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AREPORT ON

AGRICULTURE INDUSTRYIN INDIA

WITH SPECIFIC REFERENCE TO

Submitted toProf. Indrajeet Kole

Prof. Prajakta Gokhale

SUBMITTED BY:

HARSHIT GUPTAPGDM-MPM



GUIDE CERTIFICATE

This is to certify that the Project Report entitled ³ Agriculture Industry i n

India with special reference to Deepak Fertilisers & Petrochemicals Corp. Ltd. ´

which is being submitted herewith for the award of the degree of PGDM,

Sinhgad institute Of Management; Pune is the result of the research work

completed by Harshit Gupta under my supervision and guidance.

Mr. Indrajeet Kole

(Project Guide)

Date:

Place: Pune



INTRODUCTION

Agriculture is the artificial cultivation and processing of animals, plants, fungi and other lifeforms for food, fibers and other by products. Agriculture was the key implement in the rise of sedentary human civilization, whereby farming of domesticated species createdfood surpluses that nurtured the development of much denser and more stratified societies.Agriculture in India is the means of livelihood of almost two thirds of the work force in thecountry. It has always been INDIA'S most important economic sector. The 1970s saw a hugeincrease in India's wheat production that heralded the Green Revolution in the country. Theincrease in post -independence agricultural production has been brought about by bringingadditional area under cultivation, extension of irrigation facilities, use of better seeds, better techniques, water management, and plant protection. Dependence on India agriculturalimports in the ea¶rly 1960s convinced planners that India's growing population, as well asconcerns about national independence, security, and political stability, required self-sufficiency in food production. This perception led to a program of agricultural improvementcalled the Green Revolution, to a public distribution system, and to price supports for farmers. The growth in food-grain production is a result of concentrated efforts to increase allthe Green Revolution inputs needed for higher yields: better seed, more fertilizer, improvedirrigation, and education of farmers. Although increased irrigation has helped to lessen year-to-year fluctuations in farm production resulting from the vagaries of the monsoons, it has noteliminated those fluctuations.

Nontraditional crops of India, such as summer mung (a variety of lentil, part of the pulsefamily), soybeans, peanuts, and sunflowers, were gradually gaining importance. Steps havebeen taken to ensure an increase in the supply of non-chemical fertilizers at reasonable prices.

There are 53 fertilizer quality control laboratories in the country. Realizing the importance of Indian agricultural production for economic development, the central Government of Indiahas played an active role in all aspects of agricultural development. Planning is centralized,and plan priorities, policies, and resource allocations are decided at the central level. Foodand price policy also are decided by the central government. Thus, although agriculture inIndia is constitutionally the responsibility of the states rather than the central government, thelatter plays a key role in formulating policy and providing financial resources for agriculture.Expansion in crop production, therefore, has to come almost entirely from increasing yieldson lands already in some kind of agricultural use.

The monsoons, however, play a critical role in Indian agriculture in determining whether theharvest will be bountiful, average, or poor in any given year. One of the objectives o f government policy in the early 1990s was to find methods of reducing this dependence on themonsoons.



INDUSTRY OVERVIEW

India ranks second worldwide in farm output. Agriculture and allied sectors like forestry and

logging accounted for 14.6% of the GDP in 2009-10, employed 52% of the total workforce,10.23 per cent (provisional) of the total exports and despite a steady decline of its share inthe GDP, is still the largest economic sector and plays a significant role in the overall socio-economic development of India.

India's agriculture and allied sector grew by 3.8 per cent in the first six months of the currentfiscal (2010-11), against one per cent in the year-ago period on the back of better Kharif cropoutput. According to the GDP data released by the Central Statistical Organization (CSO) onNovember 30, 2010, the country's farm sector grew by 2.5 per cent and 4.4 per cent each inthe first two quarters of the current fiscal, against 1.9 per cent and 0.9 per cent, respectively,in the same period last year.

The Government is giving highest priority to agriculture and allied sector. The Eleventh Planallocation has been considerably higher over the Tenth Plan allocation. An amount of US$ 19billion has been allocated for the Ministry of Agriculture during the Eleventh Five Year Plan.

Capital investment in agriculture has increased from US$ 1.2 billion in 2007-08 to US$ 3.26billion in 2010-11 (inclusive of State Plan Scheme Rashtriya Krishi Vikas Yojana), as per aMinistry of Agriculture press release dated August 3, 2010.

History of the industry

Since independence, India has become one of the largest producers of wheat, edible oil,potato, spices, rubber, tea, fishing, fruits, and vegetables in the world. The Ministry of Agriculture oversees activities relating to agriculture in India. Various institutions for agriculture related research in India were organized under the Indian Council of AgriculturalResearch (est. 1929). Other organizations such as the National Dairy Development Board(est. 1965), and National Bank for Agriculture and Rural Development (est. 1982) aided theformation of cooperatives and improved financing.

Indian agriculture began by 9000 BCE as a result of early cultivation of plants, anddomestication of crops and animals. Settled life soon followed with implements andtechniques being developed for agriculture. Double monsoons led to two harvests beingreaped in one year. Indian products soon reached the world via existing trading networks andforeign crops were introduced to India. Plants and animals²considered essential to their

survival by the Indians²came to be worshiped and venerated.

The middle ages saw irrigation channels reach a new level of sophistication in India andIndian crops affecting the economies of other regions of the world under Islamic patronage.Land and water management systems were developed with an aim of providing uniformgrowth. Despite some stagnation during the later modern era the independent Republic of India was able to develop a comprehensive agricultural program.



