securities and portfolio mgt

COMPANY PROFILEGITANJALI GEMS:- Gitanjali Groupis one of the largest branded jewellery retailers in the world. It is headquartered in Mumbai, India Gitanjali sells its jewellery through over 4000 Points of Sale and enjoys a market share of over 50 per cent of the overall organised jewellery market in India. Prominent brands housed by the group are Nakshatra, D'damas, Gili, Asmi, Sangini, Maya, Giantti, World of Solitaire, Shuddhi, Diya to name a few.Gitanjali is engaged in the cutting and polishing diamonds as well as in jewellery manufacturing, branding and retailing. It exports its cut and polished diamonds, as well as its diamond and other jewellery products to various international markets such as the USA, Middle East, Japan, China, Hong Kong, Thailand and to markets in Europe such as Antwerp and Italy. The group remains a dominant player in the diamond and jewellery segments. It has also recently forayed into the retail and lifestyle space. The company has been listed onBombay Stock Exchangewith script code 532715,National Stock Exchange of Indiascript nameGitanjali. It has also recently entered the ecommerce market through a marketplaceJewelsoukand an exclusive online storeGitanjali Giftsand Xebec is their agency of choice.Dr. Reddy's Laboratories:- Dr. Reddy's Laboratories Ltd, is a pharmaceutical company based in Hyderabad, Telangana, India. The company was founded by Anji Reddy, who previously worked in the mentor institute, Indian Drugs and Pharmaceuticals Limited, of Hyderabad, India.Dr. Reddy's began as a supplier to Indian drug manufacturers, but it soon started exporting to other less-regulated markets that had the advantage of not having to spend time and money on amanufacturing plantthat would gain approval from a drug licensing body such as theU.S. Food and Drug Administration(FDA). By the early 1990s, the expanded scale and profitability from these unregulated markets enabled the company to begin focusing on getting approval from drug regulators for their formulations and bulk drug manufacturing plants in more-developed economies. This allowed their movement into regulated markets such as the US andEurope. In 2014, Dr. Reddy Laboratories was listed among 1200 of India's most trusted brands according to theBrand Trust Report2014, a study conducted by Trust Research Advisory, a brand analytics company. Dr. Reddy's manufactures and markets a wide range of pharmaceuticals in India and overseas. The company has over 190 medications, 60 active pharmaceutical ingredients (APIs) for drug manufacture, diagnostic kits, critical care, and biotechnology products. Dr. Reddy's originally launched in 1984 producingactive pharmaceutical ingredients. In 1986, Reddy's started operations on branded formulations. Within a year Reddy's had launched Norilet, the company's first recognized brand in India. Soon, Dr. Reddy's obtained another success with Omez, its branded omeprazole ulcer and reflux oesophagitis medication launched at half the price of other brands on the Indian market at that time.Within a year, Reddy's became the first Indian company to export the active ingredients for pharmaceuticals to Europe. In 1987, Reddy's started to transform itself from a supplier of pharmaceutical ingredients to other manufacturers into a manufacturer of pharmaceutical products.

RELIANCE INDUSTRIES LIMITED:- Reliance Industries Limited (RIL)is anIndianconglomerateholding companyheadquartered inMumbai, Maharashtra, India. The company operates in five major segments:exploration and production,refining and marketing,petrochemicals,retailand telecommunication. The group is present in many business sectors across India including petrochemicals, construction, communications, energy, health care, science and technology, natural resources, retail, textiles, and logistics. RIL is the second-largestpublicly traded companyin India bymarket capitalisation[4]and is the second largest company in India by revenue after the state-runIndian Oil Corporation.[5]The company is ranked No. 99 on theFortune Global 500list of the world's biggest corporations, as of 2013.[6]RIL contributes approximately 14% ofIndia's total export.The company's equity shares are listed on theNational Stock Exchange of IndiaLimited (NSE) and theBSELimited. TheGlobal Depository Receipts(GDRs) issued by the Company are listed onLuxembourg Stock Exchange. It has issued approx. 56 million GDRs wherein each GDR is equivalent to 2 equity shares of the company. Approx. 3.46% of its total shares are listed on Luxembourg Stock Exchange. Its debt securities are listed at the Wholesale Debt Market (WDM) Segment of the National Stock Exchange of India Limited (NSE)Credit Ratings: It has received domestic credit ratings of AAA from CRISIL (S&P subsidiary) and Fitch. Moodys and S&P have provided investment grade ratings for international debt of the Company, as Baa2 positive outlook (local currency issuer rating) and BBB+ outlook respectively.

