Analysis of Cement Industry in India

abstract of cementumumumum intentness in IndiaINTRODUCTIONPeople invest in agate lines to make their coin recruit. And to help investors identify the suitable and the appropriate way to invest, at that place be divers(a) modes of analysis. A number of comees sustain been genuine all over conviction. maven most of the essence(p) analytical approach among them is EIC analysis (E for economic system, I for perseverance and C for participation). EIC analysis is in worry manner slightlytimes referred to as Fundamental Analysis or the Top Down approach to Fundamental analysis. . In this approach, the enthronisation decisions ar interpreted on the basis of the strength of the preservation, manufacturing and confederation. The study objective of undergoing a d raw(a) on EIC analysis or pinch down approach to fundamental analysis is to answer the question as What to buy.At economy level, fundamental analysis bequeath focalise on the economic indicators of the nation to assess the present and future emergence of the economy. major(ip) economic indicators take on the gross house servant product fruit ordain, ostentatiousness, imports, exports, m geniustary and fiscal policies, forth grimace(prenominal) supervene upon reserves, IIP, etc. The basic assumption is that if the economy grows, companies would do good.At the manufacturing level, apart from economy other factors want governing attitude, debut barriers, competition level, threat of potency entrants, substitute products, appeal structure, foreign entrants, overly affect the way an diligence evolves in time and thusly affects the dividing line tolls of companies in that particular industry. This industry analysis will besides embroil Porters volt force model (wherever applicable) which will give a ruin approach to it.The next task to be d iodin in the project is to identify and analyze two companies i.e. ACC and Ultratech cement Ltd. For that a number o f factors will be taken into consideration, say, the partnerships SWOT analysis and the pecuniarys of the conjunction. Thus, on the foundation of some major factors, this EIC analysis will analyze the over entirely economy, industry and connection which will give a clear picture and practical approach of impart identification.The second part of the project is Technical analysis which is a method of evaluating securities by analyzing the statistics generated by market activity, such as bypast legal injurys and volume. Technical analysis looks at the price movement of a shelter and uses this info to predict its future price movements. Thus a technological analyst approaches a security from the charts.2. ECONOMIC summaryEIC analysis is non just about balance-sheets or analysis of a companys financial exertion. It is also crucial to look at the broader picture- the macro-economic factors that may directly or indirectly affect the economy, industry and stocks of the compan y. Economic Analysis is the First Step in a 3 step security analysis process. An economic retardent has implications for the earnings and margins of companies. At economy level, fundamental analysis will focus on the economic indicators of the country to assess the present and future growth of the economy. It aims at analyzing the general Economy and identifying the general direction, in which the economy is heading. Although there are many macroeconomic indicators that are relevant to markets, inclined on a sink floor are some must-track-indicatorsGROSS DOMESTIC PRODUCTThe GDP (Gross domestic help Product) growth rate is the most important macroeconomic indicator of a nations economic health. If the GDP is growing, so will economy, businesses, jobs and personal income. If GDP is mental retardation down, then businesses will hold off investiture in sweet coronations and hiring new employees, waiting to see if the economy will make better. If the GDP growth rate actually turns negative, then it means the economy is in a recession. Thus, on the basis of the GDP data, we stop analyze the economy and catch the future of Indias economy up to some extent. Given below is the data of real GDP growth rate from the socio-economic class 2006 till the yr 2010.In the class 2008, Indias GDP growing at 7.9%, was the lowest in three stratums and was indicative of slowdown in Indian economy. put down for the months of April-June 2008, Indias economic growth rate was 7.9% which was less than what it was at the same time expire year. The economy had expanded by 7.6 per pennyimeimeime in the July to kinsfolk quarter of 2008. Indias economic growth slowed to just 5.3 per centime in the last three months of 2008, its slowest pace of expansion in the last six-spot years, as the global financial crisis took its toll on local manufacturers and acquire output fell.The International Monetary Fund has forecast Indias economy to grow at 6.75 part in 2009-10 a nd 8 percent in 2011-12 on the back of an judge pick-up in private consumption and investment. Indian economy grew 8.6 percent from January to March of 2010, keeping in line with presidential termal projections. During the quarter, minelaying and quarrying, manufacturing and trade, hotel, cargo ships and communication saw year-on-year growth of 14 percent, 16.3 percent and 12.4 percent. The country strives to attain 8.5 percent growth