Project Senior PDF

A STUDY ON
“ EVALUATING PORTFOLIO & MAKING INVESTMENT

DECISIONS”
A Project Report
Being submitted as a partial fulfilment for the award of the degree of
MASTER OF BUSINESS ADMINISTRATION
BY
KADALI MOUNIKA
(Regd.No.20B01E0014)
Under the guidance of

Mr. CH. ANUDEEP (PH. D)
ASSISTANT PROFESSOR
DEPARTMENT OF MANAGEMENT STUDIES
SHRI VISHNU ENGINEERING COLLEGE FOR WOMEN
(Autonomous)
(Approved by A.I.C.T.E, New Delhi & Permanently Affiliated to JNTUK, Kakinada

accredited by NBA &NAAC with ‘A’ Grade)
BHIMAVARAM-534202
BATCH 2020-2022
CERTIFICATE
This is to certify that the company analysis report entitled “EVALUATING

PORTOLIO & MAKING INVESTMENT DECISION” is a genuine and bonafided work
by K. Mounika student of M.B.A, bearing Regd. No: 20B01E0014 under my guidance and
supervision, for the partial fulfillment of the award of Master of Business Administration
by Shri Vishnu Engineering College for Women (Autonomous), Bhimavaram.
Mr. CH. Anudeep((PH.D) Dr. G. Subba Raju(PH.D)
PROJECTGUIDE HEAD OF THE DEPARTMENT
EXTERNAL EXAMINER
Approved by: AICTE. New Delhi I Affiliated to: JNTUK, Kakinada

DECLARATION
I hereby declare that this project report entitled “EVALUATING PORTFOLIO & MAKING
INVESTMENT DECIONS”, submitted by me under the guidance of Mr. CH. ANUDEEP,
M.B.A, Assistant Professor, Department of MBA, Shri Vishnu Engineering College for
Women (Autonomous), Vishnupur, Bhimavaram for the partial fulfilment of the award of the
degree of Master of Business Administration, is a original work done by me and has not been
submitted earlier in part or full to this or any other University for any degree or diploma.
Place: BHIMAVARAM
Date: (KADALI MOUNIKA)

ACKNOWLEDGEMENT
I am grateful to my project guide MR. CH. ANUDEEP, M.B.A, Assistant Professor

Department of MBA, Shri Vishnu Engineering College for Women (Autonomous), Vishnupur,
Bhimavaram. I record my grateful indebtedness to his for the effective supervision and
successful completion of the work.
With great pleasure. I express my deep and profound gratitude to the people concerned
who helped me directly or indirectly in successful completion of this project.
I take this opportunity to express my gratitude to Dr. G. Subba Raju, Professor &
Head of the Department, MBA, Shri Vishnu Engineering College for Women (Autonomous)
for his encouragement in the completion of my work.
I am extremely grateful to principal Dr. G. SRINIVASA RAO, Shri Vishnu

Engineering College For Women (Autonomous) for providing me an opportunity to carry out
this work.
I will be failing in my duty if do not express my profound thanks to other faculty
members Mrs. J. Swarna Jyothi, Mr. B. Roja Kiran, Dr. M. Karthik, Mrs. G. V. Sravya, Mrs.
M. Divya for their assistance and guidance in making this worth relevant and effective.
It is my primary responsibility to my father Mr. K. Srinivasa Rao and my mother Mrs.

K. Lakshmi and special thanks to my friends for their encouragement and co-operation at
various stages of my work
(KADALI MOUNIKA)
INDEX
CONTEXT PAGE NO
CHAPTER – I
• Introduction
• Need of the Study
• Objectives of the Study 1-8
• Methodology of the Study
• Limitations of the study
CHAPTER – II
• Company Profile 9 - 25
CHAPTER – III
• Theoretical Frame Work 26 – 35
CHAPTER – IV
• Data Analysis and Interpretation 36 - 77
CHAPTER – V
• Findings
• Suggestions 78 - 81
• Conclusion
• Bibliography
• Annexure 82 - 83
CHAPTER – I
INTRODUCTION
SHRI VISHNU ENGINEERING COLLEGE FORWOMEN(AUTONOMOUS)
A STUDY ON EVALUATING PORTFOLIO & MAKING INVESTMENT

DECISION
What is portfolio?
• Portfolio is a collection of asset.

• The asset may be physical or financial like shares, bonds, debentures, preference
shares etc…,
• The individual investor or a fund manager would like to put all his money in the
shares of the company for that would amount to great risk.
• Main objective is to maximize portfolio return and at the same time minimizing the
portfolio risk by diversification.
• Portfolio management is the management is the management of various financial
• assets, which comprise the portfolio.
• According to SEBI (Portfolio Manager) Rules, 1993; Portfolio means the total
holding of securities belonging to any person.
• Designing portfolios to suit investor requirement often involves making several
projections regarding the future, based on their current information.
• When the actual situation is at variance from the projections portfolio composition
needs to be changed.
• One of the key inputs in portfolio building is the risk bearing ability of the investor.
• Portfolio management can be having institutional example. Unit Trust, Mutual Funds.
Pension Provident and Insurance Funds. Investment companies and Non-investment
companies.
• Institutional e.g., individual, HUF, Non-investment company’s etc..,
• The large institutional investors avail services of professionals.
• A professional, who manages other people’s or institution’s investment portfolio with
the objective of profitability, growth, risk minimization, is known as a portfolio
manager.
• The portfolio manager performs the job of security analyst.
• In case of medium and large sized organization, job function of portfolio manager and
security analyst are separate.
• Portfolios are built to suit the return expectation and the risk appetite of the investor.
Portfolio Analysis:
Portfolio Analysis is one of the areas of investment management that enables market
participants to analyse and assess the performance of a portfolio (equities, bonds, alternative
investments etc) with the objective of measuring performance on a relative and absolute basis
along with its associated risks.
➢ Portfolio analysis considers the determination of future risk and return in holding
various blends of individual securities.
➢
➢ Portfolio expected return is weighted average of the expected return of individual
securities but portfolio variance, in short contrast, can be something less than a
weighted average of security variances.
DEPARTMENT OF MANAGEMENT STUDIES Page 2

➢ As a result an investor can sometimes reduce portfolio risk by adding security with
greater individual risk than any other security in the portfolio. This is because risk
depends greatly on the co-variance among return of individual securities.
Since portfolios expected return is a weighted average of expected return of its securities, the
contribution of each security to the portfolios expected returns depends
➢ on its expected returns and its proportionate share of the initial portfolio’s market
value.
Risk:
Risk is a concept that denotes potential negative impact to an asset or some characteristic of
value that may arise from some present process or future event. In everyday usage, risk is
often used synonymously with the probability of a known loss. Risk is uncertainty of the
income/capital appreciation or loss of the both. The total risk of an individual security
companies two components, the market related risk called systematic risk also known as
undiversifiable risk and the unique risk of that particular security called unsystematic risk or
diversifiable risk.
Types of risk
Systematic Risk ( market ) Unsystematic Risk ( company risk )

Interest rate risk Labour troubles
Market risk Liquidity problems
Inflation risk Raw materials risk
Demand Financial risks
Government policy Management problems
Investment factors
Phases of Portfolio Management

Five phases can be identified in the process:
1. Security Analysis
2. Portfolio Analysis
3. Portfolio Selection
4. Portfolio Revision
5. Portfolio Evaluation
Security Analysis
Security analysis is the analysis of tradeable financial instruments called securities. It deals
with finding the proper value of individual securities (i.e., stocks and bonds). These are
usually classified into debt securities, equities, or some hybrid of the two. Tradeable credit
derivatives are also securities. Commodities or futures contracts are not securities. They are
distinguished from securities by the fact that their performance is not dependent on the
management or activities of an outside or third party. Options on these contracts are however
considered securities, since performance is now dependent on the activities of a third party.
The definition of what is and what is not a security comes directly from the language of a
United States Supreme Court decision in the case of SEC v. W. J. Howey Co.. Security
analysis for the purpose to state the effective value of an enterprise is typically based on the

examination of fundamental business factors such as financial statements, going concern,

business strategy and forecasts.
Portfolio Analysis
Portfolio analysis is the process of studying an investment portfolio to determine its
appropriateness for a given investor's needs, preferences, and resources. It also evaluates the
probability of meeting the goals and objectives of a given investment mandate, particularly
on a risk-adjusted basis and in light of historical asset class performance, inflation, and other
factors.
Portfolio Selection
Portfolio Selection is the unifying process in Modern Portfolio Theory, but the best way to
select portfolios is a matter of intense debate. Most of MPT evolved from Markowitz, who
hypothesized that the best way to select securities in each portfolio was to construct a set of
efficient portfolios. by using a technique known quadratic programming. Markowitz defined
an efficient portfolio as the group of securities with the highest possible return for a given
amount of risk. He argued that the optimum sets of portfolios produced by the programming
model were those for which it is not possible to get a higher reward or return on the portfolio
without accepting more risk. Conversely, if a portfolio is efficient, it is not possible to reduce
risk without reducing the return. Prior to Markowitz's insight, investment strategy did not pay
much attention to risk in an organized way.
Portfolio Revision
Portfolio Revision is the process of changing the composition of securities or bonds in the
portfolio depending on the performance, expectations & the strategy. If the policy of investor
shifts from earnings to capital appreciation the stocks should be revised accordingly. An
investor can sell these shares if the price of the shares considered risk, quality & tax
concessions. If any stock offers a competitive edge over the present stock, investment should
be shifted to that stock.
Portfolio Evaluation
Portfolio evaluating refers to the evaluation of the performance of the investment portfolio. It
is essentially the process of comparing the return earned on a portfolio with the return earned
on one or more other portfolio or on a benchmark portfolio. Portfolio performance
evaluation essentially comprises of two functions, performance measurement and performance
evaluation. Performance measurement is an accounting function which measures the return
earned on a portfolio during the holding period or investment period. Performance evaluation,
on the other hand, address such issues as whether the performance was superior or inferior,
whether the performance was due to skill or luck etc.

Need of the study

The need of the study is to understand the portfolio management and also understand the
effect while investing in single security and investing in more than one security i.e.,
diversification.

Objectives Of The Study:

➢ To calculate the return of various companies.
➢ To calculate the risk of various companies.
➢ To calculate the Portfolio return and risk of different portfolios designed for the
combination of various companies.
➢ To evaluate the performance of various portfolios.
➢ To understand and analyse and select the best portfolio.

Methodology of the Study
Research type :- Empirical

Type of sampling :- convenient sampling
Sample size :- 5 companies from different sectors
Sample universe:- Companies listed and trade in NSE
Data Type :- Secondary data
Research tools used:-
• Arithmetic average or mean
• Return =Dividend+ (current price-previous price) *100
--------------------------------
previous price
• Standard Deviation
• Variance
• Correlation – Karl Pearson’s method
• Sharpe’s Index
• Treynor’s Index
• Jenson’s Index
Data collection methods

The entire data were collected from the secondary source. Internet is the main
source of secondary sources of date collection used.
Analysis And Interpretation

The analysis and interpretations has been made with the help of graphs and
percentage of return of securities. Microsoft Excel 2019 is used for this purpose.

Limitations of The Study

• The sample size is limited 5 stocks from different sectors.
• Markowitz modern portfolio theory is used here to calculate return and risk of
portfolio.
• Portfolio created for the study is of 2 securities /stock combination , for making study
easier and understandable. Portfolios with 2 or more number of stock can give a wider
image of portfolio management.
• The data was collected from the time horizon of the 1 financial year starting from
APRIL 2021 – MARCH 2022.
The data has been collected from secondary sources only, relevance of information
may not fully trustworthy.