PART- A

;

FINANCIAL PERFORMANCE

GITANJALI GEMS:- (a) Cash Flow Statement

Cash Flow------------------- in Rs. Cr. -------------------

Mar '14Mar '13Mar '12Mar '11Mar '10

12 mths12 mths12 mths12 mths12 mths

Net Profit Before Tax-23.95264.79258.74228.97149.36

Net Cash From Operating Activities-2007.801015.80-481.55317.1784.11

Net Cash (used in)/fromInvesting Activities192.82-588.6429.86-68.88-61.49

Net Cash (used in)/from Financing Activities1394.70-266.96581.49-122.19-125.12

Net (decrease)/increase In Cash and Cash Equivalents-420.28160.20129.86126.09-104.01

Opening Cash & Cash Equivalents550.77390.57260.71134.62238.63

Closing Cash & Cash Equivalents130.49550.77390.57260.71134.62

Source:-moneycontrol.comINTERPRETATION:- The cash flow statement shows that the net profit before tax was highest in year 2013. At the same time it was lowest in year 2014 . The net cash from the operating activities is very much fluctuating over the years. It was highest in year 2013 and lowest in year in 2014. The statement shows that net cash from investing activities is negative in three years that means the firm is not enough contribute in investing activities. But it has highest in 2014 which is 192.82 The net cash used from financing activities is maximum in the year 2014 and 2012 .At the same time it is negative in rest of years. Thus, Company contributed fewer amounts in financing activities. The cash and cash equivalents of the firm decreased in the year 2010 and 2014, which shows the low liquidity position of the firm in these years. The cash and cash equivalents of the firm increased in the year 2011 to 2013 showing the high liquidity position of the firm. The opening cash and cash equivalents are minimum in the year 2011 and maximum in the year 2014. The Closing cash and cash equivalents maximum in the year 2013 and minimum in the year 2014

