CHAPTER-1

INTRODUCTION

“A PROJECT ON RISK AND RETURN ANALYSIS ON SELECTED PHARMACEUTICALS

AND FMCG AT SHAREKHAN”

INTRODUCTION

Investment in the equity is a very risky and investor experience it is a very risky. Technical evaluation
should be a study of the exchange with regards to elements touching the provision and demand of stocks
helps to hold close the intrinsic price of shares and to understand whether or not or not the shares are
undervalued and overvalued. The alternate symptoms would facilitate the capitalist to spot major market
turning points. This is regularly a major technical evaluation of chosen corporations that helps to grasp the
price behaviour of the shares, the indicators given by them also the principal turning points of the value.
Any capitalist or merchandiser must actually ponder technical analysis as a tool whether or no longer to
store for the inventory at a chosen cause of your time thru its basically study. This successively would
facilitate buyers to spot the existing trend and risks committed safety on par with market this find out about
is solely supported facts furnished on shares listed in NSE. For the purpose of the find out about methods
like Beta, Relative electricity index and straight ahead transferring average are used and additionally the
power of stock is inferred.

Return can be described as the authentic profits from an undertaking as excellent as understanding in the
rate of capital. Thus, there are two elements in Return the foremost factor or the periodic cash flows from
the investment, both in the shape of hobby or dividends; and the exchange in the fee of the asset, usually
referred to as the capital reap or loss. A man or woman making a funding expects to get some Returns from
the funding in the future. However, as future is uncertain, the future predicted Returns too are uncertain. It
is the uncertainty related with the Returns from a funding that introduces a Risk into a project. The
envisioned Return is the undecided future Return that an association expects to get from its project. The
realized Return, on the contrary, is the wonderful Return that an affiliation has truly earned.

Risk and return evaluation plays a key role in most character decision making process. Every investor wants
to keep away from chance and maximize return. In general, hazard and return go hand. If an investor wishes
to earn greater returns than the investor need to appreciate that this will solely be executed by way of
accepting a commensurate expand in risk. Based on risk and return analysis, high risk offers excessive
returns with low threat offers to low return.
INDUSTRY PROFILE

The Indian financial area has the identical development in the globe as new titles are additionally held in
the Indian industry. The economic area is now considered as boom area and contributes to gdp. The bourse
performs a quintessential necessary duty in the Indian monetary gadget that strengths the Indian economy.
Solution team of actors in monetary device are banks, brokers, non-bank financial institutions, asset
management companies, credit score unions and insurance companies.

INDIAN STOCK MARKET

Bourse is a place where the shares are offered and sold via public companies, government, and semi-govt,
etc. it performs a very vital role in the economy, companies are publicly traded and the securities are traded
at an agreed charge inventory market is an extremely good section of the economic device of a country.
The bourse performs a pivotal feature in the expand of the us of a that finally influences the monetary
system of the u. s. a. to an excellent extent. That is reason that the govt, industry and even the central banks
of the u. s. retain a shut watch on the happenings of the stock market. The inventory market is critical from
the industry’s element of view as top as the investor’s thing of view.

Whenever an agency desires to bring up money for in a similar fashion enlargement or setting up a new
enterprise venture, they have to both take a mortgage from a economic organization or they have to issue
shares thru the bourse. In fact, the bourse is the principal source for any organisation to increase some
capital for the company it can problem shares of the company, they challenge more range of money for
corporation expansion.

This is the necessary feature of the bourse and for this reason they play the most critical position of assisting
the increase of the corporation and commerce in the country. That is the purpose that a rising inventory
market is the sign of growing industrial quarter and a growing economic system of the country. It helps the
pursuits of the customers via a vary of coverage and set of legal guidelines on the stockpile of the SEBI is
the watchdog for the scholarship award, it usually monitors buying and promoting activity.

The bourse is an quintessential platform to carry money for the improvement of the country, it increases
public attention on financial savings practices, investment and Risk taking.it has normally been placed via
familiar perception.

THE KEY COMPONENTS OF STOCK EXCHANGE

SECURITIES

According to the 1956 legislation on securities regulation, marketable securities such as stocks, bonds, and
debentures of a enterprise organization or extra body company or government. The securities are labeled
as follows.
  Shares:

The public sale is known as unit fee of capital. At what time groups want capital for enlargement and
development of their enterprise on the consequences, businesses issue shares on the way in the path of the
unrestricted by way of issuing the hand, businesses will expand their long-term capital. The organisation
will pay dividends to shareholders. The shares are primarily categorized into two types.Equity shares
Preference shares

 Debentures:

debentures are a financial instrument is a recognizable debt. Private region organizations emit this
debenture to meet the long-term capital needs. The employer promises to debtors to pay an amount of
precept with interest.

 Bonds:

this is a debt instrument in which the licensed company is provided to buyers to repay the important quantity
and the time of maturity. Normally, bonds are difficulty thru a public organization, a savings institution,
and agencies in the indispensable market. The majority are acquainted technique to extend the duties
through subscription. Government bonds are typically auctioned.

 Derivatives:

the derivatives be a economic instrument whose price is consequential from its special asset, which can be
bond stocks, commodities. The occasion for derivatives as follows

 Futures
 Options

Important intermediaries in stock exchange

Intermediaries these are the hand dumpcarts for Indian bourse.

Stock brokers: an inventory brokers who are qualified gurus buy and put up for sale(trade) securities on
behalf investors. The stock brokers provide a help customer for managing their finance and investing in
portfolio. The brokers will load some quantity of commissions for customers to their service

Financial intermediaries: these are fundamental troupe into the secondary market that offers intermediary
offerings for men and women and organizations that facilitate economic transactions inside the monetary
market. Financial intermediaries receive money from an employer and invests those moneys in some other
company. Ex banks, mutual funds, NBFC’s.
Individual investors: man or woman investors contain these elements besides specifying that they elevate
out no longer need to report other than to purchase or sell orders to their brokers. Individual buyers invest
dollars in specific movements they wish for their funding

 Issuers of securities
 Corporate bonds
 Government
 Financial institutions
 Banks

History

In 1875, “he native stock brokers union” composed the Bombay stock exchange. It be the increased phase
professional inventory trade in Asia. As per available records, there was an change India. The replacing
was once begun at time of 1875 under banyan tree. The cloth commercial enterprise earned his at first
honour of Ahmedabad in 1894. In 1908, the Kolkata inventory exchange started imparting business chance
for planting and jute industrial facilities, after the honour of madras constructed up in 1922. The two net
beneficial trades for changing cash and money with a bundle of hints and directors are as NSE, OTC (over
the counter alternate of India) as of now, there are 24 shares exchanges are working in more than a few
conditions of India, constructed up in different states of India like as follows.

Ahmedabad stock exchange(Ahmadabad)

Vadodara stock exchange(Vadodara)

Bhubaneshwar stock exchange (Bhubaneshwar)

Bombay stock exchange (Mumbai)

Kolkata stock exchange (Kolkata)

Kochi stock exchange (kochi)

Madras stock exchange (Chennai)

Delhi stock exchange (Delhi)

Guwahati stock exchange (Guwahati)

Hyderabad stock exchange (Hyderabad)

Jaipur stock exchange (Jaipur)

Indore stock exchange (Indore)

Kanpur stock exchange (Kanpur)

Patna stock exchange (Patna)

TYPES OF STOCK EXCHANGE IN INDIA

Mainly two types of stock exchange in India as follows:

1) National stock exchange

2) Bombay stock exchange

NATIONAL STOCK EXCHANGE.

The National Stock Exchange (NSE) is the main stock trade in India and the fourth biggest in the world
via equity trading quantity in 2015, in accordance to World Federation of Exchanges (WFE). It began
operations in 1994 and is ranked as the largest inventory alternate in India in phrases of whole and average
day by day turnover for fairness shares each 12 months given that 1995, primarily based on annual reports
of SEBI.

NSE MARKETS

Equity & Equity Linked Products

 Cash Market (Equities)

 Indices Mutual Funds
 Exchange Traded Funds
 Initial Public Offerings
 Offer for Sale
 Institutional Placement Program
 Security Lending and Borrowing Scheme
 Sovereign Gold Bonds Scheme

Derivatives

 Equity Derivatives
 Currency Derivatives
 NSE Bond Futures

Debt

 Debt Market
 Corporate Bonds
  Electronic Debt Bidding Platform (NSE-EBP)

STOCK BROKING FIRMS IN INDIA

In the late 1980’s and mid 1990’s, there had been solely singular intermediaries, and market due to the fact
an entire remained assured and present be a time when the center inventory had the capability to move.

Another huge time which has distinct the duration to 1994 protected the introduction on the share
marketplace of addiction in 1997, the opening economic machine in 1991. The NSE improvement led to
another period of share market. NSE has truly fought against the membership averages capacity of Bombay
and won. In mid-2000, the format and demat processor have come to be essential.

