Beruflich Dokumente
Kultur Dokumente
Submitted By
HIMANI P.PADIA
T-8032
1
Declaration
I hereby declare that the project titled “EQUITY ANALYSIS WITH RESPECT TO
BANKING SECTOR“is an original work undertaken by me, under the guidance of
Prof. JAGADISH REDDY.The report submitted is a bona-fide work of my own efforts
and has not been submitted to any institute/university/conference or published
before.
Date:
Place:
2
Faculty Guide Certificate
I Prof. JAGADISH REDDY certify Ms. HIMANI P. PADIA the work done and the
training undertaken by her is genuine to the best of my Knowledge and is
acceptable.
Signature
Date :
3
ACKNOWLEDGEMENT
SCHOOL OF BUSINESS.
I wish to show my deep sense of gratitude to my corporate guide Mr. ATISH GUPTA, Chief Manager,
INDIABULLS Securities Ltd.for his support and guidance. Thanks and appreciation to the helpful
employees of Capital First especiallyfor their support and for providing necessary information during
the project work .
I render my whole hearted thanks to all the other respected faculties of the
management department, for their assistance and co-operation given to me in regard
to this work.
Finally, yet importantly, I would like to express my heart full thanks to my beloved
parents for their blessings, my friends and classmates for their help and cooperation
extended in this endeavor of mine and wish me for the successful completion of this
project.
HIMANI P.PADIA
4
CONTENTS
Page No.
Chapter - 1
Company profile------------------------------------------------------------9-13
Industry profile------------------------------------------------------------14-34
Literature review----------------------------------------------------------35
Chapter -3
Research methodology------------------------------------------------------36
Objectives-----------------------------------------------------------------------37
Limitations-----------------------------------------------------------------------37
Chapter-4
Findings ----------------------------------------------------------------------59
Recommendations----------------------------------------------------------60
Conclusion-----------------------------------------------------------------61
Annexure-------------------------------------------------------------------62-77
Bibliography----------------------------------------------------------------78
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CHAPTER-1
INTRODUCTION
What is Equity?
Equity is the ownership interest of investors in a business firm. Investors can own
equity shares in a firm in the form of common stock or preferred stock. Equity
ownership in the firm means that the original business owner no longer owns 100%
of the firm but shares ownership with others.On a company's balance sheet, equity is
represented by the following accounts: common stock, preferred stock, paid-in
capital, and retained earnings. Equity can be calculated by subtracting total liabilities
from total assets.
EQUITY ANALYSIS:-
Since 1990 till date, Indian stock market has returned about 17% to
investors on an average in terms of increase in share prices or capital appreciation
annually. Besides that on average stocks have paid 1.5 % dividend annually.
Dividend is a percentage of the face value of a share that a company returns to its
shareholders from its annual profits.Compared to most other forms of
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investments, investing in equity shares offers the highest rate of return, if invested
over a longer duration.
Each investment alternative has its own strengths and weaknesses. Some options
seek to achieve superior returns (like equity), but with corresponding higher risk.
Other provide safety (like PPF) but at the expense of liquidity and growth. Other
options such as FDs offer safety and liquidity, but at the cost of return. Mutual funds
seek to combine the advantages of investing in arch of these alternatives while
dispensing with the shortcomings. Indian stock market is semi-efficient by nature
and, is considered as one of the most respected stock markets, where information is
quickly and widely disseminated, thereby allowing each security’s price to adjust
rapidly in an unbiased manner to new information so that, it reflects the nearest
investment value. And mainly after the introduction of electronic trading system, the
information flow has become much faster. But sometimes, in developing countries
like India, sentiments play major role in price movements, or say, fluctuations, where
investors find it difficult to predict the future with certainty.
Banks are the major part of any economic system. They provide a strong base to
Indianeconomy as well. Even in the share markets, the performance of banks shares
is ofgreat importance.