FACTS AND FIGURES OF INDIAN AGRICULTURE

y

India has the largest area in the world under pulse crops .

y

India is the first in the world to evolve a cotton hybrid.

y

India has the w orld's highest percentage of arable land to the total geographical area,in the world.

y

About 50% of India's geographical area is used for agricultural activity. With thespread of irrigation facilities, the introduction of high yielding variety of seeds andfarm mechanization, the vulnerability of the Indian agricultural sector to the vagariesof the monsoons has declined, compared to earlier.

y

About 80 percent of India's farmland is used to grow India's main foods--grains andpulses, the seeds of various pod vegetables, such as beans, chickpeas, and pigeonpeas.

y

India has the w orld's largest cattle and buffalo population. These animals are notbutchered for meat, but farmers keep cattle and water buffaloes for plowing and for milk. Most commercial milk production comes from water buffaloes. Hides fromcattle and water buffaloes are used for leather after the animals have died. Sheep areraised mostly for wool and sheepskin.

y

Dairy accounts for nearly 26% of the total value of agricultural output. India has theworld's second highest production of milk. India possesses 26 good breeds of cattleand six breeds of buffaloes. India's cattle is renowned the world over for its quality of endurance and resistance to tropical diseases.

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India grows more than half of the w orld's mangoes and leads all countries in theproduction of cashews, millet, peanuts, pulses, sesame seeds, and tea.

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The nation ranks second in the production of cauliflowers, jute, onions, rice, sorghum,and sugar cane.

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India is a major producer of apples, bananas, coconuts, coffee, cotton, eggplants,oranges, potatoes, rapeseeds, rubber, tobacco, and wheat.

y

India is also the world's largest gro w er of betel nuts, which are palm nuts chewed asa stimulant by many people in tropical Asia. It is also a leading producer of suchspices as cardamom, ginger, pepper, and turmeric.

y

In terms of gross fertilizer consumption, India ranks fourth in the world, after theUSA, the erstwhile USSR and China.

y

India lives mainly in its villages, 600,000 of them.

y

Agriculture provides livelihood to about 65% of India's labour force

y

Agriculture contributes nearly 33% to India's Gross Domestic Product (GDP)

y

Agriculture accounts for about 10% of India's exports.

y

The farmers and their families use most of their crops. Half of all Indian farms are lessthan 2.5 acres (1 hectare) in area. Only 4 percent cover more than 25 acres (10hectares).



India¶s Position in World Agriculture

RANK

Total Area SeventhIrrigated Area FirstPopulation SecondEconomically Active population SecondTotal Cereals ThirdWheat SecondRice SecondCoarse grains FourthTotal Pulses FirstOil Seeds SecondFruits and Vegetables SecondImplements (Tractors) ThirdMilk First

Live Stock (castles, Buffaloes) First

The Indian Agricultural Scenario

The total geographical area of India is 328.7 million hectares of which 140.3 million hectaresis net sown area, while 193.7 million hectares is the gross cropped area, according to theAnnual Report 2009-10 of the Ministry of Agriculture.

Production

India has become the world's largest producer across a range of commodities due to itsfavourable agro-climatic conditions and rich natural resource base. India is the largestproducer of coconuts, mangoes, bananas, milk and dairy products, cashew nuts, pulses,ginger, turmeric and black pepper. It is also the second largest producer of rice, wheat, sugar,cotton, fruits and vegetables.

As per the Centre for Monitoring Indian Economy (CMIE) farm output will grow by 10 per cent to 114 million tonne (MT) in the 2010 Kharif season, while Rabi season is expected toreport a 2 per cent increase at 116.6 MT.

Oilseeds production is expected to rise by 11.1 per cent during the season to 18.1 per cent,sugarcane to notch up by 15.6 per cent to 321 MT and cotton to grow by 12.4 per cent to 26.9million bales compared to 23.9 million bales in the last season. The agency pegs the overallfoodgrain output growth up by 5.3 per cent to 229.7 MT.

Major agricultural crops, including foodgrain, oilseeds, cotton, sugarcane, and fruits andvegetables, are projected to grow by 7.2 per cent in 2010-11, while production of non-foodcrops as a whole is projected to grow by 9.7 per cent in the year.



Exports

According to the government's agri-trade promotion body, Agricultural and Processed FoodProducts Export Development Authority (APEDA), India's exports of agricultural andfloricultural products, fruits and vegetables, animal products, cereals and processed foodproducts was worth US$ 1.14 billion during April-May 2010-11.

India's agri-export turnover is expected to rise to nearly US$ 18 billion by 2014, according toAPEDA.

Major Players in this Industry

1.

National Fertilizer Ltd.

2. Paradeep Phosphates Ltd.3.

Fertilizers & Chemical Travancore Ltd.

4.

Pyrites, Phosphate & Chemicals Ltd.

5.

Hindustan Fertilizer Corporation Ltd.

6.

Deepak Fertilisers & Petrochemicals Corp. Ltd.



DEEPAK FERTILISERS & PETROCHEMICALS CORP. LTD.

Company Information

The genesis of Deepak Fertilisers And Petrochemicals Corporation could be said to be in theyear 1970 when Mr. C. K. Mehta set up Deepak Nitrite Ltd, combining his skills in tradingand manufacturing. DNL grew by leaps and bounds, surpassing expectations of all investorsand also won many prestigious awards like the Sir P.C. Ray award, for being the bestChemical Industrial unit inIndia.In 1983, Deepak Fertilisers and Petrochemicals Corporation Limited (DFPCL) startedcommercial production of ammonia (in technical collaboration with Fish InternationalEngineers (USA) using natural gas as feedstock. This marked the fulfillment of a need for lateral integration into the world of basic building block chemicals, premium fertilizers andpetrochemicals. At the time, this was India's only merchant ammonia manufacturer. TheInternational Finance Corporation initially supported this venture of Deepak group in the

form of equity participation in DFPCL.The company undertook major expansion and diversification in 1989 to achieve forwardintegration of ammonia and diversification in Methanol.