However, exchange nowadays consists of subordinates who have been not remarkable, different sizeable
adjustments in the duration of 1994 have been the formation pf company finance companies. Singular
agents like motilal and uday kotak have grown to be business houses. The non-public zone has also
witnessed the shift IFI.

The major stock broking firms in India:

 Kotak securities
 Equiwealth securities ltd
 IL & FS invests mart ltd
 Karvy stock broking ltd
 Anandrathi monetary services ltd
 Religare stock brokers
 Share khan securities
 Motilal oswal securities

Recent Developments in Financial Sector

 The nation's monetary administrations segment comprises of the capital markets, protection area
and non-banking money related organizations (NBFCs). India's gross national investment funds
(GDS) as a level of Gross Domestic Product (GDP) remained at 30 percent in 2017. The aggregate
sum of Initial Public Offerings expanded to Rs 84,357 crore (US$ 13,089 million) before the finish
of FY18. The all out number of IPO's achieved 161 and added up to US$ 5.52 billion between
January-November 2018.@ In FY17, singular riches in India extended to Rs 344 lakh crore (US$
5,337.47 billion) from Rs 310 lakh crore (US$ 4,620.66 billion) in FY16.
 The benefit the executives business in India is among the quickest developing on the planet. In
September 2018, corporate financial specialists Assets Under Management AUM remained at US$
127.33 billion, while HNWIs and retail speculators came to US$ 99.28 billion and US$ 80.46
billion, individually. In the Asia-Pacific, India is among the best five nations regarding HNWIs.

 Bombay Stock Exchange (BSE) and National Stock Exchange of India (NSE) accomplished
authorization from the Securities and Exchange Board of India (SEBI), to dispatch product
subsidiaries exchanging from October 1, 2018.

 Amid April-December 2018, value common assets have enrolled a record net inflow of Rs 812.11
billion (US$ 11.26 billion).Total value subsidizing's of microfinance division developed at the rate
of 39.88 to Rs 96.31 billion (Rs 4.49 billion) in 2017-18 from Rs 68.85 billion (US$ 1.03 billion)
in 2016-17.^The open store of NBFCs expanded from US$ 293.78 million in FY09 to Rs 319.05
billion (US$ 4.95 billion) in FY18, enlisting a compound yearly development rate (CAGR) of 36.86
percent.

 In November 2018, Bombay Stock Exchange (BSE) has empowered offering live status of
utilizations documented by recorded organizations on its online entrance and furthermore presented
week after week prospects and choices contracts on Sensex 50 file from October 26, 2018. The
Government of India is intending to dispatch a worldwide trade exchanged reserve (ETF) in FY20
to raise long haul speculations from abroad annuity reserves.

 The Government of India has found a way to develop the changes in the capital markets, including
improvement of the Initial Public Offer (IPO) process which permits qualified outside financial
specialists (QFIs) to get to the Indian security markets.
COMPANY PROFILE

Sharekhan is one of the leading retail broking House of SSKI Group which used to be going for walks
effectively considering 1922 in the country. It is the retail broking arm of the Mumbai-based SSKI Group,
which has over eight many years of experience in the inventory broking business. Sharekhan provides its
customers a huge vary of equity associated offerings including change execution on BSE, NSE, Derivatives,
depository services, on line trading, funding advisory, Mutual Fund Advisory etc.

The firm‟s on line buying and selling and investment web page - www.sharekhan.com - was once launched
on Feb 8, 2000. The website gives get entry to to most appropriate content and transaction facility to retail
customers throughout the country. Known for its jargon-free, investor friendly language and high excellent
research, the site has a registered base of over two lakh customers. The wide variety of buying and selling
individuals currently stands More than eight Lacs. While on-line trading currently debts for just over 8 per
cent of the daily trading in stocks in India, Sharekhan alone accounts for 32 per cent of the volumes traded
online. two

The content-rich and lookup oriented portal has stood out among its contemporaries due to the fact of its
steadfast dedication to presenting clients best-of-breed technological know-how and finest market
information. The goal has been to let customers make knowledgeable decisions and to simplify the process
of investing in stocks.

On April 17, 2002 Sharekhan launched Speed Trade, a net-based executable utility that emulates the broker
terminals alongside with host of other facts relevant to the Day Traders. This was once for the first time
that a net-based trading station of this caliber was once offered to the traders. In the remaining six months
Speed Trade has grow to be a de facto wellknown for the Day Trading community over the net.

ABOUT SHAREKHAN – ALWAYS THE FIRST

Founded in 2000 and a subsidiary of BNP Paribas in view that November 2016, Sharekhan used to be one
of the first brokers to provide on-line buying and selling in India. With 16 lakh customers, 153 branches
and greater than 2400 enterprise companions unfold throughout over 575 locations, Sharekhan is one of the
greatest brokers in India. Sharekhan presents a vast range of savings & funding options such as equities,
futures and options. forex trading, portfolio management, research and mutual dollars and investor
education. On an average, Sharekhan executes more than 400,000 trades each day

Guiding India's retail inventory buyers for 16 years

Registered with NSE and BSE for capital market, futures and choices and currency segments and CDSL
and NSDL for depository services.A full-service stock broking company supplying on-line offerings right
from online account opening to trading and investments.
Created India’s fantastic online buying and selling platforms: Website (www.sharekhan.com), TradeTiger
(the ultimate computing device buying and selling software), Sharekhan App (available for Android and
iOS devices) and Sharekhan Mini (a low bandwidth internet site specially for cell browsers) A robust brick-
and-mortar community with over 2600 stores in 575+ cities

Research-based financial advice on all asset instructions to suit all investing and trading styles

Dedicated Education and training guides for buyers and merchants in association with Online Trading
Academy

About our group

BNP Paribas is a main bank in Europe with an worldwide reach. It has a presence in 75 countries, with
extra than 189,000 employees. It has had a presence in India for over one hundred fifty years having set up
its first department in Kolkata, in 1860. With this unparalleled ride of the Indian market, it is among the
leading company banks in the country. Through its branches in eight key cities — Mumbai, Delhi, Kolkata,
Chennai, Hyderabad, Bangalore, Ahmedabad and Pune — BNP Paribas gives state-of-the-art solutions in
its three core groups — corporate and institutional banking, funding options and retail banking — many of
them in affiliation with strong local partners. The financial institution also provides offerings for character
consumers in Wealth Management

Sharekhan business

1. Brokering business.

2. White feathering house production.

Vision

To be the best retail broking brand in the retail business of the stock market.

Mission

To educate and empower the individual investor to make better investment decisions through quality
advices and superior services.

Stock exchange Mumbai

 Share khan is the retail broking arm of SSKI, an organization with more then eight decade of trust
and credibility in the stock market.
 Amongst pioneers of investment research in the Indian market.
 In 1984 venture into institutional broking and the corporate finance.
 Leading domestic player in the Indian institutional business.
  Over US$5 billion of private equity deal.
 SSKI group companies
 SSKI investor services ltd (Sharekhan)
 S.S. Kantilal Isharlal securities
 SSKI corporate finance.

SHAREKHAN PROFILE

SHAREKHAN RETAIL BROKING

 Among the top three (3) branded retail services providers (Rs 856 crs average daily volume.
 NO. 2 player in online business
 Large network of branded broking outlets in the country servicing around 5, 45, 000 Clients

MANAGEMENT TEAM

Jaideep Arora - Chief Executive Officer and Whole-Time Director

Shankar Vailaya-Whole-Time Director

Share khan Limited Board Members

Name Primary Company

Jaideep Arora Sharekhan Limited

Shankar Vailaya Sharekhan Limited

Jimmy Lachmandas Mahtani Baring Private Equity Asia

Marc Desaedeleer Citi Venture Capital International

Rahul Kumar Yadav Sharekhan Limited

SWOT ANALYSIS OF SHAREKHAN

STRENGTHS

 Big client base

 In-house research house
 online as well as offline trading
 Online IPO/ MF services
 Share shops
 Transparent
 User friendly tie ups with 10 banks 8. Excellent order execution speed and reliability

WEAKNESS

 Lack of awareness among customer

 Less focus on customer retention
 Less Exposure

OPPORTUNITIES

 Diversification
 Product modification
 Improve Web based trading
 Provide competitive brokerage
 Concentrate on PMS
  Focus on Institutional investors
 Concentrate on HNI‟s (high net worth investor)

THREATS

 Aggressive promotional strategies by close competitor like Religare, Angel Broking and India bulls.
 More and more players are venturing into this domain, which can further reduce the earning of
Share Khan.
 Stock market is very volatile; risk involves is very high.

BENEFITS

 Free Depository A/c Secure Order by Voice Tool Dial-n-Trade.

