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Slow and Stead Group

BY:

HemantNurshid

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Fact of the Case study

Investor: Mr. Alok Kumar, 35yrs

Occupation: Private employee

Earnings: Alok + his wife (15+6) lakhs=21lacs. P.a.

Personal information: Married with 2daughters( 5yrs & 3yrs old

respectively), and dependent parents.Existing Portfolio:15lacs in Mutual fund, 1.5lacs in Debt

fund(maturity of 2yrs), 8lacs Fixed deposit, 6lacs Gold ornaments,10,000 as Life insurance premium.

Assets: Owned house, 2 cars( Honda civic, santro)

Liabilities:

Home loan of Rs. 30,000 p.m. go on for next 10yrs.

Car loan of Rs. 12,000 p.m. go on for next 2yrs.

Assumption: max life time of wage earner 70 year

Retirement 60 year

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Risk Profile

Risk Capacity:- High

Risk Behavior:- High to moderate

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Cash Flows of Mr. Alok Family

OUT FLOWS:- Parent s expenses 15000*12 (assume)

Daughter education 15000*12 (assume)

Car maintenance 15000*12 (assume)

House hold expenses 15000*12 (assume)

L I premium 10000

Car (E M I) 12000*12 (2 year)

Home loan 30000*12 (10 year)

Travelling expenses 300000

Total 15 24000

Present investable amount 5, 75,000

After2 year investable amount 7,19,000

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Investment Objective

Fund for Daughter marriage( about 60lacs).

Provision for retirement purpose.(30,000 *12)

Fund for medical treatment of family.Travelling & other expenses after retirement

5,00,000 for last 10 year.

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Assets Allocation

Equity: 50%

Debt: 20%

Insurance: 20%MF: 10%

Assets Allocation

Equity

Debt

Insurance

MF

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Allocation of Equity fund

Equity ofL&T for long Term 70%.

Equity of Hul & Dabur 30%.

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Allocation of Debt fund

Bond ofL&T 50%.

NHAI bond 30%.

KVP 20%

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Allocation of MF

SBI magnum fund 50%.

Birla sunlife index fund 50%.

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Allocation ofInsurance fund

ICIC lombard family floater plan20%.

Lic of Mrs. Alok80%.

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FUNDAMENTAL ANALYSIS

ECONOMIC ANALYSIS

INDUSTRY ANALYSIS

COUNTRY ANALYSIS

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INDUSTRY ANALYSIS

After analyzing the top growing industry, we, as afinancial planner found that Constructionindustry is the best option for Mr. Alok to invest

in. We analyzed this sector on the following basis:

Growth rate of this industry.

Huge flow ofFDI & FII flows.

High demand.

Economic growth, etc.

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COPARAISION OF DIFFERENT

COMPANY ON THE BASIS OF

DIFFERENT RATIO

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RTATIO L & T D L F H CC GAMMON PUNJ

LLYOD

P/E RATIO(%) 25.89 84.83 23.22 22.36 12.23

E P S (Rs) 72.66 4.51 2.69 9.39 11.06

D P S (Rs) 12.5 2 .80 .60 .15

N P (%) 11.18 NOTAVIALABLE

2.22 2.77 4.87

RETURN ON NET

WORTH(%)

23.92 5.96 5.36 6.21 10.27

RETURN ON CAPITAL

EMPLOYED(%)

25.42 7.02 9.24 10.38 9.55

DEBT EQOITY RATIO .37 .99 1.66 .67 .98

BOOK VALUE(Rs) 303.66 75.59 50.03 151.02 107.71

CURRENT MARKET 1917.95 382.60 60.75 210 135.35

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Why Construction Industry?

The budget 2010-11 addressed infrastructure sector. The Finance Minister has announced Rs10,000 crores allocation towards Indira Awaas Yojna and Rs 48000 crores towards BharatNirman.

Allocation for infrastructure projects for the ensuing fiscal will be Rs.173,552 crore ($38.5billion)

Allocation for Road Transport was raised by over 13% to Rs19,894 crore.The programmeaims at developing 50,000 km of national highways in seven phases by 2015 with aninvestment of over Rs. 3,000 billion at 2007 prices & nearly 60% of the future fundingrequirements of the NHDP Rs. 3,014.88 billion till 2015 are expected to come from theprivate sector.

In the construction equipment sector before slowdown it grew at35% but now it boost upabout 18-25%

In urban infra sector govt. has allocated Rs. 11,842 crore under the Jawaharlal Nehru NationalUrban Renewal Mission (JNNURM) & also set aside Rs. 40,900 crore for 200910 for itsBharat Nirman initiative for housing, rural roads, power, irrigation, telephony, and drinkingwater supply.

Commercial and office complexes mushrooming in major Indian metros.

Over 25 million new housing units required in 7years,etc.\

UPA government has planned to build 20km of national highways a day to increase itsnetwork.

Country at present has about 70,000km of national highways which is only about two per centof total over 33 lakh km of road network.

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COMPANY ANALYSIS

It is final stage in Fundamental analysis. It is

being done in two parts:

How the company performed in comparisonto other company operating in similar field?

How company performed in comparison to

earlier year?

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L & T PROFILE

Larsen & Toubro Limited (L&T) is atechnology, engineering, construction and manufacturing company.

Engineering Construction and Contracts Division ofL&T is Indiaslargest construction organization with over 60 years of experienceand expertise in the field

ranks 35th among top global contractors and 60th amonginternational contractors as per survey Engineering News Recordmagazine USA

L&T Infra quickly achieved cumulative approvals ofRs 17,133 croresand cumulative disbursements ofRs 7,615 crores across Energy

A.M. Naik-Chairman & Managing Director

Y.M. Deosthalee- Time Director & ChiefFinancial Officer

K. Venkataramanan- Director & President (Engineering &Construction Projects)

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L & T PROJECT

On 8th oct 2010, L&T bags new order worth Rs 1585 from Building &Factory segments.

On 30th sep 2010, L&T bags Rs 700cr. Order from water & materialhandling sector.

27th sep 2010, The co. wins Rs. 1610 cr. Order from visa power ltd. For

1200 mw power plant. Lube based oil project for petronas melka refinery in Malysia.

700 TPD methonol and 100 TPD co. plant construction.

1025 crore project for construction of hospital and residential project inMumbai.

Heavy lift cum pipelay vessel project.

NQ-re construction (NQRC) project in Mumbai high north field. 9 well platform project.

23rd Aug2010, the co. bags Rs. 1195 cr. ONGC order.

5th Aug 2010, the co. bags 1749 cr. Order from metallurgical sector.

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Ratio March 09 march10

P/E RATIO(%) 10.95 25.89

E P S (Rs) 59.49 72.66

Dividend Per Share(Rs)10.5 12.5

Net Profit Margin(%) 10.06 11.18

Return On Net Worth (%) 27.99 23.92

Return On Capital Employed(%) 24.14 25.42

Debt equity ratio(%) 53 37

Book Value(Rs) 212.32 303.66

Comparison with earlier year

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L & TLINIER CHART

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Closing priceSOpening Price

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L & T SHORT AND LONG TERM

MOVING AVERAGE

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Chart Title

closing price 200days average 10 Days AVG

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TAXATION BENEFIT

Taxation benefit upto 250000 on house loan.

Taxation benefit uto Rs 16750 on health

insurtance. Taxation benefit on li premium ofRs. 10000.