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Equity Analysis of Maruti Suzuki

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Equity Analysis of Maruti Suzuki

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  • December 4, 2010
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Equity Research Report
Maruti Suzuki Ltd

INTRODUCTION
Equity Research refers to the study of the performance of the economy as a whole, the industry and various companies and analyzing the same. It enables to predict the future performance of a particular stock based on its past performance, the current status of the internal as well as the external environment. This include both fundamental as well as technical analysis. The internal environment includes:

* The financial performance
* The operational performance
* The future deals with the clients
* The share price trend
* The management of the company, i.e. the Board of Directors etc. * The nature of the business
The external environment includes:
* The Economy
* The global scenario with respect to the business
* General economic scenario
* Political scenario
* Performance of the stock market on the whole
* Competitors
EQUITY RESEARCH can be done by two methods:
1) Fundamental Analysis
Fundamental analysis is a method of forecasting the future price movements of a financial instrument based on economic, political, environmental and other relevant factors and statistics that will affect the basic supply and demand of whatever underlies the financial instrument. It takes a long term approach to analyze the market as compared to technical analysis. It often looks at data over a number of years. 2) Technical Analysis

Technical traders study the price movements of the particular company's stock in the market. Technical analysts strongly believe that the price movements follow a trend and by identifying the trend, one can accurately predict the price that might occur in future. Technical analysts use financial tools with software support. One can be overawed by the terms and studies of a technical analyst when he/she explains the rationale behind the prediction. Technical analysis is used for a time frame of weeks, days or even minutes....