This knol is an index to the knols of companies included in the list of 30 companies whose share prices are used in calculating the sensitive index of Bombay Stock Exchange, India.
(This knol and related knols will provide information and equity research developed by my students in the subject as class assignments of their course. This dissemination plan is as per my paper "Independent Equity Research from Business Schools: A Possibility" published in AIMS International Journal on Management www.aims-international.org/AIJM/2-2-5.pdf).
Housing Development Finance Corpn. Ltd.
Larsen & Toubro Ltd.
Maruti Udyog Ltd.
A C C Ltd
.
Bajaj Auto Ltd.
Bharat Heavy Electricals Ltd.
Cipla Ltd.
Dr. Reddy'S Laboratories Ltd.
Grasim Industries Ltd.
Gujarat Ambuja Cements Ltd.
Hero Honda Motors Ltd.
Hindalco Industries Ltd.
I C I C I Bank Ltd.
Ranbaxy Laboratories Ltd.
Reliance Energy Ltd.
Tata Consultancy Services Ltd.
Tata Motors Ltd.
This knol tries to argue that investment in equities is proper at this point in time for long term portfolio purposes. In many countries, the equity indexes may have gone below fair values due to lack of purchasing power in the hands of security market intermediaries.
Fundamental Analysis – Graham–Rao Method
http://knol.google.com/k/narayana-rao-kvss/fundamental-analysis-grahamrao-method/2utb2lsm2k7a/7
Target Prices of Equity Shares – Concept and Utility
http://knol.google.com/k/narayana-rao-kvss/-/2utb2lsm2k7a/147
Charles on Dow on Trading and Speculation - Dow Theory
http://knol.google.com/k/narayana-rao-kvss/charles-on-dow-on-trading-and/2utb2lsm2k7a/148
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–Foreign: Accounting for a part of banking capital, non-resident Indian (NRI) deposits showed a net inflow of US $ 1.1 billion in April-September 2008, increasing from net outflow of US$ 78 million in April-September 2007.
–Demographic
| Index | Days Close | Days Close | Days Close | |
| 5th Dec 08 | 12th Dec 08 | 19th Dec 08 | P/E ratio | |
| ET 100 | 3204.09 | 12.13 | ||
| Sectoral Indices | ||||
| Auto-Ancillaries | 4483.36 | 8.59 | ||
| Automobiles | 2424.13 | 8.51 | ||
| Banks | 5633.29 | 9.53 | ||
| Capital goods | 8653.69 | 17.44 | ||
| Cement | 4699.77 | 5.31 | ||
| Chemicals | 3968.69 | 5.32 | ||
| Construction | 9378.76 | 17.15 | ||
| Consumer durables | 3568.39 | 6.36 | ||
| FMCG | 3311.64 | 19.01 | ||
| Fertiliser | 3311.18 | 5.5 | ||
| Hospitality | 4267.23 | 10.3 | ||
| Infotech | 1948.15 | 9.36 | ||
| Logistics | 10875.04 | 10.8 | ||
| Media | 2412.8 | 19.71 | ||
| Metals | 6096.29 | 3.58 | ||
| NBFC | 10675.91 | 12.01 | ||
| Oil & Gas | 3186.18 | 15.86 | ||
| Pharma | 3119.78 | 13.34 | ||
| Power | 3612.03 | 19.36 | ||
| Realty | 3952.32 | 5.77 | ||
| Retail | 671.22 | 55.38 | ||
| Shipping | 5871.53 | 3.39 | ||
| Sugar | 8070.69 | 4.51 | ||
| Teleservices | 1655.4 | 15.11 | ||
| Textiles | 2922.81 | 17.97 | ||
| Conglomerates | 6600.24 | 8.25 | ||
| Bollywood | 784.71 | 9.76 |
|
Test
|
Parameter
|
March
03-04
|
March
04-05
|
Score
|
Comments
|
|
Test 1
|
(Fig in Rs. Core)
|
|
853.6
|
1
|
Positive
|
|
Test 2
|
|
789.2
|
1
|
Positive
|
|
|
Test 3
|
Earnings Quality
(Fig in Rs. Crore)
CFO>Net Income
|
|
|
0
|
The cash flow
from operating
activity is less
|
|
|
|
729.4
|
|
||
|
|
|
853.6
|
|
||
|
Test 4
|
Debt- Total Assets Ratio |
0.07
|
0.06
|
1
|
Decreased by 0.01
|
|
Test
|
Parameter
|
March
03-04
|
March
04-05
|
Score
|
Comments
|
|
Test 5
|
Increase in Working Capital (Current Ratio Fig in times) |
2.28
|
2.67
|
1
|
Increased by 0.39
|
|
Test 6
|
Increase in asset Turnover |
1.7
|
1.8
|
1
|
Increased by 0.1
|
|
Test 7
|
Growth in Profitability |
9
|
13
|
1
|
Increased by 4%
|
|
Test 8
|
144.5
|
144.5
|
1
|
No issue of stock
|
|
|
Test 9
|
Gross Profit Margin
|
11.49
|
13.06
|
1
|
Increased by 1.57
|
|
|
|
|
TOTAL
SCORE
|
8
|
|
This implementation scheme of DDM uses the calculations done in Graham-Rao method of analysis.
