IN RATIO

 [6
6 [665 [667 [66- [664

À&À
EàIT 391.99 499.74 412.34 238.87 114.07
Sales 929.28 1191.11 1033.22 754.40 381.46
 $ ü[
7 ü
54 o5 5
 o
44 [5 56
  1?2
2À
EàIT 1309.89 1183.10 786.40 784.24 651.69
Sales 5359.52 4960.60 3997.90 3438.24 2891.36
 $ [ü üü [o 7Î
5 4- [[ 7
 [[ Îü
  1?2

 


EàIT 1028.10 794.40 556.65 1448.42 283.63
Sales 4469.80 4158.90 3365.20 3955.66 2005.85
 $ [o 66
5
6
4 Îü o4 4

ü
ü
  1?2
À 
EàIT 773.27 511.51 629.67 329.51 274.14
Sales 3632.19 2899.15 2523.63 1962.96 1596.54
 $ [
[5
- 4ü [ü 5Î
4 --
-
-
  1?2
 /2À2
EàIT 480.40 1271.81 1043.73 592.34 466.83
Sales 2522.75 3866.45 3151.92 2243.18 1680.34
 $
5 6ü o[ 75 oo

 [4 ü
 [- -7
  1?2

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CHART2.2;- OPERATIN‘ PROFIT MAR‘IN RATIO










 



 





  



 





INTERPRETATION
Here operating profit margin ratio indicates that the net profit per rupee of
sales revenue. Above five companies making adequate profit last five years. Comparing five
years for the last three years Divis shows a good operating profit margin.

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RETURN ON ASSETS

TAàLE 2.3; - RETURN ON ASSETS

 [6
6 [665 [667 [66- [664

À&À
Net income 344.20 424.41 353.56 191.75 70.47
Total assets 1574.92 1314.43 960.07 696 491
   [
7Î o[ [5 o4 7[ [- ÎÎ
ü oÎ
1?2
2À
Net income 1081.49 776.81 701.43 668.03 607.64
Total assets 5910.19 5282.02 4327.38 3350.88 2442.86
  
7 o
ü -

4 [

5 5o [ü 7-
1?2

 


Net income 846.00 560.80 473.67 1168.66 211.11
Total assets 6477.80 5899.40 5274.11 4703.26 3186.01
  
o 64 5 Î
 7 57 [ü 7Î 4 4o
1?2
À 
Net income 654.89 419.76 353.04 213.72 185.04
Total assets 3437.36 2320.21 2282.60 1752.96 1556.55
  
5 6Î
7 65
Î ü-
[
5

75
1?2
 /2À2
Net income 898.65 1276.99 1014.04 628.88 461.29
Total assets 5747.47 5175.02 4310.14 3517.64 3210.76
  
Î 4o [ü 4- [o Îo
- 77
ü o-
1?2

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CHART2.3:- RETURN ON ASSETS















 

 




 





INTERPRETATION

Here return on assets measures the overall efficiency of capital invested in business.
Looking five years charts of the five pharmaceuticals companies¶ shows that these
pharmaceutical companies good efficiency capital investment in business. àut year 2008 and
2009 divis shows a high return on assets.

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 2  &À 
/

EARNING PER SHARE RATIOS

TAàLE 3.1:- EARNIN‘ PER SHARE

 [6
6 [665 [667 [66- [664

À&À
EAT 344.20 424.41 353.56 191.75 70.47
Number of shares
outstanding 1321.44 647.58 645.57 129.11 128.19
 [4 6Î 4Î Îü Îü --
ü7 Î
 Îü 57
2À
EAT 1081.49 776.81 701.43 668.03 607.64
Number of shares
outstanding 8029.21 7772.91 7772.91 7772.91 2998.70

o ü- 5 55 5 6[ 7 Î5 [6 [4

 


EAT 846.00 560.80 473.67 1168.66 211.11
Number of shares
outstanding 1688.45 1684.69 1681.73 1679.12 766.95
 Î6

 oo [5 [7 [4 -6 65 [- Îo

À 
EAT 654.89 419.76 353.04 213.72 185.04
Number of shares 889.44 828.20 820.81 803.45 401.41
outstanding
 -o 4o Î6 47 üo 6
 [4 4 ü4 65
 /2À2
EAT 898.65 1276.99 1014.04 628.88 461.29
Number of shares
outstanding 2071.16 2071.16 2071.16 1934.02 1857.32
 üo o5 4
44 ü7 54 o[ Î[ [ü 7o

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CHART 3.1:- EARNING PER SHARE














 

 






 





INTERPRETATION

Here earning per share is the earning after tax divided by the no of equity shares. Above
charts showing that there is fluctuating happing in earning per share of the companies.

