BUSINESS STUDIES ASSIGNMENT

STOCK EXCHANGE
By Gagan Tumkur

1. What is a Stock Exchange?

A stock exchange is a market setup where the buyers and sellers trade securities. The
securities could be equity, bonds, debt instruments, or exchange-traded funds. The
stock market works on the basic principle of matching supply and demand through an
auction process.
The trading platforms follow the rules and regulations enforced by an authoritative
body. The Securities Exchange Commission (SEC) oversees trading in the US. The
online exchange has made trading convenient even for small investors and traders.
Now they can easily keep track of their purchases. They can buy or sell securities
within seconds.
2. Stock Exchange Explained
 A stock exchange is a mediator or facilitator that connects various market
participants. The traded products include shares of a publicly-traded company,
debt instruments, exchange-traded funds (ETFs), indices, equity swaps, single-
stock futures, and stock index futures. Just like the SEC, European Securities and
Markets Authority (ESMA) regulates exchanges in Europe.
 An exchange can be bifurcated into two: the primary market and the secondary
market. In the primary market, new issues or the initial public offerings (IPOs) are
announced. This is referred to as “going public.” The secondary market facilitates
the procurement and sale of existing securities that debuted during their IPO.
 A stock market involves various participants: the brokers who invest clients’
money; the dealers who trade on their behalf; the broker-dealers who buy and sell
stocks for themselves and their clients; and finally the market makers who aim to
reap profit and improve the market's efficiency.
3. History of Stock Exchanges
The history of stock exchanges can be traced back to the 1300s when the Venetian
lenders offered debt issues to various investors and lenders. Their role was similar to
that of the brokers. The Venetians kept a record of all sales. Evidently, the first
exchange was set up in Belgium in the 1500s. It was named “Sans the Stock” and
facilitated the trade of bonds and promissory notes.
In the 1600s, the East India Company issued stocks to raise money for the sea journey,
which was a risk. The investment was subject to weather turmoil, pirate invasions, and
loss of direction. Nevertheless, the investors were promised a percentage of sales if
the ship reached its destination.
Ultimately in 1791, a well-channelized stock market came into existence. The US
stock exchange and National Association of Securities Dealers Automated Quotations
(NASDAQ) were formed. It trades all kinds of securities and has an electronic trading
system. It had competitors; the more advanced New York Stock Exchange (NYSE),
formed in 1793. The NYSE further facilitated the trading of securities on a global
scale.
4. Biggest Stock Exchanges in World
 New York Stock Exchange (NYSE), USA
 National Association of Securities Dealers Automated Quotations (NASDAQ)
USA
 Shanghai Stock Exchange (SSE), China
 European New Exchange Technology (EURONEXT)
 Hong Kong Stock Exchange (HKEX), Hong Kong
5. Types of stock markets
 Dealer Market: A market where the dealers are the price setters as they declare the
purchase or sale price of securities at a specific value. This type focuses on market
movement and efficiency.
 Auction Market: In such a marketplace, the price is determined by the highest bid
made by a broker and the lowest selling price that the seller accepts.
 Over The Counter Exchange: The OTC exchange facilitates securities trading via
broker-dealers. These are stocks that are not part of top stock markets. Companies
that fail to get listed, sell their securities over the counter.
 Electronic Exchange: It is a form of direct selling and buying of securities on a
virtual trading platform. Here, the market makers have no role to play. The
Electronic Communication Network (ECN) plays the role of a broker. In the
present era, almost all stock markets have an electronic trading facility.
6. Functions of Stock Exchange
The role of a stock market is not limited to capital accumulation.
 Validation and Authentication of Transactions
There are numerous buying and selling requests on the stock market, which could
sometimes lead to an inefficient transaction. Hence, it is the responsibility of the
stock market to validate each transaction. Furthermore, they make sure that the
transactions are processed correctly, eliminating any room for error.
 Price Determination
Prices of shares and other financial instruments depend on the prevailing demand
and supply. So, it is one of the functions of the stock market to accurately
 determine the price of a particular product. Thus, any blunder in such a mechanism
could lead to more or less pay for the product.
 Acts as Economic Barometer
Every stock market is a reflection of the country’s economy. It keeps a check over
the ups and downs of the market, price variation of stocks, and the impact of price
variation on the economy.
 Ensures Economic Growth
It facilitates the purchase and sale of securities and other financial instruments in
the open market. This, in turn, indicates a constant circulation of money in the
economy. Circulation is seen as a sign of a healthy economy.
 Provides Liquidity
Stock exchanges offer flexibility to investors and traders. They can purchase and
sell securities at any time (during trading hours). Thus, it is a marketplace that
ensures the liquidity of funds put in by the participants.
 Promotes Investment
The stock market motivates retail investors to participate in trading activities. In
addition, it nudges investors into investing in stocks so that they can generate
a passive income.
 Encourages Healthy Speculation
Now, speculation is not always illegal; instead, a stock market strategically
encourages a certain level of speculation. Speculation is essential for accelerating
the demand and supply of stocks.
7. History of the Indian Stock Exchange