CHAPTER - II
COMPANY PROFILE
SHRI VISHNU ENGINEERING COLLEGE FORWOMN(AUTONOMOUS)
1.INFOSYS LIMITED
Infosys Limited is an Indian multinational information technology company that
provides business consulting, information technology and outsourcing services. The company
was founded in Pune and is headquartered in Bangalore. Infosys is the second-largest Indian
IT company after Tata Consultancy Services by 2020 revenue figures and the 602nd largest
public
Infosys had a total of 259,619 employees (generally known as "Infoscions") as of 2021, out of
which 38.6% were women. Out of its total workforce, 229,658 are software professionals and
remaining 13,796 work for support and sales. In 2016, 89% of its employees were based in
India.
During the financial year 2019, Infosys received 2,333,420 applications from prospective
employees, interviewed 180,225 candidates and had a gross addition of 94,324 employees, a
4% hiring rate. These numbers do not include its subsidiaries.
In its Q3FY22 results in January, Infosys has reported that attrition has risen to 25.5%, from
20.1% in the September quarter. It has announced a profit of Rs 5,809 crore for the third quarter
and said it is planning to hire 55,000 freshers for FY22 as part of its global graduate hiring
program.
Vision
“To be a globally respected corporation that provides best of breed business solutions,
leveraging technology, delivered by best in class people”.
Mission
“To achieve our objectives in an environment of fairness, honesty and courtesy
towards our clients, employees, vendors and society at large”.
HISTORY
Infosys was founded by seven engineers in Pune, Maharashtra, India with an initial
capital of $250 in 1981. It was registered as Infosys Consultants Private Limited on 2 July
1981. In 1983, it relocated its office to Bangalore, Karnataka, India.
The company changed its name to Infosys Technologies Private Limited in April 1992 and
to Infosys Technologies Limited when it became a public limited company in June 1992. It
was later renamed to Infosys Limited in June 2011. An initial public offering (IPO) was floated
in February 1993 with an offer price of ₹95 per share against a book value of ₹20 per share.
The IPO was undersubscribed but it was "bailed out" by US investment bank Morgan Stanley,
which picked up a 13% equity stake at the offer price. Its shares were listed in June 1993 with
trading opening at ₹145 per share.
Infosys shares were listed on the Nasdaq stock exchange in 1999 as American depositary
receipts. It became the first Indian company to be listed on Nasdaq. The share price surged
to ₹8,100 by 1999 making it the costliest share on the market at the time. At that time, Infosys
was among the 20 biggest companies by market capitalization on the Nasdaq. The ADR listing
was shifted from Nasdaq to N
YSE Euronext to give European investors better access to the company's shares.

In July 2014, Infosys started a product subsidiary called EdgeVerve Systems, focusing on
enterprise software products for business operations, customer service, procurement and
commerce network domains. In August 2015, the Finacle Global Banking Solutions assets
were officially transferred from Infosys and became part of the product company EdgeVerve
Systems product portfolio.
List of Infosys CEOs
Portrait Picture Name Period
Narayan Murthy 1981 to March 2002
Nandan Nilekani March 2002 to April 2007
Kris Gopalakrishnan April 2007 to August 2011

S. D. Shibulal August 2011 to July 2014
Vishal Sikka August 2014 to August 2017
UB Pravin Rao (interim) August 2017 to December 2017
Salil S. Parekh January 2018 onwards
Financials
Revenue (In Profits/Loss (In Total Assets (In

Year Employees
crores) crores) crores)
FY
22,742 6,266 27,504 113,800
2010
FY
27,501 6,835 31,293 130,800
2011
FY
33,734 8,332 38,357 150,000
2012

FY
40,352 9,429 46,275 156,000
2013
FY
50,133 10,656 56,966 160,405
2014
FY
53,319 12,372 66,289 176,187
2015
FY
62,441 13,489 75,098 194,004
2016
FY
68,484 14,353 83,148 200,364
2017
FY
70,522 16,029 79,349 204,107
2018
FY
82,675 15,404 84,066 228,123
2019
FY
90,791 16,594 91,800 242,371
2020
FY
100,472 19,351 107,511 259,619
2021
FY
121,641 22,110 116,729 314,015
2021

SWOT Analysis of Infosys (My Observations)
Strengths
1. Low Salary
2. Large Array of IT Services
3. Strategic Alliances
4. Good ROI
5. Good Training and Development Programmes for its Employees
Weakness
1. Depending on Foreign Markets

2. Emerging markets
3. High Attrition Rate
Opportunities
1. Acquisition of New Startups

2. Digital Transformation
3. Cloud-Based Computing
4. Concentrate on emerging markets
Threats
1. Intense Competition
2. Changes in US immigration laws
3. Liability Laws
4. Volatile World Markets

2.ICICI BANK LIMITED
The full form of ICICI is Industrial Credit and Investment Corporation of India.
ICICI Bank Limited is an Indian multinational bank and financial services company
headquartered in Vadodara. It offers a wide range of banking products and financial services
for corporate and retail customers through a variety of delivery channels and specialized
subsidiaries in the areas of investment banking, life, non-life insurance, venture
capital and asset management.
Industrial Credit and Investment Corporation of India (ICICI) Bank Limited is an Indian
multinational banking and financial services company. It has its corporate office in Mumbai,
Maharashtra and was established on 5th January 1994. The banks have 5275 branches and
15,589 ATMs across India. It has a brand presence in 17 countries worldwide.
In 1998, ICICI bank launched internet banking services and in 1999 it became the first Indian
company and the first bank to be listed on NYSE. ICICI bank also helped set up the Credit
Information Bureau of India Limited (CIBIL).
The bank has a network of 5,275 branches and 15,589 ATMs across India and has a presence
in 17 countries. The bank has subsidiaries in the United Kingdom and Canada; branches in
United States, Singapore, Bahrain, Hong Kong, Qatar, Oman, Dubai International Finance
Centre, China and South Africa; as well as representative offices in United Arab
Emirates, Bangladesh, Malaysia and Indonesia. The company's UK subsidiary has also
established branches in Belgium and Germany.
Vision
“To be the trusted financial services provider of choice for our customers, thereby
creating sustainable value for our stakeholder”.
Mission
“To grow our risk calibrated core operating profit by: Delivering products and
services that create value for customers. Bringing together all our capabilities to seamlessly
meet customer needs”.
History
The Industrial Credit and Investment Corporation of India (ICICI) was established on
5 January 1955 and Sir Arcot Ramasamy Mudaliar was elected as the first Chairman of ICICI
Ltd. It was structured as a joint-venture of the World Bank, India's public-sector banks and
public-sector insurance companies to provide project financing to Indian industry. ICICI Bank
was established by ICICI, as a wholly owned subsidiary in 1994 in Vadodara. The bank was
founded as the Industrial Credit and Investment Corporation of India Bank, before it changed
its name to ICICI Bank. The parent company was later merged with the bank.
In the 1990s, ICICI transformed its business from a development financial institution offering
only project finance to a diversified financial services group, offering a wide variety of products
and services, both directly and through a number of subsidiaries and affiliates like ICICI Bank.
ICICI's shareholding in ICICI Bank was reduced to 46% through a public offering of shares in
India in 1998, followed by an equity offering in the form of American depositary receipts on

the NYSE in 2000. ICICI Bank acquired the Bank of Madura Limited in an all-stock deal in
2001 and sold additional stakes to institutional investors during 2001–02. ICICI Bank
launched Internet Banking operations in 1998.
In 1955 ICICI was formed as an initiative of the World Bank. In the 1990s, ICICI transformed
its business from a financial institution limited to development projects to a diversified
financial services group. Ever progressing with the times, ICICI addressed a need to upgrade
its corporate structure to that of universal banking.
The merger of ICICI with ICICI bank seemed like a natural step in line with its newly adopted
universal outlook. This would enhance value for ICICI shareholders with low-cost deposits,
increased fee-based income, participation in the payment system and transaction banking
services. It would also greatly benefit ICICI Bank shareholders through a large capital base and
scale of operations, access to corporate relationships built over five decades, new business
segments and more.
Chief Executive Officer (CEO)
Sandeep Bakhshi
Managing director (MD) and Chief Executive Officer (CEO) of ICICI Bank
Sandeep Bakhshi, managing director (MD) and chief executive officer (CEO) of ICICI Bank,
is the Business Standard Banker of the Year 2020-21 for turning around the private sector
lender and changing the perception about it during his tenure of the past three and a half years.
The Success Journey

• In 1994, ICICI Bank was promoted, by ICICI Limited, the Indian Financial
Institution.
• In fiscal 1998, through a public offering of shares in India, ICICI’s shareholding in
ICICI Bank was reduced to 46%.
• In 1999, ICICI become the first Indian company and the first bank or financial
institution from non-Japan Asia to be listed on the NYSE.
• 2000 saw an equity offering in the form of ADRs listed on the NYSE.

• In fiscal 2001, ICICI Bank acquired Bank of Madhura, in an all-stock amalgamation.

• In 2001 & 2002, ICICI propagated secondary market sales to institutional investors.
• In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the
merger of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI
Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI
Bank.
• In 2002, the shareholders along with the High Court of Gujarat and the High Court of
Judicature as well as the Reserve Bank of India, approved the merger.
• In December 1996, Boards of ICICI Bank and The Sangli Bank Limited at their
respective meetings approved an all-stock amalgamation of Sangli Bank with ICICI
Bank.
• In April 1997, RBI approved the scheme of amalgamation.
• In August 2010, the amalgamation of Bank of Rajasthan Ltd. with ICICI Bank Ltd.
came into effect. The merger substantially enhanced the combined branch network to
over 2500 across the country.
In the last decade, ICICI Bank has come a long way as a leading private sector bank in
India with total assets of Rs. 1,098,365 crore (US$ 145.1 billion) at March 31, 2020 and
profit after tax Rs. 7,931 crore (US$ 1.0 billion) for the year ended March 31, 2020. ICICI
Bank currently has a network of 5,275 branches and 15,589 ATM's across India. On March
17, 2020, ICICI Bank announced the launch of 'ICICI Stack', a set of the country's most
comprehensive digital banking services to ensure uninterrupted banking experience to
customers at a time when they are advised to stay indoors in the wake of the coronavirus
outbreak. At ICICI Bank, we believe that digitally-enabled banking solutions not only
empower our customers to fulfil their ambitions but also create value for our stakeholders.

4.Britannia Industries Limited
Britannia Industries Limited is an Indian company specialised in food industry, part of

the Wadia Group headed by Nusli Wadia. Founded in 1892 and headquartered in Kolkata, it is
one of India's oldest existing companies and best known for its biscuit products. The company
sells its Britannia and Tiger brands of biscuits, breads and dairy products throughout India
and abroad. Beginning with the circumstances of its takeover by the Wadia Group in the early
1990s, the company has been mired in several controversies connected to its management.
However, it still has a large market share and it is profitable.
Britannia’s product portfolio includes Biscuits, Bread, Cakes, Rusk, and Dairy products
including Cheese, Beverages, Milk and Yoghurt. Britannia is a brand which many generations
of Indians have grown up with and our brands are cherished and loved in India and the world
over. Britannia products are available across the country in close to 5 million retail outlets and
reach over 50% of Indian homes. The company’s Dairy business contributes close to 5 per cent
of revenue and Britannia dairy products directly reach 100,000 outlets. Britannia Bread is the
largest brand in the organized bread market with an annual turnover of over 1 lac tons in volume
and Rs.450 crores in value. The business operates with 13 factories and 4 franchisees selling
close to 1mn loaves daily across more than 100 cities and towns of India. We have a presence
in more than 60 countries across the globe.
Vision
Developing a stable client base with significant repeat business. A flexible and
innovative approach towards the needs of our clients. Aware of emerging trends and
technological break throughs. A lucid yet commanding approach to project management that
promotes clarity and timeliness.
Mission
“To meet or, where possible, exceed the expectations of our diverse client base with
flexible, innovative solutions of the highest quality that adhere to safe, ethically sound and
environmentally friendly codes of practice”.
History
The company was established in 1892 by a group of British businessmen with an
investment of ₹295. Initially, biscuits were manufactured in a small house in central Kolkata.
Later, the enterprise was acquired by the Gupta brothers, mainly Nalin Chandra Gupta, an
attorney, and operated under the name "V.S. Brothers." In 1918, C.H. Holmes, an English
businessman based in Kolkata, was taken on as a partner and The Britannia Biscuit Company
Limited (BBCo) was launched.
The Mumbai factory was set up in 1924 and Peek Freans UK, acquired a controlling interest in
BBCo. Biscuits were in high demand during World War II, which gave a boost to the
company's sales. The company name was changed to the current "Britannia Industries Limited"
in 1979. In 1982, the American company Nabisco Brands, Inc. acquired the parent of Peek
Freans and became a major foreign shareholder. Biscuits