In July 1992, DFPCL commenced commercial production of Low Density AmmoniumNitrate (LDAN), Nitro Phosphate (NP), Dilute Nitric Acid (DNA), and Concentrated NitricAcid (CNA).

This has resulted in a multi-product portfolio for DFPCL consisting of chemicals,petrochemicals, fertilizers and other agri-inputs. To ensure an uninterrupted supply of naturalgas to its plant, DFPCL laid its own 43 km gas pipeline from the coastal fall point of Bombay

High to its plants in Tajola, thus becoming one of the first companies in India to have its owngas pipeline.

The Company has now diversified into specialty retailing with Ishanya, India¶s largestDesign Centre and Specialty Mall for interiors and exteriors. This 5,50,000 sq.ft. Project islocated near the hear of Pune and is home to 52 product and service categories in interiorsand exteriors.

DFPCL has a chemical storage terminal at Jawaharlal Nehru Port Trust (JNPT) to providesupport to its logistics management system and ensure a window to the world trade inchemicals. It is in the process of adding new storage facilities for Ammonia, Methanol andother products. The company also leases port storage capacities at Bombay Port Trust andVishakhapatnam.

DFPCL's business can be broadly categorized into : -

1.

Chemicals2.

Agribusiness

3.

Specialty Retailing



Chemicals: This division of DFPCL manufactures Methanol, various grades of Nitric Acidand Ammonia. DFPCL is one of the largest producers of Methanol in India, which in turn isused to manufacture drugs, pharmaceuticals, DMT, pesticides, methylamines, formaldehyde,etc. DFPCL is also one of the largest manufactures various concentrations of Nitric Acid(60%, 68%, 72% and 98%). Ammonium Nitrate: The explosives division manufactures LowDensity Ammonium Nitrate, which is used for making Ammonium Nitrate-fuel oil (ANFO),

blasting agents and also emulsified ANFO (HANFO). DFPCL is the largest manufacturer of ammonium nitrate in India (capacity expanded to 100.000 tpa in September 2002), and theonly one making prilled Ammonium Nitrate (AN). Their products are used for open castmining, underground metalliferrous mining and construction Industry.

Agribusiness: This division of DFPCL manufactures 23:23:0 prilled Nitro phosphatefertilizers under the brand name Mahadhan. DFPCL markets Mahadhan through a network of over 1000 dealers. Thanks to the company's rigorous adherence to quality, Mahadhan is oneof most widely accepted fertilizer brands in India...

Specialty Retailing:

Ishanya: Ishanya is India's first International Design Centre and Specialty Mall - a centre for excellence in space design and the one-stop shop for interior and exterior products.

y

For architects and interior designers, Ishanya is a platform to showcase their art, craft andvision to a targeted and discerning audience.

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For manufacturers and retailers of interior and exterior products, it's the perfectmarketplace to make the most of India's real estate and construction boom. For homeowners, corporate shoppers and visitors, Ishanya will provide the ultimate experiencein shopping for the home.

Social Responsibilities: The Company has been contributing towards social causes for

nearly two decades. The Deepak Charitable Trust (DCT) and the Deepak Medical Foundation(DMF) with the support of DFPCL and Deepak Nitrite Limited are carrying on developmentactivities for society.DCT has been actively working in the area of mother and childcare. Through an integratednetwork of women health workers the foundation has been imparting training andcommunication on health care. Extending the activities on both sides, the Foundation hascatalyzed and supported the creation of Aanganwadis, and taken education to youth on familyplanning. The Foundation is now working to curtail the spread of HIV / AIDS.

DFPCL takes an active interest in environmental protection. In addition to regulatoryrequirements of the State Pollution Boards and Federation of Indian Industries, care is takento reduce pollution by incorporation of appropriate effluent handling disposal systems.Ishanya Foundation

The Ishanya Foundation is focused on µWomen Empowerment¶, µEducation¶ and µHealth¶. Asits maiden project, the foundation started a Diabetic Centre at the Jahangir hospital, Pune.The Ishanya Foundation Diabetic Centre is equipped with advanced machines likeBiothesiometer, Hand Doppler, and the RS Scan (foot mapping machine). The centre offers apreventive, curative and research effort on diabetes. In its outreach programme, a number of diabetic camps and cataract operations were conducted free of cost for the needy.



The Ishanya Foundation serves 27 villages around Taloja by offering free OPD check-up by ateam of doctors, trained medical and paramedical staff. It has started self help groups toenable women save money and put it to right use, thereby gaining recognition and respect inthe society. Mobile libraries have been started in three schools in Taloja and joyful activitiesare carried out for these children.

In our plants we continuously monitor solid, semisolid and gaseous affluent discharges toensure that they are within allowable limits. We also help other small industries as well ascustomers in solving their environment- related problems.

Future Prospects: DFPCL will continue to make deeper inroads into value-added chemicals,agro inputs and related services and specialty retailing.

y

DFPCL plans to leverage its well-knit marketing and distribution network in chemicals andfertilizer industry to provide value-added services to their customers for sourcing rawmaterials and assisting them in exporting their products. The chemical storage anddrumming facilities at Jawaharlal Nehru Port (JNPT) near Bombay will provide further value-added services.

y

We are now executing two projects²an Ammonia storage facility at JNPT and a 300MTPA AN manufacturing facility at Paradip in Orissa on the East Coast of India

y

Deeper in-roads into agro-inputs and services markets are on the drawing board, includingthe MAHADHAN Agriculture Research Centre (MARC), which will serve to partner withfarmers, providing education, training and ensuring that they achieve the best performance.The Mahadhan Saarrthie initiative is being quickly expanded across Maharashtra.