Thus, the performance of the share market, the rise and the fall of market is greatly
affected by the performance of the banking sector shares and this report revolves
around all factors, their understanding and a theoretical and technical analysis
7
CHAPTER-2
COMPANY PROFILE
INTRODUCTION
Indiabulls is India’s leading Financial, Real Estate and Power Company with a wide
presence throughout India. They ensure convenience and reliability in all their
products and services. Indiabulls has over 640 branches all over India. The
customers of Indiabulls are more than 4,50,000 which covers from a wide range of
financial services and products from securities, derivatives trading, depositary
services, research & advisory services, consumer secured & unsecured credit, loan
against shares and mortgage & housing finance. The company employs around
4000 Relationship managers who help the clients to satisfy their customized financial
goals. Indiabulls entered the Real Estate business in the year 2005 with its group of
companies. Large scale projects worth several hundred million dollars are evaluated
by them.
Indiabulls Financial Services Ltd is listed on the National Stock Exchange (NSE),
Bombay Stock Exchange (BSE) and Luxembourg Stock Exchange. The market
capitalization of Indiabulls is around USD 2500 million (29thDecember, 2006).
Consolidated net worth of the group is around USD 700 million. Indiabulls and its
group companies have attracted USD 500 million of equity capital in Foreign Direct
Investment (FDI) since March 2000. Some of the large shareholders of Indiabulls are
the largest financial institutions of the world such as Fidelity Funds, Goldman Sachs,
Merrill Lynch, Morgan Stanley and Farallon Capital.
Indiabulls Group is one of India’s top business houses with businesses spread over
Real Estate, Infrastructure, Financial Services, Securities, Retail, Multiplex and
Power sectors. The group companies are listed on important Indian and Overseas
markets. Indiabulls has been conferred the status of a “Business Superbrand” by
The Brand Council, Superbrands India.
VISION
To be the largest and most profitable financial services organization in Indian retail
market and become one stop shop for all non banking financial products and
services for the retail customers. To become the preferred long term financial partner
to a wide base of customers whilst optimizing stake holder’s value
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MISSION
In 1999, three IIT-Delhi alumni Sameer Gehlaut, Rajiv Rattan and Saurabh Mittal
acquired Orbis,a Delhi based stock broking company. Young entrepreneur Sameer
Gehlaut established Indiabulls in 2000, after acquiring orbis Securities, a stock
brokerage company in Delhi. The group started its operations from a small office
near HauzKhas bus terminal in Delhi.The office had a tin roof and two computers.
The idea of leveraging technology for trading stocks led to the creation of Indiabulls
Incorporated on 10th January 2000, it was converted into a public limited company
on 27th February 2004.
Its original idea of leveraging technology bore fruit when Indiabulls was accorded
permission to conduct online trading on Indian stock exchanges.The company had
achieved the distinction of becoming only the second brokerage firm in India to be
granted this consent. The challenges facing it were immense – not least of all the
mind set of investors who were called to make the big leap from traditional stock
trading to a completely online interface. Having overcome this resistance, the
company later expanded its service portfolio to include equity, F&O, wholesale debt,
mutual fund distribution and equity research.
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Indiabulls Financial Services Limited
The company was promoted by three engineers from IIT Delhi, and has attracted
more than Rs.700 million as investments from venture capital, private equity and
institutional investors and has developed significant relationships with large
commercial banks such as Citibank, HDFC Bank, Union Bank, ICICI Bank, ABN
Amro Bank, Standard Chartered Bank and IL&FS.
Brand Values
INDIABULLS GROUP
10
Products offeredEquities and Derivatives
Milestones Achieved
11
STRATEGY AND FOCUS
.MAJOR COMPETITORS
KOTAK SECURITIES
SHAREKHAN
A competitor’s strength may be its marketing systems, aggressive sales force, and it
srelationship with major external environmental variables like government &financial i
nstitute or a financial resources base. For the effective competitiveanalysis only
strength & weaknesses are not sufficient we need to consider other key factors like
market share of the company & 7p s of service marketing i.e.