The company's factories have an annual capacity of 433,000 tonnes. The brand names of
Britannia's biscuits include Vita Marie Gold, Tiger, Nutri choice, Good day, 50 50, Treat, Pure
Magic, Milk Bikis, Bourbon, Nice Time and Little Hearts among others. In 2006, Tiger, the
mass market brand, realised $150.75 million in sales, including exports to the U.S. and
Australia. This amounts to 20% of Britannia revenues for that year. Also Britannia Industries
has roped in Bollywood actor Salman Khan to endorse its range of 'Tiger' brand of biscuits.
According to Britannia, Khan will play a role in further enhancing Tiger's core values through
his association in presenting the brand, its products and promotional activities.
Varun Berry
Varun Berry is the Managing Director & CEO at Britannia Industries. Britannia
Industries Managing Director & CEO oct 2021.
Dairy products
Dairy products contribute close to 10% to Britannia's revenue. The company not only markets
dairy products to the public but also trades dairy commodities business-to-business. Its dairy
portfolio grew to 47% in 2000-01 and by 30% in 2001-02. Its main competitors are Nestlé
India, the National Dairy Development Board (NDDB), and Amul (GCMMF). Britannia holds
an equity stake in Dynamix Dairy and outsources the bulk of its dairy products from its
associate, On 27 October 2001, Britannia announced a joint venture with Fonterra Co-operative
Group of New Zealand, an integrated dairy company which handles all aspects of the value
chain from procurement of milk to making value-added products such as cheese and
buttermilk. Britannia intends to source most of the products from New Zealand, which they
would market in India. The joint venture will allow technology transfer to Britannia. Britannia
and New Zealand Dairy each hold 49% of the JV, and the remaining 2 percent will be held by
a strategic investor. Britannia has also tentatively announced that its dairy business (probably
including Dynamix) would be transferred to the joint venture. However, the authorities'
approval to the joint venture obliged the company to start manufacturing facilities of its own.
It would not be allowed to trade, except at the wholesale level, thus pitching it in competition
with Danone, which had recently established its own dairy business. Britannia Industries is one
of India’s leading food companies with a 100year legacy and annual revenues in excess of Rs.
9000 Cr. Britannia is among the most trusted food brands, and manufactures India’s favorite

brands like Good Day, Tiger, Nutri Choice, Milk Bikis and Marie Gold which are household
names in India.
Our international footprint includes presence in Middle East through local manufacturing in
UAE and Oman, are the No 2 biscuit player in UAE with a strong contention to leadership and
have a similarly strong market position in the other GCC countries. We are also the market
leaders in Nepal and are in the process of investing a manufacturing facility in the country.
Our foot print spreads across North America, Europe, Africa and South East Asia through
exports and we are investing in a state- of- the- art facility in Mundra SEZ, Gujarat, to service
the exports markets.
Our strategic expansion plan is based on the principle of ‘One new market a year’. We plan to
expand through local operations in Africa and South East Asia in the coming years.
Britannia takes pride in having stayed true to its credo, ‘Eat Healthy, Think Better’. Having
removed over 8500 tonnes of Trans Fats from products, Britannia became India’s first Zero
Trans Fat Company. Over 50% of the Company’s portfolio is enriched with essential micro-
nutrients which nourish the body.
The company set up the Britannia Nutrition Foundation in 2009, and began working on public
private partnership to address malnutrition amongst under-privileged children and women.
Brand Britannia is listed amongst the most trusted, valuable and popular brands in various
surveys conducted by prestigious organizations like Millward Brown, IMRB, WPP Group and
Havas Media Group to name a few.
Our relentless focus on quality and freshness have won us prestigious accolades including the
Golden Peacock National Quality Award and the Ramakrishna Bajaj National Quality Award.
However, the award that we cherish the most is the one given by our consumers. Britannia is
recognized as one of the most trusted, valuable and popular brands among Indian consumers
in various reputed surveys.
Britannia believes that ‘Taste & Trust’ are its sobriquet and will constantly endeavor to make
a Billion Indians reach out for a delightful and healthy Britannia product several times a day.

4. Mahindra & Mahindra

Mahindra & Mahindra Limited is an Indian multinational automotive manufacturing
corporation headquartered in Mumbai. It was established in 1945 as Mahindra & Muhammad
and later renamed as Mahindra & Mahindra. Part of the Mahindra Group, M&M is one of the
largest vehicle manufacturers by production in India. Its subsidiary Mahindra Tractors is the
largest manufacturer of tractors in the world by volume. It was ranked 17th on a list of top
companies in India by Fortune India 500 in 2018. Its major competitors in the Indian market
include Maruti Suzuki and Tata Motors.
Vision
To create a fully collaborative environment in which suppliers can deliver exactly
what the company needs, when it needs it, and at a competitive cost.
Mission
To create India's largest automobile and automobile-related products distribution
network by providing dealers and customers with the largest choice of unique world-class
products and services.
History
Mahindra & Mahindra was founded as a steel trading company on 2 October 1945
in Ludhiana as Mahindra & Muhammad by brothers Kailash Chandra Mahindra and Jagdish
Chandra Mahindra along with Malik Ghulam Muhammad (1895–1956). Anand Mahindra, the
present Chairman of Mahindra Group, is the grandson of Jagdish Chandra Mahindra. After
India gained independence and Pakistan was formed, Muhammad emigrated to Pakistan. He
acquired Pakistani citizenship and became the first finance minister of Pakistan. He served
as Governor-General of Pakistan from 1951 to 1956.
Mahindra began assembling the Jeep CJ3 in 1954, and light commercial vehicles in 1965. In
1979 the licensed assembly of Peugeot diesel four-cylinder engines and transmissions began,
and in 1982 a tie-up with Kia Motors to build their four-speed KMT90 transmission and
transfer case was announced. Mahindra's MM range was a mainstay of the lineup and was
eventually also offered with a 1.8-liter Isuzu petrol engine in addition to International and
Peugeot diesels. Mahindra started making passenger vehicles firstly with the Logan in April
2007 under the Mahindra Renault joint venture. M&M made its maiden entry into the heavy
trucks segment with the Mahindra Truck and Bus Division, the joint venture with International
Truck, USA. South African Police Mahindra XUV500.
Mahindra produces a wide range of vehicles, including MUVs, LCVs and three-wheelers. It
manufactures over 20 models of cars, including larger, multi-utility vehicles like
the Scorpio and the Bolero. It formerly had a joint venture with Ford called Ford India Private
Limited to build passenger cars.

At the 2008 Delhi Auto Show, Mahindra executives said the company was pursuing an
aggressive product expansion program that would see the launch of several new platforms and
vehicles over the next three years, including an entry-level SUV designed to seat five
passengers and powered by a small, turbocharged Diesel engine. True to their word, Mahindra
& Mahindra launched the Mahindra Xylo in January 2009, selling over 15,000 units in its first
six months. Also in early 2008, Mahindra commenced its first overseas CKD operations with
the launch of the Mahindra Scorpio in Egypt, in partnership with the Bavarian Auto Group.
This was soon followed by assembly facilities in Brazil. Mahindra & Mahindra has a
controlling stake in Mahindra REVA Electric Vehicles. In 2011, it also gained a controlling
stake in South Korea's SsangYong Motor Company. Mahindra launched its relatively heavily
publicized SUV, XUV500, code-named as W201 in September 2011.
The new SUV by Mahindra was designed in-house and it was developed on the first global
SUV platform that could be used for developing more SUVs. In India, the new Mahindra
XUV500 came in a price range between ₹1,140,000–1,500,000. The company was expected to
launch three products in 2015 (two SUVs and one CV) and an XUV500 hybrid. Besides India,
the company also targeted Europe, Africa, Australia and Latin America for this
model. Mahindra President Mr. Pawan Goenka stated that the company planned to launch six
new models in the year. The company launched the CNG version of its mini truck Maxximo
on 29 June 2012. A new version of the Verito in Diesel and petrol options was launched by the
company on 26 July 2012 to compete with Maruti's Dzire and Toyota Kirloskar Motor's Etios.
On 30 July 2015, Mahindra released sketches of a new compact SUV called the TUV300 slated
to be launched on 10 September 2015. The TUV300 design took cues from a battle tank and
used a downsized version of the mHAWK engine found on the XUV500, Scorpio and some
models of the Xylo. This new engine was dubbed the mHAWK80. In 2015, Mahindra
introduced an app based intra-city cargo platform known as SMARTSHIFT, a load exchange
platform for small commercial vehicles. In 2018, Mahindra announced merger the of
SMARTSHIFT with Mumbai-based logistics solutions provider Porter.
In January 2016 Mahindra launched a sub-compact monocoque SUV called the KUV100. The
KUV100 received a major refresh in the form of the KUV100 NXT launched in October 2017.
On 3 September 2018, Mahindra Marazzo the shark inspired vehicle was launched in
collaboration with Mahindra Research Valley (MRV), MANA and Pininfarina in four variants.
In February 2019, Mahindra launched its XUV300, a sub-4m compact monocoque SUV. The
XUV300 was found to be the safest vehicle made in India in an independent crash test
conducted by GNCAP, earning it a 5-star adult safety rating along with India's first ‘Safer
Choice’ Award.
In October 2020, Mahindra launched the second-generation Thar 2020 – the All-New Thar. In
2021, Mahindra launched the XUV700.
In June 27, 2022 Mahindra released the Scorpio N, also called the "Big Daddy of SUVs." The
previous generation will now be called, "Scorpio Classic."

Dr Anish Shah
Anish Shah is the Managing Director and CEO of the Mahindra Group. He joined Mahindra
Group in 2014,as Group President (Strategy). In 2019, he was appointed Deputy Managing
Director and Group CFO, as a part of the transition plan to the CEO role.

5. Sun Pharma
Sun Pharmacecutical Industries Limited is an Indian multinational pharmaceutical company
headquartered in Mumbai, Maharashtra, that manufactures and sells pharmaceutical
formulations and active pharmaceutical ingredients (APIs) in more than 100 countries across
the globe. It is largest pharma company in India and the fourth largest specialty generic
pharmaceutical company in the world, with a total revenue of over US$4.5 billion as of June
2021. The products cater to a vast range of therapeutic segments covering psychiatry, anti-
infectives, neurology, cardiology, orthopaedic, diabetology, gastroenterology, ophthalmology,
nephrology, urology, dermatology, gynaecology, respiratory, oncology, dental and
nutritionals. Its API products include Absorica, Acamprosate Calcium, Alendronate Sodium,
Amifostine trihydrate, Budensonide and Carvedilol.
Sun Pharmaceuticals was founded by Dilip Shanghvi in 1983 in Vapi, Gujarat, with five
products to treat psychiatry ailments. Cardiology products were introduced in 1987 followed
by gastroenterology products in 1989. Today it is ranked number one by prescriptions with
nine different specialties of doctors in India and a market leader in cardiology,
gastroenterology, ortho, diabetology, dermatology, urology, vitamins, minerals, and nutrients.
The 2014 acquisition of Ranbaxy made Sun Pharma the largest pharma company in India, the
largest Indian pharma company in the US, and the 4th largest specialty generic company
globally. Over 72% of Sun Pharma sales are from markets outside India, primarily in the United
States. The US is the single largest market, accounting for about 30% of the company's
turnover; in all, formulations or finished dosage forms, account for 93% of the turnover.
Manufacturing is across 44 global locations in India, the US, Asia, Africa, Australia and
Europe. In the United States, the company markets a large basket of generics, with a strong
pipeline awaiting approval from the U.S. Food and Drug Administration (FDA).
Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times. The
founding family continues to hold a majority stake in the company.