Dreams of visionary minds and planned strategy by professional managers will give shape toan exciting future at DFPCL



FINANCIAL STATEMENT ANALYSIS

BSE Code 500645ISIN Demat INE501A01019Book Value 120.66

NSE Code DEEPAKFERTDividend Yield

%3.02

Market Cap 13133.72

P/E 7.38EPS 20.19Face Value 10

STATEMENT OF FINANCIAL POSITION(Rs in Millions)

Particulars Mar 2010 Mar 2009 Mar 2008 Mar 2007 Mar2006

SOURCES OF FUNDSShare Capital 882.05 882.05 882.05 882.05 882.05

Share warrants & Outstandings 0.00 0.00 0.00 0.00 0.00Total Reserve 8421.95 7149.09 6105.99 5472.56 4854.72Shareholder's Funds 9304.00 8031.14 6988.04 6354.61 5736.77Secured Loans 6090.37 4460.76 1983.88 2553.14 1760.80Unsecured Loans 1221.60 1616.76 1509.91 700.00 0Total Debts 7311.97 6077.51 3493.80 3253.14 1760.80Total Liabilities 16615.97 14108.65 10481.83 9607.75 7497.57APPLICATION OF FUNDS :Gross Block 13493.63 12659.60 10392.20 8849.81 6774.12Less: Accumulated

Depreciation5906.36 5367.82 4876.85 4456.38 4079.43

Less: Impairment of Assets 0 0 0 0 0Net Block 7587.26 7291.77 5515.35 4393.43 2694.70Lease Adjustment A/c 0 0 0 0 0Capital Work in Progress 4141.59 2435.03 2481.95 1877.52 2256.76Pre-operative Expensespending

0 0 0 0 0

Assets in transit 0 0 0 0 0Investments 1557.73 1544.57 1427.45 2096.10 2266.54Current Assets, LoansAdvances

Inventories 1116.32 985.40 792.35 1152.60 609.12Sundry Debtors 1981.25 2719.45 2168.12 1219.79 906.03Cash and Bank 2062.43 1589.52 300.44 350.67 226.67Other Current Assets 99.29 121.50 64.12 72.66 158.81Loans and Advances 1007.53 778.35 849.39 827.09 443.09Total Current Assets 6266.83 6194.22 4174.43 3622.80 2343.72Less : Current Liabilities andProvisions



Current Liabilities 1676.52 2188.49 2080.35 1386.89 1153.59Provisions 639.91 523.40 432.20 356.21 452.72Total Current Liabilities 2316.43 2711.88 2512.55 1743.09 1606.30Net Current Assets 3950.40 3482.34 1661.88 1879.71 737.42Miscellaneous Expenses not

written off 0 5.49 12.08 18.68 25.27Deferred Tax Assets 97.76 76.80 49.61 41.06 62.17Deferred Tax Liability 718.78 727.35 666.49 698.74 545.29Deferred Tax Assets /Liabilities

-621.02 -650.55 -616.88 -657.68 -483.11

Total Assets 16615.97 14108.65 10481.83 9607.75 7497.57Contingent Liabilities 860.25 657.41 479.81 345.13 544.72



CASH FLOW(Rs in Millions)

Particular Mar2010

Mar 2009

Mar 2008

Mar 2007

Mar 2006

Profit Before Tax

AdjustmentChanges In working CapitalCash Flow after changes in W. CapitalCash Flow from Operating ActivitiesCash Flow from Investing ActivitiesCash Flow from Financing ActivitiesNet Cash Inflow / OutflowOpening Cash & Cash EquivalentsCash & Cash Equivalent on M&ACash & Cash Equivalent of Subsi.Translation adjustment on reservesEffect of Foreign Exchange Fluc.Closing Cash & Cash Equivalent

2377.78

491.87-63.842805.802155.57-2188.24505.57472.911589.5200002062.43

2120.01

962.35-793.432288.931720.07-2065.621634.641289.08300.4400001589.52

1515.13

592.02-20.792086.371557.45-1341.77-265.91-50.23350.670000300.44

1281.48

453.33-730.721004.09655.46-1532.201000.74124.01226.670000350.67

1117.01

194.02-389.48921.55612.61-1112.88495.62-4.66231.320000226.67

RATIO ANALYSIS

Ratio analysis is a technique by which various figures in the profit & loss a/c in b/s arerelated to each other to give a meaningful conclusion got interpreting & deciding the line of action for decision making & control.

A.

Liquidity Ratios

B.

Leverage/Solvency Ratio

C. Profitability Ratios

D.

Turnover Ratios

E.

Valuation Ratios



Follo w ing Parties are interested in Ratio analysis.

Party Interested in which Ratio

I) Shareholder 1. Return on Capitalemployed.2. Rate of dividend.3. Long term solvency.4. Earning per share.

II) Creditors 1. Current ratio.2. Liquidity ratio.3. Debts equity ratio.

III)Government

1. G.P. ratio.2. N.P. ratio.3. Capacity utilisation.

IV)Management

1. All turn over ratio.

Liquidity Ratios:

Means ability of company to make cash available as & when required. The liquidity ratiosstudy the firm¶s short term solvency and ability to pay off the liabilities. Consequently, theseratios focus on current assets and current liabilities. Some of the common liquidity ratios are:

i.

Current Ratio

ii. Quick Ratio/Acid Test Ratioiii.

Absolute Quick ratio

i.Current Ratio:

Year Mar 2010 Mar 2009 Mar 2008 Mar 2007 Mar 2006

CurrentAssets

6266.83 6194.22 4174.43 3622.80 2343.72

CurrentLiabilities

2316.43 2711.88 2512.55 1743.09 1606.30

Current Ratio 2.70 2.28 1.66 2.07 1.45

Interpretation: Current ratio is important as per company liquidity posidition. In the aboveanalysis this ratio is constantly increase except 2008 due to recession in the market. Butcurrently company¶s liquidity posidition is sound good.



ii.Liquid /Acid Test / Ratio:

Quick /LiquidAssets

4043.68 4308.97 2368.56 1570.46 1132.7

CurrentLiabilities

2316.43 2711.88 2512.55 1743.09 1606.30

Liquid /AcidTest / Ratio

1.74:1 1.59:1 0.94:1 0.90:1 0.70:1

Interpretation: This ratio is the further part of current ratio which tells currently availablecash posidition of the company if company wants to pay his liability so this ratio should bejust equal to the current liability. And this company has sound liquid assets for paying hisliquid liability.