The history of the Indian stock market can be traced back to the late 19th century. The
Bombay Stock Exchange (BSE), established in 1875, is Asia’s oldest stock exchange.
Over the years, the Indian stock exchange system has evolved with technological
advancements and regulatory measures.

 Bombay Stock Exchange (BSE): Established in 1875, it became a central hub for
trading in India. It was formally recognized by the government in 1957 under the
Securities Contracts Regulation Act.
 National Stock Exchange (NSE): Established in 1992, NSE revolutionized
trading in India by bringing in electronic systems and making trading more
efficient and transparent. It has now become the largest stock exchange in terms of
trading volume.

8. Bombay Stock Exchange (BSE)

BSE in share market is the abbreviation used for the Bombay Stock Exchange. As the
name implies, It is the stock exchange established in 1875. The benchmark index of
the BSE is SENSEX which consists of the 30 companies that are financially sound
and well established, which helps in measuring the Bombay Stock Exchange’s overall
performance.
It is the oldest Indian Stock exchange that is located in Mumbai, in the state of
Maharashtra, India. It provides a suitable platform through which the companies can
list their stocks, derivatives, bonds or any other type of financial instrument. This
process allows the traders and investors to trade in the secondary market using these
securities.
The exchange, along with the SEBI (Securities and Exchange Board of India)
supervise and regulate the proper functioning of the Indian securities market. It
follows a list of rules and regulations which the listed companies, the traders,
investors or any other market participant should strictly abide by, so that there is a
transparent, smooth and fair trading practice.
Over the years, it has expanded itself globally to facilitate cross-border listing of
stocks. It also ensures investor protection and education through various initiatives
and also ensures that any investor grievance is addressed.
Features
It is the largest and the first securities market in India based in Mumbai, India. The
securities that are listed at the BSE include stocks, stock options, stock futures, index
options, index futures, and weekly options.
The SENSEX is the benchmark index of the BSE that consists of the 30 companies
that are financially sound and well established from around 12 different sectors, which
help measure the Bombay Stock Exchange’s overall performance.
It has helped in the development of India's capital market and helped in the growth of
India's corporate sector.
Major Indices in BSE
 S&P BSE SENSEX
This premier index represents the performance of 30 leading companies from
various sectors in India. Often referred to as the market’s barometer, the SENSEX
provides a macro view of the market’s overall sentiment and direction.
 S&P BSE SENSEX 50
Encompassing a broader market perspective, this index tracks the performance of
50 major companies, incorporating those from the SENSEX and adding 20 other
influential entities.
 S&P BSE SENSEX Next 50
Focused on emerging market leaders, this index monitors 50 substantial companies
that follow those listed in the SENSEX 50.
 S&P BSE 100
Providing a comprehensive market outlook, this index covers the top 100
companies in BSE in terms of overall performance and influence.
 S&P BSE Bharat 22 Index
Reflecting the government’s strategic vision, this index encompasses 22 public
sector undertakings (PSUs), banks, and entities where the government holds a
minority stake.
 S&P BSE MidCap
 S&P BSE SmallCap
 S&P BSE 200
 S&P BSE 150 MidCap Index
 S&P BSE 250 SmallCap Index
 S&P BSE 250 Large & Mid Cap Index

Stockholders

The BSE Initial Public Offering (IPO) was launched on 23rd January 2017. The BSE
stock is currently listed on the National Stock Exchange (NSE). The stock holding
pattern of BSE (as of 31st March 2020) is as follows:

 Mutual Funds - 4.41%

 Banks and Financial Institutions - 0.17%
 Insurance Companies - 0.83%
 Foreign Institutional Investors (including Foreign Portfolio Investors) - 10.57%
 FDI - 8.36%
 Alternate investment Funds - 0.19%
 Indian Non-Institutional Corporate Bodies - 6.70%
 Retail investors - 26.01%
 HUFs, NRIs, and CM Pool Position - 7.07%
 Trading Members and Associates of Trading Members - 32.44%

BSE Trading Hours – 9:15am – 3:00pm

9. National Stock Exchange (NSE):

In Indian finance, one term you’ll frequently encounter is NSE India, an acronym for
the National Stock Exchange of India. Established in 1992, the NSE has
revolutionized the Indian capital market, providing a fully automated screen-based
electronic trading system. It has become the pulse of the Indian financial market,
serving as a barometer for the country’s financial health.
Types of Securities Traded On NSE
The NSE facilitates the trading of various securities, including equity shares, debt
instruments, and Exchange-Traded Funds (ETFs). Equity shares represent ownership
in a company and are categorized into large-cap, mid-cap, and small-cap stocks based
on their market capitalization. Debt instruments, on the other hand, include bonds,
debentures, and government securities, providing fixed income to investors. ETFs are
investment funds that track the performance of a specific index or sector, offering
investors diversification and liquidity. These ETFs play a significant role in NSE
trading, providing investors with an opportunity to invest in a basket of securities with
ease.
NSE Trading Mechanism
The NSE operates during specified trading hours, providing a transparent and
regulated environment (under SEBI) for market participants. It offers different trading
segments, such as Capital Market, Futures and Options, and Currency Derivatives.
These segments cater to diverse investment needs. It employs advanced trading
systems and platforms to ensure seamless execution of trades. Additionally, circuit
filters are in place to prevent extreme price fluctuations and maintain market stability.
Market Timings (Mon- Fri, Except Holidays)
 Pre-open session: 09:00 hrs to 09:08 hrs
 Regular trading session: 09:15 hrs to 15:30 hrs
 Closing Session: 15.40 hrs and 16.00 hrs
Block Deal Session Timings:
 Morning Window: 08:45 AM to 09:00 AM.
 Afternoon Window: 02:05 PM to 2:20 PM.

