A fundamental analysis of stock valuation of Grameen Phone Limited and Robi Axiata Limited and recommending investing decisions

Abstract

In this report, I have done stock valuation for the companies Grameen Phone Limited and Robi using fundamental analysis supported by the top-down valuation approach to recommend investment decisions for the investors. After the valuation, the intrinsic values are compared with the actual market close price dated on 17th December, 2023. The investment decision is given based on this comparison; to invest in an undervalued stock and not to invest in an overvalued stock. In the first part of the report, my internship experience at IDLC Securities Limited is covered. It contains information about my responsibilities and contribution to the organization. It also covers the challenges that I faced and my recommendations to both the organization and students regarding the internship program. It also sheds light on the advantages of this internship program. In the organization part of the report, the organization’s functional departments’ practices and performances have been discussed, namely, Finance, Accounting, Marketing, HRM, and Operations. The organization’s SWOT analysis and industry favorability using Five Porter’s Forces have also been done. Recommendations have been provided based on these analyses. The scope and limitations have also been discussed along with the methodology. In the project part, as top-down method suggests, the overall economy is discussed taking GDP, population, and unemployment as parameters taking data from 2017 to 2022. Then the telecommunication industry is analyzed using the industry cycle along with the future prospect of the industry. Forecasts have been done based on judgement and statistical reports for the year 2023. Finally, Robi’s and Grameenphone’s performances have been critically evaluated reviewing financial highlights. Then, the stock valuation is done using the Dividend Discount Model. Growth rate has been adjusted as par the previous analyses. Finally, investment decisions are recommended. The methodology and significance have been discussed discreetly for this part. At the end of the project part, the stock of Grameen Phone Limited was seen to be undervalued and the stock of Robi was seen to be overvalued. Thus, recommendations were given for investors to buy the stock of Grameen Phone Limited and not to buy, rather sell the stock of Robi. It is also advised that portfolio composition is not taken into consideration in this stock valuation