Profitability Ratios

Profits are the ultimate test of the management. It can be measured by variety of ways.Profitability ratios communicate the profitability of events that have already taken place.Important profitability ratios are as follows:

i.

GP Ratioii.

NP Ratio

iii.

Operating Profit Ratioiv.

Operating Ratio

v.

Return on Assetvi.

Return on Capital Employed

vii.

Return on Equityviii.

Proprietary Ratio

i.Operating Profit Ratio:


OperatingProfit

3233.95 3081.54 2149.25 1805.40 1361.84

Sales 12894.01 14144.19 10408.89 8331.34 5628.62

OperatingProfit Ratio

25.08 21.34 20.64 21.66 24.19

Interpretation: This ratio is calculated by EBITDA which is calculated before interest, tax,depreciation and amortization. That¶s why this ratio should be sound enough for paying theseterms. Profit is the main terms which are consider by all stakeholder of the company. So thiscompany has just enough amount of operating profit but he should try to improve this ratio.



ii.Return on Equity:


Shareholder'sFunds

9304.00 8031.14 6988.04 6354.61 5736.77

Net Profit 5117.78 4194.94 3672.98 3165.32 2756.00

Return onEquity

55% 52.23% 52.56% 49.81% 48.04%

Interpretation: It is the mandatory work for the management to maximize the share holder wealth. So this ratio tells about how efficiently managers use shareholder wealth and howmuch return shareholders getting. With the above analysis managers currently giveappropriate return on the shareholders wealth with compare to past years experience.

iii.Return on Capital Employed:


PBIT 2339.5 3081.54 2149.25 1805.40 1361.84

CapitalEmployed=TotalAssets-CurrentLiabilities

14939.45 11920.16 8401.38 8220.86 6343.98

Return on CapitalEmployed

15.6% 25.85% 25.58% 21.96% 21.46%

Interpretation: Capital employed is the fund which is generated for running our wholebusiness activity. So in this fund we can include debt as well as share capital. This ratio tellsabout how effectively we use this fund and how much return we have getting on this fund.With the above analysis ROCE become lesser with compare to past result which is alarmingsituation.

Leverage/Solvency RatiosThe term leverage in general refers to a relationship between two interrelated variables. Infinancial analysis it represents the influence of one financial variable over some other related

variable. It is an ability of the firm to use fixed costs to magnify the returns to theshareholders.

i.

Debt-Equity Ratioii.

Interest Coverage Ratio

iii.

Fixed Charge Coverage Ratioiv.

Total debt ratio/ Debt-Asset Ratio

v.

Fixed Assets Ratio



i.Debt-Equity Ratio:


Total Debt 7311.97 6077.51 3493.80 3253.14 1760.80

Equity 5117.78 4194.94 3672.98 3165.32 2756.00

Debt/Equity 1.42:1 1.44:1 0.95:1 1.02:1 0.63:1

Interpretation: This ratio is very important for investors as well as managers of thecompany. With the above analysis company have sound balance on debt and equity for minimize his cost of capital and financial risk. So company have ideal debt equity ratio.

ii. Interest Coverage Ratio :


Interest 463.29 404.66 159.46 114.88 56.49PBIT 3233.95 3081.54 2149.25 1805.40 1361.84InterestCoverageRatio

6.98 7.61 13.47 15.71 24.10

Interpretation: This ratio is important as per banks point of view. This ratio means howmany times company have profit for paying his fixed interest on debt capital. But currentlycompany is in critical posidition. Company generates only 6 times profit which is dangerousposidition and increase solvency risk.

Turnover Ratios:

These ratios measure the effectiveness with which the firm uses its resources. It shows howefficiently and effectively the assets of the firm being utilized . Some of the important activityratios are as follows:

i.

Working Capital Turnover Ratioii.

Inventory/Stock Turnover Ratio

iii.

Debtors Turnover Ratioiv.

Creditors Turnover Ratio

v. Fixed Assets Turnover Ratiovi.

Capital Turnover Ratio



i.Inventory/Stock Turnover Ratio:


Sales 12894.01 14144.19 10408.89 8331.34 5628.62

Inventories 1116.32 985.40 792.35 1152.60 609.12InventoryTurnover Ratio

11.55 14.35 13.13 7.22 9.24

Interpretation: How many times we turn our stock with related to total sales which areimportant as per operation perspective. Company has sound enough this ratio for minimizehis carrying cost.

ii.Working Capital Turnover Ratio:


Sales 12894.01 14144.19 10408.89 8331.34 5628.62

WorkingCapital

3950.40 3482.34 1661.88 1879.71 737.42

Ratio 3.26 4.06 6.26 4.43 7.63

Interpretation: Working capital is the main tool for running our business activity. This ratiois decrease with compare to past year analysis which is alarming situation.

iii.Debtors Turnover Ratio:


Sales 12894.01 14144.19 10408.89 8331.34 5628.62

Debtors 1981.25 2719.45 2168.12 1219.79 906.03

DebtorsTurnover Ratio

6.5 5.2 4.8 6.83 6.2

Interpretation: This ratio is as better as it can reduce because cash in hand is better thanwith compare to in the market. Company has just good this ratio but company should makesome policy to minimize this ratio.



iv. Debtors Collection Period =12 monthsDTR


DTR 6.5 5.2 4.8 6.83 6.2Month 12 12 12 12 12Ratio 1.84 2.30 2.5 1.75 1.93

VALUATION RATIO:

i.Price Earnings Ratio:

A valuation ratio of a company's current share price compared to its per-share earnings.P/E Ratio= Market Price Per Share / Earning Per Share

Market Price per Share=148.90 Earnings per Share=19.51

Price Earnings Ratio=7.63

Interpretation: It is the very important ratio for the valuation of the company. This ratio isimportant for comparing one company to another company. Currently company¶s P/E ratio is7.63. It¶s mean that investors have to invest 7.63 rupees for earning 1 rupee. Which is far enough for short term perspective?

ii.P/B Ratio:A ratio used to compare a stock's market value to its book value. It is calculated by dividingthe current closing price of the stock by the latest quarter's book value per share.