Market Segments of NSE

 Capital Market Segment: This is the most straightforward segment where equities
or shares of companies are bought and sold. It is the primary venue for retail
investors looking to invest in stocks.
 Futures and Options Segment: This segment deals with derivative instruments.
Traders can buy or sell futures or options contracts based on underlying assets like
equities, commodities, or currencies.
 Currency Derivatives Segment: This segment is dedicated to trading
currency futures and options. It offers an opportunity for hedging against currency
risk and is increasingly becoming popular among businesses and forex traders.
 Wholesale Debt Market Segment: This segment is for institutional investors with
high-value debt instruments. These include government bonds, corporate bonds,
and other fixed-income securities.
 Mutual Fund Service System (MFSS): This is a more recent addition, allowing for
the electronic trading of mutual fund units. It makes investing in mutual funds
easier and more efficient.
 Sovereign Gold Bonds (SGB) Segment: This segment allows trading in
government-issued gold bonds, providing an alternative to physical gold
investment.
 Indices: National Stock Exchange also offers various indices like NIFTY 50,
which track the performance of a specific set of companies or sectors, serving as
indicators for market trends.
10.Trading and Settlement Procedure
Before companies can sell securities through the stock exchange, they must have their
securities listed. This requires the approval of stock exchange authorities, ensuring the
company’s financial soundness and compliance with other criteria. While trading was
traditionally conducted on the stock exchange floor, it now occurs electronically via
computers, following specific steps:
1. Selection of Broker
Trading in securities can only be done through SEBI-registered brokers who are
members of the stock exchange. Brokers can be individuals, partnerships, or
corporate bodies. The first step is selecting a broker who will trade on behalf of the
investor. To initiate this, the investor provides details such as their PAN number,
address, educational qualifications, occupation, bank and depository account
information, and other relevant data in the client registration form. Once verified,
the broker opens a trading account for the investor.
2. Opening a Demat Account
A Demat (Dematerialised) Account, also known as a Beneficial Owner (BO)
Account, must be opened with a Depository Participant (DP), such as a bank or
stockbroker, to trade in listed securities electronically. The Depository holds
securities in electronic form, with NSDL (National Securities Depository Ltd.) and
CDSL (Central Depository Securities Ltd.) being the two major depositories in
India. Depositories and investors interact through DPs, who maintain securities
account balances and keep investors informed about their holdings.
3. Placing the Order
After opening a Demat Account, the investor places a buy or sell order with their
broker. Orders can be submitted in person, via email, or over the phone. The
investor must clearly specify the price range for buying or selling securities. For
instance, an order could state: “Buy 200 equity shares of Nestle at no more than
₹200 per share.”
4. Matching the Share and Best Price
The broker logs into the stock exchange platform to match the investor's order with
the best available price.
5. Executing the Order
Once the securities are available at the specified price, the broker executes the
order electronically. The investor is then issued a trade confirmation slip detailing
the transaction.
6. Issuance of Contract Note
Within 24 hours of the transaction, the broker provides the investor with a contract
note. This document includes the transaction details such as the number of shares,
price, date, time, and brokerage charges. It serves as a legal record for resolving
disputes between the broker and investor.
7. Delivery of Shares or Payment
After receiving the contract note, the investor must deliver the sold shares or pay
for the purchased shares before the broker's deadline. This is known as the Pay-in
Day.
8. Settlement Cycle
 The settlement cycle in India follows a T+2 rolling basis, meaning transactions
must be settled two days after the trade date. For example, if the trade occurs on
Tuesday, the settlement should be completed by Thursday.
9. Pay-out Day
On the T+2 day, the stock exchange facilitates the delivery of securities or
payment between brokers. The broker then settles the amount with the investor
within 24 hours.
10. Delivery of Shares in Demat Form
Finally, the broker transfers the securities directly to the investor’s Demat
Account. The investor must provide account details and instruct their Depository
Participant to receive the securities in electronic form.
TOP 25 STOCKS IN INDIA

CMP MCap
Company
(Rs) (Rs m)
Reliance Ind. 2,973.1 20,116,675
Tcs 4,285.3 15,504,590
Hdfc Bank 1,742.2 13,290,243
Bharti Airtel 1,712.3 10,420,103
Icici Bank 1,340.3 9,442,269
Infosys 1,906.1 7,914,407
Hul 2,979.6 7,000,842
Sbi 781.9 6,978,154
Itc 514.9 6,440,163
Life Insurance Corporation 1,010.6 6,391,726
L&T 3,795.6 5,218,862
Hcl Technologies 1,759.1 4,773,473
Bajaj Finance 7,582.7 4,701,012
Sun Pharma 1,865.5 4,475,959
Ntpc 424.2 4,112,841
Maruti Suzuki 12,616.7 3,966,723
Axis Bank 1,245.6 3,852,563
Kotak Mahindra Bank 1,906.0 3,789,257
M&M 2,952.3 3,671,208
Ongc 286.3 3,601,734
Tata Motors 971.2 3,574,875
Avenue Supermarts 5,327.0 3,466,423
Adani Enterprises 3,008.5 3,429,636
Ultratech Cement 11,803.3 3,407,567
 Titan 3,798.7 3,372,433

