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8/8/2019 LAZY LAMHE
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Slow and Stead Group
BY:
HemantNurshid
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Fact of the Case study
Investor: Mr. Alok Kumar, 35yrs
Occupation: Private employee
Earnings: Alok + his wife (15+6) lakhs=21lacs. P.a.
Personal information: Married with 2daughters( 5yrs & 3yrs old
respectively), and dependent parents.Existing Portfolio:15lacs in Mutual fund, 1.5lacs in Debt
fund(maturity of 2yrs), 8lacs Fixed deposit, 6lacs Gold ornaments,10,000 as Life insurance premium.
Assets: Owned house, 2 cars( Honda civic, santro)
Liabilities:
Home loan of Rs. 30,000 p.m. go on for next 10yrs.
Car loan of Rs. 12,000 p.m. go on for next 2yrs.
Assumption: max life time of wage earner 70 year
Retirement 60 year
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Risk Profile
Risk Capacity:- High
Risk Behavior:- High to moderate
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Cash Flows of Mr. Alok Family
OUT FLOWS:- Parent s expenses 15000*12 (assume)
Daughter education 15000*12 (assume)
Car maintenance 15000*12 (assume)
House hold expenses 15000*12 (assume)
L I premium 10000
Car (E M I) 12000*12 (2 year)
Home loan 30000*12 (10 year)
Travelling expenses 300000
Total 15 24000
Present investable amount 5, 75,000
After2 year investable amount 7,19,000
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Investment Objective
Fund for Daughter marriage( about 60lacs).
Provision for retirement purpose.(30,000 *12)
Fund for medical treatment of family.Travelling & other expenses after retirement
5,00,000 for last 10 year.
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Assets Allocation
Equity: 50%
Debt: 20%
Insurance: 20%MF: 10%
Assets Allocation
Equity
Debt
Insurance
MF
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Allocation of Equity fund
Equity ofL&T for long Term 70%.
Equity of Hul & Dabur 30%.
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Allocation of Debt fund
Bond ofL&T 50%.
NHAI bond 30%.
KVP 20%
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Allocation of MF
SBI magnum fund 50%.
Birla sunlife index fund 50%.
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Allocation ofInsurance fund
ICIC lombard family floater plan20%.
Lic of Mrs. Alok80%.
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FUNDAMENTAL ANALYSIS
ECONOMIC ANALYSIS
INDUSTRY ANALYSIS
COUNTRY ANALYSIS
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INDUSTRY ANALYSIS
After analyzing the top growing industry, we, as afinancial planner found that Constructionindustry is the best option for Mr. Alok to invest
in. We analyzed this sector on the following basis:
Growth rate of this industry.
Huge flow ofFDI & FII flows.
High demand.
Economic growth, etc.
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COPARAISION OF DIFFERENT
COMPANY ON THE BASIS OF
DIFFERENT RATIO
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RTATIO L & T D L F H CC GAMMON PUNJ
LLYOD
P/E RATIO(%) 25.89 84.83 23.22 22.36 12.23
E P S (Rs) 72.66 4.51 2.69 9.39 11.06
D P S (Rs) 12.5 2 .80 .60 .15
N P (%) 11.18 NOTAVIALABLE
2.22 2.77 4.87
RETURN ON NET
WORTH(%)
23.92 5.96 5.36 6.21 10.27
RETURN ON CAPITAL
EMPLOYED(%)
25.42 7.02 9.24 10.38 9.55
DEBT EQOITY RATIO .37 .99 1.66 .67 .98
BOOK VALUE(Rs) 303.66 75.59 50.03 151.02 107.71
CURRENT MARKET 1917.95 382.60 60.75 210 135.35
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Why Construction Industry?
The budget 2010-11 addressed infrastructure sector. The Finance Minister has announced Rs10,000 crores allocation towards Indira Awaas Yojna and Rs 48000 crores towards BharatNirman.
Allocation for infrastructure projects for the ensuing fiscal will be Rs.173,552 crore ($38.5billion)
Allocation for Road Transport was raised by over 13% to Rs19,894 crore.The programmeaims at developing 50,000 km of national highways in seven phases by 2015 with aninvestment of over Rs. 3,000 billion at 2007 prices & nearly 60% of the future fundingrequirements of the NHDP Rs. 3,014.88 billion till 2015 are expected to come from theprivate sector.
In the construction equipment sector before slowdown it grew at35% but now it boost upabout 18-25%
In urban infra sector govt. has allocated Rs. 11,842 crore under the Jawaharlal Nehru NationalUrban Renewal Mission (JNNURM) & also set aside Rs. 40,900 crore for 200910 for itsBharat Nirman initiative for housing, rural roads, power, irrigation, telephony, and drinkingwater supply.
Commercial and office complexes mushrooming in major Indian metros.
Over 25 million new housing units required in 7years,etc.\
UPA government has planned to build 20km of national highways a day to increase itsnetwork.
Country at present has about 70,000km of national highways which is only about two per centof total over 33 lakh km of road network.
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COMPANY ANALYSIS
It is final stage in Fundamental analysis. It is
being done in two parts:
How the company performed in comparisonto other company operating in similar field?
How company performed in comparison to
earlier year?
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L & T PROFILE
Larsen & Toubro Limited (L&T) is atechnology, engineering, construction and manufacturing company.
Engineering Construction and Contracts Division ofL&T is Indiaslargest construction organization with over 60 years of experienceand expertise in the field
ranks 35th among top global contractors and 60th amonginternational contractors as per survey Engineering News Recordmagazine USA
L&T Infra quickly achieved cumulative approvals ofRs 17,133 croresand cumulative disbursements ofRs 7,615 crores across Energy
A.M. Naik-Chairman & Managing Director
Y.M. Deosthalee- Time Director & ChiefFinancial Officer
K. Venkataramanan- Director & President (Engineering &Construction Projects)
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L & T PROJECT
On 8th oct 2010, L&T bags new order worth Rs 1585 from Building &Factory segments.
On 30th sep 2010, L&T bags Rs 700cr. Order from water & materialhandling sector.
27th sep 2010, The co. wins Rs. 1610 cr. Order from visa power ltd. For
1200 mw power plant. Lube based oil project for petronas melka refinery in Malysia.
700 TPD methonol and 100 TPD co. plant construction.
1025 crore project for construction of hospital and residential project inMumbai.
Heavy lift cum pipelay vessel project.
NQ-re construction (NQRC) project in Mumbai high north field. 9 well platform project.
23rd Aug2010, the co. bags Rs. 1195 cr. ONGC order.
5th Aug 2010, the co. bags 1749 cr. Order from metallurgical sector.
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Ratio March 09 march10
P/E RATIO(%) 10.95 25.89
E P S (Rs) 59.49 72.66
Dividend Per Share(Rs)10.5 12.5
Net Profit Margin(%) 10.06 11.18
Return On Net Worth (%) 27.99 23.92
Return On Capital Employed(%) 24.14 25.42
Debt equity ratio(%) 53 37
Book Value(Rs) 212.32 303.66
Comparison with earlier year
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L & TLINIER CHART
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0
500
1000
1500
2000
2500
Closing priceSOpening Price
High Price
Low Price
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L & T SHORT AND LONG TERM
MOVING AVERAGE
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0
200
400
600
800
1000
1200
1400
1600
1800
2000
Chart Title
closing price 200days average 10 Days AVG
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TAXATION BENEFIT
Taxation benefit upto 250000 on house loan.
Taxation benefit uto Rs 16750 on health
insurtance. Taxation benefit on li premium ofRs. 10000.