P/B Ratio= Current Market PriceBook Price of the Stock

Current Market Price=148.90 Book Price of the Stock=105.48P/B Ratio=1.41Interpretation: It is also a valuation ratio which is calculated for the investor¶s perspective.After this analysis we can say that company has not much difference in its book value andmarket value.



EQUITY RESEARCHResearch is a function of the market and is influenced by the swings in the market.

When the objective of the analysis is to determine what stock to buy and at what price, there

are two basic methodologies

1.

Fundamental Analysis maintains that markets may misprice a security in the shortrun but that the "correct" price will eventually be reached. Profits can be made bytrading the mispriced security and then waiting for the market to recognize its"mistake" and reprise the security.

2.

Technical Analysis maintains that all information is reflected already in the stock price. Trends 'are your friend' and sentiment changes predate and predict trendchanges. Investors' emotional responses to price movements lead to recognizableprice chart patterns. Technical analysis does not care what the 'value' of a stock is.Their price predictions are only extrapolations from historical price patterns.

Investors can use any or all of these different but somewhat complementary methods for stock picking. For example many fundamental investors use technicals for deciding entry andexit points. Many technical investors use fundamentals to limit their universe of possiblestock to 'good' companies.

The choice of stock analysis is determined by the investor's belief in the different paradigmsfor "how the stock market works".

Brief discussion on fundamental and technical analysis is given below:



FUNDAMENTAL ANALYSIS

Fundamental analysis of a business involves analyzing its financial statements and health, itsmanagement and competitive advantages, and its competitors and markets. When applied tofutures and forex, it focuses on the overall state of the economy, interest rates, production,

earnings, and management. When analyzing a stock, futures contract, or currency usingfundamental analysis there are two basic approaches one can use; bottom up analysis and topdown analysis.[1] The term is used to distinguish such analysis from other types of investment analysis, such as quantitative analysis and technical analysis.

Fundamental analysis is performed on historical and present data, but with the goal of makingfinancial forecasts. There are several possible objectives:

y

to conduct a company stock valuation and predict its probable price evolution,

y

to make a projection on its business performance,

y

to evaluate its management and make internal business decisions,

y

to calculate its credit risk.

Fundamental analysis includes:

1.

Economic analysis2.

Industry analysis

3.

Company analysis

On the basis of these three analyses the intrinsic value of the shares are determined. This isconsidered as the true value of the share. If the intrinsic value is higher than the market priceit is recommended to buy the share. If it is equal to market price hold the share and if it is lessthan the market price sell the shares.

1.

Economic Analysis:

The Economy of India is the eleventh largest in the world by nominal GDP and the fourthlargest by purchasing power parity (PPP). The country's per capita GDP (PPP) is $3,290(IMF, 127th) in 2010. Following strong economic reforms from the post-independencesocialist economy, the country's economic growth progressed at a rapid pace, as free marketprinciples were initiated in 1990 for international competition and foreign investment.

Social democratic policies governed India's economy from 1947 to 1991. The economy wascharacterized by extensive regulation, protectionism, public ownership, pervasive corruptionand slow growth. Since 1991, continuing economic liberalization has moved the countrytowards a market-based economy. A revival of economic reforms and better economic policyin first decade of the 21st century accelerated India's economic growth rate. In recent years,Indian cities have continued to liberalize business regulations. By 2008, India had establisheditself as the world's second-fastest growing major economy.



3.

Company Analysis:

Main Tools of Company Analysis

1.

Earnings per Share ± EPS2.

Price to Earnings Ratio ± P/E

3. Projected Earnings Growth ± PEG4.

Price to Sales ± P/S

5.

Price to Book ± P/B6.

Dividend Payout Ratio

7.

Dividend Yield8.

Book Value

9.

Return on Equity

1.

Price to Sales ± P/S

One ratio we can use is Price to Sales or P/S ratio. This metric looks at the current stock pricerelative to the total sales per share. We can calculate the P/S by dividing the market cap of thestock by the total revenues of the company.

We can also calculate the P/S by dividing the current stock price by the sales per share.

P/S=MarketCap/Revenues or P/S = Stock Price / Sales Price Per Share

Much like P/E, the P/S number reflects the value placed on sales by the market. The lower the P/S, the better the value, at least that¶s the conventional wisdom. However, this isdefinitely not a number you want to use in isolation. When dealing with a young company,there are many questions to answer and the P/S supplies just one answer.

Current Market Cap =13133.72Net Sales = 12894.01

Price to Sales Ratio = 1.0185

2.

Price Earnings Ratio:

A valuation ratio of a company's current share price compared to its per-share earnings.P/E Ratio= Market Price Per Share / Earning Per Share

Market Price per Share=148.90 Earnings per Share=19.51

Price Earnings Ratio=7.63

Interpretation: It is the very important ratio for the valuation of the company. This ratio isimportant for comparing one company to another company. Currently company¶s P/E ratio is7.63. It¶s mean that investors have to invest 7.63 rupees for earning 1 rupee. Which is far enough for short term perspective?