Product
Price
Place
Promotion
Process
Physical evidence
People etc.
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SWOT ANALYSIS
Weaknesses
It should have its own mutual funds as it provides advises on mutual funds
Position to answer the question of the clients in their fields.
It does not provide indices on major world markets, ADR Prices of Indian
Scripts.
Lacks Banking arm.
Opportunities
ATM facility should be provided for easy withdrawals.
Tie-ups with third party companies for selling products.
High client base will help for cross sales of its products.
Threats
Companies like Sharekhan, ICICI Direct, Kotak Securities and Private brokers
are major threats.
Banks with Demat facilities are jockeying for position.
Local brokers capable of charging lower brokerage
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INDUSTRY PROFILE
INTRODUCTION
The banking section will navigate through all the aspects of the Banking System in
India. It will discuss upon the matters with the birth of the banking concept in the
country to new players adding their names in the industry in coming few years.
The banker of all banks, Reserve Bank of India (RBI), the Indian Banks Association
(IBA) and top 20 banks like IDBI, HSBC, ICICI, ABN AMRO, etc. has been well
defined under three separate heads with one page dedicated to each bank.
However, in the introduction part of the entire banking cosmos, the past has been
well explained under three different heads namely:
The first deals with the history part since the dawn of banking system in India.
Government took major step in the 1969 to put the banking sector into systems and
it nationalised 14 private banks in the mentioned year. This has been elaborated in
Nationalisation of Banks in India. The last but not the least explains about the
scheduled and unscheduled banks in India. Section 42 (6) (a) of RBI Act 1934 lays
down the condition of scheduled commercial banks.
Without a sound and effective banking system in India it cannot have a healthy
economy. The banking system of India should not only be hassle free but it should
be able to meet new challenges posed by the technology and any other external and
internal factors.
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For the past three decades India's banking system has several outstanding
achievements to its credit. The most striking is its extensive reach. It is no longer
confined to only metropolitans or cosmopolitans in India. In fact, Indian banking
system has reached even to the remote corners of the country. This is one of the
main reasons of India's growth process.
The government's regular policy for Indian bank since 1969 has paid rich dividends
with the nationalization of 14 major private banks of India.
Not long ago, an account holder had to wait for hours at the bank counters for getting
a draft or for withdrawing his own money. Today, he has a choice. Gone are days
when the most efficient bank transferred money from one branch to other in two
days. Now it is simple as instant messaging or dial a pizza. Money have become the
order of the day.
The first bank in India, though conservative, was established in 1786. From 1786 till
today, the journey of Indian Banking System can be segregated into three distinct
phases. They are as mentioned below:
The first bank in India, though conservative, was established in 1786. From 1786 till
today, the journey of Indian Banking System can be segregated into three distinct
phases. They are as mentioned below:
15
Phase I
The General Bank of India was set up in the year 1786. Next came Bank of
Hindustan and Bengal Bank. The East India Company established Bank of Bengal
(1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent units
and called it Presidency Banks. These three banks were amalgamated in 1920 and
Imperial Bank of India was established which started as private shareholders banks,
mostly European shareholders.
In 1865 Allahabad Bank was established and first time exclusively by Indians,
Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between
1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank,
Indian Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935.
During the first phase the growth was very slow and banks also experienced periodic
failures between 1913 and 1948. There were approximately 1100 banks, mostly
small. To streamline the functioning and activities of commercial banks, the
Government of India came up with The Banking Companies Act, 1949 which was
later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No.
23 of 1965). Reserve Bank of India was vested with extensive powers for the
supervision of banking in India as the Central Banking Authority.
During those days public had lesser confidence in the banks. As an aftermath
deposit mobilisation was slow. Abreast of it the savings bank facility provided by the
Postal department was comparatively safer. Moreover, funds were largely given to
traders.
