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Summer Internship Presentation

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COMPANY PROFILE.
FINANCIAL

ADVISORY FIRM

PERSONNEL WORKING

AND OPERATIONS

MARKETING

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VARIOUS PHASES OF INTERNSHIP

ORIENTATION GENERATING PRACTICAL

STAGE

CALLS USING TECHNICAL AND FUNDAMENTAL ANALYSIS EXPOSURE THROGH SALES OF FINANCIAL CONCEPT:

APPLICATION

PE RATIO.
COMPARISION

OF WEBSITES OF FIRMS COMPETITORS.

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A COMPARATIVE STUDY OF PRICE EARNINGS MULTIPLE OF TOP IT SECTOR COMPANIES OF INDIA USING STABLE DIVIDEND DISCOUNT MODEL.

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objective

To observe and compare the PE ratios of 5 IT sector companies and trying to judge the trend that they follow in the past 5 years. Studying the fundamentals affecting the PE ratio of the companies. Advising an investor as to which stock to invest in.

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WHAT IS pe RATIO?
PRICE

EARNING RATIO:

Market Price Per Share/ Earnings Per Share. According to stable growth dividend discount model: PE=(Payout Ratio)(1+gn) / Ke gn.

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Companies for comparative study

Infosys Tech

Mahindra

Wipro TCS HCL

Technologies

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methodology
Data Data Tools

Collection for Data Analysis

Infosys.
Year. Existing PE Ratio Closing price EPS. Growth Rate Ke ROE(%) ROE Payout ratio. Estimated PE ratio. 11-Mar 31.62 3241.30 102.51 0.10 0.13 27.69 0.28 0.64 25.10 10-Mar 26.98 2615.95 96.96 0.10 0.11 29.13 0.29 0.66 120.40 1323.90 97.70 0.10 0.12 37.18 0.37 0.73 36.89 9-Mar 13.55

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8-Mar 19.73 1439.90 72.98 0.10 0.13 36.26 0.36 0.72 24.00 7-Mar 31.28 2012.60 64.34 0.10 0.15 41.90 0.42 0.76 16.99

Status. (existing PE RatioEstimated PE Ratio)

Over Valued. (Sell) Under Valued. (Buy) Under Valued. (Buy) Under Valued. (Buy) Over Valued. (Sell)

Industry's average.

26.492

23.664

10.956

22.302

79.776

Existing PE ratio- Industry's Average.

6.52 -93.42 -23.34 -4.27 14.29

Status.

Over Valued. (Sell)

Under Valued. (buy)

Under Valued. (buy)

Under Valued. (buy)

Over Valued. (Sell)

Year. Existing PE Ratio Estimated PE ratio. Industry's average.

11-Mar 31.62 25.1 26.492

10-Mar 26.98 120.4 23.664

9-Mar 13.55 36.89 10.956

8-Mar 12/13/12

7-Mar 31.28 16.99 79.776

19.73 24

22.302

12

10

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Factors affecting existing pe ratio

Increase

in Exports

Appreciation/ Stock

Depreciation Of local Currency Split in management and acquisitions

Changes Mergers

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10

Existing PE Ratios for the five companies.

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ANALYSIS OF VARIANCE.

1= Mean PE Ratio of Infosys. 2= Mean PE Ratio of TCS. 3= Mean PE Ratio of HCL Technologies. 4= Mean PE Ratio of Tech Mahindra. 5= Mean PE Ratio of Wipro. Hypothesis Formulation: Null Hypothesis: 1= 2= 3= 4= 5 (The mean PE Ratio of all the five companies are equal.) Alternate Hypothesis: Not all PE Ratio means are equal.

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ANALYSIS OF VARIANCE.
ANOVA Source of Variation SS df MS F P-value F crit

Between Groups

7741.8266

1935.45665

0.662646118

0.625182397

2.866081402

Within Groups

58415.996

20

2920.7998

Total

66157.8226

24

Analysis of

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limitations
Only Time

top 5 industries duration was only 5 years

Applied

only one method of calculating the values.

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Findings
Efficiency Business

mix

Diversification Credibility Depreciation

Prospects

Fundamentals

equally affects the decision regarding investment decision

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THANK YOU