Dilip Shanghvi founded Sun Pharmaceuticals and is one of the India's richest businessmen. In
2016, he received the fourth-highest civilian award Padma Shri from the Government of India.
He was ranked 8th in India Today's 2017 list of India's most powerful people in the
world. Forbes listed him as the 12th richest man in India with a net worth of $6.9 billion, as of
October 2019. As of 2021, he has an estimated net worth of $16 billion.
Products
We produce a comprehensive, diverse and highly complementary portfolio of generic and
specialty medicines targeting a wide spectrum of chronic and acute treatments. Our product
portfolio includes generics, branded generics, speciality, difficult-to-make technology
intensive products, over-the-counter (OTC), anti-retrovirals (ARVs), Active Pharmaceutical
Ingredients (APIs) and intermediates. Our presence in more than 100 countries helps us in
being responsive to local treatment needs while continually improving our global product
offering.
Speciality Medications
Sun Pharma has built a portfolio of patent protected speciality medicines for global markets.
Over the years, we have nurtured this evolving business through increased focus and
investments. The key segments we are targeting are dermatology, ophthalmology and
oncology. Our focus is on improving patient outcomes either by addressing unmet medical
needs or by enhancing patient convenience through differentiated dosage forms.
Our initiatives in this segment cover the entire value chain, from in-licensing early-to-late stage
clinical candidates, as well as getting access to on-market patented products. Today, we are
among the leading branded companies in the US with several speciality products launched in
the country.
Generic Medications
We provide high quality generic and branded medicines at affordable costs to patients and
doctors in more than 100 countries worldwide. Our products have the hallmark of technology-
based differentiation and cover the full range of dosage forms, including tablets, capsules,
injectables, inhalers, ointments, creams and liquids. The therapeutic segments covered by our
portfolio of over 2000 molecules include psychiatry, anti-infectives, neurology, cardiology,
orthopaedic, diabetology, gastroenterology, ophthalmology, nephrology, urology,
dermatology, gynaecology, respiratory, oncology, dental and nutritionals. In several countries,
Sun Pharma ranks among the leading companies in these therapy areas.
Over-the-Counter Medications
We provide a range of over-the-counter (OTC) / consumer healthcare products. Faringosept
(sore throat), Revital (vitamins) and Volini (topical analgesics) are a few of our flagship OTC
brands that are marketed in several countries globally. There are other category defining brands
such as Coldact & Flustat (cold & flu), Brustan, Painamol & Paduden (analgesics), Aspenter,
Aspacardin, Nudrate & Fortifikat (lifestyle OTCs), Gestid (digestives) and Chericof (cough).

Active Pharmaceutical Ingredients

We began producing Active Pharmaceutical Ingredients (APIs) in 1995 as a vital input in the
manufacture of complex formulations to facilitate vertical integration. Today, our list of APIs
exceeds 300 which is used in house as well as marketed to customers in over 60 countries. We
manufacture APIs in 14 manufacturing facilities located in India, Hungary, US, Israel and
Australia. Our product list includes generics and complex APIs that require isolated
manufacturing areas like anti-cancers, peptides, steroids, sex hormones and controlled
substances, including poppy-derived opiate raw materials that are primarily used in the
manufacture of analgesics, sold as both Narcotic Raw Materials (NRM) and APIs. We offer
bulk actives, intermediates and services for custom synthesis.
Anti Retro Viral Medications

We offer a wide range of WHO prequalified ARV medicines. Improving access and
affordability is our key objective. We supply ARVs to various National AIDS treatment
programs in Africa. In 2004, we signed up with the Clinton Health Access Initiative (CHAI) to
help reduce the cost of the triple drug cocktail for consortium partners in Africa and other
countries. Our portfolio comprises bio-equivalent ARV medicines and Active Pharmaceutical
Ingredients (API) manufactured at our state-of-the-art WHO prequalified manufacturing
facilities in India, a PIC/S approved manufacturing facility in South Africa and a facility in
Russia. Indeed, with several first-line and second line Highly Active Antiretroviral Therapy
(HAART) regimens in our portfolio, we hope to contribute significantly to combating
HIV/AIDS.

CHAPTER - III
THEORETICAL FRAME WORK
Definition of Portfolio
A Portfolio is a collection of financial investments like Stocks, bonds, commodities, cash and
cash equivalents including closed-end funds and exchange traded funds. A portfolio may
contain a wide range of assets including real estate, art and private investment.
Security Analysis
The analysis of various tradable financial instruments is called security analysis. It helps a
financial expert or a security analyst to determine the value of assets in a portfolio.
Portfolio Management
Portfolio Management is a selection , prioritisation and control of an organisation’s

programmes and projects, in line with its strategic objectives and capacity to deliver. The
goal is to balance the implementation of change initiatives and the maintenance of business-
as-usual, while optimising return on investment.
There are different models which are used in the portfolio management and those are as
follows:
Models for Portfolio Management
Portfolio management refers to the art of managing various financial products and assets to
help an individual earn maximum revenues with minimum risks involved in the long run.
Portfolio management helps an individual to decide where and how to invest his hard earned
money for guaranteed returns in the future.
• Markowitz: Portfolio Selection Model

• Capital Asset Pricing Model
• Arbitrage Theory Model
• Modern Theory Model
• Value at Risk Model
• Jensen’s Performance Index
• Treynor Index
• Sharpe’s Index
Markowitz: Portfolio Selection Model

The basic portfolio model developed by Harry Markowitz, derived the expected rate of return
of portfolio of assets and expected risk measure. Markowitz showed that the variance of the
rate of return was meaning full measure of risk under a reasonable set of assumptions and
derives the formulas for computing the variance of the portfolio. This portfolio variance
formulation indicated the importance of diversification for reducing risk, and showed how to
properly diversify.

Parameters of Markowitz: The Mean Variance Criterion

Based on his research, for building up the efficient set of portfolio, as laid down by
Markowitz, we need to look into these important parameters.
i. Expected Return
ii. Variability of returns as measured by standard deviation from the mean
iii. Covariance or variance of one asset return to other asset returns.
Assumptions of Markowitz Model:

• Investors consider each investment alternative as being represented by a probability
distribution of expected returns over some holding period.
• Investors maximize one period expected utility and possess utility curves that
demonstrate diminishing marginal utility of wealth.
• Individual estimate risk on the basis of the variability of expected returns.
• Investors base decisions solely on expected return and risk; i.e., their utility curves are
a function of expected return and variance ( or standard deviation ) of returns only.
• For a given risk level, investors prefer higher returns to lower returns. Similarly, for a
given level of expected return, investors prefer less risk to more risk.
Expected Risk Calculation

Portfolio risk = SQRT [(Wx^2*Sdx^2) + (Wy^2*Sdy^2) +
(2*Wx*Wy)*(rxy*Sdx^2*Sdy^2)]
Where,
Wx , Wy = proportion of total portfolio invested in security x & y respectively
Sdx ,Sdy = standard deviation of stock x & stock y respectively
Rxy = correlation coefficient of x & y
Expected Return Of A Portfolio Calculation:

Portfolio Return = [(Wx*rx) + (Wy*ry)]
Where,
Wx = proportion of total portfolio invested in security x
Wy = proportion of total portfolio invested in security y
rx = expected return to security x
ry = expected return to security y

Formulas Used In Markowitz Model

Arithmetic Return
Standard Deviation ( σ = SQRT(mean return-expected return)^2/N )
Covariance ( COV (X,Y) = 1/N [(X-x)(Y-y)]
Beta (β)
The Beta coefficient, in terms of finance and investing, is a measure of stock (or Portfolio’s)
volatility in relation to the rest of the market. Beta is calculated for individual companies
using regression analysis. The beta coefficient is a key parameter in the capital asset pricing
model. It measures the part of the asset’s statistical variance that cannot be mitigated by the
diversification provided by the portfolio of many risky assets, because it is correlated with
return of the other assets that are in the portfolio.
Capital Asset Pricing Model

• Capital Asset Pricing Model also abbreviated as CAPM was proposed by Jack
Treynor, William Sharpe, John Lintner and Jan Mossin.
• When an asset needs to be added to an already well diversified portfolio, Capital
Asset Pricing Model is used to calculate the asset’s rate of profit or rate of return
(ROI).
In Capital Asset Pricing Model, the asset responds only to:
▪ Market risks or non diversifiable risks often represented by beta

▪ Expected return of the market
▪ Expected rate of return of an asset with no risks involved
What are Non Diversifiable Risks ?

Risks which are similar to the entire range of assets and liabilities are called non diversifiable
risks.
Where is Capital Asset Pricing Model Used ?

Capital Asset Pricing Model is used to determine the price of an individual security through
security market line (SML) and how it is related to systematic risks.
What is Security Market Line ?

Security Market Line is nothing but the graphical representation of capital asset pricing
model to determine the rate of return of an asset sensitive to non diversifiable risk (Beta).

Arbitrage Pricing Theory
Stephen Ross proposed the Arbitrage Pricing Theory in 1976.Arbitrage Pricing Theory
highlights the relationship between an asset and several similar market risk factors.
According to Arbitrage Pricing Theory, the value of an asset is dependent on

macro and company specific factors.
Modern Portfolio Theory

Modern Portfolio Theory was introduced by Harry Markowitz. According to Modern
Portfolio Theory, while designing a portfolio, the ratio of each asset must be chosen and
combined carefully in a portfolio for maximum returns and minimum risks. In Modern
Portfolio Theory emphasis is not laid on a single asset in a portfolio, but how each asset
changes in relation to the other asset in the portfolio with reference to fluctuations in the
price. Modern Portfolio theory proposes that a portfolio manager must carefully choose
various assets while designing a portfolio for maximum guaranteed returns in the future.
Value at Risk Model

Value at Risk Model was proposed to calculate the risk involved in financial market.
Financial markets are characterized by risks and uncertainty over the returns earned in future
on various investment products. Market conditions can fluctuate anytime giving rise to major
crisis. The potential risk involved and the potential loss in value of a portfolio over a certain
period of time is defined as value at risk model. Value at Risk model is used by financial
experts to estimate the risk involved in any financial portfolio over a given period of time.
Jensen’s Performance Index

Jensen’s Performance Index was proposed by Michael Jensen in 1968. Jensen’s Performance
Index is used to calculate the abnormal return of any financial asset (bonds, shares, securities)
as compared to its expected return in any portfolio. Also called Jensen’s alpha, investors
prefer portfolio with abnormal returns or positive alpha.
Jensen’s alpha = Portfolio Return – [Risk Free Rate + Portfolio Beta * (Market Return – Risk
Free Rate)
Treynor Index
Treynor Index model named after Jack.L Treynor is used to calculate the excess return earned
which could otherwise have been earned in a portfolio with minimum or no risk factors
involved.
Where T-Treynor ratio

Sharpe’s Index
Markowitz Model had serious practical limitations due to the rigours involved in compiling
the expected returns, standard deviation, variance, covariance of each security to every other
security in the portfolio. Sharpe Model has simplified this process by relating the return in a
security to a single Market index. Firstly, this will theoretically reflect all well traded
securities in the market. Secondly, it will reduce and simplify the work involved in compiling
elaborate matrices of variances as between individual securities. If thus the market index is
used as a surrogate for other individual securities in the portfolio, the relation of any
individual security with the Market index can be represented in a Regression line or
characteristic line. This is drawn below, with the excess return on the security on the y-axis
and excess return on the Market Portfolio on the x-axis.
The equation of Sharpe’s Index is
Rp = Rf + (Rm-Rf) βi
Assumptions of Sharpe’s Index Model
To simplify analysis, the Sharpe’s index assumes that there is only 1 macroeconomic factor
that causes the systematic risk affecting all stock returns and this factor can be represented by
the rate of return on market index, such as the S&P 500.
According to this model, the return of any stock can be decomposed into expected excess
return of the individual stock due to firm specific factors, commonly denoted by its alpha
coefficient(α), the return due to economic events that affect the market and expected events
that affect only the firm. The term βi(rm-rf) represents the movement of the market modified
by the stock’s beta, while βi represents the unsystematic risk of the security due to firm-
specific factors. Macroeconomic events, such as changes in interest rates or the cost of labour
causes the systematic risk that affects the returns of all stocks and the specific events are the
unexpected microeconomic events that affect the returns of specific firms such as the death of
key people or the lowering of the firm’s credit rating, that would affect the firm but would
have a negligible effect on the economy. In a portfolio the unsystematic risk due to firm-
specific factors can be reduced to zero by diversification.
The index model is based on the following:
• Most stocks have a positive covariance because they all respond similarity to
macroeconomic factors.
• However, some firms are more sensitive to these factors than others and this firm-
specific variance is typically denoted by its beta, which measures its variance
compared to the market for one or more economic factors.