You have calculated growth rate in EPS using 7 year adjusted EPS figures. (The method involves equating the adjusted EPS series to a geometric progression and the 'r' of geometric progression is taken as the growth rate).
Do similar calculation for growth rate in Dividend per share using 7 year adjusted DPS figure.
There can be difference in growth rates.
Take the average of growth rates.
Assume that this growth rate will continue for next 6 years.(1 to 6 years from the latest year for which DPS is available)
Growth for the next 6 years (7 to 12) will be 50% of it.
Growth for further 6 years (13 to 18) will be 50% of it.
Go on reducing it till you reach terminal growth rate assumed for the company.
364-Tbill rate is 4.60% on 30.1.2009
Source: http://stcipd.com/UserFiles/File/WeeklyReportFeb02.pdf
The risk premium is to be taken as 10%. For India it 8.75% on the basis of geometric average or mean. (Reference: IIM Ahmedabad Working paper number WP.No.2006-06-04, “A First Cut Estimate of Equity Risk Premium in India”, J R Varma and S K Barua).
Because at the present time (February 2009) risk aversion is high, using 10% as the risk premium demanded by the investor is appropriate.
Make a ranking of the companies in the industry to which the company belongs. Make three groups. First five, next five and the rest.
If the company is in the first five, Mature growth rate = 6%
If the company is in the next five, mature growth rate = 5%
If the company is in the third group, mature growth rate = 4%
Original knol - http://knol.google.com/k/narayana-rao/dividend-discount-model-an/2utb2lsm2k7a/ 1060
Quarterly results in brief |
(Rs crore)
|
| Dec ' 08 | Sep ' 08 | Jun ' 08 | Mar ' 08 | Dec ' 07 | |
| Sales | 18,030.34 | 15,566.50 | 13,799.20 | 13,576.73 | 12,666.81 |
| Operating profit | 13,332.38 | 11,350.61 | 8,990.54 | 8,712.93 | 8,568.57 |
| Interest | 12,272.15 | 10,111.15 | 8,981.54 | 8,776.14 | 8,410.45 |
| Gross profit | 4,482.62 | 4,193.21 | 3,962.34 | 4,373.13 | 3,659.74 |
| EPS (Rs) | 39.04 | 35.59 | 25.84 | 29.82 | 34.37 |
Quarterly results in details |
|
|
Dec ' 08
|
Sep ' 08
|
Jun ' 08
|
Mar ' 08
|
Dec ' 07
|
|
Other income
|
3,225.56
|
2,343.14
|
2,403.87
|
2,817.20
|
2,697.19
|
|
Stock adjustment
|
-
|
-
|
-
|
-
|
-
|
|
Raw material
|
-
|
-
|
-
|
-
|
-
|
|
Power and fuel
|
-
|
-
|
-
|
-
|
-
|
|
Employee expenses
|
3,045.56
|
2,221.20
|
2,130.95
|
1,569.60
|
2,194.68
|
|
Excise
|
-
|
-
|
-
|
-
|
-
|
|
Admin and selling expenses
|
-
|
-
|
-
|
-
|
-
|
|
Research and development expenses
|
-
|
-
|
-
|
-
|
-
|
|
Expenses capitalised
|
-
|
-
|
-
|
-
|
-
|
|
Other expenses
|
1,455.57
|
1,384.08
|
1,128.24
|
1,675.06
|
1,099.13
|
|
Provisions made
|
196.83
|
610.61
|
1,549.47
|
1,619.14
|
804.43
|
|
Depreciation
|
-
|
-
|
-
|
-
|
-
|
|
Taxation
|
1,807.37
|
1,322.88
|
772.08
|
870.74
|
1,046.67
|
|
Net profit / loss
|
2,478.42
|
2,259.72
|
1,640.79
