SAPM by Suman Jha

8/8/2019 SAPM by Suman Jha

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The Life of every man is a diary in which hemeans to write one story, and writes

another; and his humblest hour is when hecompares the volume as it is with what he

vowed to make it.

- J.M. Barrie


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PortfolioPart one: Background, Basic Principles, andInvestment PolicyPart two: Portfolio constructionPart three: Portfolio managementPart four: Portfolio protection andcontemporary issues


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PortfolioA portfolio is an appropriate mix or collection of investments

held by an institution or an individual .

The assets in the portfolio could include Bank accountsstocks , bonds , options , warrants , gold certificates , realestate , futures contracts , production facilities, or any other itemthat is expected to retain its value. Portfolio management


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Portfolio ManagementPortfolio management involves deciding what assets toinclude in the portfolio, given the goals of the portfolio

owner and changing economic conditions .

Portfolio Management is used to select a portfolio of new product development projects to achieve the following goals:

o Maximize the profitability or value of the portfolioo Provide balanceo Support the strategy of the enterprise


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Industry Profiles


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Infosys 1.2 5 lakh

SBI 1.2 5 L akh

HDFC 1.75 L akhC ipla 1. 5 L akh

L & T 2 Lakh

ACC 1.5 lakh

Hindalco 0. 75 L akh

Portfolio: Considering the above factors we asgroup has made this Portfolio .


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Industry Profiles

The Metal, Metal Products and Mining Industry

Net sales at Rs. 5,178 crore in Q1 FY11 were up 33 % over Q1 FY10driven by higher volumes, better product/geographic mix and improvedRealization.

Profit before tax is higher by 8% at Rs.901 crore vis-a-vis Rs. 600 crore inQ1 FY10.

Net profit is at Rs. 534 crore as against Rs. 48 1 crore in Q1 FY10.


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F uture p ros pect of H indalco:

U tkal A lumina International Limited [ U AIL]Mahan aluminium projectAditya aluminium project


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Investment requirement in infrastructure to the tune of about Rs. 1 4,50,000 crore or U S$ 320 billion during the11th Five Year Plan period.


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O perating margin increased by 19%Sales have registered a CAG R of 19. 6%Order inflows have increased by 33 %.Order book has increased by 63 % YOY basis.Recently bagged two projects from O NGC

New Shipyard at Tamil Nadu for large defense ships.


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The Cement Industry in India

The net sales of ACC Ltd for the quarter ended 30-6-09

was Rs. 21 8,821.83 lakhs.The Beta value of ACC is 0. 68 and the return fro the

same is 7.8%.ACC has the possibility to cross Rs.1100 within a short

period of time


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FDI inflows in India for the period Jan-Jun 2010 is 8%($99 85 mn)


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Current scenario and future p ros pect of ACC

Cement sector continued its muted growth in A pril June 2010 Return requirements.Work at the 3mtpa clinkering plant in Chanda, alongwith the 2 5MW captive power plant.Capacity will increase to 30mtpa from the 2 6 mtpa inCY2009.ACC , in a joint venture (~1 4% stake) with five other

partners, has been allotted a coal mine at Moira-Madhujore in West Bengal, which has geologicalreserves of 685 mt.


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The Pharmaceutical IndustryIt is currently estimated at over U S$ 20 bn. It is expected to touch U S$40bn

by 201 5 (Source: McKinsey). Indian firms produce about 60,000 generic brands across 60 therapeutic categories. India is also among the worldsleading five AP I producers.


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The expected return from this share stands at 11. 73 % which isquite good when the riskiness of this asset is concerned.


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Current and future p ros pect of Ci p la:

The Company has posted a net profit of Rs 2 574 .20million for the quarter ended June 30, 2010 as compared toRs 2417.10 million for the quarter ended June 30, 2009.Total Income has increased from Rs 1 385 9.20 million for the quarter ended June 30, 2009 to Rs 1 4965 .10 million for the quarter ended June 30, 2010.

We expect C ipla to post E PS of Rs 1 4.2 in FY11 and Rs

16.9 in FY12, leading to 1 6% CAG R over FY10-12. Ciplais valued at 21. 4x FY11E and 1 7.9x FY12E earnings.


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The Indian Banking Industry

The banking industry is slated for growth in future. The total assets of all scheduled commercial banks by end-March 2010 is projected totouch Rs 40,90,000 crore. This is going to comprise around 65 % of GDP at current market prices as compared to 67% in 2002-0 3. The

bank's assets are estimated to grow at an CAG R of 1 3.4% during therest of the decade as against 1 6.7% between 199 4-95 and 2002-0 3.

The profit pool of the Indian banking industry is probable to increaseto U S$ 40 billion by 201 5.


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Net profit of Rs 2,91 4 crore as against Rs 2, 33 0.4 crore,

a growth of 2 5.04% on year-on-year basis.Net interest income jum ped 45.31% to Rs 7,303.6

crore from Rs 5,024.88 crore in same quarter of financialyear 2009-10.

Net non- performing assets ( NPAs) im p roved to 1.7%versus 1. 55 %.

SBISBI


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F uture p ros pect of SBI :

SBI has witnessed strong loan book expansion of 20%.The banks share in the system advances has increased

by 60bps in the aforesaid period to 1 6.6%.

SBI has added 3,149 branches over FY0 8-10 taking its pan-India network to 12, 825 branches.The SBIs share value is right now moving aroundRs.3100 level.


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Performance Of H DF C:Growth momentum in loan likely to increaseMargins likely to remain subduedAsset quality intact

Profit increased by 22% y.o.y

HDFC

loan for residential mortgage expected to grow by5

-6

%Expecting a Q1FY11 profit of 5.6 bn, which is 2 3 % morethan the last yrs quarter.


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Attribute Value DatePE ratio 37 .25 17/09/10

EPS (Rs) 64 .42 Mar, 10Sales (Rs crore) 4 ,420.1 5 Jun, 10Face Value (Rs) 10

Net profit margin (%) 1 4.76 Mar, 10Last dividend (%) 120 2 6/04/10Return on average equity 1 3.7 Mar, 10

R eport card


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Information Technology Service

IT-BPO industry is expected to garner a revenueaggregate of U S$ 73 .1 billion in 2009-10.

The Indian software and services exports is expected toreach U S$ 49.7 billion in 2009-10 as compared to U S$47 .1 billion in 200 8-09, registering an increase of 5.5 per cent in dollar terms. Further, the I T services exports isestimated to grow from U S$ 2 5.8 billion in 200 8-09 toU S$ 27.3 billion in 2009-10, showing a growth of 5.8

per cent.


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Infosys pays about $ 7000 per entry level employee inIndia and this price is expected to go up by about 1 5%

on the average in the next two years. The company isalso increasing the salary of overseas employees byabout 5-6% this year compared to about 3% last year.

FY11 to a growth of 21% on the higher end of the bandfrom the earlier estimate in A pril of 1 8%.


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SAPM by Suman Jha

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