• Covariances among securities result from differing responses to macroeconomic

factors. Hence, the covariance of each stock can be found by multiplying their betas
and the market variance.
• Cov(Ri,Rk)=βiβKσ2. This last equation greatly reduces the computations required to
determine covariance because otherwise the covariance of the securities within a
portfolio must be calculated using historical returns and the covariance of each
possible pair of securities in the portfolio must be calculated independently. With this
equation, only the betas of the individual securities and the market variance need to be
estimated to calculate covariance. Hence, the index model greatly reduces the number
of calculations that would otherwise have to be made to model a large portfolio of
thousands of securities.
Portfolio Management Strategy
There are mainly two types of portfolio strategies available, these are
1. Active Portfolio Strategy
2. Passive Portfolio Strategy
Active Portfolio Strategy
An active portfolio strategy is an investment strategy that tries to generate maximum value to
a portfolio. Investors, as well as fund managers use various techniques that evaluate which
financial securities will yield the greatest returns – yield refers to what percentage of return
an investment generates.
Active Management
The term active management implies that a professional money manager or a team of
professionals is tracking the performance of a client's investment portfolio and regularly
making buy, hold, and sell decisions about the assets in it. The goal of the active manager is
to outperform the overall market.
Advantages of active management
To an employee of a high-technology growth company who receives company stock or stock

options as a benefit might perform not to have additional funds invested in the same industry.
Several of the actively-managed mutual funds with strong long-term records invest in value
stocks. Passively-managed funds that track broad market indices such as the S&P 500 have
money invested in all securities in that index i.e, both growth and value stocks.
The use of managed funds in certain emerging markets has been recommended by Burton
Malkiel, a proponent of the efficient market theory who normally considers index funds to be
superior to active management in developed markets.

Disadvantages of active management
The most obvious disadvantage of active management is that the fund manager may make
bad investment choices or follow an unsound theory in managing the portfolio. The fees
associated with active management are also highest than those associated with passive
management, even if frequent trading is not present. Those who are considering investing in
an actively-managed mutual funds should evaluate the fund’s prospectus carefully. Data from
recent decades demonstrates that the majority of actively-managed large and mid-cap stock
funds in united states fail to outperform their passive stock index counterparts.
Active funds management strategies that involve frequent trading general higher transaction
costs which diminish the fund’s return. In addition, the short-term capital gains resulting from
frequent trades often have an unfavourable income tax impact when such funds are held in a
taxable account.
When the asset base of an actively-managed funds become too large, it begins to take on
index-like characteristics because it must invest in an increasingly diverse set of investments
instead of those limited to the fund manager’s best ideas. Many mutual fund companies close
their funds before they reach this point, but there is potential for a conflict of interest between
mutual fund management and shareholders because closing the fund will results in a loss of
income (management fees) for mutual fun company.
Passive portfolio strategy
A strategy that involves minimal expectations input, and instead relies on diversification to
match the performance of some market index. A passive strategy assumes that the
marketplace will reflect all available information in the price paid for securities, and
therefore, does not attempt to find mispriced securities.
What Is a Portfolio Manager?
A portfolio manager is a person or group of people responsible for investing a mutual,

exchange traded or closed-end fund's assets, implementing its investment strategy, and
managing day-to-day portfolio trading. A portfolio manager is one of the most important
factors to consider when looking at fund investing. Portfolio management can be active or
passive, and historical performance records indicate that only a minority of active fund
managers consistently beat the market.
KEY TAKEAWAYS
• A portfolio manager is a person or group of people responsible for investing a fund's

assets, implementing the fund's investment strategies, and managing day-to-day
portfolio management.
• Portfolio managers can take an active or passive management role.
• The ability to originate ideas and to employ excellent research skills are just two
factors that influence a portfolio manager's success.

Understanding a Portfolio Manager's Role

A portfolio manager holds great influence on a fund, no matter if that fund is a closed or open
mutual fund, hedge fund, venture capital fund or exchange-traded fund. The manager of the
fund's portfolio will directly affect the overall returns of the fund. Portfolio managers are thus
usually experienced investors, brokers, or traders, with strong backgrounds in financial
management and track records of sustained success.
Portfolio reviews and decision making
An initiatives are executed, the organization should conduct periodic reviews of actual
performance and conformance to original expectations.
Typically, organization managers specify the frequency and contents for these periodic
reviews, and individual portfolio manager oversee their planning and execution. The reviews
should be multi-dimensional, including both tactical elements (e.g., support for business
strategy goals and resource allocation) and strategy elements (e.g., support for business
strategy goals and delivery of expected organizational benefits). A significant aspect of
oversight is setting multiple decision points for each initiative, so that managers can
periodically evaluate date and decide whether to continue the work. These
“continue/change/discontinue” decision should be driven by an understanding (developed via
the periodic reviews) of a given initiative’s continuing value, expected benefits, and strategic
contribution, making these decision at multiple points in the initiative’s lifecycle helps to
ensure that managers will continually examine and assess changing internal and external
circumstances, needs and performance.
Portfolio management essentials
Every practical discipline is based on a collection of fundamental concepts that people have
identical and proven (and sometimes refined or discarded) through continuous application.
These concepts are useful until they become obsolete, supplanted by newer and more
effective ideas.
for example, in roman times, engineers discovered that if the upstream supports of a bridge
were shaped to offer little resistance to the current of a stream or river, they would last
longer. They applied this principle all across the Roman Empire. Then, in the middle ages,
engineers discovered that such supports would last even longer if their downstream side was
also shaped to offer little resistance to the current. So that became the new standard for bridge
construction. Portfolio management, like bridge-building, is a discipline, and a number of
authors and practitioners have documented fundamental ideas about its exercise.
Objectives of portfolio management
The basic objective of portfolio management is to maximize yield and minimize risk. The
other objectives are follows:
• Stability of income: an investor considers stability of income from his investment.
He also considers the stability of purchasing power of income.
• Capital growth: capital appreciation has become an important investment principle.
Investors seek growth stocks which provide a very large capital appreciation by way
of rights. Bonus and appreciation in the market price of a share.

• Liquidity: an investment is a liquid asset. It can be converted into cash with the help
of a stock exchange. Investment should be liquid as well as marketable. The portfolio
should contain a planned proportion of high grade and readily saleable in investment.
• Safety: safety means protection for investment against loss under reasonably
variations. In order to provide safety. A care review of economic and industry trends
is necessary. In other words, error in portfolio are unavoidable and it requires
extensive diversification.
• Tax incentives: investors try to minimize their tax liabilities from the investments.
The portfolio manager has to keep a list of such investment avenues along with the
return risk profile, tax implications, yield and other returns.
There are three goals of portfolio management
1. Maximize the value of the portfolio

2. Seek balance in the portfolio
3. Keep portfolio projects strategically aligned.
Functions of portfolio management
The basic purpose of portfolio management is to maximize yield and minimize risk. Every
investor Is risk averse. In order to diversify the risk by investing into various securities
following functions are required to be performed.
The functions undertaken by the portfolio management are as follows:
1. To frame the investment strategy and select an investment mix to achieve the desired
investment objective:
2. To provide a balance portfolio this not only can hedge against the inflation but can
also optimize returns with the associated degree of risk:
3. To make timely buying and selling of securities:
4. To maximize the after tax return by investing in various taxes saving investment
instruments.

CHAPTER - IV
DATA ANALYSIS & INTERPRETATION
Return & Risk of Benchmark index: NIFTY 50
Return, R(Avg) Calculation

Table: Return, R(Avg) Calculation of NIFTY 50
FY 2021-2022 P0 P1 Dividend Return

14,798.40 14,631.00
April 21 -1.13
14,481.05 15,582.80
May 21 7.608
15,629.65 15,721.50
June 21 0.587
15,755.05 15,763.05
July 21 0.0507
15,874.90 17,132.20
Aug 21 7.920
17,185.60 17,618.15
Sept 21 2.5169
17,531.90 17,671.65
Oct 21 0.797
17,783.15 16,983.20
Nov 21 -4.498
17,104.40 17,354.05
Dec 21 1.459
17,387.15 17,339.85
Jan 22 -0.27
17,529.45 16,793.90
Feb 22 -4.196
16,593.10 17,498.25
Mar 22 5.45
Total 16.29
Average Return R 1.36
Return, R = Dividend + (P1 – P0 ) / P0 * 100

FY 21 (MoM) Return for Nifty 50 = 1.36%

Risk, S.D Calculation

Table: Risk, S.D Calculation of Nifty 50
FY 20-21 R Avg R (R-Avg R) (R-Avg R)^2
April 21 -1.13 1.36 -2.489 6.196133
May 21 7.608 1.36 6.250219 39.06524
June 21 0.587 1.36 -0.77033 0.593416
July 21 0.0507 1.36 -1.30722 1.708831
Aug 21 7.920 1.36 6.56205 43.0605
Sept 21 2.5169 1.36 1.158933 1.343125
Oct 21 0.797 1.36 -0.56088 0.314588
Nov 21 -4.498 1.36 -5.85636 34.29695
Dec 21 1.459 1.36 0.101566 0.010316
Jan 22 -0.27 1.36 -1.63004 2.65703
Feb 22 -4.196 1.36 -5.55408 30.84782
Mar 22 5.45 1.36 4.096978 16.78523
Total 176.88
‘
Variance 16.079
S.D 4.009
∑(R−AvgR)2
Risk, S.D, σ = √ N−1
FY 21 (MoM) Risk for Nifty 50 = 4.009
The NSE CNX Nifty had given a good return of 1.36% per month with an adjusted risk rate
of 4.009 during FY 2021

Return & Risk of Individual Stock

1. Infosys Limited:
Infosys Limited is an Indian multinational information technology company that
provides business consulting, information technology and outsourcing services. The
company is headquartered in Bangalore. Infosys is the second-largest Indian IT
company after Tata Consultancy Services by 2020 revenue figures and the 602nd
largest public company in the world according to Forbes Global 2000 ranking. On 31
December 2020, its market capitalisation was $71.92 billion. The credit rating of the
company is A− (rating by Standard & Poor's). It is traded as NSE Nifty 50 Constituent.

Return, R (Avg) Calculation

Table: Return, R (Avg) Calculation of Infosys Limited
April 21 1385.20 1354.35 -2.224
May 21 1352.05 1393.75 15 4.193
June 21 1387.20 1580.80 13.956
July 21 1560.40 1610.50 3.211
Aug 21 1631.55 1706.45 4.591
Sept 21 1677.75 1675.20 -0.152
Oct 21 1665.15 1667.75 0.156
Nov 21 1700.05 1712.65 0.741
Dec 21 1714.90 1887.75 10.079
Jan 22 1898.45 1736.20 -8.546
Feb 22 1772.05 1715.60 -3.185
Mar 22 1702.35 1903.95 11.842
Total 34.662
Avg Return 2.888

FY 22 (MoM) Return for Infosys Limited = 2.88%


Table: Risk, S.D Calculation of Infosys Limited
April 21 -2.224 2.888 -5.112 26.133
May 21 4.193 2.888 1.305 1.703
June 21 13.956 2.888 11.068 122.50
July 21 3.211 2.888 0.323 0.104
Aug 21 4.591 2.888 1.703 2.9003
Sept 21 -0.152 2.888 -3.04 9.242
Oct 21 0.156 2.888 -2.732 7.463
Nov 21 0.741 2.888 -2.147 4.609
Dec 21 10.079 2.888 7.191 51.711
Jan 22 -8.546 2.888 -11.434 130.736
Feb 22 -3.185 2.888 -6.073 36.88
Mar 22 11.842 2.888 8.954 80.174
Total 474.16
Variance 43.105
S.D 6.565
∑(R−AvgR)2
FY 21 (MoM) Risk for Infosys Limited = 6.56

The Reliance Industries Limited had given a return of 2.88% per month with an adjusted risk
rate of 6.565 during FY 2021. The return includes a dividend of 15 per share.