Phase II
Government took major steps in this Indian Banking Sector Reform after
independence. In 1955, it nationalized Imperial Bank of India with extensive banking
facilities on a large scale especially in rural and semi-urban areas. It formed State
Bank of India to act as the principal agent of RBI and to handle banking transactions
of the Union and State Governments all over the country.
Seven banks forming subsidiary of State Bank of India was nationalized in 1960 on
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19th July, 1969, major process of nationalization was carried out. It was the effort of
the then Prime Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in
the country were nationalized.
Second phase of nationalization Indian Banking Sector Reform was carried out in
1980 with seven more banks. This step brought 80% of the banking segment in India
under Government ownership.
The following are the steps taken by the Government of India to Regulate Banking
Institutions in the Country:
After the nationalization of banks, the branches of the public sector bank India rose
to approximately 800% in deposits and advances took a huge jump by 11,000%.
Banking in the sunshine of Government ownership gave the public implicit faith and
immense confidence about the sustainability of these institutions.
Phase III
This phase has introduced many more products and facilities in the banking sector in
its reforms measure. In 1991, under the chairmanship of M Narasimham, a
committee was set up by his name which worked for the liberalisation of banking
practices.
The country is flooded with foreign banks and their ATM stations. Efforts are being
put to give a satisfactory service to customers. Phone banking and net banking is
introduced. The entire system became more convenient and swift. Time is given
more importance than money.
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The financial system of India has shown a great deal of resilience. It is sheltered
from any crisis triggered by any external macroeconomics shock as other East Asian
Countries suffered. This is all due to a flexible exchange rate regime, the foreign
reserves are high, the capital account is not yet fully convertible, and banks and their
customers have limited foreign exchange exposure.
Scheduled Banks in India constitute those banks which have been included in the
Second Schedule of Reserve Bank of India(RBI) Act, 1934. RBI in turn includes only
those banks in this schedule which satisfy the criteria laid down vide section 42 (6)
(a) of the Act.
As on 30th June, 1999, there were 300 scheduled banks in India having a total
network of 64,918 branches. The scheduled commercial banks in India comprise of
State bank of India and its associates (8), nationalised banks (19), foreign banks
(45), private sector banks (32), co-operative banks and regional rural banks.
"Scheduled banks in India" means the State Bank of India constituted under the
State Bank of India Act, 1955 (23 of 1955), a subsidiary bank as defined in the State
Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), a corresponding new bank
constituted under section 3 of the Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1970 (5 of 1970), or under section 3 of the Banking Companies
(Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980), or any other bank
being a bank included in the Second Schedule to the Reserve Bank of India Act,
1934 (2 of 1934), but does not include a co-operative bank".
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The following are the Scheduled Banks in India (Public Sector):
19
Major Banks in India
20
Organizational Structure of Banks in India:
In India banks are classified in various categories according to differ rent criteria. The
following charts indicate the banking structure
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Broad Classification of Banks in India:
1) The RBI: The RBI is the supreme monetary and banking authority in the
country and has the responsibility to control the banking system in the
country. It keeps the reserves of all scheduled banks and hence is known as
the “Reserve Bank”.
2) Public Sector Banks:
State Bank of India and its Associates (8)
Nationalized Banks (19)
Regional Rural Banks Sponsored by Public Sector Banks (196)
3) Private Sector Banks:
Old Generation Private Banks (22)
Foreign New Generation Private Banks (8)
Banks in India (40)
4) Co-operative Sector Banks:
State Co-operative Banks
Central Co-operative Banks
Primary Agricultural Credit Societies
Land Development Banks
State Land Development Banks
5) Development Banks: Development Banks mostly provide long term finance
for setting up industries. They also provide short-term finance (for export and
import activities)
Industrial Finance Co-operation of India (IFCI)
Industrial Development of India (IDBI)
Industrial Investment Bank of India (IIBI)
Small Industries Development Bank of India (SIDBI)
National Bank for Agriculture and Rural Development (NABARD)
Export-Import Bank of India.