 Automated Portfolio to keep track of the value of your actual purchases.
 24x7 Voice Tool access to your trading account.
 Personalized Price and Account Alerts delivered instantly to your Cell Phone & E-mail address.
 Special Personal Inbox for order and trade confirmations.
 On-line Customer Service via Web Chat. Anytime Ordering.
 NSDL Account Instant Cash Tranferation. Multiple Bank Option.
 Enjoy Automated Portfolio.
 Buy or sell even single share

PRODUCTS AND SERVICES OF SHAREKHAN

Choice of trading platforms

Investing and Trading tools

DIAL-N-TRADE

Along with enabling access for your trade online, the CLASSIC and TRADE TIGER ACCOUNT also
gives you our Dial-n-trade services. With this service, all you have to do is dial our dedicated phone lines
which are 1800-22-7500, 3970-7500.

PORTFOLIO MANAGEMENT SERVICES

Sharekhan is also having Portfolio Management Services for Exclusive clients.

1. PROPRIME - Research & Fundamental Analysis.

Ideal for investors looking at steady and superior returns with low to medium risk appetite. This portfolio
consists of a blend of quality blue-chip and growth stocks ensuring a balanced portfolio with relatively
medium risk profile. The portfolio will mostly have large capitalization stocks based on sectors & themes
that have medium to long term growth potential.

2. PROTECH - Technical Analysis. Protech uses the knowledge of technical analysis and the power
of derivatives market to identify trading opportunities in the market. The Protech lines of products are
designed around various risk/reward/ volatility profiles for different kinds of investment needs.

 THRIFTY NIFTY: Nifty futures are bought and sold on the basis of an automated trading system
that generates calls to go long/short. The exposure never exceeds value of portfolio i.e. there is no
leveraging; but being short in Nifty allows you to earn even in falling markets and there by generates
linear
  BETA PORTFOLIO: Positional trading opportunities are identified in the futures segment based on
technical analysis. Inflection points in the momentum cycles are identified to go long/short on
stock/index futures with 1-2 month time horizon. The idea is to generate the best possible returns in
the medium term irrespective of the direction of the market without really leveraging beyond the
portfolio value. Risk protection is done based on stop losses on daily closing prices.
 STAR NIFTY: Trailing Stops Momentum trading techniques are used to spot short term momentum
of 5-10 days in stocks and stocks/index futures. Trailing stop loss method of risk management or
profit protection is used to lower the portfolio volatility and maximize returns. Trading opportunities
are explored both on the long and the short side as the market demands to get the best of both
upwards & downward trends

3. PROARBITRAGE - Exploit price analysis

Online ipo's and mutual funds advisory is available.

 PROCESS OF ACCOUNT OPPENING

CHARGE STRUCTURE

1)- PRE PAID OR AMC A/C: -

 Advance Amount which will be fully adjsted against your brokerage you paid in One year.
Following Schemes Are Available: - Brokerage will be chagred -

1. 750/- Scheme:- 0.05 / 0.50 %

2. 1000/- Scheme 0.045 / 0.45 %
3. 2,000/- Scheme: - 0.035 / 0.40 %
4. 6,000/- Scheme: - 0.025 / 0.25 %
5. 18,000/- Scheme: - 0.020 / 0.20 %
6. 30,000/- Scheme: - 0.015 / 0.18 %
7. 60,000/- Scheme: - 0.010 / 0.15 %
8. 1,00,000/- Scheme: - 0.0075 / 0.10 %

Minimum Margine of Rs. 25000/- is Required for Account Opening.

 Annual Maintanance Charges will NIL for 1st year and Rs. 400/- from 2nd year.
 Exposure : 4 times (on margine money)
 Exposure : 10 times (on max trading)
 Online ipo's and mutual funds advisory is available.
 We are having tie-up with Eleven banks for online fund transfering i.e. HDFC, ICICI, IDBI,
CITI, Union Bank of India, Oriental Bank of Commerce, INDUSIND, AXIS, Centurian Bank
of Punjab, Bank of India and Yes Bank.
 Company Provide 4-6 E-mail to there customers per day.

Online Trade in Share

Sharekhan customers can online trade through their computers, through internet during the market timings.

Online Fund Transfer

We have tie up with Eleven Banks for online fund transferring i.e. HDFC, IDBI, CITI, UBI, OBC,
INDSLANDAND and UTI BANK, Yes bank, Bank of India for Online Money Transfer.

 Research based investment advice

 Investment and trading services
 Trading and seminars
 Technology based investment tools
 Integrated demat facility

CUSTOMER CAN TRADE IN

 Equities
 Derivatives and Commodities
 CHAPTER-2

CONCEPTUAL BACKGROUND AND LITERATURE REVIEW

RISK AND RETURN ANALYSIS

The wondering of threat and Return comparison is quintessential to the technique of investing and finance.1
All financial choices contain some Risk. One may additionally depend on to get a Return of 15% per annum
in his investment then again the threat of "not successful to collect 15% Return" will continually be there.
Return is truly a reward for investing as all investing entails some Risk.

The greater the Risk, the greater the Return expected. The goal of hazard and Return evaluation is to
maximize the Return with the aid of the use of developing a balance of Risk. For example, in case of
working capital management, a good deal much less stock you keep, the larger the expected Return as much
less of your cash is locked as asset.; but you additionally have a accelerated risk of strolling out of uncooked
fabric when you certainly need it for manufacturing or maintenance. Which ability you free sale. Thus all
companies try very difficult to hold minimal stock as possible barring effecting easy production. This is a
very common example of Risk Return trade-off. In case of a funding in shares/stocks,

I as an investor be given to get a higher Return than steady deposits but I am moreover prepared to take
danger of losing my cash in stock market. Hence essential is to recognize how a correct deal hazard one
can take and make investments accordingly. two A lay man shall ask himself:”

1. How lots cash I can put in shares today, and even if I free this cash it will now not have an effect on my
way of life? If your reply is Rs1000 it conceivable you are equipped to take a threat for Rs1000.

2. How a total lot Return I be counted on from stock in subsequent one year? if you select to make 12% per
annum your expectation is real and you are taking a hazard of Rs1000 to make 12% per annum. By doing
this a lay man is calculating his Risks and estimating a Return on funding two

In fact, Risk and Return are two key determinants of share prices. Greater the chance assumed increased
will be the Return. Investment which bring up low hazard such as authorities securities will grant a low fee
of Return. Any rational investor would analyse the Risk related with the unique stock and a thorough
expertise of danger helps him to sketch his portfolio so as to minimize the hazard related with the
investment. Return on funding may additionally be because of income, capital grasp or a first-rate hedge
toward inflation.

The diploma of Risk relies upon the factors of asset, investment instruments, mode of investment etc. the
wider the differ of feasible outcomes, the accelerated the Risk. The degree of risk in a special scenario is
now not absolute. It depends upon on the stage of data reachable with the entity going via the Risk. When
the whole statistics is available, the draw close of the entity differs. Two unique entities would possibly
also interpret the equal information otherwise or exquisite expectations for the future which would lead to
two first-rate sets of chance distribution. Hence the same set of situations might also additionally translate
in to splendid ranges of hazard for unique people. Further human beings do now no longer make any
difference between chance and uncertainty.

Though danger and uncertainty go together, however they fluctuate in perception. Uncertainty refers to a
scenario about which the possibility of practicable consequence is now now not known. It cannot be
quantified. The idea of protection evaluation is primarily based on danger and Return. To earn Return on
investment, funding has to be made for some length which in flip implies passage of time. Dealing with the
Return to be finished requires estimate of the Return on funding on funding over the time period. Risk
denotes deviation of authentic Return from the estimated Return. The fact that the investors do no longer
keep a single protection which they think about most profitable is enough to say that they are involved now
not only in maximization of Return but also minimization of Risk. In fact, there is a fine relationship
between the amount of Risk and predicted Return, larger the Risk, larger the Return. One of the most
challenging issues for an investor is to estimate the best stage of Risk he is capable to assume”

“The precept that viable Return rises with an extend in Risk. Low degrees of uncertainty (low Risk) are
related with low manageable Returns, whereas excessive tiers of uncertainty (high Risk) are associated with
high manageable Returns. According to the Risk-Return trade off, invested money can render higher profits
completely if it is scenario to the chance of being lost. Because of the Risk-Return change off, you have to
be aware of your non-public Risk tolerance when figuring out on investments for your portfolio. Taking on
some risk is the charge of reaching Returns; therefore, if you pick out to make money, you can no longer
reduce out all Risk. The intention as an choice is to discover an terrific stability - one that generates some
profit, however then again allows you to sleep at night.”

Risk and Return

Understanding the Risks pertaining to the special investments is of little cease result until you’re conscious
of your mind-set closer to Risk. How heaps hazard you can tolerate depends on many factors, such as the
kind of man or woman you are, your funding objectives, the greenback quantity of your total assets, the
dimension of your portfolio, and the time horizon for your investments. two How frightened are you about
your investments? Will you take a appear at the fees of your stocks daily? Can you sleep at night time time
if your shares decline in rate beneath their acquisition prices? Will you identify your broking every and
every time a stock falls by means of the use of a factor or two? If so, you do now now not tolerate danger
well, and your portfolio have to be geared toward conservative investments that generate earnings via
capital preservation.
The proportion of your portfolio allocated to stocks might also be low to zero relying on your relief zone.
If you are not stricken when your shares decline in charge due to the fact with a lengthy holding period you
can wait out the decline, your portfolio of investments can be designed with a greater proportion of stocks.
Following determine illustrates the continuum of threat tolerance.