2. ICICI Bank Limited
ICICI Bank Limited is an Indian multinational bank and financial services company
headquartered in Vadodara. It offers a wide range of banking products and financial services
for corporate and retail customers through a variety of delivery channels and specialized
subsidiaries in the areas of investment banking, life, non-life insurance, venture
capital and asset management.
Industrial Credit and Investment Corporation of India (ICICI) Bank Limited is an Indian
multinational banking and financial services company. It has its corporate office in Mumbai,
Maharashtra and was established on 5th January 1994. The banks have 5275 branches and
15,589 ATMs across India. It has a brand presence in 17 countries worldwide.
In 1998, ICICI bank launched internet banking services and in 1999 it became the first Indian
company and the first bank to be listed on NYSE. ICICI bank also helped set up the Credit
Information Bureau of India Limited (CIBIL).


Table: Return, R (Avg) Calculation of ICICI Bank Limited
April 21 593.95 600.40 1.086
May 21 597.00 662.20 10.921
June 21 650.25 630.85 -2.983
July 21 630.65 682.70 2 -8.570
Aug 21 681.55 719.00 5.494
Sept 21 720.00 701.80 -2.527
Oct 21 692.20 802.30 15.905
Nov 21 804.45 714.30 -11.206
Dec 21 728.25 740.25 1.647
Jan 22 765.75 789.25 3.068
Feb 22 810.90 743.45 -8.317
Mar 22 715.70 730.05 0.020
Total 4.538
Avg Return 0.378

FY 22 (MoM) Return for ICICI Bank Limited = 0.38%


Table: Risk, S.D Calculation of ICICI Bank Limited
April 21 1.086 0.378 0.708 0.501
May 21 10.921 0.378 10.543 111.15
June 21 -2.983 0.378 -3.361 11.29
July 21 -8.570 0.378 -8.948 80.06
Aug 21 5.494 0.378 5.116 26.17
Sept 21 -2.527 0.378 -2.905 8.439
Oct 21 15.905 0.378 15.527 241.08
Nov 21 -11.206 0.378 -11.584 134.189
Dec 21 1.647 0.378 1.269 1.610
Jan 22 3.068 0.378 2.69 7.234
Feb 22 -8.317 0.378 -8.695 75.603
Mar 22 0.378 -0.358 0.128
Total 697.48
Variance 63.408
S.D 7.963
∑(R−AvgR)2
FY 21 (MoM) Risk for ICICI Bank Limited = 7.96
The ICICI Bank Limited had given a return of 0.38% per month with an adjusted risk rate of
7.96 during FY 2021. The return includes a dividend of 2 per share.

3. Britannia Limited
Britannia Industries Limited is an Indian company specialised in food industry, part of
the Wadia Group headed by Nusli Wadia. Founded in 1892 and headquartered in Kolkata, it is
one of India's oldest existing companies and best known for its biscuit products. The company
sells its Britannia and Tiger brands of biscuits, breads and dairy products throughout India
and abroad. Beginning with the circumstances of its takeover by the Wadia Group in the early
1990s, the company has been mired in several controversies connected to its management.
However, it still has a large market share and it is profitable.


Table: Return, R (Avg) Calculation of Britannia Limited
April 21 3618.50 3449.00 62 -2.971
May 21 3439.25 3447.85 12.5 0.613
June 21 3446.75 3649.65 5.886
July 21 3595.80 3423.40 -4.794
Aug 21 3504.65 3997.50 14.062
Sept 21 4015.35 3948.95 -1.653
Oct 21 3921.10 3675.75 -6.257
Nov 21 3678.15 3545.50 -3.606
Dec 21 3535.25 3606.06 2.003
Jan 22 3617.55 3535.65 -2.264
Feb 22 3656.60 3427.45 -6.266
Mar 22 3391.75 3148.40 -7.175
Total -12.422
Avg Return, R -1.035

FY 21 (MoM) Return for Britannia Limited = -1.035%


Table: Risk, S.D Calculation of Britannia Limited
April 21 -2.971 -1.035 -1.936 3.74809
May 21 0.613 -1.035 1.648 2.715904
June 21 5.886 -1.035 6.921 47.90024
July 21 -4.794 -1.035 -3.759 14.13008
Aug 21 14.062 -1.035 15.097 227.919
Sept 21 -1.653 -1.035 -0.618 0.3819
Oct 21 -6.257 -1.035 -5.222 27.269
Nov 21 -3.606 -1.035 -2.571 6.61004
Dec 21 2.003 -1.035 3.038 9.2294
Jan 22 -2.264 -1.035 -1.229 1.5104
Feb 22 -6.266 -1.035 -5.231 27.363
Mar 22 -7.175 -1.035 -6.14 37.699
Total 406.477
Variance 36.95
S.D 6.0788
∑(R−AvgR)2
FY 21 (MoM) Risk for Britannia Limited = 6.078
The Britannia Limited had given a good return of -1.35% per month with an adjusted risk rate
of 6.078 during FY 2021. The return includes a dividend of 62 , 12.5 per share.

4. Mahindra & Mahindra Limited
Mahindra & Mahindra Limited (M&M) is an Indian multinational automotive manufacturing

corporation headquartered in Mumbai. It was established in 1945 as Mahindra & Muhammad
and later renamed as Mahindra & Mahindra. Part of the Mahindra Group, M&M is one of the
largest vehicle manufacturers by production in India. Its subsidiary Mahindra Tractors is the
largest manufacturer of tractors in the world by volume.[3] It was ranked 17th on a list of top
companies in India by Fortune India 500 in 2018.[4] Its major competitors in the Indian market
include Maruti Suzuki and Tata Motors.


Table: Return, R (Avg) Calculation of Mahindra & Mahindra Limited
April 21 807.60 752.55 -6.816
May 21 752.95 807.95 7.304
June 21 806.30 777.70 -3.547
July 21 779.45 743.10 8.75 -3.540
Aug 21 757.50 793.30 4.698
Sept 21 769.90 803.05 4.305
Oct 21 827.85 884.25 6.813
Nov 21 870.35 835.50 -4.004
Dec 21 834.70 837.15 0.293
Jan 22 829.80 885.80 6.748
Feb 22 869.70 790.85 -9.066
Mar 22 778.35 793.35 1.927
Total 5.115
Avg Return, R 0.426

FY 21 (MoM) Return for Mahindra & Mahindra = 0.426%


Table: Risk, S.D Calculation of Mahindra & Mahindra Limited
April 21 -6.816 0.426 -7.242 52.446
May 21 7.304 0.426 6.878 47.307
June 21 -3.547 0.426 -3.973 15.785
July 21 -3.540 0.426 -3.966 15.729
Aug 21 4.698 0.426 4.272 18.249
Sept 21 4.305 0.426 3.879 15.046
Oct 21 6.813 0.426 6.387 40.794
Nov 21 -4.004 0.426 -4.43 19.63
Dec 21 0.293 0.426 -0.133 0.017
Jan 22 6.748 0.426 6.322 39.967
Feb 22 -9.066 0.426 -9.492 90.098
Mar 22 1.927 0.426 1.501 2.253
Total 357.32
Variance 32.48
S.D 5.69
∑(R−AvgR)2
FY 21 (MoM) Risk for Mahindra & Mahindra = 5.69
The M&M had given a return of 0.426% per month with an adjusted risk rate of 5.69 during
FY 2021. The return includes a dividend of 8.75 per share.

5. Sun Pharmaceutical Industries Limited
Sun Pharmaceutical Industries Limited (d/b/a Sun Pharma) is No. 4th Global and no.
1 Indian multinational pharmaceutical company headquartered in Mumbai, Maharashtra, that
manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients
(APIs) primarily in India and the United States. The company offers formulations in various
therapeutic areas,suchas cardiology, psychiatry, neurology, gastroenterology and diabetology.
It also provides APIs such as warfarin, carbamazepine, etodolac, and clorazepate, as well
as anti-cancers, steroids, peptides, sex hormones, and controlled substances. It is traded as
NSE Nifty 50 Constituent.


Table: Return, R (Avg) Calculation of Sun Pharmaceutical Industries Limited
April 21 610.25 654.45 7.155
May 21 659.20 668.30 1.399
June 21 671.05 675.45 0.655
July 21 684.15 773.95 13.125
Aug 21 775.00 794.05 2 2.716
Sept 21 788.50 818.25 3.772
Oct 21 826.60 795.00 -3.822
Nov 21 811.80 753.60 -7.722
Dec 21 745.00 845.70 13.463
Jan 22 848.95 834.50 -1.702
Feb 22 891.70 843.90 7 -4.580
Mar 22 820.90 920.60 0.121
Total 24.581
Avg Return, R 2.048

FY 21 (MoM) Return for Sun Pharmaceutical Limited = 2.048%


Table: Risk, S.D Calculation of Sun Pharmaceutical Industries Limited
April 21 7.155 2.048 5.107 26.082
May 21 1.399 2.048 -0.649 0.421
June 21 0.655 2.048 -1.393 1.9405
July 21 13.125 2.048 11.077 122.69
Aug 21 2.716 2.048 0.668 0.446
Sept 21 3.772 2.048 1.724 2.9726
Oct 21 -3.822 2.048 -5.87 34.457
Nov 21 -7.722 2.048 -9.77 95.453
Dec 21 13.463 2.048 11.415 130.302
Jan 22 -1.702 2.048 -3.75 14.062
Feb 22 -4.580 2.048 -6.628 43.930
Mar 22 0.121 2.048 -1.927 3.713
Total 476.48
Variance 43.316
S.D 6.582
∑(R−AvgR)2
FY 21 (MoM) Risk for Sun Pharmaceutical Industries Limited = 6.58
The Sun Pharmaceutical Limited had given a return of 2.048% per month with an adjusted
risk rate of 6.58 during FY 2021. The return includes a dividend of 2 , 7 per share.

Beta, β of stocks
β, Beta of stocks with respect to Nifty
Cov( ra,rp )
βα = Var rp
Where,
ra = return of individual stock
rp = return of NSE CNX Nifty
Beta of stock
Stocks Covariance Nifty β , Beta Result

Variance
Infosys Limited Conservative

11.217 16.08 0.69
ICICI Bank
Limited 16.08 1.19
Aggressive
19.12
Britannia
Limited 16.08 0.77
Conservative
12.48
Mahindra &
Mahindra Conservative
16.08 0.97
Limited 15.69
Sun
Pharmaceutical Conservative
Industries Ltd 6.628 16.08 0.41
Where,
β > 1 = Aggressive
β < 1 = Conservative
β = 1 = Moderate
ICICI Bank Limited is beating market return with beta of 1.19. So, this is very aggressive,
While Infosys Limited, Britannia Limited, Mahindra & Mahindra Limited, Sun
Pharmaceutical Industries Ltd has got low beta of 0.69, 0.77, 0.97 & 0.41 respectively. So,
they are conservative.

Return, Risk and Beta of Stocks
Return, Risk & Beta of Individual stock for FY 22 (MoM) is as follows:
Stocks Return, R Risk, S.D β , Beta
Infosys
Limited 2.888 6.56 0.69
ICICI Bank
Limited 0.378 7.96 1.19
Britannia
Limited -1.035 6.078 0.77
Mahindra &
0.426 5.69 0.97
Mahindra
Limited
Sun
Pharmaceutical
Industries Ltd 2.048 6.58 0.41

Graph:
Return, Risk & Beta of Individual Stocks of FY 22 (MoM)
Return, Risk & Beta of Stocks

9
8
7
6
5
4
3
2
1
0
-1 Infosys Limited ICICI Bank Limited Britannia Limited Mahindra & Sun Pharmaceutical
Mahindra Limited Industries Ltd
-2
Return Risk Beta
The Infosys Ltd & Sun Pharmaceutical Industries Ltd is the top performer in terms of return.
But while comparing the adjusted return Infosys Ltd is the out-performer compared to rest of
4 stock. The Infosys Ltd has given a return of 2.88% with the adjustable risk of 6.56 and got a
beta of 0.69.