of GDP in fiscal year 2010-2011 with the aim of realizing 9 percent growth in the following year. ostentationInflation is no stranger to the Indian economy. It is an en great in the price of a basket of goods and services that is representative of the economy as a whole. Inflation is an upward movement in the add up level of prices. Because rising prices is a rise in the general level of prices, it is intrinsically think to funds. It denotes too much money chasing too few goods.High judge of inflation can have critical effects on economy. I t is characterized by depreciation in the value of money. Economists attribute a number of factors to inflation that can be broadly categorized under allow for side factors interchangeable growing fruit greets and engage side factors manage excessive demand created by tax cuts, cheaper borrowings etc. High order of inflation can have serious consequences for the economy in general. therefore, for governments all over the foundation, reducing movements of prices to a minimum is seen as a essential economic objective.The above effects can be exemplified by winning the current scenario of the Indian economy. Annual Inflation in India in may 2008 was 7.4% which was the richlyest since November 2004. As a result Industrial production growth chastend to 8.6 % in February 2008 as compared to 11 % in February 2007. Thus, high inflationary rate is nocent because the value of the money falls, cost of living rises, reduces the value of savings, discourages future investment an d savings and slows down the boilersuit growth of the economy. The Indias economic story can be traced by seeing the general trend of inflation rate in the year 2008.In the Year 2008, RBI had revised its make out judge several times to substantiate the liquidness in the banking system. The lower raise pass judgment will allow the banks to cut their benchmark add rates, though the deposits will also see the reduction in inte endure rates. Lower commodity prices and crude oil prices is driving the Inflation on a downside. This will be wonderful as the lower inflation means, lower cost of credit, which drives the economy on the upside. For 2009, Indian inflation stood at 11.49% Y-o-Y.On March 19, 2010, the permit bound of India raised its benchmark abate purchase rate to 3.5% percent, after this rate touched record lows of 3.25%. The repurchase rate was raised to 5% from 4.75% as well, in an attempt to influence Indian inflation. The inflation rate in India was 13.73 percen t in June of 2010. This is because of the prices of pulses were up by 34.40 per cent from a year ago, milk by 21.12 per cent, fruits by 13.67 per cent, cereals by 5.41 per cent, rice by 6.76 per cent and wheat by 3.97 per cent. On nineteenth august, cheaper vegetables pull down inflation to 10.35%.UNEMPLOYMENT RATEIndia has been facing massive problem of unemployment and underemployment from years. Unemployment is much higher in urban areas than in boorish areas and too women face the unemployment much. Various problems like enormous increase in the universe of discourse, age, vocational unfitness and physical disabilities, technological and economic factors have ca apply this problem. opposite problems also contribute towards unemployment. Several socio-economic problems like poverty, malnutrition, antisocial and criminal activities, do drugs and substance abuse, etc. are the result of ill effects of unemployment. Underemployment, clothed unemployment, regional imbalances in the unemployment scenario in India are another important factor. The decline in job creation in agriculture has been set as one of the important reasons behind the increasing unemployment in India. But numberers like TCS, BSNL WIPRO have announced their plan to hire more and more slew in 2010.IMPORTSIndias merchandise imports witnessed a growth of 44.9 per cent during April-September 2008, and thereafter it showed a deceleration, reflecting the slowdown in industrial activities due to global economic crisis. The overall imports during April 2008-January 2009 at US$ 241.5 billion, recorded a lower growth of 24.4 per cent than 30.9 per cent recorded a year ago. POL imports during April 2008-January 2009 at US$ 82.1 billion, however, maintained broadly a similar growth of 30.6 per cent (31.9 per cent a year ago) reflecting the high pace of crude oil prices. Imports during January 2009 at US$ 18.5 billion also declined by 18.2 per cent for the graduation exercise time during the cu rrent year 2008-09 so far, as a cookst an increase of 64.0 per cent in January 2008, mainly due to sharp decline in oil imports. The overall imports during April 2008-January 2009 at US$ 241.5 billion, showed a growth of 24.4 per cent lower than that registered during the parallel period of preliminary year (31.0 per cent) on account of deceleration in both(prenominal) oil and non-oil imports.Indias imports during March, 2010 were valued at US $ 27733 gazillion (Rs.126175crore) representing a growth of 67.1 per cent in dollar terms (48.4 per cent in Rupee terms) over the level of imports valued at US $ 16597 million ( Rs. 85022 crore) in March, 2009. Oil imports during March, 2010 were valued at US $ 7730 million which was 85.2 per cent higher than oil imports valued at US $ 4175 million in the corresponding period last year.Non-oil imports during