Measurement of Risk and Return

The beta ratio measures and compares the fund’s Return with that of the market benchmark to investigate
the extent to which the fund’s Return is impacted by market factors. A beta of one ability that the fund’s
Return will go up and down in tandem with the movement of the markets as indicated by using the
benchmark. A beta greater than one signifies an aggressive fund that will pass up more than the benchmark,
however will also more rapidly fall. If a fund has a beta of 1.5 and the market rises through 10 per cent, the
fund’s Return is anticipated to go up by 15 per cent (10 per cent x 1.5) and vice-versa.

The beta of a fund has to be seen in conjunction with the R-squared for perception the chance of the fund.
R-squared measures how much of the fund’s Return can be explained by the market movements. It does
this with the aid of measuring how intently the fund’s performance tracks that of the benchmark index.

The lower the Rsquared, the less dependable is the beta. two Standard Deviation (SD) is the ratio that
measures how the shares real performance strays from the average Returns over a period. So, it’s a measure
of the consistency of stock Returns. Further, the chance related with a single asset is assessed from
qualitative and quantitative point of view. Qualitative view of hazard can be acquired by using the use of
sensitivity evaluation and chance through trendy deviation and coefficient of variations.

Types of risks:

Investment Risks:

Investment risk is related to the probability of earning a low or negative actual return as compared to the
return that is estimated. There are 2 types of investments risks:

Stand-alone risk:

This risk is associated with a single asset, meaning that the risk will cease to exist if that

particular asset is not held. The impact of stand alone risk can be mitigated by diversifying

the portfolio.

Stand-alone risk = Market risk + Firm specific risk

Where,

Market risk is a portion of the security's stand-alone risk that cannot be eliminated trough
diversification and it is measured by beta

Firm risk is a portion of a security's stand-alone risk that can be eliminated through proper

diversification

Portfolio risk

This is the risk involved in a certain combination of assets in a portfolio which fails to deliver

the overall objective of the portfolio. Risk can be minimized but cannot be eliminated,

whether the portfolio is balanced or not. A balanced portfolio reduces risk while a nonbalanced portfolio
increases risk.

Sources of risks:

Inflation

Business cycle

Interest rates

Management

Business risk

Financial risk

Types of Risk

Unfortunately, the thought of risk is now not a simple idea in finance. There are many different types of
threat identified and some kinds are extraordinarily greater or especially less important in extraordinary
conditions and applications. In some theoretical models of financial or financial processes, for example,
some kinds of dangers or even all threat may also be entirely eliminated. For the practitioner working in
the actual world, however, threat can never be entirely eliminated. It is ever-present and ought to be
recognized and dealt with. In the learn about of finance, there are a quantity of exceptional kinds of
danger has been identified. It is important to remember, however, that all sorts of risks showcase the
identical advantageous risk-return relationship

Systematic Risk Vs Unsystematic Risk

There is one more way to classify financial risk – is risk will impact whole economy or particular
company or a sector.
Systematic Risk – it is also known as market risk or economic risk or non diversifiable risk & it impacts
full economy or share market. Let’s say if interest rate will increase whole economy will slow down &
there is no way to hide from this impact. As such there is no way to reduce systematic risk other than
investing your money in some other country. Beta can be helpful in understanding this.

Unsystematic Risk – it affects a small part of economy or sometime even single company. Bad
management or low demand in some particular sector will impact a single company or a single sector –
such risks can be reduced by diversifying once investments. So this is also called Diversifiable Risk

Measurement of risks

Statistical measures that are historical predictors of investment risk and volatility and major components
in modern portfolio theory (MPT) . MPT is a standard financial and academic methodology for assessing
the performance of a stock or a stock fund compared to its benchmark index.

There are five principal risk measures:

Alpha: Measures risk relative to the market or benchmark index

Beta: Measures volatility or systemic risk compared to the market or the benchmark index
R-Squared: Measures the percentage of an investment's movement that are attributable to movements in
its benchmark index

Standard Deviation: Measures how much return on an investment is deviating from the expected normal
or average returns

Sharpe Ratio: An indicator of whether an investment's return is due to smart investing decisions or a result
of excess risk.

Each risk measure is unique in how it measures risk. When comparing two or more potential investments,
an investor should always compare the same risk measures to each different potential investment to get a
relative performance.

LITERATURE REVIEW

(miller & bromiley, 30 nov 2017) This study demonstrates that a number measures of corporate Risk
strategic management research has used reflect distinctive Risk factors. Factor analysis of nine measures
of Risk yielded three factors: income circulate Risk, inventory Returns Risk, and strategic Risk. The
elements had been secure over time. Income movement and strategic Risk in a given five-year duration
reduced company performance in the subsequent 5 years; however, the power of the effect varied
throughout industries and between high- and low-performance firms. Contrary to previous crosssectional
work, overall performance reduced subsequent income circulation uncertainty for excessive performers and
multiplied profits circulation Risk for low performers.

(Whitelaw, 15 June 2015) Empirical proof that predicted inventory Returns are weakly related to volatility
at the market degree appears to contradict the intuition that Risk and Return are positively related. We
inspect this issue in a typical equilibrium change financial system characterized via a regimeswitching
consumption manner with time-varying transition chances between regimes. When estimated the use of
consumption data, the model generates a complex, non-linear and time-varying relation between anticipated
Returns and volatility, duplicating the salient points of the Risk/Return trade-off in the data. The outcomes
emphasize the importance of time-varying investment possibilities and highlight the perils of relying on
intuition from static models.

(linter, 27 june 2014) This chapter discusses the trouble of selecting optimal security portfolios through
Risk-averse investors who have the choice of investing in Risk-free securities with a high quality Return or
borrowing at the same charge of pastime and who can sell short if they wish. It gives alternative and extra
obvious proofs below these more time-honored market prerequisites for Tobin's important separation
theorem that “the proportionate composition of the non-cash belongings is impartial of their combination
share of the investment balance … and for Risk avert ere in in basic terms competitive markets when utility
features are quadratic or quotes of Return are multivariate normal. The chapter focuses on the set of Risk
belongings held in Risk averters' portfolios. It discusses a range of considerable equilibrium residences
within the Risk asset portfolio. The chapter considers a few implications of the consequences for the
normative components of the capital budgeting choices of a employer whose stock is traded in the market.
It explores the complications added by means of institutional limits on quantities that both individuals or
firms may borrow at given rates, by way of rising prices of borrowed funds, and certain other real world
complications.

(BALD, January 2013) They concluded that the excessive US equity top rate seemed to an exception as
an alternative than the rule. For example, the German market confirmed only 1.91% equity Return during
most of remaining century. The story is comparable for japan the place the post-war Return on equity was
once 5.52% and the pre-war –3.04%. Markets such as Portugal, chile and peru did no longer do well over
long intervals of analysis

( Pivo & Fisher, 01 march 2011)This article examines the effects of walkability on property values and
funding Returns. Walkability is the diploma to which an place within strolling distance of a property
encourages on foot for leisure or practical purposes. We use facts from the National Council of Real Estate
Investment Fiduciaries and Walk Score to take a look at the effects of walkability on the market fee and
funding Returns of greater than 4,200 offices, apartment, retail and industrial homes from 2001 to 2008 in
the United States. We found that, all else being equal, the advantages of greater walkability had been
capitalized into higher office, retail and condominium values. We located no effect on industrial properties.
On a 100‐point scale, a 10‐point extend in walkability expanded values via 1–9%, depending on property
type. We additionally found that walkability was once associated with decrease cap fees and greater
incomes, suggesting it has been preferred in each the capital asset and building house markets. Walkability
had no huge impact on historical total funding Returns. All walkable property kinds have the plausible to
generate Returns as excellent as or better than much less walkable properties, as long as they are priced
correctly. Developers ought to be willing to enhance more walkable houses as lengthy as any extra value
for more walkable areas and related improvement fees do no longer exhaust the walkability premium

(Andrew , Lee, Tracy, & Klaauw, thirteen Sep 2011 )We discover a normally undocumented but
important dimension of the housing market crisis: the roleplayed by using actual property investors. Using
unique credit-report data, we document massive increases in the share of purchases, and as a result
delinquency, by way of real property investors. In states that experienced the greatest housing booms and
busts, at the peak of the market almost half of purchase loan originations were associated with investors.
In section by apparently misreporting their intentions to occupy the property, investors took on more
leverage, contributing to higher quotes of default. Our findings have vital implications for policies designed
to address the penalties and recurrence of housing market bubbles.
(Patrick J.Wilson, 2011)The Risk/Return tradeoff is a perennial trouble of portfolio managers. Portfolio
diversification strategies should be such that funding are held in market that are nicely insulated from each
other so that the effect of market fluctuation in one market are now not transferred to the other. Conventional
wisdom advocate that a well-diversified portfolio have to comprise assets unfold across distinct markets,
such as protecting of equities, bond and property, whilst an increasingly more established idea is that
portfolios should additionally be various internationally. Research over the closing few years has, if now
not wondered this traditional wisdom, at least sought confirmation. The current paper continues this inquiry.
Looks, in particular, at the twin problems of whether property should from phase of a well-diversified home
portfolio, and whether property should from part of a portfolio that is varied internationally. Using the
surprisingly new approach of co integration analysis, gives proof from the USA the UK and Australia that
home real property and equities market are segmented, and additionally provides evidence that securitized
property markets are section internationally.

