Project Proposal Report

Equity analysis of Education Sector

Submitted By

Manish Ramrakhani

Enroll no-09BS0001192

Synopsis

The project is about the overall performance of of listed Education companies. By studying various aspects of industrial and economical changes over a period of 4 years and this impact on companies financial performance from investor point of view. How these changes made in demand and supply chain affected the economics and how it got transferred to balance sheet of company and finally how investor reacted to these changes?

The changes are reflected through change in fundamental financial ratios which reflect various aspects like profitability, leverage and operational performance of company and comparing these ratios with the overall industry benchmark ratios. It will indicate how a stock perform over a period of time with respect to industry performance.

The performance of any stock can be measured through:

Fundamental Analysis

Fundamental analysis can be performed by Top to bottom approachTools like:Economic analysisIn this economic analysis is done to study the effect of various forces like inflation, demand and supply of raw materials in market.

Industry Analysis Companies whose market share is 80% of industry they represent industry variation in their performance affect industry as a whole. Now due to demand and supply industry will react in certain way to protect its growth.

Company AnalysisDifferent companies have different financial structures to safeguard their investors and creditors they react.A company’s performance is measured by goodwill, its performances, liquidity, leverage, turnover, profitability & financial health was checked & analysis with the help of ratio analysis for the purpose of long term successful investment.

By studying all these factors over a particular period of time on various companies in Education industry in India. We can recommend the investor to buy/sell certain stocks based on their operational and financial performance in comparison to their competitors to gain value of their invested assets.

Objectives

The main purpose of this analysis (both fundamental and technical) to acquire the knowledge to perform equity analysis of stocks. Finally guide investors to make rational decision in this sector (education sector)in their investment portfolio.

A satisfied customer always act like an asset to an organization because it is five times more difficult to acquire a new customer than to a satisfy a present one. So helping a customer in his decision is helping the organization in growth.

Limitation of study

There are certain limitation of both fundamental and technical analysis:

Fundamental Analysis

Too many economic indicators and extensive macroeconomic data can confuse investors. The same set of information on macroeconomic indicators can have varied effects on the same currencies at different times. It is beneficial only for long-term investments.

Proposed methodology

Firstly fundamental research is conducted on each and every company previous and present financial performance by calculating various ratios like profitability, leverage, activity and turnover ratios. By calculating these ratios and representing a trend line by these values give the basic growth prospects of a company weather it is doing good or satisfactorily.

Now comparing these ratios with industry standards and other peers give the basic idea about its performance with respect to overall industry and peers.

And valuation of stock can be done weather its over valued or under valued and its performance with market trends. It gives us the beta value which represents the aggressiveness of stock with respect to market.

After this whole sector performance will be studied by trends of whole industry is following for its survival and growth.

For the short term purpose various charts of different stock will be studied to know the current performance of stock and its movement in short term.

Schedule

15 days to get basic knowledge about past trends of Education sector and what factor basically affect the growth of this sector in India. Contribution by government policies to help companies in future growth.

Next 30 days to perform the financial ratio analysis of individual firms by calculating various ratios and comparing them with industry standards and among peer competitors.

30days on technical analysis will be performed by studying periodic price movement of stock and using technical tools to study their daily performance.

Finally consolidate all these analysis and recommend clients with these analysis to invest wisely stocks in this sector.

Reference

Annual reports of companies in Education sector

http://nseindia.com/

http://economictimes.com

http://moneycontrol.com

http://indiainfoline.com

Faculty Guide Name: Prof. A Gopalakrishnan

Date: 14 August 2010

Signature of the Student