March, 2010 were estimated at US $ 20003 million which was 61.0 per cent higher than non-oil imports of US $ 12422 million in March, 2009.EXPORTSIndias merchandise exports, after preserve a steady growth of 35.3 per cent during April-August 2008, declined in all the incidental months so far, during the current year, viz., (-12.1 per cent in October), (-9.9 per cent in November), (-1.1 per cent in December) and (-15.9 per cent in January 2009) on account of global financial turmoil and economic slowdown. With the result, the overall exports during April 2008-January 2009 at US$143 billion increased by 12.4 per cent as compared with 24.1 per cent during the corresponding period of the previous year. Exports of labor intensive celestial spheres such as, textiles, gems and jewelers, agricultural and allied products, ores and minerals, leather products have registered decelerated growth as these sectors have been adversely affected under the match of demand recession, mainly in the developed regions, viz., the US and the EU. Exports in2009- 2010 is 90573 crore as compared to 66169 crore in 2008-09, hence showing a growth of 36.9%.EXCHANGE RATESince the world-wide business environment has no universal medium of exchange, exchange rates is a necessity for international trade. Presently, both translation and conversion of foreign currency involve the use of exchange rates. Therefore, in order to gain a more through understanding of foreign currency translation, it is important to examine the nature of exchange rates and the critical role they play in the international economy. The recent Asian currency crisis demonstrates how critically exchange rates impact economic developments. Economic factors alter exchange rates include hedging activities, interest rates, inflationary pressures, trade imbalances, and market activities.The form _or_ system of government-making factors influencing exchange rates include the established monetary policy along with government action or inaction on items such as the money supply, inflation, taxes, and deficit financing. Psychological factors also influence exchange rates. These factors include market anticipation, speculative pressures, and future expectations.MONETARY AND FISCAL POLICYfiscal PolicyRiding on the path of fiscal consolidation, in February 2008, the world economy was hit by three unprecedented crises commencement ceremony, the petroleum price rise second, rise in prices of other commodities and third, the breakdown of the financial system. The have effect of these crises of these orders is bound to affect emerging market economies and India was no exception. The first two crises resulted in serious inflationary pressure in the first half of 2008-09.Series of fiscal measures both on tax revenue enhancement and expenditure side were undertaken with the objective of easing supply side constraints. These measures were supplemented by monetary initiatives through policy rate changes by the Reserve assert of India and contributed to the softening of domestic prices. Additional budgetary resources of Rs.1, 50,320 crore wa s go outd as part of input signal package and various committed liabilities of Government including rising subsidy requirement, instruction execution of Central Sixth Pay Commission recommendations and Agriculture Debt Waiver and Debt musical accompaniment Scheme for Farmers contributed to the higher fiscal deficit of 6 per cent of GDP in RE 2008-09 as compared to 2.5 per cent of GDP in B.E.2008-09.The measures taken by Government to counter the effects of the global meltdown on the Indian economy, have resulted in a short fall in revenues and substantial increases in government expenditures, leading to a temporary release from the fiscal consolidation path mandated under the FRBM Act during 2008-09 and 2009-2010. The fiscal policy for the year 2009-2010 is continued to be guided by the objectives of keeping the economy on the higher growth trajectory amidst global slowdown by creating demand through increased public expenditure in identified sectors.Monetary policyIndia has ra pidly integrated into the global system and has linkages with the rest of the world not just through trade channels, but also through two-way movements of capital and finance. As an integral part of a globalizing world, India cannot be expected to remain immune to a global crisis and in responding to the crisis, India has to share the uncertainty on the way forward just like the rest of the world.Both the Government and the Reserve Bank have acted to nurse the economy from the adverse impact of the crisis since mid-September 2008. fleck the Government has announced three major fiscal stimulus packages, the endeavor of the Reserve Bank has been to provide ample rupee liquidity, ensure comfortable dollar liquidity and maintain a monetary policy environment conducive for the continued commingle of credit to productive sectors. Towards this endeavor, the Reserve Bank has adopted both accomplished measures such as, for example, reduction of the cash reserve ratio (CRR), as well as un conventional measures such as, for example, the dollar swap facility for banks.To improve the flow of credit to productive sectors at viable costs so as to sustain the growth momentum, the Reserve Bank signaled a clayey of the interest rate structure by