(V.RAMACHANDRAN, JUNE 2011) The first chapter deals with Introduction of corporation and second
chapter offers with Review of literature and the 1/3 one is Objectives, Scope and Limitations of the study.
Analysis is made on fourth chapter the use of more than a few tools. The equipment are Average Return,
Standard Deviation, Beta, Alpha, Correlation Coefficient and R square value. The remaining chapter offers
with the findings i.e. the effects got from the study and pointers given to the investors.

(Prescott, 2010) It is beneficial to recognize the historic trends in fairness investment as it would assist in
making informed long-term asset allocation decisions. The paper presents a theoretical frame work for
examination the relationship between Risk Return and funding horizon. It future tries to acquire the
accessible proof in the Indian fairness market to make inference about the danger Return relationship over
varied funding horizons. The US equities furnished hazard premium of about 6% over the 1889-1978
period.

(Grable, 2000; Grable and Joo,) 2000; Bemasek and Shwiff, 2001; Chaulk, Johnson, and Bulcroft, 2003;
Yook and Everett, 2003; Grable, Lytton, and O'Neill, 2004; Hallahan, Faff, and McKenzie, 2004; Yao,
Hanna, and Lindamood, 2004; Fan and Xiao, 2006; Van de Venter and Michayluk, 2007; Gilliam,
Chatterjee, and Zhu,2010). A number of academic studies have provided evidence of demographic and non
demographic characteristics related to the financial risk tolerance of individuals. The most common
variables researched by academics to determine their relationship with financial risk tolerance are gender,
age, marital status, number of dependents, income, wealth, education and financial knowledge. We report
the main findings as well as a number of less-researched variables. Gender differences have been widely
examined, with a large number of studies reporting higher financial risk tolerance for males

Stephen Sault (2006) had conducted a study on fundamental and technical analysis literatures invest
considerable effort in assessing their respective ability to explain share prices, they invariably do so without
reference to each other. In this context, we propose an equity valuation model integrating both fundamental
and technical analysis and, in doing so, recognize their potential as complements rather than as substitutes.
Testing confirms the complementary nature of fundamental and technical analysis by showing that, while
each performs well in isolation, models integrating both have superior explanatory power. While our
findings relate to the valuation of shares, they also have implications for other valuation exercises.

Cheol-ho park and scott h. Irwin (2004) The purpose of this report is to review the evidence on the
profitability of technical analysis. To achieve this purpose, the report comprehensively reviews survey,
theoretical and empirical studies regarding technical trading strategies. We begin by over viewing survey
studies that have directly investigated market participants’ experience and views on technical analysis.
Foreign exchange markets, and that about 30% to 40% of practitioners appear to believe that technical
analysis is an important factor in determining price movement at shorter time horizons up to 6 months.

DG PRAVEEN AND NIHAR RANAJN PANDA (2002) had conducted a study on “Beat the market with
hammer “,Japanese candlestick analysis is one of most popular and oldest forms of technical analysis.
Candlestick charting studies the records of the market movements in the past to identify the future patterns.
It identifies exuberant buying and panic selling, enabling the trader to pocket a great deal of profits from
the stock market. Compared to traditional bar charts, many traders consider candlestick charts more visually
appearing and easier to interpret. Each candlestick provides an easy to decipher picture of price action.
Immediately a trader can see and compare the relationship between the open and close as well as the high
and low.

PHILIPPE GERGOOIRE (2001) conducted a study on “Predictive Power of Technical Analysis: The
moving average rules on European” According to him simple forms of technical analysis possessed
significant forecast power on various market indexes. He shows that these results can be replicated on
formally selected European indexes, which almost completely eliminates any influences from data –
snooping. Implications of these results in terms of market efficiency are also discussed.

(Dr. S. Krishnaprabha): Risk and return analysis plays a key role in most individual decision making
process. Every investor wants to avoid risk and maximize return. In general, risk and return go hand. If an
investor wishes to earn higher returns than the investor must appreciate that this will only be achieved by
accepting a commensurate increase in risk. Based on risk and return analysis, high risk gives high returns
with low risk gives to low return, based on this concept in Banking and Automobile sector high risk gives
low return, and in Information technology, fast moving consumer goods, Pharmaceutical sector low risk
gives high return. Alpha stock is positive and the companies are independent to market return and have a
profitable return.

Kalava Ramesh (2017) observed Risk (), Return and Volatility (β) of the selected funds along with
Diversification (R2 ) and Value at Risk (VaR) for the 5 years period in his thesis. The author selected top
10 AMC companies in India based on market capitalization by taking 89 mutual © Associated Asia
Research Foundation (AARF) A Monthly Double-Blind Peer Reviewed Refereed Open Access
International e-Journal - Included in the International Serial Directories. Page | 62 fund schemes and he
concluded that majority of schemes are highly volatile when compared with the respective benchmarks.

A.K.Dubey (2014) observed the results that the betas are more or less instable for various stocks at various
investment horizons. The study revealed that the time scale dependent estimates of systematic risk involved
in various stocks and the tools used in the present study would provide the practitioners while their portfolio
planning.

Harish S.N. and T.Mallikarjunapa (2014) studied 14 years stock data to test the stability of Beta values
by constructing three portfolios. Finally, they concluded that the impact of individual stocks was very high
so that the stability of beta on the portfolio was adverse.

RESEARCH GAP

The above literary works gives the insights about the detailed risk and return analysis of many sectors which
gives an idea to implement the same on my study and, no other study which encompasses the study on fmcg
and pharmaceuticals and no study that specifically conducted on working share khan which created a gap
so on the backdrop of this conducted.
 CHAPTER-3

RESEACH DESIGN

STATEMENT OF THE PROBLEM

The problem undertaken to study in the present project work is to calculate Returns and Risk associated
with selected stocks Pharmaceuticals and Fmcg sector listed on NSE Stock exchange and to compare that
with both stocks are calculated to study the price movements of the stock market. After doing the project
one can make decisions regarding the investment in which company one can expect.

NEED FOR THE STUDY

Stock markets have existed in India for a very long time yet the professionals in the field of finance talking
negatively about the instruments, the reason why I bring it up again is that it is very important to understand
what the old system was verse the new the old system were based on trust. They were closed group system
and hence deviation from truly competitive markets. Such closed groups are vulnerable to problem when
the demand of the economy reach beyond the capacity of the group and group has expended without open
and transparent criteria for entry, the network of trust gets.

OBJECTIVES

 To understand about the Indian stock exchange

 To understand about the Risk and Return concept
 To analyze the Risk and Return of Pharmaceuticals and Fmcg Stocks
 To make comparative study of risk and return of selected company stocks.

SCOPE OF THE STUDY

This project primarily deals with Pharma and Fmcg Sectors this study is limited to compare different
company shares in respect of their Risk & Return. The study covers only 10 pharma and 10 Fmcg companies
that are selected on the basic of market cap, which are listed in nifty NSE. This project is helpful to sector
share investor in sector. This study is based on determining Risk and Return analysis it helps investor to
predict the future trends of market in this study.

SAMPLING

5 companies stock have been selected from the Pharmaceuticals industry

 Sun Pharma
 Cipla
 Divis Labs
  Dr Reddys LabsPiramal Enter
 Aurobindo Pharm

5 companies stock have been selected from the FMCG industry

 Nestle
 Britannia
 GlaxoSmith Con
 Heritage Food
 Hindustan Unilever

The above companies are selected for the analysis on the basis of Market capitalisation they have, and the
data selected for the analysis is 5 years’ data which starts from 2014 to 2018.

TOOLS FOR DATA COLLECTION

The data is mainly collected from secondary sources The data is mainly collected from BSE website. One
year closing prices stocks are takes for the study. Along with this gathered little information by referring
journals, news, papers and websites.