11. Best 5 Stocks in India to Invest in (₹10,000 Each)

I. Reliance Industries Limited (RIL)

II. Tata Consultancy Services
III. HDFC Bank
IV. Infosys Limited
V. Bajaj Finance Limited

12. Key Terms to Understand before analyzing stocks –

1. PE ratio: Price to Earnings ratio, which indicates how much an investor is willing
to pay for a share for every rupee of earnings. A general rule of thumb is that
shares trading at a low P/E are undervalued (it depends on other factors too).
2. Return on Assets (ROA): - Return on Assets measures how effectively a company
can earn a return on its investment in assets. In other words, ROA shows how
efficiently a company can convert the money used to purchase assets into net
income or profits.
3. Current ratio: - The current ratio measures a company's ability to pay its short-
term liabilities with its short-term assets. A higher current ratio is desirable so that
the company could be stable to unexpected bumps in business and economy.
4. Return on equity: - ROE measures the ability of a firm to generate profits from its
shareholders' investments in the company. In other words, the return on equity
ratio shows how much profit each rupee of common stockholders’ equity
generates.
5. Debt to equity ratio: - It is a good metric to check out the capital structure along
with its performance.
6. Operating Margin: - This will tell you about the operational efficiency of the
company.
7. Dividend Yield: - It tells us how much dividend we will receive in relation to the
price of the stock.
8. Earnings Per Share: - It tells us how much profit is allocated to to each
outstanding share of a common stock. The higher the EPS, the better it is for
investors.
9. Return on Capital Employed - Return on Capital Employed (ROCE), a profitability
ratio, measures how efficiently a company is using its capital to generate profits.
10. EPS growth: Investors should ensure the EPS figure is growing faster than revenue
numbers because it indicates company management is increasing the efficiency
with which it runs the company.

13. Reliance Industries Limited (RIL)

Company Profile:
Reliance Industries Limited (RIL) is one of India's largest and most diversified
multinational conglomerates. Founded by Dhirubhai Ambani in 1966, RIL operates
in a wide range of sectors including petrochemicals, refining, oil & gas exploration,
retail, telecommunications, and digital services. With its strong presence in both
domestic and international markets, Reliance is a key player driving India's economic
growth.
Petrochemicals Polymers
Fiber Intermediates
Elastomers
Refining and Marketing
Oil and Gas Exploration and
Production
Telecommunications (Jio Platforms) Mobile Telephony
Business High-Speed Internet
Segments OTT Platforms (JioTV,
JioCinema)
Cloud Services
Retail
Digital Services
Media and Entertainment
Textiles

Financial Performance
Revenue Breakdown (FY 2023)
Total Revenue ₹8.52 trillion
Petrochemicals and Refining ~70%
Telecommunications (Jio) ~15%
Retail ~10%
Others (Media, Textiles, etc.) ~5%
Profitability:
Reliance consistently posts strong profits and is known for generating healthy
EBITDA margins across its business verticals.
EBITDA (FY 2023) ₹1.45 trillion
Net Profit (FY 2023) ₹77,970 crores (₹779.7 billion)

Market Capitalization
As of 2023, Reliance Industries Limited is among the top 100 largest companies in the
world by market capitalization, with a market cap of over ₹17 trillion (approximately
$210 billion).
Stock Overview
 MARKET CAP ₹ 20,10,821.77 Cr.
ENTERPRISE VALUE ₹ 21,53,363.77 Cr
NO. OF SHARES 676.62 Cr.
P/E 50.24
P/B 3.85
FACE VALUE ₹ 10
DIV. YIELD 0.34 %
ROE 8.46 %
ROCE 9.66%

Price Summary (As of 21st September 2024)

HIGH ₹ 2990
LOW ₹ 2942
52 WEEK HIGH ₹ 3217
52 WEEK LOW ₹2220

Strengths
 The company has shown a good revenue growth of 29.58% for the Past 3 years.
 The company has an efficient Cash Conversion Cycle of -49.63 days.
 The company has a good cash flow management; CFO/PAT stands at 1.47.
 The company has a high promoter holding of 50.33%.
WHY is Reliance Industries an attractive stock to invest in?
 Reliance Industries has a PE ratio of 50.
 The current share price of Reliance Industries is Rs 2,996.60.
 Reliance Industries has ROA of 4.43 %
 Reliance Industries has a Current ratio of 1.09 .
 Reliance Industries has a ROE of 8.46 %
 Reliance Industries has a Debt to Equity ratio of 0.41 which means that the
company has low proportion of debt in its capital.
 The operating margin of Reliance Industries for the current financial year
is 13.89 %.
 The current year dividend for Reliance Industries is Rs 10 and the yield is 0.33 %.
 Earnings Per Share: - The latest EPS of Reliance Industries is Rs 59.16 .

