EDELWEISS

IDEAS CREATE,
VALUES PROTECT

By-SATYAM
ACHARYA

ABOUT THE COMPANY:Edelweiss was founded in 1996.

Founder of Edelweiss- Mr.Ramesh Shah.
Headquarters in Mumbai, India.
Company belongs to Financial Service industry.
Financial Instruments are the product.
Example- Demat services, Stock broking,
commodities, currency, derivatives etc.

 Edelweiss Liquid Fund & Edelweiss Liquid Plus Fund was launched
through its asset management company
The IPO of the company successfully brought in funds of Rs. 681 crore.
Entered into commodity trading.
Entered into insurance advisory business.
Acquired Rooshnil Securities Private Limited and renamed it as
Edelweiss Securities Limited.
Obtained Futures and options license.
Edelweiss Capital Limited (ECL)Commenced Business from 16th
January 1996 but conceived as public limited on 11th November 1995.

2008

2007

2004-05

2002

2001

1995-96

INTRODUCTION

INTRODUCTION
Market capitalization of Rs.44.65 billion
Net worth of Rs. 35.314 billion. Growth at 52%
CAGR.
Revenue income for the financial year 2014-15
was Rs.39 Billion at a CAGR of 49%.
PAT for the year was Rs.3.082 Billion at a CAGR
of 30%.
The CAGR for diluted EPS was 20%.
The Beta of Edelweiss stock is 1.12.

SWOT ANALYSIS FOR EDELWEISS

1.
2.
3.
4.
5.

.
1.
2.
3.

Strengths
High growth rate of Net Worth @52% CAGR.
Existing distribution and sales networks.
Acquired JPMC mutual fund at 7500cr
High profitability and revenue.
Competitive Pricing.
Weaknesses
Future profitability.
Future debt rating.
Investments in research and development.

SWOT ANALYSIS FOR EDELWEISS

CONTINUED......

1.
2.
3.
4.
5.
6.

.
1.
2.

Opportunities
New markets, other countries
Growing economy.[CPI-5%]
Growth rates and profitability.
New products and services.(ETF)
New acquisitions.
Income level is at a constant increase.
Threats
Financial capacity.
Technological problems.

Bargaining Power of
Customers
(Moderate).
As there are a large
number of broking
companies in India
the bargaining
power of customer
should be high.
But due to being a
regulatory industry
the customers
cannot bargain to
any extent but to
some limit.

Bargaining
Power of
Suppliers

Threat of Substitute
Products(Low).
The products ofered
in this industry are
homogenous and do
not have perfect
substitute.
But people have
alternate ways for
application of funds
such as Gold, Real
Estate, Angel
Investor etc.

Threat of Existing
Companies(High)

There are 464 stock

broking companies
and the competition
is very high.
The proftability in
this industry
depends on Quality
of service provided,
Innovations and
Trust.

Threat of New
Entrants(Low).
There is low threat
of new entrants as
the industry is
regulated by SEBI.
Licensing is required
for entrants, which
is a difcult process.
Thus, entering into
this industry is
tough.

MICHAEL E PORTERS FIVE FORCE ANALYSIS

FOR EDELWEISS

PRODUCT RANGE
Investing and Trading.
Global Wealth Management.
Equity.
Derivatives.
Currency Derivatives.
Mutual Fund.
Commodity.
Fixed Income.

PROJECT EQUITY
RESEARCH

Def. It primarily means analyzing companys fnancials, perform

ratio analysis, forecast the fnancials(fnancial modeling) and
explore objectives of making buy/sell recommendation for stock
market investment.

It has two broad aspects;1.Fundamental analysis

1.1 Ratio analysis

2.Technical analysis

I.

RATIO ANALYSIS
Its a tool which enables the banker or lender
to arrive at the following factors :
Liquidity position
Proftability
Solvency
Financial Stability
Quality of the Management
Safety & Security of the loans & advances to
be or already been provided

II. TECHNICAL ANALYSIS

Technical Analysis can be defned as an art and science

of forecasting future prices based on an examination
of the past price movements. Technical analysis is not
astrology for predicting prices. Technical analysis is
based on analyzing current demand-supply of
commodities, stocks, indices, futures or any tradable
instrument.

CLASSIFICATION OF RATIOS
Balance Sheet

P&L Ratio or

Balance Sheet

Ratio

Income/Revenue

and Proft &

Statement Ratio

Loss Ratio

Operating Ratio

Composite Ratio

Financial Ratio

Current Ratio
Quick Asset Ratio
Proprietary Ratio
Debt Equity
Ratio

Gross Profit Ratio

Operating Ratio
Expense Ratio
Net profit Ratio
Stock Turnover
Ratio

Fixed Asset
Turnover Ratio,
Return on Total
Resources Ratio,
Return on Own
Funds Ratio,
Earning per Share
Ratio, Debtors
Turnover Ratio,

COMPARATIVE ANALYSIS
VALUATION

RELIND

JUBLIF

FININD

SUPPET

PE (x)

11.50

14.01

26.74

13.11

Price to Book Value

(x)

1.29

2.42

4.67

3.78

EV to Sales (x)

1.27

1.79

2.07

0.60

EV to EBITDA (x)

10.33

14.98

25.69

16.56

Dividend Yield (%)

1.08

0.80

0.55

0.92

SOLVENCY
MARGINS

RELIND

JUBLIF

FININD

SUPPET

0.74

1.81

0.86

0.04

Interest
Coverage(x)

9.35

1.17

2.79

4.38

Current Ratio (x)

0.74

0.88

0.82

0.99

12.25

11.94

8.05

3.63

6.28

-0.99

1.93

1.35

Debt to
Ratio (x)

&

Equity

EBITDA Margin
(%)
Net Profit Margin
(%)
GROWTHPOSITION

RELIND

JUBLIF

FININD

SUPPET

3YrCAGRSales(%)

1.55

10.63

5.65

5.29

3YrCAGRProfit(%)

3.88

-17.59

0.81

2.23

1YrSalesGrowth%

-13.59

0.39

0.94

-18.74

1YrEBITDAGrowth(%)

4.97

-15.71

-46.23

0.52

1YrNetProfitGrowth
(%)

1.49

-84.11

-68.02

16.66

Indicator
Relative
index(RSI)

Analysis
strength RSI is 56.5. According to RSI analysis, reliance is technically strong.

Signal (0 - 10)
9.0

Moving
average MACD: 10.9 and Signal Line: 12.5. According to MACD analysis, reliance is
convergence
marginally weak.
divergence(MACD)

3.0

Simplemovingaverage

According to simple moving average analysis, reliance is in a strong uptrend.

Major support levels are 1029.925, 996.601, 965.4597.

10.0

Moving According to exponential moving average analysis, reliance is in a strong

uptrend. Major support levels are 1026.612, 1008.94, 969.2228.

10.0

Exponential
Average

FibonacciRetracement

According to fibonacci retracement, price is above all levels. Major support is at

991.8622 and 972.05. Resistance level is 1056.0.

6.5