Primary data

Primary data are collected fresh & for the first time & this is original in character. The primary data was
collected through personal interview & directly from the company’s management

Secondary data

Secondary data means data already available which have been collected and analysed by someone else and
investigation. The secondary data are used in this project which are extracted from the online sources and
various literary journals and research papers,

DATA ANALYSIS

 Data are analyzed using various statistical formulas like ROI, RETURN, and RISK.
 Data are imported from BSE official website
 Data are analyzed in form of tables
 Data analysis are made for financial sector in stock Graph charts and tables are used
LIMITATIONS OF THE STUDY

 This project covers only selected companies of BSE Scrips

 The share prices of selected companies were taken only for the time from April 2014 to March 2018.
 The study limited only to five company’s stocks. Of fmcg and 5 Companies of Pharmaceuticals
 This study is limited only to Pharma and Fmcg

CHPTERIZATION SCHEME

Introduction

In introduction part I have explained about Industry profile and glance about my topic and brief explanation
about my company profile

Conceptual Background and Review of literature

In this part I have explained about the theories and literary works of others which supports my study and
detailed theoretical backdrop of my topic

Research Methodology

In this part I have explained about the cause which made me to choose this topic and the process I followed
to gather the data’s and about my sampling study etc.

Data Analysis and Interpretation

In this part with the help of some statistical tools I have derived some values and used that to interpret and
suggest

Findings, conclusions and Recommendations:

It is the last part of this study were I have to conclude the whole research from whatever I found in data
analysis chapter
 CHPATER-4

ANALYSIS AND INTERPRETATION

Formulas used for calculation:

1. Return = (∑ROI)/N

2. ROI = Current year closing price – previous year closing price X 100

previous year closing price

3. Risk = √∑𝑑2

4. d= (𝑅𝑂𝐼 − 𝑋)

where,

N= Number of years

X= Average of total of ROI i.e.,

= ROI

ROI= Return on investment

PHARMACEUTICAL SECTOR

1. SUN PHARMA

Opening closing and highest trading price of Sun Pharma

Date Open High Close

2014 568 932 826.15

2015 823 1200.7 819.95

2016 810 898 629.75

2017 634 728.45 570.8

2018 573.9 678.8 430.65

Risk and Return calculations of SUN PHARMA

Date Close
ROI(%) d= (ROI-X) d2
2014 826.15
2015 819.95
-0.75047 10.82175525 117.1104
2016 629.75
-23.1965 -11.62431208 135.1246
2017 570.8
-9.36086 2.211366814 4.890143
2018 430.65
-24.5533 -12.98103429 168.5073

∑ROI= -57.8611 ∑D2= 425.6324

ANALYSIS

from the above data we can see that sun pharma’s stock started in 2014 at 568 rupees and it closed at the
year end at rupees 826, it is a positive sign for the investors those who bought at earlier and the high price
is 932 on 2014, it was a profitable year for sun pharma stock holders. and on 2015 it started with 823 and
the highest it is 1200 but closed less than the opening price we can say it was a very volatile year, and on
2016 it opened at 810 and touched at 898 and again stumble between very low at 700 and 2017 it started a
very low at 634 and highest it is 730 and closed at very low 570 and in 2018 started it very low and touched
678 and ended at very low in 5 years that is 430.
RETURN

Return = (∑ROI)/N

=57.8611/5

Return =-11.5722

RISK

Risk = √∑𝑑2

Example

= √ 425.6324

= 20.63086
5

Risk =4.126172

Graph showing 5 years open, high, and Close of sun pharma

SUN PHARMA
2500
2000
1500
1000
500
0
1 2 3 4 5

Date Open High Close

Interpretation

From the above data and graph the opening price, closing price and highest price of sunpharma shares is
not constant in 2013-2014 it had 238 opening price between 2014-2017 it was gradually decreased and
again it started to fall to lowest ever in 2015 it is 430.65
 2. CIPLA

Opening closing and highest trading price of CIPLA

Date Open High Close

2014 403 671.95 625.8

2015 627.1 752.45 649.5

2016 651 658 568.2

2017 569.1 663 607.15

2018 606 678 520

Risk and Return calculations of CIPLA

Date Close
ROI(%) d= (ROI-X) d2
2014 625.8
2015 649.5
3.78715244 7.03297979 49.46
2016 568.2
-12.517321 -9.2714937 85.96
2017 607.15
6.85498064 10.100808 102
2018 520
-14.353949 -11.108121 123.4
∑ROI= -16.229137 ∑D2= 360.8

ANALYSIS

From the above table showing 5 years of open high , and close of Cipla, ac pharmaceuticals stock where
we can clearly say that on 2014 it started at a price of 403 and during that time pharma stock booming like
never before it is the reason for the High it touched nearly 200 points and closed at lower than high at 625
and on 2015 it opened at 627 and touched 50 points more at around 760 and closed again with 650 and in
2016 it again started at 651 and highest is 658 and closed at lower than 3 years 568 and on 2017 it started
at 569 and touched highest at 663 and closeted relatively low at 607 and on 2018 it started again with 606
and touched 678 and again closed at lower at 520 and it seems this stocks is very volatile.
RETURN

Return = (∑ROI)/N

= -16.229137/

Return = -3.245827342

RISK

Risk = √∑𝑑2

= √ 360.8

= 18.9
5

Risk =3.79915824

Graph showing 5 years open, high, and Close of Cipla

CIPLA
2500
2014 2015 2016 2017 2018
2000

1500

1000 752.45
671.95
625.8 627.1 649.5 651658
568.2 663
569.1 607.15 606678520
403
500

0
1 2 3 4 5

Date Open High Close

Interpretation

From the above data and graph the opening price, closing price and highest price of Cipla shares are
gradually increasing but in the year 2016-2017 it has eventually decreased from 651 to 568 and again it
started recover in 2017-2018 with a highest trading price of 606 but again dropped at 520 at the end of year
201
 3. DIVIS LABOROTORIES

Opening closing and highest trading price of CIPLA

Date Open High Close

2014 613.7 940.95 859.25

2015 865.35 1241.8 1155.25

2016 1163 1380 783.1

2017 791.5 1141.75 1098.2

2018 1115 1577 1482.2

Risk and Return calculations of DIVIS LABOROTORIES

Date Close ROI(%) d= (ROI-X) d2

2014 859.25
2015 1155.25 34.44865 18.96091376 359.5163
2016 783.1 -32.2138 -47.70153986 2275.437
2017 1098.2 40.23752 24.74978424 612.5518
2018 1482.2 34.96631 19.47857518 379.4149
∑ROI= 77.43867 ∑D2= 3626.92

ANALYSIS

From the above table we can find that the stocks at the year 2014 it started at 613 and the highest price is
940 and again it is closed at the less than highest at 859 and again on 2015 it started at 865 and the highest
price is 1240 and it touched the price of 1155 and on 2016 the price started at 1163 and it touched the
highest price is 1380 and it again fell lower than 2 years at 783 and again it started 792 at 2017 and the it
went till 1141 and at ended at the price of 1099 and again it was a good start for Cipla touched 1115 at the
highest at 1577 and again ended at 1490 and it was the profitable 5 years for Cipla than the expected.
because of booming in pharma it took much greater than expected and that was great when they find the
relatively good and great in end
RETURN

Return = (∑ROI)/N

= 77.43867/5

Return = 15.49

RISK

Risk = √∑𝑑2

= √ 3626.91

= 60.22

Risk = 12.04

Graph showing 5 years open, high, and Close of Divis Laborotories

DIVIS LAB
Date Open High Close

2500
2014 2015 2016 2017 2018
2000
1577
1482.2
1380
1500 1241.8 1163
1155.25 1141.75
1098.2 1115
940.95
859.25 865.35
1000 783.1 791.5
613.7
500

0
1 2 3 4 5

Interpretation

From the above data and graph the opening price, closing price and highest price of Cipla shares are
gradually increasing. The opening price at the beginning of 2014 was 613.7 and it has closing value in 2018
is 1482 almost more than a 100% returns in 5years
 4. DR REDDY LABOROTORIES

Opening closing and highest trading price of Dr reedy laboratories

Date Open High Close

2014 2534 3662 3244.95

2015 3244 4382.95 3103.15

2016 3119 3689 3058.5

2017 3072.95 3203.95 2414.4

2018 2414.4 2745 2617

Risk and Return calculations of Dr reddy Laborotories

Date Close
ROI(%) d= (ROI-X) d2
2014 3244.95
2015 3103.15
-4.36987 -0.67452 0.454973
2016 3058.5
-1.43886 2.25649 5.091746
2017 2414.4
-21.0593 -17.364 301.5082
2018 2617
8.391319 12.08667 146.0876
∑ROI= -18.4768 ∑D2= 453.1425

Analysis

From the above table we can find that the stocks at the year 2014 it started at 2534 and the highest price is
3662 and again it is closed at the less than highest at 3244 and again on 2015 it started at 3244 and the
highest price is 4388 and it touched the price of 3103 at low close , and on 2016 the price started at 3119
and it touched the highest price is 3689 and it again fell lower than opening at 3058 and again it started
3072 at 2017 and the it went till 3203 and at ended at the price of 2414.4 and again it was a good start for
reddy’s touched 2414 at the highest at 2745 and again ended at 2617.
RETURN