3.

Price to Book Ratio

Investors looking for hot stocks aren¶t the only ones trolling the markets. A quiet group of folks called value investors go about their business looking for companies that the market haspassed by.

Some of these investors become quite wealthy finding sleepers, holding on to them for thelong term as the companies go about their business without much attention from the market,until one day they pop up on the screen, and some analyst ³discovers´ them and bids up thestock. Meanwhile, the value investor pockets a hefty profit.

Value investors look for some other indicators besides earnings growth and so on. One of themetrics they look for is the Price to Book ratio or P/B. This measurement looks at the valuethe market places on the book value of the company.

We can calculate the P/B by taking the current price per share and dividing by the book valueper share.

P/B = Share Price / Book Value Per Share

Like the P/E, the lower the P/B, the better the value. Value investors would use a low P/B isstock screens, for instance, to identify potential candidates.

P/B Ratio= Current Market PriceBook Price of the Stock

Current Market Price=148.90

Book Price of the Stock=105.48P/B Ratio=1.41

4.

Dividend Payout Ratio

Companies that pay higher dividends may be in mature industries where there is little roomfor growth and paying higher dividends is the best use of profits (utilities used to fall into thisgroup, although in recent years many of them have been diversifying).

Either way, we must view the whole DPR issue in the context of the company and itsindustry. By itself, it tells us very little.

DPR = Dividends Per Share / EPS

Dividends Per Share = 8.77

Earning Per Share = 19.51

Dividend Payout Ratio = 45%



5.

Dividend Yield

If you are a value investor or looking for dividend income then there are a couple of measurements that are specific to you. For dividend investors, one of the telling metrics isDividend Yield.

This measurement tells you what percentage return a company pays out to shareholders in theform of dividends. Older, well-established companies tend to payout a higher percentage thendo younger companies and their dividend history can be more consistent.

You calculate the Dividend Yield by taking the annual dividend per share and divide by thestock¶s price.

Dividend Yield = Annual dividend per share / Stock's price per share

Annual dividend per share = 8.77

Stock's price per share = 150.45

Dividend Yield = 5.82%

6.

Book Value

How much is a company worth and is that value reflected in the stock price?

There are several ways to define a company¶s worth or value. One of the ways you definevalue is market cap or how much money would you need to buy every single share of stock atthe current price.

Another way to determine a company¶s value is to go to the balance statement and look at theBook Value. The Book Value is simply the company¶s assets minus its liabilities.

Book Value = Assets - Liabilities

In other words, if you wanted to close the doors, how much would be left after you settled allthe outstanding obligations and sold off all the assets.

A company that is a viable growing business will always be worth more than its book valuefor its ability to generate earnings and growth.

Assets = 16615.97

Liabilities = 9304.00

Book Value = 7311.97



TECHNICAL ANALYSIS

Technical analysis is the analysis of past price changes in the hope of forecasting future price

changes. Technical analysis is a security analysis discipline for forecasting the futuredirection of prices through the study of past market data, primarily price and volume.A stock or commodity market analysis technique which examines only market action such asprices, trading volume and open interest. It is the study of market behavior which tries todiscern patterns which enhance position taking. Among some of the tools and indicators usedare: charts, volume, open interest, put to call ratios, moving averages, and oscillators. Thiscompares to Fundamental Analysis and Conditional Analysis. Evaluating investments byassuming that the future price of a security can be predicted by analyzing the pastperformance of the stock and the market as a whole. Technicians are "number crunchers."This is the opposite of Fundamental Analysis.A method of evaluating securities by analyzing statistics generated by market activity, suchas past prices and volume. Technical analysts do not attempt to measure a security's intrinsic

value, but instead use charts and other tools to identify patterns that can suggest futureactivity. Technical analysts believe that the historical performance of stocks and markets areindications of future performance.

In a shopping mall, a fundamental analyst would go to each store, study the product that wasbeing sold, and then decide whether to buy it or not. By contrast, a technical analyst would siton a bench in the mall and watch people go into the stores. Disregarding the intrinsic value of the products in the store, the technical analyst's decision would be based on the patterns or activity of people going into each store.

In the technical analysis we have compare past stock price of Deepak Fertilizer with BSE SENSEX. Such that, how the stock price of a particular companymoves with the main SENSEX where company is listed?



Stock Prices of Jan. and Feb. of DEEPAK FERTILISERS &PETROCHEMICALS CORP. LTD.

DATE OPEN HIGH LOW CLOSE VOLUME25-02- 11 149.9 153 147.95 150.45 48538

24-02-11 154.85 154.85 148 148.9 3805222-02-11 160 160 153.2 154.35 11824821-02-11 169.7 169.7 156.9 159.65 10843218-02-11 167 171.75 160.4 162.4 5064917-02-11 171.2 171.85 166.4 168.8 5804916-02-11 169.4 171.9 165 170.1 10880315-02-11 162.2 169 160.25 167.2 6991814-02-11 159 165 159 161.85 22278911-02-11 155 160.7 146.3 159 33062010-02-11 150.35 155.8 145.3 152.1 11215509-02-11 157.85 157.85 150.15 154 6881508-02-11 163.5 164.65 154.7 158.35 6131107-02-11 162 166.45 161.85 164.35 7072704-02-11 161.7 166.25 161.1 162.85 9540003-02-11 157 162.8 156.3 160 13386102-02-11 162.35 162.95 156.1 157.45 9392901-02-11 161 162.8 157 158.85 8214831-01-11 155.7 162.7 155 159 8405228-01-11 154 157.85 149 156.35 31544