14. TATA Consultancy Services

Tata Consultancy Services (TCS) is a global leader in IT services, consulting, and
business solutions. Part of the Tata Group, one of India’s largest and oldest
conglomerates, TCS is renowned for its wide range of technology services and
solutions that cater to clients across industries. Headquartered in Mumbai, India,
TCS operates in 50+ countries, serving clients in sectors such as banking and
financial services, healthcare, telecommunications, retail, and manufacturing.
TCS is among the largest IT services companies globally by market capitalization
and revenue, competing with global giants like Accenture, IBM, and Infosys.
Business Segments
 IT Services
 Digital Transformation
 Enterprise Solutions
 Banking and Financial Services (BFSI)
 Consulting and System Integration
Financial Performance
Revenue and Profitability (FY 2023)
Total Revenue ₹225,458 crore (approximately $27 billion).
Net Profit ₹42,303 crore (approximately $5.1 billion).
Operating Margin ~24.5%.
Return on Equity (ROE) 43%.
Stock Overview
MARKET CAP ₹ 15,50,314.32 Cr.
 ENTERPRISE VALUE ₹ 15,43,715.32 Cr.
NO. OF SHARES 361.81 Cr.
P/E 34.31
P/B 18.48
FACE VALUE ₹1
DIV. YIELD 1.7 %
ROE 59.60 %
ROCE 79.73%

Price Summary (As of 21st September 2024)

HIGH ₹ 4330.70
LOW ₹ 4,227.50
52 WEEK HIGH ₹ 4592
52 WEEK LOW ₹3311

Strengths
 The Company is Virtually Debt Free.
 The Company has a good ROE track record of 54.05%.
 The company has effective cash conversion ratio of 89.86.
 The Company has healthy Operating Margin of 27.60%.
WHY is TCS an attractive stock to invest in?
 has a PE ratio of 36.08 which is high and comparatively overvalued .
 The current share price of TCS is Rs 4,506.05.
 TCS has ROA of 36.92 % which is a good sign for future performance. (higher
values are always desirable)
 TCS has a Current ratio of 2.20 .
 TCS has a ROE of 59.60 % .(higher is better)
 TCS has a Debt to Equity ratio of 0 which means that the company
has low proportion of debt in its capital.
 TCS has reported revenue growth of 6.31 % which is poor in relation to its growth
and performance.
 The operating margin of TCS for the current financial year is 27.60 %.
 The current year dividend for TCS is Rs 73 and the yield is 1.62 %.
 Earnings Per Share: - The latest EPS of TCS is Rs 124.90 .

15.HDFC BANK
Company Profile
HDFC Bank Limited is one of India’s leading private sector banks. Established in
1994, it has grown into one of the most significant and respected financial institutions
in India, offering a wide range of banking services, including wholesale banking,
retail banking, treasury operations, and lending services. It is renowned for its
robust financial health, consistent growth, and innovative banking solutions.
HDFC Bank is a subsidiary of Housing Development Finance Corporation
(HDFC), which is India's leading housing finance company. Over the years, it has
built a reputation for being customer-centric, tech-savvy, and innovative in its
approach to banking.
Business Segments
 Retail Banking
 Wholesale Banking
 Treasury Operations
Financial Performance
Revenue and Profitability (FY 2023)
Total Revenue ₹1.7 trillion
Net Profit ₹44,107 crores (₹441.07 billion)
 Net Interest Margin (NIM) ~4.1% (one of the highest in the industry)
Return on Assets (ROA) ~1.9%
Return on Equity (ROE) ~16.9%

Market Capitalization
HDFC Bank has consistently ranked as one of the most valuable companies in India.
As of 2023, its market capitalization exceeds ₹12 trillion (approximately $145
billion), making it one of the top 5 banks in the world by market value.
Balance Sheet Strength
Total Assets (FY 2023) ₹24.4 trillion
Gross Non-Performing Assets (GNPA) 1.23% (One of the lowest in India’s
banking sector)
Capital Adequacy Ratio 18.9% (Above regulatory requirements)

Stock Overview
MARKET CAP ₹ 13,29,024.28 Cr.
CASA % 38.19
NO. OF SHARES 762.86 Cr
P/E 20.44
P/B 2.92
FACE VALUE ₹1
DIV. YIELD 1.12 %
ROE 16.97 %
ROCE 15.26%

Price Summary (As of 21st September 2024)