(b) FINANCIAL RATIOS

------------------- in Rs. Cr. -------------------


Investment Valuation Ratios

Operating Profit Per Share (Rs)87.11113.8188.6363.5957.51

Bonus in Equity Capital33.1933.1933.5336.0036.26

Profitability Ratios

Return On Capital Employed(%)6.2712.0113.0910.379.25

Liquidity And Solvency Ratios

Current Ratio0.810.951.010.941.04

Debt Equity Ratio2.121.391.281.241.19

Management Efficiency Ratios

Debtors Turnover Ratio1.492.612.662.592.18

Inventory Turnover Ratio7.226.975.724.644.25

Cash Flow Indicator Ratios

Dividend Payout Ratio Net Profit-96.395.536.528.339.85

Earning Retention Ratio188.1094.5093.4591.2690.20

Source:-moneycontrol.com

INTERPRETATION:- (a)Operating profit per share:- The operating profit per share is consectively increased from 2010 to 2013,but in 2014 ,there is fall in value and came to 87.11 ,but still co. has good operating profit per share.(b)Bonus in equity shares:- Bonus in equity shares ratio indicate issuance of bonus shares to equity shareholder. This ratio was highest in 2010 and it was decreased 2012 and continues with proceeding years with slighter change.(c ) Return on capital employed:- The return on capital employed indicates the relationship between profits and capital employed. Higher the ratio, better the company`s return. This ratio was highest in 2012 and lowest in 2014.(d) Current Ratio:- It is generally believed that 2:1 ratio shows a comfortable working capital position. The tendon committee appointed by RBI had wide recommended a current ratio of 2:1.Co. was not able to maintain this ratio in any of year.(e)Debt-Equity Ratio:- This ratio indicates the relationship between the outsider funds and shareholders. This ratio was highest in year 2014 and lowest in year 2010.(f)Debtors Turnover Ratio:- Debtor turnover ratio indicates the velocity of debt collection of firm. This ratio was highest in year 2012 and lowest in year 2014.(g)Inventory Turnover Ratio:- Inventory turnover is a measure of thecompany'sability to flip its products for cash. This ratio of company is increasing year by year from 2010 to 2014.(h)Dividend Payout Ratio (Net Profit):- This ratio indicate percentage ofearnings paid to shareholders in dividends. This ratio was highest in year 2010 and lowest in year 2014.

(i) Earrings Retention Ratio:- Earrings Retention Ratio indicates the percentage of acompany'searnings that are not paid out in dividends but credited toretained earnings. This ratio was highest in Year 2014 and lowest in year 2010.which is opposite of dividend payout ratio.

(c ) PROFIT & LOSS APPROPRIATION:- PARTICULARS

Operating Profit2014

396.322013

489.192012

405.892011

354.022010

230.07

PBDIT395.00508.41450.14354.39230.24

Interest414.19238.74187.93122.0876.96

PBDT-19.19269.67262.21232.31153.28

Depreciation4.764.883.473.363.94

Other Written Off0.000.000.000.000.00

Profit Before Tax-23.95264.79258.74228.95149.34

Extra-ordinary items0.000.000.000.00-0.22

PBT (Post Extra-ord Items)-23.95264.79258.74228.95149.12

Tax-1.29-0.370.404.367.05

Reported Net Profit-22.65265.16258.34224.60142.09

Total Value Addition362.86435.98358.51213.58129.62

Preference Dividend0.000.000.000.000.00

Equity Dividend0.0028.0627.3425.4616.85

Corporate Dividend Tax0.004.704.444.132.86

Per share data (annualised)

Shares in issue (lakhs)920.65920.65911.22848.72842.70

Earning Per Share (Rs)-2.4628.8028.3526.4616.86

Equity Dividend (%)0.0030.0030.0030.0020.00

Book Value (Rs)305.63304.58277.84264.43241.60

Source:-moneycontrol.com

INTERPRETATION:- The operating profit of company is increasing from 2010 to 2013, but in year 2013 ,there is minor decrease. The company was showing good amount of reported net profits from year 2010 to 2013 but in year 2014 there is loss in company. The company was also providing equity dividend from year 2010 to 2013,which is a benefit for equity shareholders . Company had goos figure of EPS from 2010 to 2013 but there is negative in 2014.So to invest in securities of company investor has to fully assess its present scenario.

Dr. Reddys Laboratories:- (a) Cash Flow Statement Source:-moneycontrol.com Cash Flow------------------- in Rs. Cr. -------------------



Net Profit Before Tax2454.401753.201259.201051.901084.80

Net Cash From Operating Activities905.50288.801403.00246.301253.20

Net Cash (used in)/fromInvesting Activities-880.80-518.90-423.50-613.00-1111.10

Net Cash (used in)/from Financing Activities28.20151.80-194.9061.00-152.20

Net (decrease)/increase In Cash and Cash Equivalents59.50-83.90784.60-305.70-10.10



INTERPRETATION:- The cash flow statement shows that the net profit before tax is good over the five years it was highest in year 2014. It was lowest in year . The net cash from the operating activities continuously decreased from the 2010 to 2011, but it further increased in 2012 as 1403 crore which shows the sound position of the firm. The firm has generated sufficient cash flows to maintain operating capability of enterprise over five years. But again it was 905.50 crore in 2014 The statement shows that net cash from investing activities is negative in almost all years that means the firm is not enough contribute in investing activities. The net cash used from financing activities is maximum in the year 2013 and lowest in year 2012. The cash and cash equivalents of the firm decreased in the year 2010, 2011 and 2013, which shows the low liquidity position of the firm in these years. The cash and cash equivalents of the firm increased in the year 2012 and 2014 showing the high liquidity position of the firm.