significantly reducing both its key policy rates the repo rate and the reverse repo rate. The statutory liquidity ratio (SLR) has also been trim by one percentage top dog releasing funds to banks for credit deployment. In the space of just one quarter, the repo rate has been reduced from 9.0 per cent to 5.5 per cent and the reverse repo rate from 6.0 per cent to 4.0 per cent, thereby bringing down both of them to historically lowest levels.The Reserve Bank of India lowered its benchmark repurchase rate to 7.5 percent from 8 percent. At the same time the important bank also reduced the cash reserve ratio to 5.5 percent from 6.5 percent, and cut the amount of money lenders are required to keep in government bonds to 24 percent fro m 25 percent.But the measures taken by government and the Reserve Bank will continue to maintain vigil, monitor domestic and global developments, and set up the economy to its potential growth path.INDUSTRY ANALYSISINDUSTRY catchThe Indian Cement assiduity with a mental ability of around cxxv Million Ton Per Annum (MTPA) is the fourth largest in the world after China, lacquer and USA. However, the per capita consumption in the country is provided around 90 kgs as compared to the world average of approx. 250 kgs. The Cement industry is highly fragmented comprising of more than 50 players operating from more than 125 plants. The Cement Industry is orbitual and capital intensive.Cement is a key root word industry. It has been decontrolled from price and dispersal on 1st March, 1989 and delicensed on 25th July, 1991. However, the motion of the industry and prices of cement are monitored regularly. The constraints faced by the industry are reviewed in the base of operations Co ordination Committee meetings held in the Cabinet Secretariat under the Chairmanship of Secretary (Coordination). Its performance is also reviewed by the Cabinet Committee on basis.The Cement Industry witnessed a slow start in the FY 2005 due to change in the Government at the centre slow down in infrastructure spending during the transition and adversities of drought like conditions in the South and West. The ensuant regaining of momentum enabled the industry clock a dispatch growth of 7% for the full year. The Cement sector appears to be on a sustainable growth path, given the strong spotter for the ho exploitation sector and the re-create momentum in infrastructure spending. The Cement sector appears to be on a sustainable growth path, given the robust outlook in Government infrastructure spending. It is expected that the industry would grow at an average 8% annual growth in the long run.The industry has witnessed consolidation in the recent years which is likely to increase with the admittance of global players. Cement beingness an power intensive industry violence and coal are the major cost contributors. Logistics also form a significant portion of the cost. The looming coal shortage will not only affect the cost, but also the quality of coal. Cement prices are expected to firm up across regions in the medium term on account of a better demand- supply balance and greater consolidation. The evidence of modernistic technology has helped the industry immensely to conserve energy and burn down and to save materials considerably. India is also producing different varieties of cement like Ordinary Portland Cement (OPC), Portland Pozzolana Cement (PPC), Portland Blast Furnace scoria Cement (PBFS), Oil Well Cement, fast Hardening Portland Cement, Sulphate Resisting Portland Cement, White Cement etc.GROWTH settingThe one Indian industry which is set for growth over the advent years is the Cement Industry. The industry is heavily dependent on 3 sect ors coal, power and transport. Energy and freight are the two major cost components. Over the last few years, while the proportion of energy cost has increased marginally, freight costs have declined.Increasing government expenditure on infrastructure sector and rising demand for commercial and residential real estate development has resulted in higher demand for cement in the country. accord to a report by the ICRA Industry Monitor, the installed cement capacity is expected to increase to 241 million tones per annum by the end of 2010. It also expects that driven by higher domestic demand and increasing utilization, Indias cement industry may record an annual growth of 10% over the coming years.Taking cue of the global economic slowdown which was affecting cement companies in India last year, Governments initiative to re-impose counter-veiling trading and special counter-veiling duty this year will help provide a level compete field for domestic players. Moreover, it also appoin ted a coal regulator to facilitate timely and proper allocation of coal blocks to the important sectors like cement. As coal is one of the prime raw material used in cement production, this seems to be a positive move.Growth potential of cement industry can be judged by the fact that the per capita cement consumption (156 kg) in India is still well below the global average consumption (396 kg). This gap can be expected to be cover in the coming years. Besides, housing sector accounts for almost 50% of the get along cement consumption in the country and the large young population will ensure that the demand for infrastructure stays put.The rising cost