HIGH ₹ 1745
LOW ₹ 1707
52 WEEK HIGH ₹ 1791
52 WEEK LOW ₹1363
Strengths
 The bank has been maintaining a healthy ROA of 1.96% since last 3 years.
 Company has a good Return on Equity (ROE) track record: 3 Years ROE 16.88%.
 The company has been consistently maintaining a NIM of 3.53% since last 3
years.
 The Bank is prominently managing its Non-Performing Assets, Average NET
NPA of last 3 years is 0.31%.
 CASA stands at 38.19% of total deposits.
 Good Capital Adequacy Ratio of 18.80%.
 The company has delivered good Profit growth of 25.03% over the past 3 years.
 The company has delivered good Income growth of 28.82% over the past 3 years.
 Strong Advances growth of 29.93% in the last 3 years.
WHY is HDFC Bank an attractive stock to invest in?
For Banking companies, The primary source of Income is interest earned on various
loans given to individuals and corporates. HDFC Bank has earned Rs 2,58,340.58 Cr.
revenue in the latest financial year.
 In terms of advances, HDFC Bank reported 55.25 % YOY, rise . If you see 3 years
advance growth, it stands at 29.93 %.
 It’s overall cost of liability stands at 4.92 %. Also, the total deposits of HDFC
Bank from these accounts stood at Rs 23,79,786.28 Cr.
 One other important measure of banks’ financial health is provisioning coverage
ratio. The YoY change in provision and contingencies is positive at 97.09 %
which means it has increased from the previous year.
 Non-Interest income or other incomes are very important for banks as it gives a
regular source of income for bank with no additional risk. Other income of HDFC
Bank surged and is currently at Rs 49,241.00 Cr.
 The best metric which provides insights about bank’s valuation is P/B ratio.
Currently HDFC Bank is trading at a P/B of 2.74 . The historical average PB
of HDFC Bank was 3.19.
 The current share price of HDFC Bank is Rs 1,637.10.
16.Infosys Limited
Infosys Limited is one of India’s largest and most respected multinational
corporations in the information technology and consulting sector. Headquartered in
Bengaluru, Infosys is a global leader in next-generation digital services and
consulting, offering a wide range of services, including software development,
business process outsourcing (BPO), information technology (IT) consulting, and
digital transformation. Founded in 1981 by N. R. Narayana Murthy and six other
engineers, Infosys has grown into a major force in global IT services.
The company has a strong global presence, with offices and operations across 50+
countries, serving industries such as financial services, manufacturing, retail,
telecommunications, energy, and utilities.
Business Segments
 Digital Transformation Services
 Consulting and System Integration
 Application Development and Maintenance
 Business Process Outsourcing (BPO)
 Engineering Services
 Cybersecurity and Risk Management
Financial Performance
Revenue and Profitability (FY 2023)
Total Revenue ₹1.46 trillion (approximately $17.53 billion)
Net Profit ₹24,095 crores (approximately $2.88 billion)
Operating Margin ~21.5%
Return on Equity (ROE) ~30%
Market Capitalization
As of 2023, Infosys’ market capitalization exceeds ₹6 trillion (approximately $73
billion), making it one of India’s largest companies and a global leader in IT services.
Stock Overview
MARKET CAP ₹ 7,92,437.22 Cr.
ENTERPRISE VALUE ₹ 7,84,246.22 Cr.
NO. OF SHAREs 415.21 Cr.
P/E 29.3
P/B 9.21
FACE VALUE ₹5
DIV. YIELD 2.41 %
ROE 37.02 %
ROCE 48.66%
Price Summary (As of 21st September 2024)
HIGH ₹1915
LOW ₹1866
52 WEEK HIGH ₹ 1,975.05
52 WEEK LOW ₹1352

Strengths

 The Company is Virtually Debt Free.

 The Company has a good ROE track record of 33.90%

WHY is Infosys an attractive stock to invest in?