(b) FINANCIAL RATIOS Source:-moneycontrol.com------------------- in Rs. Cr. -------------------








Current Ratio1.591.481.481.131.46






Dividend Payout Ratio Net Profit18.2419.5220.8230.5963.04


INTERPRETATION:- (a)Operating profit per share:- The operating profit per share is consecutively increased from 2010 to 2014 and that too with good figure. (b)Bonus in equity shares:- Bonus in equity shares ratio indicate issuance of bonus shares to equity shareholder. This ratio was highest in 2010 which is 66.19 and it was lowest in 2014 which is 65.64 .(c ) Return on capital employed:- The return on capital employed indicates the relationship between profits and capital employed. Higher the ratio, better the company`s return. This ratio was highest in 2012 and lowest in 2011.(d) Current Ratio:- It is generally believed that 2:1 ratio shows a comfortable working capital position. The tendon committee appointed by RBI had wide recommended a current ratio of 2:1.Co. was not able to maintain this ratio in any of year, but it was highest in 2014 which is 1.59:1(e)Debt-Equity Ratio:- This ratio indicates the relationship between the outsider funds and shareholders. This ratio was highest in year 2012 and lowest in year 2010.(f)Debtors Turnover Ratio:- Debtor turnover ratio indicates the velocity of debt collection of firm. This ratio was highest in year 2012 and lowest in year 2014.(g)Inventory Turnover Ratio:- Inventory turnover is a measure of thecompany'sability to flip its products for cash. This ratio was highest in year 2010 and lowest in year 2011.(h)Dividend Payout Ratio (Net Profit):- This ratio indicate percentage ofearnings paid to shareholders in dividends. This ratio was highest in year 2010 and lowest in year 2014.

(i) Earrings Retention Ratio:- Earrings Retention Ratio indicates the percentage of acompany'searnings that are not paid out in dividends but credited toretained earnings. This ratio was highest in Year 2014 and lowest in year 2011.which is opposite of dividend payout ratio.

(C ) PROFIT& LOSS APPROPRIATION:-

PARTICULARS20142013201220112011

Operating Profit2,761.701,985.701,861.701,219.501,088.50

PBDIT2,913.202,127.401,669.801,336.501,342.50

Interest78.3061.4069.209.9016.00

PBDT2,834.902,066.001,600.601,326.601,326.50

Depreciation380.50312.80301.10247.90222.40


Profit Before Tax2,454.401,753.201,259.201,051.901,084.80

Extra-ordinary items0.000.00-0.30-0.40-0.10

PBT (Post Extra-ord Items)2,454.401,753.201,258.901,051.501,084.70

Tax521.60487.70346.80158.50238.70

Reported Net Profit1,932.801,265.50912.40893.40846.10

Total Value Addition4,325.303,777.002,806.502,298.501,825.00


Equity Dividend306.20254.80233.10190.40190.00



Shares in issue (lakhs)1,701.091,698.361,695.601,692.531,688.45

Earning Per Share (Rs)113.6274.5153.8152.7850.11

Equity Dividend (%)360.00300.00275.00225.00225.00

Book Value (Rs)548.41458.29396.19355.69350.30

Source:-moneycontrol.com INTERPRETATION:- The operating profit of company is highest in year 2014 and lowest in year 2011 as compared to other years but company has good amount of operating profits in all five years.. The company was showing good amount of reported net profits from year 2010 to 2014.The reported net profits are increasing from 2010 to 2014. The company was also providing a good amount of equity dividend from year 2010 to 2014,which is a positive point for prospective equity shareholders . Company has good figure of EPS over the five years. The securities of this company can be beneficial for equity shareholders. So to invest in securities of company investor has to fully assess its present scenario.

