Comparative Analysis of Tata Steel and Tata Coffee on the Basis of Their Capital Market Performances

Abstract

Capital market is a mechanism through which funds can be borrowed and lent for long period of time and stock price is determined though free interaction of market forces such as demand and supply. Since share price is market determined, often it does not reflect the true intrinsic value. There are different conceptual frameworks, tools and techniques to analyze the performance of capital market instruments. All the models are based on some critical assumptions as well as on strong analytical foundations. Almost in all the cases, models are formed on the basis of simplistic assumption that ‘investors are rational in nature’ where in reality, market is driven by emotion, sentiment, greed and fear of the investors. Thus the assumption of perfection of capital market or rationality of investors does not hold in real life. Hence capital market performance of a company should be used as an integral part to analyse the perception of investors about the company instead of using the same to judge the fundamental strength of the company. The objective of the paper is to identify the different methods which are used to judge the capital market performance of a stock, to perform Economy –Industry – Company (EIC) analysis for Tata Steel and Tata Coffee and to compare and contrast between the share performances of these two companies. The proposed dissertation is expected to take into consideration the secondary data available in several research articles prevalent in the different reputed national and international journals downloaded from EBSCOhost and Emerald. The proposed research work incorporates the necessary information inputs from the statutory and non-statutory disclosure provided by Tata Steel and Tata Coffee in the form of their quarterly, half early and annual reports. Apart from that, data base from official website of Bombay Stock Exchange (BSE) is used in the proposed research study. Data analysis will proceed by using relevant statistical and financial techniques as well as models. Statistical techniques incorporate Mean, Variance, Coefficient of Variation, correlation coefficient and regression coefficient.