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PAY OUT RATIOS

TAàLE 3.2:- PAY OUT RATIO

 [6
6 [665 [667 [66- [664

À&À
DPS 6 6 4 10 10
EPS 26.05 65.54 54.77 148.51 54.98
 [o 6o 5
Î - o6 4 -o
7
5
2À
DPS 2 2 2 2 2
EPS 13.47 9.99 9.02 8.59 20.26

ü 7Î [6 66 [[
- [o [7 5 7-

 


DPS 11.25 6.25 3.75 3.75 5
EPS 50.11 33.29 28.26 70.09 27.53
 [[ üÎ
7 --
o [- Î oÎ
7
4
À 
DPS 13.5 12.5 10 5 6.5
EPS 73.63 50.68 43.01 26.6 46.09

7 oo [ü 44 [o [Î
7 7
ü
6
 /2À2
DPS 13.75 13.75 10.5 6.75 5.5
EPS 43.39 61.66 48.96 32.52 24.83
 o
45 [[ o [
üÎ [6 -4 [[
Î

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CHART 3.2:- PAY OUT RATIO














 


  









INTERPRETATION
Here the pay out ratio is fluctuating dividend giving by the companies varying in every
year. Low pay out may be company reserve for future expansion. High growth firm sometimes
having low or zero growth rates, these like companies suitable for long term investors.

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P/E RATIOS
TAàLE 3.3:- P/E RATIO
 [6
6 [665 [667 [66- [664

À&À
Market price per 706.22 969.99 1287.095 3103.86 1924.3
share
EPS 26.05 65.54 54.77 148.51 54.98
) [-


ü 7 [o Î [6 5 oÎ
2À
Market price per 346.18 227.77 228.206 245.67 686.81
share
EPS 13.47 9.99 9.02 8.59 20.26
) [Î - [[ 7 [Î o [7 4 oo 5

 


Market price per 1390.05 558.61 352.12 5169.14 2448.79
share

EPS 50.11 33.29 28.26 70.09 27.53

) [- -ü
4 -7
[ ü4 -o -Î 77 5Î
À 
Market price per 1693.49 724.72 404.29 438.9 1050.85
share

EPS 73.63 50.68 43.01 26.6 46.09

) [o
ü o 5 ü
4 Î [[ 7
 /2À2
Market price per 421.75 879.27 1435.02 1278.69 1026.47
share

EPS 43.39 61.66 48.96 32.52 24.83

) 5 -[
ü [4 [5 o
 o5 o[ ü
oü

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CHART 3.3:- P/E RATIO




















 





 





INTERPRETATION
There are two thing will happen in case of P/E ratios that when it low it means it shares
are underpriced, when it higher it is overheated market. àut while forecasting the future P/E ratio
should compare fundamental factors of the companies.






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2/ À2 À
2/ À
A price chart is a sequences of price plotted over a specific time period. On the chart
the Y- axis (vertical axis) represents the price scale and X-axis (horizontal axis) represents the
time scale. Prices plotted from left to right across the X-axis.

The use of the chart is limited to just technical analysis. àecause charts provide an easy
to read graphical representation of a security price movement over a specific period of time, it
also is a great benefit to fundamental analysis.


 À
Trend is the direction of movement. The share prices can either increase or fall or remain
flat. The three direction of the share price movement are called as rising, falling, and flat trends.
It is important tool in technical analysis. The trend line are straight lines drawn connecting either
the tops or bottoms of the share price movement. To draw a trend line, the technical analyst has
two tops and two bottoms.

 
À 2&

One of the important tools of the chart analysis is identification of the support and
resistance level. Support levels are a barrier to price decline a resistance is barrier to price
advancement.

Support and resistance usually occur whenever the turnover of large number of shares
tends to concentrated at several price levels. When the stock touches certain level and then drops
this is called resistance and if the stock reaches down to certain level and then rises there exists a
support.

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2ÀÀÀ


TAàLE 4.1:- PRICE MOVEMENT- CIPLA

¦





 

   





   

CHART 4.1:- PRICE MOVEMENT- CIPLA

¦










¦O
 












 

INTERPRETATION

Here chart considering the average price of the stock in these years. The stock prices after
the 2008 are growing. This up ward trend are reached up to 2010, so here we advice that both
short and long term investors can able invest in this shares.

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)*



TAàLE 4.2:- PRICE MOVEMENT - DIVI¶S

¦





 
  
  
  



TAàLE 4.2 :- PRICE MOVEMENT OF DIVI¶S



 




 


 O
 



 












 


INTERPRETATION
Here this chart showing year average price of the sun pharmaceuticals. There is a decline
in the 2008, 2009& up to 2010. So here we advice that long term investors can able invest in this
shares, considering the short term it high risky to invest but higher risk higher will be the return.

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!"*


!
!