Correlation and Covariance of Portfolios
Table: Correlation & Covariance of Portfolios
Portfolio Stocks Combination Correlation Covariance

1 Infosys Ltd &
ICICI Bank Ltd -0.003 -0.176
2 Infosys Ltd &
Britannia Ltd 0.34 13.41
3 Infosys Ltd &
Mahindra & Mahindra -0.03 -1.26
Ltd
4 Infosys Ltd &
Sun Pharmaceutical Industries Ltd 0.29 12.92
5 ICICI Bank Ltd &
Britannia Ltd 0.19 9.30
6 ICICI Bank Ltd &
Mahindra & Mahindra 0.75 34.19
Ltd
7 ICICI Bank Ltd &
Sun Pharmaceutical Industries Ltd -0.025 -1.32
8 Britannia Ltd &
Mahindra & Mahindra 0.22 7.74
Ltd
9 Britannia Ltd &
Sun Pharmaceutical Industries Ltd 0.20 8.03
10 Mahindra & Mahindra
Ltd & -0.07 -2.70
Sun Pharmaceutical Industries Ltd
Correlation between the stocks/securities should be negative. So, that if one stock moves up
other moves down therefore the loss and profit will be limited in the portfolio and risk also
will be low.
If the correlation between stocks/securities is positive, there is a chance of unlimited loss and
unlimited profit in the portfolio. The risk of portfolio will be comparatively high.
Combination of Infosys Ltd & ICICI Bank Ltd, Infosys Ltd & Mahindra & Mahindra
Ltd, ICICI Bank Ltd & Sun Pharmaceutical Industries Ltd, Mahindra & Mahindra Ltd &
Sun Pharmaceutical Industries Ltd has got negative correlation, which is better.

Return & Risk Of Various Portfolios

Calculation Of Portfolio Return
Rp = ( RA* WA)+( RB * WB )
RP = Portfolio Return
RA = Return of Stock A, RB = Return of Stock B
WA = Weightage of Stock A, WB = Weightage of Stock B
Calculation Of Portfolio Risk

Portfolio Risk = √(Wx ∗ S. D)2 + (Wy ∗ S. D)2 + 2WxWy 𝓇xy S. Dx S. Dy
Where,
Wx , Wy = Portfolio of total proportion invested in security X and Y respectively,
S.Dx , S.Dy = S.D of stock X and Y respectively,
ꝩxy = Correlation coefficient of X and Y respectively.

Portfolio 1
Table: Return and Risk of Portfolio 1
Weighted Individual
Stocks Return Proportion Variance S.D Correlation Return
Infosys
Ltd 2.88 0.50 43.105 6.56 1.44
ICICI -0.003
Bank 0.378 0.50 63.408 7.96 0.189
Ltd
Portfolio Return, R 1.629
Portfolio Variance 26.52
Portfolio Risk, S.D 5.149
Portfolio Return, Rp = 1.629%

Portfolio Risk = 5.149

Portfolio 2
Table: Return & Risk of Portfolio 2
Weighted Individual
Infosys
Ltd 2.888 0.50 43.105 6.565 1.44
0.34
Britannia -1.035 0.50 36.95 6.078 -0.517
Ltd


Portfolio 3
Weighted Individual
Infosys 2.88 0.50 43.105 6.56 1.44

Ltd
-0.03
Mahindra 0.426 0.50 32.48 5.69 0.213
&
Mahindra
Ltd


Portfolio 4
Weighted Individual
Infosys 2.888 0.50 43.105 6.56 1.44

Ltd
0.29
Sun 2.048 0.50 43.316 6.58 1.024
Pharmaceutical
Industries Ltd
Portfolio Return, 2.464

R
Portfolio Risk, 5.27

S.D


Portfolio 5
Weighted Individual
ICICI 0.378 0.50 63.408 7.96 0.189

Bank 0.19
Ltd
Britannia -1.035 0.50 36.95 6.078 -0.517

Ltd
Portfolio Return, R -0.328
Portfolio Return, Rp = -0.328%


Portfolio 6
Weighted Individual
ICICI 0.378 0.50 63.408 7.96 0.189

Bank
Ltd 0.75
Mahindra 0.426 0.50 32.48 5.699 0.213

&
Mahindra
Ltd


Portfolio7
Weighted Individual
ICICI 0.378 0.50 63.408 7.96 0.189

Bank -0.025
Ltd
Sun 2.048 0.50 43.316 6.58 1.024

Pharmaceutical
Industries Ltd
Return, 1.213
Portfolio R
Variance 26.009
Portfolio
Risk, 5.099
Portfolio S.D


Portfolio 8
Weighted Individual
Britannia -1.035 0.50 36.95 6.078 -0.517

Ltd
0.22
Mahindra 0.426 0.50 32.48 5.699 0.213

&
Mahindra
Ltd
Portfolio Return, R -0.304
Portfolio Return, Rp = -0.304%


Portfolio 9
Weighted Individual
Britannia -1.035 0.50 36.95 6.078 -0.517

Ltd 0.20
Sun 2.048 0.50 43.316 6.58 1.024

Pharmaceutical
Industries Ltd
Return, 0.507
Portfolio R
Variance 24.058
Portfolio
Risk, 4.905
Portfolio S.D


Portfolio 10
Weighted Individual
Mahindra & 0.426 0.50 32.48 5.69 0.213

Mahindra
Ltd -0.072
Sun 2.048 0.50 43.316 6.58 1.024

Pharmaceutical
Industries Ltd
1.237
Portfolio Return,R
17.57
Portfolio Variance
4.19
Portfolio Risk,S.D


Beta of Portfolio’s
β of Portfolio’s with respect to NSE CNX Nifty

βP = ( βx Wx)+ ( βy Wy )
where,
βP= Beta of portfolio
βx &βy are beta of stock1 & stock2 respectively,
Wx&Wyare weightage of stock1 & stock2 respectively.
Table: Beta of Portfolios
Portfolio Stocks Combination βx Wx βy Wy βP Result

1 Infosys Ltd &
ICICI Bank Ltd 0.69 0.50 1.19 0.50 0.94 Aggressive
2 Infosys Ltd &
Britannia Ltd 0.69 0.50 0.77 0.50 0.73 Aggressive
3 Infosys Ltd &
Mahindra & Mahindra
Ltd 0.69 0.50 0.97 0.50 0.83 Conservative
4 Infosys Ltd &
Sun Pharmaceutical
Industries Ltd 0.69 0.50 0.41 0.50 0.55 Aggressive
5 ICICI Bank Ltd &
Britannia Ltd 1.19 0.50 0.77 0.50 0.98 Conservative
6 ICICI Bank Ltd &
Mahindra & Mahindra
7 ICICI Bank Ltd &
Sun Pharmaceutical
8 Britannia Ltd &
Mahindra & Mahindra
9 Britannia Ltd &
Sun Pharmaceutical
&
Sun Pharmaceutical
Industries Ltd 0.97 0.50 0.41 0.50 0.69 Conservative
Where,
βp > 1= Aggressive βp < 1= Conservative βp = 1= Moderate

Return, Risk & Beta of Portfolios

Return, Risk & Beta of various portfolios for FY 21 (MoM) is as follows:
Table: Return, Risk & Beta of Portfolios
Portfol Stocks Combination Return Risk βp

io
1 Infosys Ltd &
ICICI Bank Ltd 1.629 5.149 0.94
2 Infosys Ltd &
Britannia Ltd 0.923 5.17 0.73
3 Infosys Ltd &
Mahindra & Mahindra
Ltd 1.653 4.27 0.83
4 Infosys Ltd &
Sun Pharmaceutical Industries Ltd 2.464 5.27 0.55
5 ICICI Bank Ltd &
Britannia Ltd -0.328 5.44 0.98
6 ICICI Bank Ltd &
Mahindra & Mahindra
Ltd 0.402 6.39 1.08
7 ICICI Bank Ltd &
8 Britannia Ltd &
Mahindra & Mahindra
Ltd -0.304 4.59 0.87
9 Britannia Ltd &
&

Graph
Return, Risk & Beta Of Portfolio

7
0
Infosys Ltd Infosys Ltd Infosys Ltd Infosys Ltd ICICI Bank ICICI Bank ICICI Bank Britannia Britannia M & M Ltd
-1 & & Britannia & M&M Ltd & Sun Ltd & Ltd & M & Ltd & Sun Ltd & M & Ltd & Sun & Sun
ICICI Bank Ltd Pharma Ltd Britannia M Ltd Pharma Ltd M Ltd Pharma Ltd Pharma Ltd
Ltd Ltd
Return Risk βp
Taking the risk adjusted return: Infosys Ltd & Mahindra & Mahindra Ltd, Infosys & Sun
Pharma, Infosys Ltd & ICICI Bank Ltd and Mahindra & Mahindra & Sun Pharmaceutical
Industries Ltd are the combination which are out-performers.

Performance Evaluation Of Portfolio
Sharpe’s Index (or) Sharpe’s Performance Index

Rp−Rf
Sharpe’s Index = σp (or)S.D
Where,
Rp = Return of portfolio
Rf = Risk free return
S.D = Standard deviation
Here Risk free rate is 0.62% per month
Table: Sharpe’s Index – Sharpe’s Performance Index
Portfolio Stocks Combination Rp Rf S.D Sp Rank

1 Infosys Ltd &
ICICI Bank Ltd 1.629 0.62 5.149 0.196 3
2 Infosys Ltd &
Britannia Ltd 0.923 0.62 5.17 0.058 6
3 Infosys Ltd &
Mahindra & Mahindra Ltd 1.653 0.62 4.27 0.242 2
4 Infosys Ltd &
Sun Pharmaceutical Industries Ltd 2.464 0.62 5.27 0.349 1
5 ICICI Bank Ltd &
Britannia Ltd -0.328 0.62 5.44 -0.174 9
6 ICICI Bank Ltd &
Mahindra & Mahindra
Ltd 0.402 0.62 6.39 -0.034 8
7 ICICI Bank Ltd &
8 Britannia Ltd &
Mahindra & Mahindra
Ltd -0.304 0.62 4.59 -0.201 10
9 Britannia Ltd &
Sun Pharmaceutical Industries Ltd 0.507 0.62 4.905 -0.023 7
&
A Portfolio with highest Sharpe’s Index, Spis the best compared to other portfolios. Which
can be ranked according to that.

Graph
Sharpe's Perfomance Index based on Rank

12
10
0
Infosys Infosys Infosys Infosys ICICI Bank ICICI Bank ICICI Bank Britannia Britannia M & M
Ltd & Ltd & Ltd & Ltd & Sun Ltd & Ltd & M & Ltd & Sun Ltd & M & Ltd & Sun Ltd & Sun
ICICI Bank Britannia M&M Ltd Pharma Britannia M Ltd Pharma M Ltd Pharma Pharma
Ltd Ltd Ltd Ltd Ltd Ltd Ltd
As per Sharpe’s Index : Infosys Ltd & Sun Pharmaceutical Industries Ltd, Infosys Ltd &
Mahindra & Mahindra Ltd, Infosys Ltd & ICICI Bank Ltd, Mahindra & Mahindra &
Sun Pharmaceutical Industries Ltd, ICICI Bank Ltd & Sun Pharmaceutical Industries Ltd are
the top 5 with ranks of 1, 2, 3, 4 & 5 respectively. Which are also the top performers in giving
return compared to other combinations.

