A study on Equity Analysis of

Indian IT sector (2013)

Presented by:Ramawatar Tawaniya

Introduction

Equity analysis is researching and analyzing equities, or stocks.

The methods used to analyze securities and market investment decision

falls into two very broad categories:

Technical Analysis

Fundamental Analysis

It include EIC approach analysis- Economy, Industry and

Company analysis.

(1) IT- Software, (2) ITeS Business Process

Outsourcing (BPO)

( 3) IT- Hardware and peripherals, (4) ITEducation

7 IT companies are selected TCS, Wipro, Infosys, Satyam computer

services, HCL Technologies, Tech Mahindra, L&T InfoTech.

Statement of problem:
Study

analyse the performance of the

seven IT companies for the last five
years and comparison is made for
their performance in different years.
Study also analyse the performance of
the five FMCGS companies for the last
five years and comparison is made for
their performance in different years.

Objectives of the study:

The

primary objective of equity research is

to analyze the earnings persistence.
To study the growth of IT sector.
To analyze which IT company gives best
return to the shareholders.
To find out potentiality of selected company
through current ratios.
To analyze fluctuation of equity market over
IT companies.
Comparative analysis of 7 tough IT
competitors.

Methodology of the study

Research Method:
The descriptive method is used for this study.
Sample Size:
For this study seven IT companies are selected.
Sources of data:
Secondary data from various websites, newspapers, magazines.
Statistical Tools Used for Analysis:

EIC approach and financial ratios- debt to equity, current ratio,

ROE, EPS ratio.

Findings:
Seven

companies were performing well till 2008

with a positive trend in the earnings per share.
Increasing EPS indicate good earnings.
The P/E ratio of all the selected companies is
increasing year after year.
Infosys is found with more current ratio as
compare to other companies.
There was a downward trend in 2009 in most of
companies because of recession.
EPS of Satyam company goes in negative, the
reason behind was it because of scandal in the
company in the year 2009.
HCL Technologies has the highest P/E ratio in
2009 which indicates that it is overvalued.

Conclusion:
Hence

from the study it can be

concluded that IT sector is booming
after recession and there will be a
good growth in next upcoming few
years. India has become a hot
destination for MNCs to Invest.
Inspite of being a tough year for all
the companies across globe, Indian
market has given good performance
as compare to other companies in the
world.

Suggestions:
Investing

in Wipro for long time could be a good

option because they are spreading their business.
An investor must take research about stock of
company and its previous data before investing.
Current ratio must be improved by company and it
should be in ideal ratio 2:1.
The investor must focus on its key financial ratios
such as earnings per share, price-earnings ratio,
debt-equity ratio, dividends per share etc.
There are various factors which effects on stock
market, so an investor must be aware of all those.

Thank you