TAàLE 4.3:- PRICE MOVEMENT Dr. REDDY¶S LAà

¦





 

  [

  
[[


 

CHART 4.3:- PRICE MOVEMENT Dr. REDDY¶S LAà

J 


   




O
 




 











 



INTERPRETATION
Here these chart showing average price of the Dr. Reddy¶s Lab. It shows the volatility in
the price trend of the company. It also long term may be suitable, considering the short term it
high risky to invest but higher risk higher will be the return.

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c

$
TAàLE 4.4:- PRICE MOVEMENT LUPIN LTD
 




 

 


 
  [ [ [  
CHART 4.4 :- PRICE MOVEMENT LUPIN LTD

J 

 




 

 O
 

 















 


INTERPRETATION
Here this chart showing year average price of the Lupin. Chart considering the average
price of the stock in these years. The stock prices after the 2008 are growing. This up ward trend
are reached up to 2010, so here we advice that both short and long term investors can able invest
in this shares.

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c! 


$
TAàLE 4.5:- PRICE MOVEMENT SUN PHARMACEUTICALS LTD
 




 

 [  [
  
[
[ [


CHART 1.5:- PRICE MOVEMENT SUN PHARMACEUTICALS LTD

J 
 



 






O
 
















 



INTERPRETATION
Here the average price of the Sun Pharmaceutical Limited. This chart
showing last two years there is high growth in stock price of the company. According to above
chart long term investors may be suitable to invest but short term investors it may high risk.

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FINDIN‘S OF THE STUDY
M Pharmaceutical industry is defensive share, so this industry share withstands recession and
depression. Defensive stocks like pharma held by the investor for the income earning
purpose.
M Clinical Research Outsourcing (CRO), a budding industry valued over US$ 118 million
per year in India, is estimated to grow to US$ 380 million by 2010, as MNCs are entering
the market with ambitious plans.
M The government is trying to boost R&D in domestic pharma industry. It is giving tax
exemption for a period of ten years and relieving customs and excise duties of all the
drugs and material imported or exported for clinical trials to promote innovative R&D.
M Considering the financial analysis of the five pharmaceutical companies in this industry
through ratios those companies having good favorable Liquidity ratios, Profit Margin
ratio sand Valuation ratios, company should always try to maintain a good relationship
with investors through keeping good EPS, Dividend per Share, Pay Out ratio and P/E
ratio.
M Considering stock market performance of the pharmaceutical companies through
technical analysis. in technical analysis price movement chart and these showing a down
trend so it advising that in most of the pharma company cases investors should go for
long term investment rather than the short term investment.

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‘‘À 

ÿ Pharmaceutical companies have lots of room to grow; so invest in theses type of

industries helps the investors at long time.
ÿ àuy shares of reputed companies backed by top class management.
ÿ Do not invest in inactive shares generally it is difficult to encash them.
ÿ àefore investing we should undertake a deep study on the net sales, net profits in
relations to equity capital employed & should attempt to forecast for the coming
years.
ÿ From the company point of view, the company should allow the investors to take
part in board of directors meeting & gives maximum dividend to the shareholders.
ÿ Do not over pay for growth.
ÿ Do not invest in unlisted shares.
ÿ The investors should become cautious while investing for very long time.
ÿ The investors should analyze the price movement
ÿ Economic performance is greatly affected to the performance of the industries of
the country, so investors should know economic performance of the country while
investing.




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 2 2À 
ÿ This is the final and most important stage of the entire project. The main objective of my
project ends with this stage. This part will indicate to the investor, creditors, and
shareholders each of the company¶s overall operating efficiency and performance that
will help them to make the most efficient investment decision.
ÿ The final investment decision is not only give on the basis of ratio analysis but it is also
given on the basis of common size statement and trend analysis. Thus, it will highly
affect the investment decision.
ÿ From the analysis of pharmaceutical company, it is found that the financial position and
the capital structure of the sunpharma is stronger and comparatively higher than other
five companies.
ÿ àut after that according to me it is not advisable for the investing money in dr.reddy lab
and cipla ltd. On the base of overall analysis. Compare to the other five companies this
companies are not stronger and capable.
ÿ And lastly I conclude that ratio analysis is the most important yardstick that provides
measure of comparison between different companies. It would be easier for the investor
to make the profitable decision so that they can earn much profit as possible out of their
investment.

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#À# ‘/
ANNUAL REPORTS OF:-

M CIPLA LIMITED
M DIVI¶S LAàORATORIES
M Dr. REDDY¶S LAàORATORIES
M LUPIN PHARMACEUTICALS
M SUN PHARMACEUTICALS
M INDIAINFOLINE LTD

WEàSITE

M www.indiainfoline.com
M htt ¦ 
M www.google.com
M www.moneycontrol.com

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