Finance Project
On
Evaluation OF
Consumer Durable Firms

Sumbitted By:(Section c) Team Members gazal gupta Varun Bansal

TABLE OF CONTENTS

* OVERVIEW * CALCULATIONS * WORKING * CONCLUSION

Consumer Durables
Overview of India’s Consumer Durables Market
The Indian consumer durables segment can be segregated into consumer electronics (TVs, VCD players and audio systems etc.) and consumer appliances (also known as white goods) like refrigerators, washing machines, air conditioners (A/Cs), microwave ovens, vacuum cleaners and dishwashers.

Most of the segments in this sector are characterized by intense competition, emergence of new companies (especially MNCs) and introduction of state-of-the-art models, price discounts and exchange schemes. MNCs continue to dominate the Indian consumer durable segment, which is apparent from the fact that these companies command more than 65 per cent market share in the colour television (CTV) segment.

In consonance with the global trend, over the years, demand for consumer durables has increased with rising income levels, double-income families, changing lifestyles, availability of credit, increasing consumer awareness and introduction of new models. Products like air conditioners are no longer perceived as luxury products.

Companies under Evaluation:-

* Bajaj Electricals * HCL info Systems ltd * TTK Prestige Ltd * Value Industries Ltd * Voltas Ltd

Calculations
Calculation of Cost of equity using CAPM approach

K=Rf + β (Rm- Rf)
K= Cost of Equity
Rf = Risk free rate. We assumed it to be 7.6%.
Rm= Market rate of return. We computed it using the BSE closing stock data
Rm = (SP1- SP0)/ SP0 SP:-Stock Price β = Covariance (m,f) / Variance(m) m:Market price (BSE) f: Firm price

Calculation of Current Share Price Using Dividend