|
1,883.25
|
1,808.64
|
|
Extra ordinary item
|
-
|
-
|
-
|
-
|
-
|
|
Prior year adjustments
|
-
|
-
|
-
|
-
|
-
|
|
Equity capital
|
634.88
|
634.88
|
634.88
|
631.47
|
526.30
|
|
Equity dividend rate
|
-
|
-
|
-
|
-
|
-
|
|
Agg.of non-prom. shares (Lacs)
|
2576.73
|
2576.73
|
2576.73
|
2542.63
|
2119.60
|
|
Agg.of non promotoholding (%)
|
40.59
|
40.59
|
40.59
|
40.27
|
40.27
|
|
OPM (%)
|
73.94
|
72.92
|
65.15
|
64.18
|
67.65
|
|
GPM (%)
|
21.09
|
23.41
|
24.45
|
26.68
|
23.82
|
|
NPM (%)
|
11.66
|
12.62
|
10.13
|
11.49
|
11.77
|
Half yearly results in brief |
(Rs crore)
|
|
|
Sep ' 08
|
Mar ' 08
|
Sep ' 07
|
Mar ' 07
|
Mar ' 06
|
|
Sales
|
29,365.70
|
26,243.54
|
22,706.77
|
21,277.40
|
18,067.23
|
|
Operating profit
|
20,341.15
|
17,281.50
|
16,391.54
|
12,545.20
|
9,843.15
|
|
Interest
|
19,092.69
|
17,186.59
|
14,742.48
|
13,005.94
|
10,292.78
|
|
Gross profit
|
8,155.55
|
8,032.87
|
5,074.68
|
6,823.37
|
5,876.83
|
|
EPS (Rs)
|
61.44
|
58.47
|
57.71
|
48.61
|
37.40
|
Half yearly results in details |
|
|
Sep ' 08
|
Mar ' 08
|
Sep ' 07
|
Mar ' 07
|
Mar ' 06
|
|
Other income
|
4,747.01
|
5,514.39
|
3,180.54
|
4,705.33
|
4,517.50
|
|
Stock adjustment
|
-
|
-
|
-
|
-
|
-
|
|
Raw material
|
-
|
-
|
-
|
-
|
-
|
|
Power and fuel
|
-
|
-
|
-
|
-
|
-
|
|
Employee expenses
|
4,352.15
|
3,764.28
|
4,021.59
|
4,053.59
|
4,448.29
|
|
Excise
|
-
|
-
|
-
|
-
|
-
|
|
Admin and selling expenses
|
-
|
-
|
-
|
-
|
-
|
|
Research and development expenses
|
-
|
-
|
-
|
-
|
-
|
|
Expenses capitalised
|
-
|
-
|
-
|
-
|
-
|
|
Other expenses
|
2,512.32
|
2,774.19
|
2,048.56
|
2,099.83
|
1,966.83
|
|
Provisions made
|
2,160.08
|
2,423.57
|
245.08
|
2,578.78
|
1,808.96
|
|
Depreciation
|
-
|
-
|
-
|
-
|
-
|
|
Taxation
|
2,094.96
|
1,917.41
|
1,792.37
|
1,686.34
|
2,099.39
|
|
Net profit / loss
|
3,900.51
|
3,691.89
|
3,037.23
|
2,558.25
|
1,968.48
|
|
Extra ordinary item
|
-
|
-
|
-
|
-
|
-
|
|
Prior year adjustments
|
-
|
-
|
-
|
-
|
-
|
|
Equity capital
|
634.88
|
631.47
|
526.30
|
526.30
|
526.30
|
|
Equity dividend rate
|
-
|
-
|
-
|
-
|
-
|
|
Agg.of non-prom. shares (Lacs)
|
2576.73
|
2119.60
|
211.96
|
3143.39
|
2119.60
|
|
Agg.of non promotoholding (%)
|
40.59
|
40.27
|
40.27
|
59.73
|
40.27
|
|
OPM (%)
|
69.27
|
65.85
|
72.19
|
58.96
|
54.48
|
|
GPM (%)
|
23.91
|
25.29
|
19.60
|
26.26
|
26.02
|
|
NPM (%)
|
11.43
|
11.63
|
11.73
|
9.85
|
8.72
|
Annual results in brief |
(Rs crore)
|
|
|
Mar ' 08
|
Mar ' 07
|
Mar ' 06
|
Mar ' 05
|
Mar ' 04
|
|
Sales
|
48,950.31
|
39,491.02
|
35,794.93
|
32,428.00
|
30,460.48
|
|
Operating profit
|
33,673.05
|
25,257.87
|
19,676.75
|
17,885.07
|
16,587.07
|
|
Interest
|
31,929.08
|
23,436.82
|
20,159.29
|
18,483.38
|
19,274.16
|
|
Gross profit
|
13,107.55
|
9,999.94
|
11,299.23
|
10,990.36
|
9,553.46
|
|
EPS (Rs)
|
106.56
|
86.29
|
83.73
|
81.79
|
69.94
|
Annual results in details |
|
|
Mar ' 08
|
Mar ' 07
|
Mar ' 06
|
Mar ' 05