27-01-11 163 163 155.5 156.85 4762925-01-11 167.8 168 158.65 162 7288524-01-11 170 172.2 165 165.7 3161221-01-11 172.95 173.5 168.55 169.8 1660720-01-11 173.8 173.9 169.05 170.55 1121419-01-11 171.35 175.6 171.2 173.95 1304018-01-11 176 176.8 170.05 171.3 1421817-01-11 176.5 179.9 174.5 174.9 1875914-01-11 182.2 184.4 178.3 179.15 5444213-01-11 177.25 186 177.25 182.45 8169712-01-11 176.5 179.3 174.1 177.45 4314311-01-11 170 178.4 169.5 175.1 10477810-01-11 179.95 180 166.2 167.65 4757907-01-11 179.9 184.8 175 176.4 11489506-01-11 174 187 172 180.05 43670805-01-11 172 180 170.1 176.9 21549204-01-11 169.5 172.25 168.5 170 624605



T i l i iliz

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Stock Prices of Jan. and Feb. of BSE 30 STOCKS SENSEX

Date Open High Lo w Close3 January 20,621.61 20,664.80 20,531.00 20,561.05

4 January 20,617.38 20,651.21 20,449.01 20,498.725 January 20,509.95 20,509.95 20,243.95 20,301.106 January 20,395.50 20,425.85 20,107.17 20,184.747 January 20,163.85 20,210.62 19,629.22 19,691.8110 January 19,714.42 19,720.43 19,158.43 19,224.1211 January 19,279.77 19,431.56 19,003.60 19,196.3412 January 19,353.34 19,574.63 19,048.56 19,534.1013 January 19,492.30 19,522.38 19,136.27 19,182.8214 January 19,198.04 19,447.82 18,811.96 18,860.4417 January 18,911.43 19,018.94 18,779.38 18,882.2518 January 18,983.20 19,120.62 18,933.47 19,092.0519 January 19,153.31 19,167.06 18,898.56 18,978.3220 January 18,892.43 19,100.26 18,794.73 19,046.5421 January 19,007.08 19,065.34 18,932.40 19,007.5324 January 19,095.69 19,194.46 18,998.38 19,151.2825 January 19,227.42 19,340.99 18,949.44 18,969.4527 January 19,086.69 19,086.69 18,656.05 18,684.4328 January 18,708.62 18,723.12 18,235.45 18,395.9731 January 18,226.21 18,395.09 18,038.48 18,327.761 February 18,425.18 18,452.06 17,982.17 18,022.222 February 18,216.91 18,306.00 18,042.61 18,090.623 February 18,113.73 18,466.21 18,064.61 18,449.314 February 18,450.07 18,542.20 17,926.98 18,008.15

7 February 18,135.02 18,180.94 17,977.01 18,037.198 February 18,141.51 18,141.51 17,742.18 17,775.709 February 17,723.99 17,864.32 17,508.35 17,592.7710 February 17,603.29 17,636.88 17,362.59 17,463.0411 February 17,519.13 17,752.56 17,295.62 17,728.6114 February 17,940.16 18,227.62 17,857.12 18,202.2015 February 18,260.08 18,361.66 18,050.48 18,273.8016 February 18,273.06 18,358.84 18,216.12 18,300.9017 February 18,345.12 18,532.61 18,233.79 18,506.8218 February 18,564.08 18,690.97 18,159.82 18,211.5221 February 18,238.54 18,457.49 18,082.66 18,438.3122 February 18,390.72 18,457.90 18,187.33 18,296.1623 February 18,233.77 18,377.48 18,150.01 18,178.3324 February 18,135.12 18,135.12 17,559.70 17,632.4125 February 17,775.08 17,812.44 17,469.97 17,700.9128 February 17,811.08 18,296.53 17,718.88 17,823.40



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Research Analysis:

Two month low price of stock is 147.95 Two month high price of stock is 186.00Percent change = 25.71%

Two month low price of BSE SENSEX is 17463.04Two month high price of BSE SENSEX is 20561.05Percent change = 17.7

1. Stock has high sensitivity with compare to BSE SENSEX.

2. If we see that since Jan. stock price and sensex price constantly decrease. So we can saythat stock have positive beta factor with related to sensex.

3. In the starting time of Jan stock made a resilience level at 180 Rs. But due to increasenumber of seller in the market, stock fall down to near 150 Rs.

4. Currently stock trade at the price range between 150-155. So we can predict that in theshorter future time stock will be trade between 153-158 ranges. Because there is not muchpotential in the market.

5. Currently stock trade at their lower rate so we can say that stock will be trade at slightlyhigh price.

6. If we see candlestick chart of stock and BSE Sensex here is similar movement. So stock prices changes similar to the Sensex price in the future.



CONCLUSION

Doing this project has been a good learning for me and helped me to understand the Indianagriculture scenario. From decades back to the 21st century, India has come a long way in theagriculture sector. The Indian Agriculture Industry is on the brink of a revolution that willmodernize the entire food chain, as the total food production in India is likely to double in thenext ten years. That will become very beneficial for our entire economy. So that we can saythat Indian agriculture industry have a great potential for our growth.This research also helps me to increase my analytical power and to understand company¶sfinancial statement and its means.In the first part of the project, I have make analysis of company¶s balance sheet, profit andloss statement and ratios. Such things helped me to understand company¶s financial positionwith respect to decisions of managers and investors of the company. This analysis is part of afundamental analysis to predict the future price movement of the stock and to judge about thegrowth potential of the company in future.In the second part of the project, I have made fundamental and technical analysis for equityresearch to know about future price movement of the stock of the company.

In the fundamental analysis, I made research on all the external factors to know about futureprice movement. In the technical analysis, I made analysis of past price movement to predictthe future price change of the stock. This technical analysis I have done by comparing thehistorical price of BSE SENSEX.

So this project helped me to understand all related scenario for the company research analysiswith respect to investors as well as managers of the company.

Title agriculture

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