Return = (∑ROI)/N

= -18.48/5

Return = -3.70

RISK

Risk = √∑𝑑2

= √ 453.14

= 21.29

Risk = 4.26

Graph showing 5 years open, high, and Close of DR REDDY LABOROTORIES

DRREDDY'S LAB
Close High Open Date

2617
5 2745
2414.4
2018
2414.4
4 3203.95
3072.95
2017
3058.5
3 3689
3119
2016
3103.15
2 4382.95
3244
2015
3244.95
1 3662
2534
2014
0 1000 2000 3000 4000 5000

Interpretation

From the above data and graph the opening price, closing price and highest price of Dr reddy Laborotories
I shares are gradually increasing. The opening price at the beginning of 2014 was 2534 and it has closing
value in 2018 is 2617. The highest traded price in last 5 years is 4382
 5. Pirmal Laborotories

Opening closing and highest trading price of Pirmal Laborotories

Date Open High Close

2014 550.73 865.86 826.74

2015 826.59 1036.85 998.18

2016 999.27 2082.64 1611.49

2017 1617.9 3064.86 2847.05

2018 2850.08 3302.55 2381.85

Risk and Return calculations of Pirmal Laborotories

Date Close
ROI(%) d= (ROI-X) d2
2014 826.74
2015 998.18
20.73687 -7.76551 60.30307
2016 1611.49
61.44283 32.94045 1085.073
2017 2847.05
76.6719 48.16952 2320.303
2018 2381.85
-16.3397 -44.8421 2010.814
∑ROI= 142.5119 ∑D2= 5476.493

Analysis

from the above data we can see that sun pharma’s stock started in 2014 at 550 rupees and it closed at the
year end at rupees 826, it is a positive sign for the investors those who bought at earlier and the high price
is 865 on 2014, it was a profitable year for sun pharma stock holders. and on 2015 it started with 826 and
the highest it is 1036 but closed less than the opening price we can say it was a very volatile year, and on
2016 it opened at 999 and touched at 2084 and again stumble between very low at 1611 and 2017 it started
a very low at 1617 and highest it is 3064 and closed at very low 2847 and in 2018 started it very low and
touched 2850 and ended at very low in 5 years that is 2381
RETURN

Return = (∑ROI)/N

= 142.51/5

Return = 28.50

RISK

Risk = √∑𝑑2

= √ 5476.49

= 74.00

Risk = 14.80

Graph showing 5 years open, high, and Close of Pirmal Laborotories

PRIMAL
3302.55
3500 3064.86
2847.05 2850.08
3000
2381.85
2500 2014 2015 20162082.64 2017 2018
2000 1611.49 1617.9
1500 1036.85
998.18 999.27
865.86
826.74 826.59
1000 550.73
500
0
1 2 3 4 5

Date Open High Close

Interpretation

From the above data and graph the opening price, closing price and highest price of Pirmal Laborotories
Ishares are gradually increasing. The opening price at the beginning of 2014 was 550.43 and it has closing
value in 2018 is 2381. The highest traded price in last 5 years is 3302
FMCG SECTOR

1. Nestle India

Opening closing and highest trading price of Nestle India

Date Open High Close

2014 5310.15 6624.55 6379.8

2015 6355 7499.95 5824.1

2016 5850 7390 6029.8

2017 6030 8001 7845

2018 7880 11700.05 11107.25

Risk and Return calculations of Nestle India

Date Close
ROI(%) d= (ROI-X) d2
2014 6379.8

2015 5824.1
-8.710304 -22.0121 484.5345
2016 6029.8
3.5318762 -9.76996 95.4522
2017 7845
30.103818 16.80198 282.3064
2018 11107.25
41.583811 28.28197 799.8699

∑ROI= 66.509201 ∑D2= 1662.163

Analysis

From the above data we can see that Nestlé’s stock started in 2014 at 5310 rupees and it closed at the year
end at rupees 6379, it is a positive sign for the investors those who bought at earlier and the high price is
6624 on 2014, it was a profitable year for Nestle stock holders. and on 2015 it started with 6355 and the
highest it is 7499 but closed less than the opening price we can say it was a very volatile year, and on 2016
it opened at 5840 and touched at 7390 and again stumble between very low at 6029 and 2017 it started a
very low at 6030 and highest it is 8001 and closed at very low 7845 and in 2018 started it very low and
touched 7880 and ended at very high in 5 years that is 11107.25
RETURN

Return = (∑ROI)/N

= 66.51/5

Return = 13.30

RISK

Risk = √∑𝑑2

= √ 1662.16

= 40.77

Risk = 8.15

Graph showing 5 years open, high, and Close of Nestle India

NESTLE INDIA
14000
12000
10000 11700.05
11107.25
8000
7499.95 8001
7845 7880
6000 7390
6624.55
6379.8 6355 5824.1
4000 5310.15 5850 6029.8 6030

2000
2014 2015 2016 2017 2018
0
1 2 3 4 5

Date Open High Close

Interpretation

From the above data and graph the opening price, closing price and highest price of Nestle India shares are
gradually increasing. The opening price at the beginning of 2014 was 5310 and it has closing value in 2018
is 11107. The highest traded price in last 5 years is 11700.05
 2. Britannia

Opening closing and highest trading price of Nestle India

Date Open High Close

2014 462.45 932.5 920.1
2015 920.1 1717.5 1481.85
2016 1481.55 1787.5 1441.1
2017 1448.85 2481.85 2357.88
2018 2357.5 3472.05 3118.4

Risk and Return calculations of Britania

Date Close
ROI(%) d= (ROI-X) d2
2014 920.1
2015 1481.85
61.05315 30.21829 913.145
2016 1441.1
-2.74994 -33.5848 1127.939
2017 2357.88
63.61668 32.78182 1074.648
2018 3118.4
32.2544 1.419541 2.015097
∑ROI= 154.1743 ∑D2= 3117.747

Analysis

From the above data we can see that britania’s stock started in 2014 at 462 rupees and it closed at the year
end at rupees 920, it is a positive sign for the investors those who bought at earlier and the high price is 920
on 2014, it was a profitable year for stock holders. and on 2015 it started with 920 and the highest it is 1717
but closed less than the opening price we can say it was a very volatile year, and on 2016 it opened at 1481
and touched at 1787 and again stumble between very low at 1441 and 2017 it started a very low at 1448
and highest it is 2481 and closed at very low 2357 and in 2018 started it very low and touched 2357and
ended at very high in 5 years that is 3472
RETURN

Return = (∑ROI)/N

= 154.17/5

Return = 30.83

RISK

Risk = √∑𝑑2

= √ 3117.75

= 55.84

Risk = 11.17

Graph showing 5 years open, high, and Close of Britania’s

BRITANIA
Date Open High Close

3472.05
3118.4

2481.85
2357.88 2357.5
2014 2015 2016 2017 2018
1717.5 1787.5
1481.85 1481.55 1441.1 1448.85
932.5920.1 920.1
462.45

1 2 3 4 5

Interpretation

From the above data and graph the opening price, closing price and highest price of Britania’s shares are
gradually increasing. The opening price at the beginning of 2014 was 462 and it has closing value in 2018
is 3118. The highest traded price in last 5 years is 3472.05
 3. GlaxoSmith Con

Opening closing and highest trading price of GlaxoSmith Con

Date Open High Close

2014 4444 5950 5864.75
2015 5858.4 6800 6406.85
2016 6370.1 6675 4997.05
2017 5002.15 6650 6557.15
2018 6644.95 7934.85 7633.1

Risk and Return calculations of Britania

Date Close
ROI(%) d= (ROI-X) d2
2014 5864.75
2015 6406.85 9.243361 2.269758 5.151802
2016 4997.05 -22.0046 -28.9782 839.7347
2017 6557.15 31.22042 24.24682 587.9082
2018 7633.1 16.40881 9.435203 89.02306
∑ROI= 34.86801 ∑D2= 1521.818

Analysis

From the above data we can see that GlaxoSmith’s stock started in 2014 at 4444 rupees and it closed at the
year end at rupees 5864, it is a positive sign for the investors those who bought at earlier and the high price
is 5950 on 2014, it was a profitable year for Glaxosmith stock holders. and on 2015 it started with 5854
and the highest it is 6800 but closed less than the opening price we can say it was a very volatile year, and
on 2016 it opened at 6370 and touched at 6675 and again stumble between very low at 4997 and 2017 it
started a very low at 5000.2 and highest it is 6650 and closed at low 6557 and in 2018 started it very low
and touched 6644 and ended at very high in 5 years that is 7934
RETURN