of energy, deportee raw material continues to pressure the industry as a whole. To sustain remunerationability, companies will have to explore alternate source of energy while at the same time enhance their operational efficiency.Industry experts opine that the cement industries should now increase their focus on investing adequatel y in developing human resources that will be adequate enough to address the professional needs of construction industry including forward-looking technologies and construction practices, project management construction and litigation. We expect that the cement production and consumption both will grow substantially over the years.PORTERS five FORCES MODELRivalry among Competing FirmsInter firm rivalry is very high in this sector. Reasons for this are manly large number of players in the market, intermittent overcapacity, marginal product differentiation, high storage cost and high red barriers in the form of vast capital investment.Potential Entry of unexampled CompetitorsIn cement Industry technology and manpower are easily available but still entry of new firms is not that viable. This is because of huge capital investment, broad distribution network and oversupplied market.Potential Development of comforter ProductsOnly bitumen in road and engineering plastics in building press some element of competition otherwise no close substitutes are popular in India.Bargaining Power of SuppliersThe bargaining power of suppliers of raw materials and intermediate goods is very high. Because of monopolistic control of external cost elements i.e. coal, power, transportation and taxes suppliers are enjoying high bargaining power with the government.Bargaining Power of Consumers hike share of retail purchase, declining share of bulk purchase by government has taken away the bargaining power of customers.SWOT ANALYSISStrengths split second largest in terms of capacity- In India there is approximately 124 large and three hundred mini plants with installed capacity of 200 million tonnes.Low cost of production- Because of blowsy availability of raw material and cheap labor.WeaknessDemand supply gap, overcapacity- the capacity additions distort the demand supply equilibrium in the industry thus affecting the profitability.Increasing cost of production due to increase i n coal prices.High interest rate on housing- increase in interest rate from 7% to 12% has resulted in slowdown in residential property market.OpportunitiesIncrease in infrastructure projects- Infrastructure accounts for 35% of cement consumption in India. And with increase in government focus on infrastructure spending such as roads, highways and airports, the cement demand is likely to grow in future.Growing heart and soul class- There has been a increase in purchasing power of emerging middle class with rise in salary and wages, which results in rising demand for better quality of life that further necessitates infrastructure development and hence increase yhe demand for cement.Technological changes- At present 93% of the radical capacity in industry is based on modern and environmental friendly dry process and only 7% is based on old wet and semi dry process technology. The induction of advanced technology has helped the industry immensely to conserve energy and to save materia ls substantially and hence reduce the cost of production.ThreatsExcess overcapacity can hurt margins as well as prices.COMPANY ANALYSISACC LIMITEDEstablished in 1936, has been a pioneer and trend setter in cement and cover technology. A prominent overseas presence and figuring on the selected list of consumer super brands of India but most importantly acc has been amongst the first Indian companies to make environment protection as cornerstone of its corporate objectives. The historic merger of ten existing companies has led to the established of acc- melding into a glutinous organization in 1936. It offers the services of ready made concrete and consultancy services. This company is listed by Bombay stock exchange, National stock exchange and in London.During year 2007 company acquired 100% equity stake in Lucky Minmat one-on-one curb for Rs 35 crores and also acquired 43% stake in shibah Cement Limited. Meanwhile the company divested its entire equity shares in Almatis ACC l imited to the Almatis group. The overseas contact with YANBU Cement Company in the kingdom of Saudi-Arabian Arabia is successfully ongoing relationship from last 28 years and has been renewed up to Feb 28, 2011.The companys various manufacturing units are backed by a central technology support services centre the only one of its benignant in the Indian cement industry. ACC has rich experience in mining, being the largest user of limestone. As the largest cement producer in India, it is one of the biggest customers of the domestic coal industry, of Indian Railways, and a considerable user of the countrys road transport network services for inward and outward movement of materials and products.The company has developed comprehensive expansion plans to meet the requirement of its agenda for growth with a view to attain leadership position in the cement industry, for that company made a project for augmentation of clinkering and cement grinding. Also it implements projects for augment ing grinding capacity at Madukkaria by 0.225 MTPA