RELIANCE INDUSTRIES LIMITED:- (a) Cash Flow StatementCash Flow------------------- in Rs. Cr. -------------------



Net Profit Before Tax27818.0026284.0025750.0025242.2420547.44

Net Cash From Operating Activities42160.0032995.0026974.0033280.5220490.22

Net Cash (used in)/fromInvesting Activities-64013.00-14797.00-3046.00-20332.88-18204.50

Net Cash (used in)/from Financing Activities5530.00-8249.00-11465.00724.57-10999.60

Net (decrease)/increase In Cash and Cash Equivalents-16323.009949.0012463.0013672.21-8713.88



Source:-moneycontrol.comINTERPRETATION:- The cash flow statement shows that the net profit before tax is very good over the five years it was highest in year 2014. At the same time it was lowest in year 2010. The net cash from the operating activities continuously is also good over five years and have slighter change among all years,which shows the sound position of the firm. The firm has generated sufficient cash flows to maintain operating capability of enterprise over five years. The statement shows that net cash from investing activities is negative in almost all five years that means the firm is not enough contribute in investing activities. The net cash used in financing activities is maximum in the year 2010,2012 and 2013. The cash and cash equivalents of the firm is very much sound over five years which shows the high liquidity position of the firm in these years.(b) FINANCIAL RATIOS Source:-moneycontrol.comReliance Industries

------------------- in Rs. Cr. -------------------






Operating Profit Margin(%)8.008.329.6214.3114.87



Current Ratio0.981.251.301.231.14






Dividend Payout Ratio Net Profit14.5214.7214.9114.369.92


INTERPRETATION:- (a)Operating profit per share:- The operating profit per share was highest in 2011 which was 127.49 and lowest in 2010 which was 101.59 (b)Bonus in equity shares:- Bonus in equity shares ratio indicate issuance of bonus shares to equity shareholder. This ratio was highest in 2013 which is 71.81 and it was lowest in 2011 which is 65.11 .(c ) Return on capital employed:- The return on capital employed indicates the relationship between profits and capital employed. Higher the ratio, better the company`s return. This ratio was highest in 2011 and lowest in 2014.(d) Current Ratio:- It is generally believed that 2:1 ratio shows a comfortable working capital position. The tendon committee appointed by RBI had wide recommended a current ratio of 2:1.Co. was not able to maintain this ratio in any of year, but it was highest in 2012 which is 1.30:1(e)Debt-Equity Ratio:- This ratio indicates the relationship between the outsider funds and shareholders. This ratio was highest in year 2014 and lowest in year 2010,2012 and 2013.(f)Debtors Turnover Ratio:- Debtor turnover ratio indicates the velocity of debt collection of firm. This ratio was highest in year 2014 and lowest in year 2011.(g)Inventory Turnover Ratio:- Inventory turnover is a measure of thecompany'sability to flip its products for cash. This ratio was highest in year 2014 and lowest in year 2010.(h)Dividend Payout Ratio (Net Profit):- This ratio indicate percentage ofearnings paid to shareholders in dividends. This ratio was highest in year 2014 and lowest in year 2010.

(i) Earrings Retention Ratio:- Earrings Retention Ratio indicates the percentage of acompany'searnings that are not paid out in dividends but credited toretained earnings. This ratio was highest in Year 2012 and lowest in year 2010.