Infosys stock price today is Rs 1,939.10. Here are a few indispensable ratios that
should be a part of every investor’s research process, or, in simpler words, how to
analyse Infosys
 PE ratio: Infosys has a PE ratio of 29.77 which is high and
comparatively overvalued .
 Share Price: - The current share price of Infosys is Rs 1,939.10.
 Return on Assets (ROA): -. Infosys has ROA of 25.27 % which is a good sign for
future performance. (higher values are always desirable)
 Infosys has a Current ratio of 2.62 .
 Infosys has a ROE of 37.02 % .(higher is better)
 Infosys has a Debt to Equity ratio of 0 which means that the company
has low proportion of debt in its capital.
 Infosys has reported revenue growth of 3.97 % which is poor in relation to its
growth and performance.
 The operating margin of Infosys for the current financial year is 24.63 %.
 Dividend Yield: - It tells us how much dividend we will receive in relation to the
price of the stock. The current year dividend for Infosys is Rs 46 and the yield
is 2.37 %.
 The latest EPS of Infosys is Rs 65.14 .

17.Bajaj Finance Limited

Bajaj Finance Limited (BFL) is one of India’s leading non-banking financial
companies (NBFCs), offering a diverse range of financial products and services. Part
of the renowned Bajaj Group, Bajaj Finance primarily focuses on consumer finance,
small and medium enterprise (SME) lending, commercial lending, and wealth
management services. Over the years, it has emerged as a key player in the financial
services sector, known for its innovative offerings, customer-centric approach, and
robust financial performance.
Headquartered in Pune, Maharashtra, Bajaj Finance operates across India and serves
millions of customers through its extensive branch network and strong digital
presence.
Business Segments
 Consumer Finance
 SME and Commercial Lending
 Rural Lending
 Wealth Management
 Insurance and Investment Services
Financial Performance
Revenue and Profitability (FY 2023)
Total Revenue ₹32,987 crores (approximately $4 billion)
Net Profit ₹11,508 crores (approximately $1.4 billion)
Net Interest Margin (NIM) 10.5%
Return on Assets (ROA) 4.8%
Return on Equity (ROE) 23.5%
Market Capitalization
As of 2023, Bajaj Finance's market capitalization is over ₹4.5 trillion
(approximately $54 billion), making it one of the largest NBFCs by market value in
India.
Stock Overview
MARKET CAP ₹ 4,70,101.22 Cr.
ADVANCES ₹ 2,43,334.43 Cr.
NO. OF SHARES 62 Cr.
P/E 35.92
P/B 6.32
FACE VALUE ₹2
DIV. YIELD 0.47 %
ROE 20.74 %
ROCE 12.29%

Price Summary (As of 21st September 2024)

HIGH ₹ 7,653.60
LOW ₹ 7,484
52 WEEK HIGH ₹ 8,190
52 WEEK LOW ₹ 6,190

Strengths
 Company has maintained a good ROA of 4.83% in last 3 years.
 Company has a healthy Return on Equity (ROE) track record of 19.80%.
 Operating Income has grown well for the company over past 3 years: 3 years
CAGR 25.85%.
 The company has delivered substantial profit growth of 47.31% over past 3 years.
 The company boasts a well-maintained advances growth ratio of 29.10%.
 Promoters shareholding is 54.70%.
WHY is Bajaj Finance an attractive stock to invest in?
 Net profit of Bajaj Finance is Rs 12,644.11 Cr and the compounded growth of
profit in the past 3 years is 47.31 %. The PAT margin of Bajaj Finance is 26.94 %.
 EPS grew by 20.19 % YOY.
 Bajaj Finance has a healthy ROE track record. The ROE of Bajaj Finance is
at 20.74 % for the latest year.
 Current P/E ratio of 35.39 and the average historical P/E for the last 5 years
was 48.58.
 Bajaj Finance is trading at a P/B of 5.75 . The average historical P/B of Bajaj
Finance for the last 5 years was 7.28. This can be compared with the Market price
per share in order to know if the stock is undervalued or overvalued.
 Share Price: - The current share price of Bajaj Finance is Rs 6900.

18.Conclusion:

The Indian stock market provides vast opportunities for both institutional and retail
investors. With the right strategies and research, investors can benefit from capital
appreciation, dividends, and wealth generation. The five stocks chosen—Reliance
Industries, TCS, HDFC Bank, Infosys, and Asian Paints—offer a mix of strong
financial performance, market leadership, and growth potential, making them
excellent choices for investment. This project provides a comprehensive
understanding of the Indian stock exchange, its benefits, working mechanisms, and
top stock choices for investment.