Return = (∑ROI)/N

= 34.87/5

Return = 6.97

RISK

Risk = √∑𝑑2

= √ 1521.82

= 39.01

Risk = 7.80

Graph showing 5 years open, high, and Close of Glaxosmith

GlaxoSmith
7934.85
7633.1
8000
6800 6675 6650
6557.15 6644.95
7000 6406.85 6370.1
5950
5864.75 5858.4
6000 4997.05 5002.15
5000 4444

4000
3000 2014 2015 2016 2017 2018
2000
1000
0
1 2 3 4 5

Date Open High Close

Interpretation

From the above data and graph the opening price, closing price and highest price of Glaxosmith’s shares
are gradually increasing. The opening price at the beginning of 2014 was 4444 and it has closing value in
2018 is 7633. The highest traded price in last 5 years is 7934
 4. Heritage foods

Opening closing and highest trading price of Heritage foods

Date Open High Close

2014 102.08 221.1 187.8

2015 188 297 285.38

2016 287.13 477.78 442.13

2017 438.5 885.1 826.05

2018 832 868.05 527.6

Risk and Return calculations of heritage foods

Date Close
ROI(%) d= (ROI-X) d2
2014 187.8

2015 285.38
51.95953 20.44139 417.8504
2016 442.13
54.92676 23.40862 547.9636
2017 826.05
86.83419 55.31605 3059.865
2018 527.6
-36.1298 -67.6479 4576.241
8601.92
∑ROI= 157.5907 ∑D2=

Analysis

From the above data we can see that Heritage Foods’s stock started in 2014 at 102 rupees and it closed at
the year end at rupees 187, it is a positive sign for the investors those who bought at earlier and the high
price is 221 on 2014, it was a profitable year for heritage foods stock holders. and on 2015 it started with
188 and the highest it is 297 but closed less than the opening price we can say it was a very volatile year,
and on 2016 it opened at 287 and touched at 477 and again stumble between very low at 442 and 2017 it
started a very low at 438 and highest it is 885 and closed at low 826 and in 2018 started it very low and
touched 868 and ended at very low in 5 years that is 527
RETURN

Return = (∑ROI)/N

= 157.59/5

Return = 31.52

RISK

Risk = √∑𝑑2

= √ 8601.92

= 92.75

Risk = 18.55

Graph showing 5 years open, high, and Close of Heritage Foods

HERITAGE FOODS
Date Open High Close
2018
2017
2016
2015
2014

868.05
826.05
885.1

832
477.78

527.6
442.13

438.5
287.13
285.38
221.1
187.8
102.08

297
188

1 2 3 4 5

Interpretation

From the above data and graph the opening price, closing price and highest price of Heritage foods ’s shares
are gradually increasing. The opening price at the beginning of 2014 was 102.08 and it has closing value
in 2018 is 527.6. The highest traded price in last 5 years is 868
 5. Hindustan Unilever

Opening closing and highest trading price of Hindustan Unilever

Date Open High Close

2014 570 828.75 759.5

2015 759.25 979 862.35

2016 859.55 954 826.3

2017 826.25 1384.1 1368.1

2018 1355 1870.5 1818.05

Risk and Return calculations of HUL

Date Close
ROI(%) d= (ROI-X) d2
2014 759.5

2015 862.35
13.5418 -8.0221 64.3539
2016 826.3
-4.1804 -25.744 662.77
2017 1368.1
65.5694 44.0055 1936.49
2018 1818.05
32.8887 11.3248 128.251

∑ROI= 107.82 ∑D2= 2792

Analysis

From the above data we can see that Heritage Foods’s stock started in 2014 at 570 rupees and it closed at
the year end at rupees 759, it is a positive sign for the investors those who bought at earlier and the high
price is 828 on 2014, it was a profitable year for heritage foods stock holders. and on 2015 it started with
759 and the highest it is 979 but closed less than the opening price we can say it was a very volatile year,
and on 2016 it opened at 859 and touched at 955 and again stumble between very low at 826 and 2017 it
started a very low at 826 and highest it is 1384 and closed at low 1368 and in 2018 started touched 1355
and it closed at 1818 and the highest in all time is 1870.
RETURN

Return = (∑ROI)/N

= 107.825/5

Return = 21.56

RISK

Risk = √∑𝑑2

= √ 2792

= 52.84

Risk = 10.57

Graph showing 5 years open, high, and Close of HUL

HUL
Date Open High Close
2018
2017
2016
2015
2014

1818.05
1870.5
1384.1
1368.1

1355
862.35

859.55
828.75

826.25
979

954
759.25

826.3
759.5
570

1 2 3 4 5

Interpretation

From the above data and graph the opening price, closing price and highest price of HUL’s shares are
gradually increasing. The opening price at the beginning of 2014 was 570 and it has closing value in 2018
is 1818. The highest traded price in last 5 years is 1870.
Risk and Return of Pharma and Fmcg

INDUSTRY RISK RETURN

PHARMA COMPANIES

SUNPHARMA 4.126172136 -11.5722243

CIPLA 3.80 -3.25

DIVIS LAB 12.04 15.49

DR REDDY 4.26 -3.70

PIRMAL ENTER 14.80 28.50

FMCG

NESTLE INDIA 8.15 13.30

BRITANNIA 11.17 30.83

GLAXOSMITH CON 7.80 6.97

HERITAGE FOODS 18.55 31.52

HINDUSATAN UNILEVER 10.57 21.56

COMPARISON ANALYSIS

From the above table we can easily compare which sector is making good profits and which company’s
shareholders are making money out of investing and it is found that FMCG is doing good comparing to
Pharma because Pharma has many risk factors because of fluctuating and market volatility and external
market conditions also affects the price and risk factors.
Graph showing the comparison analysis between FMCG and Pharma sectors

Pharma and fmcg risk and return

30.83 31.52
28.5

21.56
18.55
15.49 14.8
12.04 13.3
11.17 10.57
4.126172136 3.8 4.26 0 0 8.15 7.8 6.97

-3.25 -3.7
-11.5722243

RISK RETURN

Interpretation

The above graph clearly shows that Fmcg is better than Pharma because it is more profitable and less risk
oriented because out of, first five pharma only primal and Divis lab yields money for investors and other 3
like sun pharma, Cipla and Dr reedy highly risk oriented and the return is less than the risk, but the second
five stocks are fmcg are highly profitable than risk only Heritage food’s has Great risk and greater returns
and only nestle gives the low profit comparing to other 4 fmcg stocks and that too gives a highly profit than
risk.
 CHAPTER – 5

FINDINGS, SUGGESTION, AND CONCLUSION

FINDINGS

 The average Return of Sun pharma for 5 years are associated with the Risk of 4.12 hence it will
conclude that shares are Riskier with minus return -11.5722243
 The average Return of Cipla for last five years are associated with the Risk of 3.80 with the Return
of -3.25 hence it can say that stocks are very Risky
 The average Return of Divis lab shares is 15.50 with the Risk of 12.28 so it concludes that shares
are not much Riskier than all the stock with the higher Return
 The average Return of Dr reddy’s shares for past years is -3.70 with the Risk of 4.26 hence it can
say that this can’t advisable
 The average Return shares of primal are 28.50 associated with Risk of 14.85 so it can conclude that
it has good return with moderate risk
 The average Return of nestle India for 5 years are associated with the Risk of 8.15
 hence it will conclude that shares returns are 13.30 advisable moderately
 The average Return of Britannia shares is 30.83 with the Risk of 11.17 so it concludes that shares
gives more returns than other stocks
 The average Return of Glaxo Mathis only 6.97with the Risk of 7.80 so it concludes that shares has
not very high risk but partially risk oriented
 The average Return shares of Heritage foods are 31.52 associated with Risk of 18.55 so it can
conclude that it has a very good returns and less risk
 Found this study helped me to expand the knowledge of Risk and return analysis of selected stock
 The study at Share khan was very helpful got to know about various trading strategies and cold
calling by the stock brokers and stregically oriented customer and got to know about how and what
base the customer purchases and sales shares
 Comparing with fmcg and pharma fmcg has a very great returns comparing to pharma it shows how
widely the customer choosed towards fmcg products, over pharma and the pharma also little
affected when the govt introduced the new system of GST

SUGGESTIONS

 The study of Risk Return analysis will help the investor to choose the securities based on
his requirement.
  The study of this type provides clear information about the performance of various securities
in the same sector in terms of Return and Risk.
 The stock with high systematic Risk is not favorable to invest due to the reason that it has
highest market Risk, which cannot be diversified like unsystematic Risk.
 The customer should always choose the investment plan for long term rather choosing for
short sales
 The customer always should look the historical each moment of govt new provisions to play
safer

Conclusion

Long term investors were able to take advantage of the market as it less volatile. As there is less fluctuation
in the shares when compared to market as well as its prices, the long term investors able to predict about
when the share will raise. Majority of, Fast Moving Consumer Goods, Gives more return while compared
Pharmaceutical Sector.