(C ) PROFIT & LOSS APPROPRIATION:- Source:-moneycontrol.com

2014 2013 2012 2011 2010

Operating Profit30,877.0030,787.0033,831.0037,832.7129,969.07

PBDIT39,813.0038,785.0039,812.0041,191.3233,057.12

Interest3,206.003,036.002,668.002,328.301,999.95

PBDT36,607.0035,749.0037,144.0038,863.0231,057.17

Depreciation8,789.009,465.0011,394.0013,607.5810,496.53


Profit Before Tax27,818.0026,284.0025,750.0025,255.4420,560.64

Extra-ordinary items0.000.000.000.000.00

PBT (Post Extra-ord Items)27,818.0026,284.0025,750.0025,255.4420,560.64

Tax5,834.005,281.005,710.004,969.144,324.97

Reported Net Profit21,984.0021,003.0020,040.0020,286.3016,235.67

Total Value Addition24,545.0022,399.0017,236.0015,470.1912,381.68


Equity Dividend2,793.002,628.002,531.002,384.992,084.67



Shares in issue (lakhs)32,319.0232,286.6332,710.5932,733.7432,703.74

Earning Per Share (Rs)68.0265.0561.2661.9749.64

Equity Dividend (%)95.0090.0085.0080.0070.00

Book Value (Rs)609.78557.49498.21446.25392.51

INTERPRETATION:- The operating profit of company is highest in year 2014 and lowest in year 2010 as compared to other years but company had too good amount of operating profits in all five years. The operating profits of RIL are higher than Gitanjali gems and Dr. Reddy laboratories. The company was showing very good amount of reported net profits from year 2010 to 2014. The company was also providing a good amount of equity dividend from year 2010 to 2014, which is a positive point for prospective equity shareholders . Company has good figure of EPS over the five years. The securities of this company can be beneficial for equity shareholders As company is providing very good amount of equity dividends.

FUTURE PROSPECTSNEWS:-(a) Gitanjali Gems

Date :- 24/3/2015Industry representatives have once again pushed for a relaxation in the 80:20 rule on gold imports. Pankaj Parekh, vice-chairman, GJEPC says: For exporters there was not much of a problem under 80:20 also accepting the initial 2-3 months. And for domestic yes, things would be easing out. And with things easing out smuggling too would reduce and availability of raw material should not be a problem. Mehul Choksi, Chairman and MD, Gitanjali Group believes the duty in gold should be reconsidered as it is very high, making India not comparable with international market. Many other points were also discussed. The direct loan of gold which is a very important instrument for financing of gold which is much lower compared to buying in cash at the moment, that was discussed too. Differential taxes as far as coins and bars are concerned as far as investment on gold is concerned and apart from these the duty-free import of machinery and expanding fashion jewellery and silver jewellery markert, he says.Gold stocks will remain in focus on Saturday as the industry expects cut in import duty in Union Budget 2015-16. Tribhovandas Bhimji Zaveri , Titan Company , PC Jeweller and Gitanjali Gems rallied 1-4 percent on hopes of 2-5 percent cut in import duty compared to 10 percent currently. India's demand for gold was muted this week as buyers in the world's top consumer of the metal held off purchases ahead of an expected cut in import duty and a likely drop in local prices.

(b) Dr.Reddy Labourtories

Date :- 24/3/2015

Amit Gupta of ICICIdirect told CNBC-TV18, "There are few stocks from the pharma and healthcare space one can look at. Particularly Dr Reddy's Laboratories is one stock which one can look at because it is definitely witnessing the short covering in the market. It has already attempted Rs 3500 level, it came down to Rs 3300 and it is on the verge of giving abreakout above Rs 3500 in the coming sessions."Drugmaker Dr Reddy's Laboratories Ltd is in talks to acquire the Indian operations of Belgian pharmaceutical company UCB SA for about $135 million, said a person with direct knowledge of the matter.Sudarshan Sukhani of s2analytics.com told CNBC-TV18, "If you are a long-term investor and you should be then pharma is a buying opportunity at anytime. The corrections are immaterial. If you are a trader the first signs of exhaustion are coming on pharma stocks; there are some exceptions for example Dr Reddy's Labs is not showing that."(c ) Reliance Industries LimitedDate :- 24/3/2015Dipan Mehta, member at BSE & NSE told CNBC-TV18, " ITC , ICICI Bank , Reliance Industries and Larsen & Toubro , none of them are buying opportunities. As we go forward we want to look at the tier III private sector banks. Some of the largecap IT companies and some of the large cap pharma companies that would be more on the shopping listing." "We dont have a particular call on ICICI Bank or Reliance for that matter and these could correct even further," he added. Kunal Bothra, Head of Advisory at LKP Securities told CNBC-TV18, " Reliance Industries has remained a mystery for the markets for the last one to two years. Every time it shows strength and that is where you see the start of selling pressure. So, this has been a very interesting mystery which the markets have still not tried to answer. I think Rs 800 is a good support technically for Reliance. Till the time it doesnt break that the investors could look to hold the stock further."

