A STUDY ON INDEPENDENT EQUITY

RESEARCH
(WITH REFERENCE TO TATA COFFEE LTD, HYDERABAD)
A project report submitted in partial fulfllment of the
requirements for the award of the degree of
MASTER OF BUSINESS ADMINISTRATION
Submitted By
SWETHA.VITALA
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DEPARTMENT OF MANA*EMENT STUDIES
CH. S.D. ST.THERESA2S COLLE*E FOR WOMEN3 E4u'u
0A54i+ted t! ANDHRA UNIVERSITY3 Vi)+6(+7+t&+m1
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Introduction
India is a developing country. Nowadays many people are interested to
invest in financial markets especially on equities to get high returns, and to save tax in honest
way. Equities are playing a major role in contribution of capital to the business from the
beginning. ince the introduction of shares concept, large numbers of investors are showing
interest to invest in stock market. In an industry plagued with skepticism and a stock market
increasingly difficult to predict and contend with, if one looks hard enough there may still be a
genuine aid for the !ay "rader and hort "erm Investor.

"hese simple statements are the cause of a major challenge in forecasting security prices,
because they refer to human expectations. #s we all know firsthand, humans expectations are
neither easily quantifiable nor predictable. If prices are based on investor expectations, then
knowing what a security should sell for $i.e., fundamental analysis% becomes less important than
knowing what other investors expect it to sell for. "hat&s not to say that knowing what a security
should sell for isn&t important''it is.
Equity research is a study of equities or stocks for the purpose of investments. Equities or
common stock comprises a big chunk in any company(s capital and shareholders need to know
whether to stay invested in the company or sale the shares and come out. #s an individual, it is
time consuming to do equity research ' that is to study the company, its financial statements,
products, management and take a decision about investment. Exactly for the same reason there
are people working in research companies whose job is to do equity research and recommend
companies for investment.
Investing, like marriage, isn&t something that should be entered into lightly. Investing in
equities gives high returns but they correspondingly have higher risk also. )efore we invest in a
company, there are more than a few things we need to know about it

Objectives:
"o analy*e the earnings capacity of the stock.
"o analy*e the performance of the company
!etailed analysis of coffee industry
"o recommend increase+decrease of investment in a particular security
"he general market trend influencing the market value of the given equity
Limitations:
"he study is confined to a limited period i.e., , weeks. "ime is one of the limiting factors.
"he company is covering various sectors- it(s become difficult at the time of comparisons.
"he study is limited to the companies having equities.
!etailed study of the topic was not possible due to limited si*e of the project.
uggestions and conclusions are based on the limited data of five years.
SCOPE OF THE STUDY:
"he scope of the study is identified after and during the study is conducted. "he project is
based on tools like fundamental analysis and ratio analysis. .urther, the study is based on
information of last five years.
"he scope of the study is limited for a period of five years.
"he scope is limited to only the fundamental analysis of the chosen stock.
/erformance of the stock is not compared with competitors
"he scope of this project is limited to only one industry i.e. 0offee industry
Researc metodo!o"#
"he process of gathering information for the purpose of initiating, modifying or terminating a
particular investment or group of investments.
Researc metodo!o"#:
"he system of collecting data for research projects is known as research methodology. "he data
may be collected for either theoretical or practical research for example management research
may be strategically conceptuali*ed along with operational planning methods and change
management.
Data co!!ection metods:
In data collation methods we have two types. "hese are
/rimary data
econdary data
Primar# data:
In primary data collection, you collect the data yourself using methods such as interviews and
questionnaires.
Secondar# data:
econdary data is the data that have been already collected by and readily available from other
sources. 1y project sources are
2ournals
Internet
#nnual reports
CO$P%&Y PROFILE
Early in the history of coffee, it was cultivated exclusively in the #rabian /eninsula. "o
maintain this monopoly on coffee production, the #rabians forbade the export of coffee beans
that had not been roasted or boiled enough to prevent germination. 3owever, in the 45th century,
)aba )udan, an Indian pilgrim to 1ecca, smuggled seven coffee beans back home to India.
"here he planted the beans in the 1ysore region, establishing the first coffee plantation in India.
)y 4,67, under )ritish rule, India began to grow coffee for export.

Co''ee in te ()st Centur#
"oday, coffee is a giant global industry employing more than 87 million people. "his
commodity ranks second only to petroleum in terms of dollars traded worldwide. 9ith over 677
billion cups consumed every year, coffee is the world&s most popular beverage. If you can
imagine, in )ra*il alone, over : million people are employed in the cultivation and harvesting of
over ; billion coffee plants. ales of premium specialty coffees in the <nited tates have reached
the multi billion'dollar level, and are increasing significantly on an annual basis.
"he co''ee industr# o' India is the sixth largest producer of coffee in the world.
"here are over 4, 54,777 coffee farms in India, cultivating nearly =77,777 acres of coffee trees.
1ost coffee production in India is on small farms, with over =7 percent of all farms consisting of
47 acres or fewer
1ost coffee in India is grown in three states> ?arnataka, ?erala, and "amilnadu. "hese
states accounted for over =8 percent of India&s coffee production in the 8744'8748 growing
season.
Manufacturing Prc!""#
FI&DI&*S
!uring the .@75 year revenue of the company experience at 6:A growth rate which is
higher in historical periods which I had analy*ed.
!uring .@75 year the company invested more than INB 4billion in capital assets which was
converted into assets during .@7, years+
"he company raised fund through secured loans during .@75 years for its capital
investments, after raise the funds during .@75 year the company had repaid its loans in every
year due to this ecured loan balance of the company declined+
"he company had not raised any funds through the equity sources during the historical
periods from .@7C to .@47+
9hile observing the sales pattern company is not maintaining stable growth rate in sales
In .@7, other Income raised to 5,A and again it fell down in 877= to 4CA.
SU**ESTIO&S
0onsidering the demand of coffee products, Expecting revenue of the company will increase
in forecasting periods which will increase the earnings of the company.
Interest expense are :A on sales .its better to maintain optimum capital structure
If any scarcity of coffee beans occurs in forecasting periods, then company might need to
spend higher amount to purchase it which will reduce the earning levels of the company+
I think company has to maintain provisions for )ad debts
In my point of view 0ompany has to maintain sufficient cash reserves. while observing
historical data cash reserves are not maintained stable they are mostly dependent on debt
which will raise interest expenses
CO&CLUSIO&
#s per my knowledge performance of the company is good. )ook value of the company is
4:4+', in stock market it was trading in between 4,7 to 877 so i strongly support to buy this
stock. In my research I dint use !0. analysis. I didn(t compare with other competitors
..undamentals of the company is strong
0urrent scenario suggests, markets are on a bearish run, especially in case of .#nalysis
suggests that the chosen stock is going to perform well, with huge potential of earnings for
equity holders.