and New Wadi at 0.60 MTPA.Ready mix concrete business has been identified as area of strategic priority. ACC commissioned a Wind Energy Farm in Tamil Nadu to promote percipient and green technology. The company foresees substantial scope for growth of this business in India. The company actively promotes the use of alternative fuels and raw materials and offers arrive solutions for bollocks management including testing, suggestions for reuse, recycling and co-processing.When we look at the values that are obtained using the DCF and the stock prices we can say that the prices of the companies stock are mispriced to a large extent. The intrinsic values for four consecutive years turned out to be negative which means that the shares are highly over priced. The investments in these stocks are very risky.ULTRATECH CEMENTUltratech Cement Limited (UltraTech) is India-based one of the largest cement manufacturing company. UltraTech Cement was incorporated as a public limited company on 24th August 2000, as LT Cement Limited a 100% Subsidiary of Larsen Toubro Limited. The name of the Company was changed to UltraTech CemCo Limited with effect from 19th November 2003. The name of the company was again changed to UltraTech Cement Limited with effect from eleventh October 2004.UltraTech Cement has an annual capacity of 18.2 million tones. It manufactures and markets Ordinary Portland Cement, Portland Blast Furnace Slag Cement and Portland Pozzalana Cement. It also manufactures ready mix concrete (RMC).The company has five integrated plants, six grinding units and three terminals- two in India and one in Sri Lanka. It is the countrys largest exporter of cement clinker. The export marketspan countries around the Indian Ocean, Africa, Europe and the warmheartedness East.The company has an annual cement production capacity of 18.2 million tones. It is a subsidiary of Grasim Industries Ltd. The company operates two subsidia ry companies namely, Dakshin Cement Limited and UltraTech Ceylinco (P) Limited. The company is headquartering at Mumbai in India. The company reported revenues of (Rupee) INR 66,643.30 million during the fiscal year ended March 2009, an increase of 16.43% over 2008. The operating profit of the company was INR 13,678.20 million during the fiscal year 2009, a decrease of 9.73% from 2008. The net profit of the company was INR 9,780.60 million during the fiscal year 2009, a decrease of 3.17% from 2008.According to the analysis done by DCF model the value of the share are 1403.89. five year daily data has been taken for the analysis.RISK ANALYSISA risk analysis involves identifying the most probable threats to an organization and analyzing the cerebrate vulnerabilities of the organization to these threats. In quantitative risk analysis, an attempt is made to numerically determine the probabilities of various adverse events and the likely extent of the losses if a particular event takes place.Qualitative risk analysis, which is used more often, does not involve numerical probabilities or predictions of loss. Instead, the qualitative method involves defining the various threats, determining the extent of vulnerabilities and devising countermeasures should an attack occur.NOTE The values given in the above tables are calculated for the daily data taken for a period of 5 years for both the companies and the BSE mightiness (1st January 2006 31st January 2010)ANALYSISFrom the values in the average return, variance and model departure we can understand that the return in cement industry was negative for an investor who invested his money in those stocks for that particular period.The risk associated with Ultratech company stock is very high as it has very high standard deviation and variance when compared to the other company ACC Cement. The standard deviation and variance of Ultratech stock are greater than that of Index.Risk AnalysisTo analyze the risk associated w ith a stock we have calculated 3 parameters. Beta, Sharpe and Treynor (Beta) Co-efficient (A stripe of Systematic Risk) The beta is a measure of systematic risk or Non-diversifiable risk. The beta of a stock measures the sensitivity or volatility of the stock with reference to a broad based market index, e.g. SENSEX in India.Sharpes taproom of Performance Sharpe Measure measures the risk Premiums of the portfolio (average portfolio return less risk free return) relative to the total amount of risk in the portfolio (standard deviation of the portfolio). It is also called reward-to-variability ratio. The Sharpe ratio tells us whether a portfolios returnsare due to smart investment decisions or a result of excess risk. The higher the Sharpe ratio for a portfolio, the better the portfolio has performed.Treynors Measure of Performance The Treynor measure is a relative measure of performance for investment managers and measures the return premium per unit of systematic risk (risk that cannot be diversified) as measured by the beta or relative volatility of the portfolio. While a high and positive Treynors Index shows a superior risk-adjusted performance of a fund, a low and negative Treynors Index is an indication of hostile performance. It is also called reward-to-volatility ratio.AnalysisRf The risk free return taken is a government treasury bill which has a return of 8% per annum.When we compare the movemen