PART B

BETA CALCULATIONGITANJALI GEMS SHARE PRICES ON:- 10 MARCH 2015=48.25 CNX NIFTY SHARE PRICES ON:-11 MARCH 2015 =47.65 10 MARCH=8755.9RIL SHARE PRICES ON:- 10 MARCH =859.10 11 MARCH=8723.5511 MARCH = 855.85Dr. Reddys Laboratories Share prices on:-10 MARCH= 3437.3011 MARCH=3470.75

1. Market Return ( RM )(Closing index on Day 2 Closing Index on Day 1) /Closing Index on Day 1 *100=(8723.55-8755.9)/87555.9*100(Rm)= -0.3692. Security Return (Ri) for Reliance industries limited(Closing index on Day 2 Closing Index on Day 1) /Closing Index on Day 1 *100=(855.85-859.10)/859.10*100(Ri)= -0.37833. Security Return (Ri) for Gitanjali Gems= (47.65-48.25)/48.25*100(Ri)= -1.2434. Security return (Ri) for Dr. Reddys laboratories= (3470.75-3437.30)/3437.30*100(Ri)=0.973#EXPECTED MARKET RETURN:- It is an average of 5 years RM.10 Mar 2015- 10 Mar 2014 = (8755.9-6511.9)/6511.9*100= 34.45910 Mar 2014- 10 Mar 2013= (6511.9-5942.35)/5942.35*100 =9.58410Mar 2013- 10 Mar 2012= (5942.35-5333.55)/5333.55*100=11.4110Mar 2012- 10 Mar 2011 = (5333.55-5445.45)/5445.45*100= -2.0510 Mar 2011- 10Mar 2010 = (5445.45-5116.25)/5116.25*100=6.434Average of 5 years (Rm) =11.967# EXPECTED SECURITY RETURN FOR RIL:- It is an average of 5 years Ri.10 Mar 2015- 10 Mar 2014 = (859.10-885.45)/885.45*100= -2.97510 Mar 2014- 10 Mar 2013= (885.45-851.30)/851.30*100 = 4.0110Mar 2013- 10 Mar 2012= (851.30-773.80)/773.80*100= 10.0110Mar 2012- 10 Mar 2011 = (773.80-984.75)/984.75*100= -21.4210 Mar 2011- 10Mar 2010 = (984.75-1008.75)/1008.75*100= -2.37Average of 5 years (Ri) = -2.549#EXPECTED SECURITY RETURN FOR GITANJALI GEM:- It is an average of 5 years Ri.10 Mar 2015- 10 Mar 2014 = (48.25-62.35)/62.35*100= -22.6110 Mar 2014- 10 Mar 2013= (62.35-610.60)/610.60*100 = -89.7810Mar 2013- 10 Mar 2012= (610.60-364.35)/364.35*100= 67.5810Mar 2012- 10 Mar 2011 = (364.35-215.35)/215.35*100= 69.1810 Mar 2011- 10Mar 2010 = (215.35-118.70)/118.70*100= 81.42Average of 5 years (Ri) =21.158