|
Mar ' 04
|
|
Other income
|
8,694.93
|
5,769.25
|
7,388.69
|
7,119.91
|
7,612.45
|
|
Stock adjustment
|
-
|
-
|
-
|
-
|
-
|
|
Raw material
|
-
|
-
|
-
|
-
|
-
|
|
Power and fuel
|
-
|
-
|
-
|
-
|
-
|
|
Employee expenses
|
7,785.87
|
7,932.58
|
8,123.04
|
6,907.35
|
6,447.69
|
|
Excise
|
-
|
-
|
-
|
-
|
-
|
|
Admin and selling expenses
|
-
|
-
|
-
|
-
|
-
|
|
Research and development expenses
|
-
|
-
|
-
|
-
|
-
|
|
Expenses capitalised
|
-
|
-
|
-
|
-
|
-
|
|
Other expenses
|
4,822.74
|
3,890.93
|
3,602.06
|
3,166.82
|
2,797.62
|
|
Provisions made
|
2,668.65
|
2,409.64
|
4,393.08
|
4,468.76
|
4,628.10
|
|
Depreciation
|
-
|
-
|
-
|
-
|
-
|
|
Taxation
|
3,709.78
|
3,048.99
|
2,499.48
|
2,217.08
|
1,244.36
|
|
Net profit / loss
|
6,729.12
|
4,541.31
|
4,406.67
|
4,304.52
|
3,681.00
|
|
Extra ordinary item
|
-
|
-
|
-
|
-
|
-
|
|
Prior year adjustments
|
-
|
-
|
-
|
-
|
-
|
|
Equity capital
|
631.47
|
526.30
|
526.30
|
526[4].30
|
526.30
|
|
Equity dividend rate
|
-
|
-
|
-
|
-
|
-
|
|
Agg.of non-prom. shares (Lacs)
|
2119.60
|
3143.39
|
2119.60
|
2119.60
|
2119.60
|
|
40.27
|
59.73
|
40.27
|
40.27
|
40.27
|
|
|
OPM (%[6])
|
68.79
|
63.96
|
54.97
|
55.15
|
54.45
|
|
GPM (%)
|
22.74
|
22.09
|
26.17
|
27.79
|
25.09
|
|
NPM (%)
|
11.67
|
10.03
|
10.20
|
10.88
|
9.67
|
|
Shri O.P. Bhatt
|
Chairman
|
|
Shri S.K. Bhattacharyya
|
MD & CC&RO
|
|
Shri R. Sridharan
|
MD & GE(A&S)
|
|
Dr. Ashok Jhunjhunwala
|
Board Member
|
|
Shri Dileep C. Choksi
|
Board Member
|
|
Shri S. Venkatachalam
|
Board Member
|
|
Shri. D. Sundaram
|
Board Member
|
|
Dr. Deva Nand Balodhi
|
Board Member
|
|
Prof. Mohd. Salahuddin Ansari
|
Board Member
|
|
Dr.(Mrs.) Vasantha Bharucha
|
Board Member
|
|
Dr. Rajiv Kumar
|
Board Member
|
|
Shri Arun Ramanathan
|
Board Member
|
|
Smt. Shyamala Gopinath
|
Board Member
|
|
Year
|
Equity Capital in INR cores
|
Face Value
|
Outstanding shares
|
PAT
|
EPS on accounting year end
|
|
1999
|
10278
|
10
|
526298878
|
1027.8
|
19.53
|
|
2000
|
20515.5
|
10
|
526298878
|
2051.55
|
38.98
|
|
2001
|
16042.5
|
10
|
526298878
|
1604.25
|
30.48
|
|
2002
|
24316.2
|
10
|
526298878
|
2431.62
|
46.2
|
|
2003
|
31050
|
10
|
526298878
|
3105
|
59
|
|
2004
|
36810
|
10
|
526298878
|
3681
|
69.94
|
|
2005
|
43045.2
|
10
|
526298878
|
4304.52
|
81.79
|
|
2006
|
44066.7
|
10
|
526298878
|
4406.67
|
83.73
|
|
2007
|
45413.1
|
10
|
526298878
|
4541.31
|
86.29
|
|
2008
|
67291.2
|
10
|
631470376
|
6729.12
|
106.56
|
| Seven Year Average | 76.21571 |
| Ratio of Average and Initial | 1.649691 |
| Growth | 16.5 |
| Fair P/E | 16.5 |
| Fair Price | 1257.559 |
| Mkt Price | 934.5 |
good work
Hello Mr. Narayana,
Ravish Ojha - 03 Feb 2010I analyzed the knol created by your on the BSE companies.
its full of data but it will be nice if you could express opinion as well on this analysis because the data can be read/retrieved by the users elsewhere too.
Thanks,
Ravish