Treynor’s Index – Treynor’s Reward-to-Variability Measure

Rp−Rf
Treynor’s Index = βp
Where,
Rp = Return of portfolio
Rf = Risk free return
βp = Beta of portfolio
Here, Risk free return ( Bank FD rate ) = 7.437 % per annum i.e., 0.62 % per month
Table: Treynor’s Index – Treynor’s Reward-to-Variability Measure
Portfolio Stocks Combination Rp Rf βp Tp Rank

1 Infosys Ltd &
ICICI Bank Ltd 1.629 0.62 0.94 1.073 3
2 Infosys Ltd &
Britannia Ltd 0.923 0.62 0.73 0.415 6
3 Infosys Ltd &
Mahindra & Mahindra
Ltd 1.653 0.62 0.83 1.245 2
4 Infosys Ltd &
5 ICICI Bank Ltd &
Britannia Ltd
-0.328 0.62 0.98 -0.967 9
6 ICICI Bank Ltd &
Mahindra & Mahindra
Ltd 0.402 0.62 1.08 -0.202 8
7 ICICI Bank Ltd &
8 Britannia Ltd &
Mahindra & Mahindra
Ltd -0.304 0.62 0.87 -1.062 10
9 Britannia Ltd &
Sun Pharmaceutical Industries Ltd 0.507 0.62 0.59 -0.191 7
&
A Portfolio with highest Treynor’s Index, Tpis best compared to the other portfolios. Which
can be ranked according to that.

Graph
Portfolio Rank Based On Treynor's Index

12
10
0
Infosys Ltd Infosys LtdInfosys Ltd Infosys Ltd ICICI Bank ICICI Bank ICICI Bank Britannia Britannia M & M Ltd
& & & M&M & Sun Ltd & Ltd & M & Ltd & Sun Ltd & M & Ltd & Sun & Sun
ICICI Bank Britannia Ltd Pharma Britannia M Ltd Pharma M Ltd Pharma Pharma
Ltd Ltd Ltd Ltd Ltd Ltd Ltd
As per Treynor’s Index: Infosys Ltd & Sun Pharmaceutical Industries Ltd, Infosys Ltd &
Mahindra & Mahindra Ltd, Infosys Ltd & ICICI Bank Ltd, Mahindra & Mahindra &
Sun Pharmaceutical Industries Ltd, ICICI Bank Ltd & Sun Pharmaceutical Industries Ltd are
the top 5 with ranks of 1, 2, 3, 4 & 5 respectively.

Jenson’s Index-Reward to Risk Ratio

α = Rp1-Rp
= Rf + (Rm – Rf )βp
Rm = return of market portfolio(return of NSE CNX Nifty)
Return = 1.36
Rf = Risk free portfolio
βp = Beta of portfolio
Table: Jenson’s Index- Reward to risk ratio
Portfolio Stocks Combination Rp Rm Rf βp α Result

1 Infosys Ltd &
ICICI Bank Ltd 1.629 1.36 0.62 0.94 1.316 Effective
2 Infosys Ltd &
Britannia Ltd 0.923 1.36 0.62 0.73 1.160 Ineffective
3 Infosys Ltd &
Mahindra & Mahindra
Ltd 1.653 1.36 0.62 0.83 1.234 Effective
4 Infosys Ltd &
Sun Pharmaceutical Industries
Ltd 2.464 1.36 0.62 0.55 1.027 Effective
5 ICICI Bank Ltd &
Britannia Ltd -0.328 1.36 0.62 0.98 1.345 Ineffective
6 ICICI Bank Ltd &
Mahindra & Mahindra
Ltd 0.402 1.36 0.62 1.08 1.419 Ineffective
7 ICICI Bank Ltd &
Ltd 1.213 1.36 0.62 0.8 1.212 Effective
8 Britannia Ltd &
Mahindra & Mahindra
Ltd -0.304 1.36 0.62 0.87 1.264 Ineffective
9 Britannia Ltd &
Ltd 0.507 1.36 0.62 0.59 1.056 Ineffective
&
Ltd 1.237 1.36 0.62 0.69 1.131 Effective
Where,
Rp > α = Effective
Rp < α = Ineffective

Graph
Return & Expected Return of Portfolio’s
Return & Expected Return Of Portfolio's

5
0
Infosys Ltd Infosys Ltd Infosys Ltd Infosys Ltd ICICI Bank ICICI Bank ICICI Bank Britannia Britannia M & M Ltd
-1 & & Britannia& M&M Ltd & Sun Ltd & Ltd & M & Ltd & Sun Ltd & M & Ltd & Sun & Sun
ICICI Bank Ltd Pharma Ltd Britannia M Ltd Pharma Ltd M Ltd Pharma Ltd Pharma Ltd
Ltd Ltd
Return Jenson's Index, α
According to Jenson’s Index: All the portfolios are efficient, which means each portfolio has
given excellent return than the expected return for them. From the graph it is clear that so
many portfolios has beats the estimates in terms of return. Few of them are ICICI Bank Ltd &
Britannia Ltd, HDFC & Infosys, Reliance & Infosys, Infosys & Sun Pharma and HDFC &
HUL.

CHAPTER - V
FINDINGS, SUGGESTIONS & CONCLUSION
Findings
As the study of portfolio makes me to understand and learn many things about this concept.
The Findings of this study are:
➢ It is observed that among the individual stock calculation, Infosys Limited is better
stock with return is 2.88% and risk is 6.56 with beta of 0.69. Sun Pharmaceutical
Industries Limited is also better stock with return but risk is same.
➢ It is observed that on portfolio construction, an equal combination of Infosys Ltd &
Sun Pharmaceutical Industries Ltd given a better risk adjusted return 2.464 % with
risk 5.27 and beta of 0.55. The correlation between them is 0.29 and covariance
between them is 12.92.
➢ It is observed that combination of Infosys Ltd & Mahindra & Mahindra Ltd also have a
high return combination with a return of 1.653% and but risk of 4.27 and beta of 0.83.
➢ It is observed that on evaluating portfolio performance, Infosys Ltd & Sun
Pharmaceutical Industries Ltd has 1st in Sharpe’s Index and also has 1st in Treynor’s
Index and it is also efficient in Jenson’s Index.
➢ It is observed that on coming to Jenson’s Index Infosys Ltd & ICICI Bank Ltd, Infosys
Ltd & Mahindra & Mahindra Ltd, Infosys Ltd & Sun Pharmaceutical Industries Ltd,
ICICI Bank Ltd & Sun Pharmaceutical Industries Ltd & Mahindra & Mahindra & Sun
Pharmaceutical Industries Ltd portfolios are efficient.
➢ It is observed that Infosys Limited is performed well.

Suggestions:
➢ It is suggested that on individual stock calculation ICICI Bank Limited has good return
but the risk is too high so we suggesting investors not to invest here.
➢ It is also suggested that investors on the combination of stock ICICI Bank Ltd &
Mahindra & Mahindra Ltd has more risk of 6.39 it is not good option when compared
to other combinations.
➢ It is suggested that ICICI Bank Ltd & Britannia Ltd is also not a good option to
investors that has risk of 5.44 and with adjusted return -0.328% with beta of 0.98.
➢ It is suggested that to investors that on evaluating the portfolio performance Britannia
Ltd & Mahindra & Mahindra Ltd has 10th in both Sharpe’s Index & Treynor’s Index.
It is also not a good option.
➢ It is suggested that on comparing and all the stocks ICICI Bank Limited does not
performed will so this suggesting investors not to invest on this.

Conclusion
➢ The aim and objectives of the study has achieved.
➢ Investors with low risk averse can go for investing in a combination of Infosys Ltd &
Mahindra & Mahindra Ltd.
➢ Investors with moderate risk can go for investing in combination of Infosys Ltd &
Britannia Ltd, ICICI Bank Ltd & Sun Pharmaceutical Industries Ltd, Britannia Ltd &
Sun Pharmaceutical Industries Ltd, Mahindra & Mahindra & Sun Pharmaceutical
Industries Ltd.
➢ Investors who are aggressive can go for investing in a combination of ICICI Bank Ltd
& Britannia Ltd, ICICI Bank Ltd & Mahindra & Mahindra Ltd, Britannia Ltd &
Mahindra & Mahindra Ltd.
➢ Don’t put your trust in only one investment. It is like “ putting all eggs in one basket ”
This will help to reduce the risk in the long term.
➢ The invested are benefited by investing in selected scripts of Industries.

BIBLIOGRAPHY
Books
• SECURITY ANALYSIS AND PORTFOLIO MANAGEMENT
- S.KEVIN
• INVESTMENT MANAGEMENT
- YOGESH MAHESHWARI
Websites
• www.nseindia.com
• www.bseindia.com
• www.moneycontrol.com
• www.yahoofinance.com
• www.globalresearch.co.in
• www.sebi.gov.in
• www.reuters.com
• www.rbi.co
• www.businesstimes.com
• www.economictimes.com
• www.stocktraderschat.com
• www.economictimes.indiatimes.com/definition/portfoliomanegementservices
• www.rediff.com/business
• www.forbes.com
Magazines, Articles & Journals

• Markowitz, Harry M (1952). “Portfolio Selection”. Journal of Finance.
• Security Analysis & Portfolio Management – Dhanesh Khatri.
• Financial Management – Prasanna Chandra & I M Pandey.
• Article on “Equity Portfolio Management Mechanics” by Bryn Harman, CFA.
• Markowitz, Harry M, “Portfolio Selection : Efficient Diversification of Investment”
New York: John Wiley & Sons, 1959.

ANNEXURE

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A STUDY ON

“ EVALUATING PORTFOLIO & MAKING INVESTMENT

Under the guidance of

DEPARTMENT OF MANAGEMENT STUDIES

SHRI VISHNU ENGINEERING COLLEGE FOR WOMEN

(Approved by A.I.C.T.E, New Delhi & Permanently Affiliated to JNTUK, Kakinada

This is to certify that the company analysis report entitled “EVALUATING

Mr. CH. Anudeep((PH.D) Dr. G. Subba Raju(PH.D)

PROJECTGUIDE HEAD OF THE DEPARTMENT

Approved by: AICTE. New Delhi I Affiliated to: JNTUK, Kakinada

INVESTMENT DECIONS”, submitted by me under the guidance of Mr. CH. ANUDEEP,

Date: (KADALI MOUNIKA)

I am grateful to my project guide MR. CH. ANUDEEP, M.B.A, Assistant Professor

I am extremely grateful to principal Dr. G. SRINIVASA RAO, Shri Vishnu

It is my primary responsibility to my father Mr. K. Srinivasa Rao and my mother Mrs.

A STUDY ON EVALUATING PORTFOLIO & MAKING INVESTMENT

• Portfolio is a collection of asset.

DEPARTMENT OF MANAGEMENT STUDIES Page 2

Systematic Risk ( market ) Unsystematic Risk ( company risk )

Phases of Portfolio Management

DEPARTMENT OF MANAGEMENT STUDIES Page 2

examination of fundamental business factors such as financial statements, going concern,

DEPARTMENT OF MANAGEMENT STUDIES Page 2

Need of the study

DEPARTMENT OF MANAGEMENT STUDIES Page 3

Objectives Of The Study:

DEPARTMENT OF MANAGEMENT STUDIES Page 4

Methodology of the Study

Research type :- Empirical

Data collection methods

Analysis And Interpretation

DEPARTMENT OF MANAGEMENT STUDIES Page 5

Limitations of The Study

DEPARTMENT OF MANAGEMENT STUDIES Page 6

DEPARTMENT OF MANAGEMENT STUDIES Page 8

List of Infosys CEOs

Portrait Picture Name Period

Narayan Murthy 1981 to March 2002

Nandan Nilekani March 2002 to April 2007

Kris Gopalakrishnan April 2007 to August 2011

DEPARTMENT OF MANAGEMENT STUDIES Page 9

S. D. Shibulal August 2011 to July 2014

Vishal Sikka August 2014 to August 2017

UB Pravin Rao (interim) August 2017 to December 2017

Salil S. Parekh January 2018 onwards

Revenue (In Profits/Loss (In Total Assets (In

DEPARTMENT OF MANAGEMENT STUDIES Page 10

DEPARTMENT OF MANAGEMENT STUDIES Page 11

SWOT Analysis of Infosys (My Observations)

1. Depending on Foreign Markets

1. Acquisition of New Startups

DEPARTMENT OF MANAGEMENT STUDIES Page 12

2.ICICI BANK LIMITED

DEPARTMENT OF MANAGEMENT STUDIES Page 13

Chief Executive Officer (CEO)

The Success Journey

DEPARTMENT OF MANAGEMENT STUDIES Page 14

• In fiscal 2001, ICICI Bank acquired Bank of Madhura, in an all-stock amalgamation.

DEPARTMENT OF MANAGEMENT STUDIES Page 15