#EXPECTED SECURITY RETURN FOR Dr.Reddys Laboratries:- It is an average of 5 years Ri.10 Mar 2015- 10 Mar 2014 = (3437.30-2686.65)/2686.65*100= 27.9310 Mar 2014- 10 Mar 2013= (2686.65-1819.20)/1819.20*100 = 47.6810Mar 2013- 10 Mar 2012= (1819.20-1702.25)/1702.25*100= 6.87010Mar 2012- 10 Mar 2011 = (1702.25-1590.35)/1590.35*100= 7.03610 Mar 2011- 10Mar 2010 = (1590.35-1165.25)/1165.25*100= 36.48Average of 5 years (Ri) =25.199

CALCULATION OF BETA1) FOR Dr. REDDYs SECURITIES:-CO-VARIANCE:- Cov [ Security, Market] = [Ri E (Ri )][Rm E (Rm)]=[0.973-25.199] [-0.369-11.967]= (-24.22)*(-12.336)=298.77VARIANNCE (MARKET):- [Rm- E(Rm)]2 =[-0.369-11.967]2 =152.17Beta = Cov [ Security, Market] / SD2 [Market]BETA for Dr. Reddys laboratories:-298.77/152.17 = 1.963

2) FOR GITANJALI GEMS SECURITIES:-CO-VARIANCE:- Cov [ Security, Market] = [Ri E (Ri )][Rm E (Rm)]=[-1.243-21.15] [0.369-11.967]= (-22.393)* (-12.33)=276.10VARIANNCE (MARKET):- [Rm- E(Rm)]2 =[0.369-11.967]2 =152.17Beta = Cov [ Security, Market] / SD2 [Market]BETA for Gitanjali gems:-276.10/152.17 = 1.814

3) FOR RIL SECURITIES:-CO-VARIANCE:- Cov [ Security, Market] = [Ri E (Ri )][Rm E (Rm)]=[0.3783-(-2.549)] [0.369-11.967]= (2.171)* (-12.33)= -26.76VARIANNCE (MARKET):- [Rm- E(Rm)]2 =[0.369-11.967]2 =152.17Beta = Cov [ Security, Market] / SD2 [Market]BETA for RIL:- -26.76/152.17 = -0.1758

Conclusion for Beta calculation:- Beta() measures the sensitivity of securities return t market changes. The beta of aninvestmentis a measure of the risk arising from exposure to generalmarketmovements. Themarket portfolioof all investableassetshas a beta of exactly 1. A beta below 1 can indicate either an investment with lowervolatilitythan the market. A beta above one generally means that the asset both is volatile and tends to move up and down with the market. Beta is important because it measures the risk of an investment that cannot bediversifiedaway. We have stock of three companies Gitanjali gems, Reliance industries ltd , Dr. Reddys Laboratories whose beta is 1.814 , (-0.1758), 1.963 respectively. RIL has lowest beta as compared to other companies, which means it has less risk as compared to others. However, securitites return of these three companies is less volatile than market changes. The security of company Dr.Reddys laboratories has highest beta ,which means it is more risky than others.

CONCLUSIONRisk chahe ght hai ril ch bt from cash flows and ratios earring jada a co. d.bt

REFERENCES http://www.moneycontrol.com/india/stockpricequote/diamond-cutting-jewellery-precious-metals/gitanjaligems/GG03 http://www.moneycontrol.com/financials/gitanjaligems/balance-sheet/GG03#GG03 http://www.moneycontrol.com/india/stockpricequote/refineries/relianceindustries/RI http://www.moneycontrol.com/financials/relianceindustries/balance-sheet/RI#RI http://www.moneycontrol.com/india/stockpricequote/pharmaceuticals/drreddyslaboratories/DRL http://www.moneycontrol.com/financials/drreddyslaboratories/balance-sheet/DRL#DRL http://www.nseindia.com/ http://www.gitanjaligroup.com/ http://www.gitanjaligroup.com/about_us/about_us.html http://www.gitanjaligroup.com/business/businesses.html http://www.drreddys.com/aboutus/aboutus.html http://www.drreddys.com/businesses/businesses.html http://www.ril.com/html/aboutus/aboutus.html http://www.ril.com/html/aboutus/awards.html http://www.ril.com/html/aboutus/milestones.html

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