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Role of Banks:
Banks play a positive role in economic development of a country as repositories of
community’s savings and as purveyors of credit. Indian Banking has aided the
economic development during the last fifty years in an effective way. The banking
sector has shown a remarkable responsiveness to the needs of planned economy. It
has brought about a considerable progress in its efforts at deposit mobilization and
has taken a number of measures in the recent past for accelerating the rate of
growth of deposits. As recourse to this, the commercial banks opened branches in
urban, semi-urban and rural areas and have introduced a number of attractive
schemes to foster economic development.
By pooling the savings together, banks can make available funds to specialized
institutions which finance different sectors of the economy, needing capital for
various purposes, risks and durations. By contributing to government securities,
bonds and debentures of term-lending institutions in the fields of agriculture,
industries and now housing, banks are also providing these institutions with an
access to the common pool of savings mobilized by them, to that extent relieving
them of the responsibility of directly approaching the saver. This intermediation role
of banks is particularly important in the early stages of economic development and
financial specification. A country like India, with different regions at different stages of
development, presents an interesting spectrum of the evolving role of banks, in the
matter of inter-mediation and beyond.
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being issued in lieu of security earnest money deposits for release of advance
money, supply of raw materials for processing, full payment of bills on the assurance
of the performance etc. Commercial banks issue such guarantees also.
Investment Banking
Consumer Banking
Commercial Banking
Retail Banking
Retail Banking and Trade finance operations are conducted at the branch level while
the wholesale banking operations, which cover treasury operations, are at the hand
office or a designated branch.
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Retail Banking:
Deposits
Loans, Cash Credit and Overdraft
Negotiating for Loans and advances
Remittances
Book-Keeping (maintaining all accounting records)
Receiving all kinds of bonds valuable for safe keeping
Trade Finance:
Issuing and confirming of letter of credit.
Drawing, accepting, discounting, buying, selling, collecting of bills of
exchange, promissory notes, drafts, bill of lading and other securities.
Treasury Operations:
Buying and selling of bullion. Foreign exchange
Acquiring, holding, underwriting and dealing in shares, debentures, etc.
Purchasing and selling of bonds and securities on behalf of constituents.
The banks can also act as an agent of the Government or local authority. They
insure, guarantee, underwrite, participate in managing and carrying out issue of
shares, debentures, etc.
Apart from the above-mentioned functions of the bank, the bank provides a whole lot
of other services like investment counseling for individuals, short-term funds
management and portfolio management for individuals and companies. It undertakes
the inward and outward remittances with reference to foreign exchange and
collection of varied types for the Government.
Bill Payment
Funds Transfer
Special Promotions & Offers
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Ticket Booking
Online loans and credit cards
Online Shopping
Online Tax payment
Prepaid mobile recharge
With an aim to reform and strengthen India's banking sector, the LokSabha passed
the 'Banking Amendment Bill' in Dec 2012. Once, the bill is passed by RajyaSabha
as well, it will pave way for RBI to issue new banking licenses to private sector and
attract more foreign investments in the sector.
The Bill also proposes to enhance the voting rights of investors in case of both public
sector and private sector banks from existing 1% to 10% of public sector banks and
from 10% to 26% of private sector banks. This move will attract more foreign
investment in the sector
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FACTORS AFFECTING BANKING SECTOR
Starting off with the project, in the initial phase of SIP, I learnt the basics of the stock
market. As I had to work here in this market for 3.5 months this was the basic
necessity. In that phase I had a nice exposure of how to deal with clients, how to
handle the queries of the investors, it was a practical exposure to learn the working
of the market, how the market moves and all about the corporate culture. Also I had
learnt what factors basically affect the equity market. Then I decided to limit my
project to just Banking Sector, because it is one of the most dynamic sector and also
availability of time was not permitting me to go beyond this. There are N numbers of
factors which affect the share prices. They can be broadly classified into two:
INTERNAL FACTORS
EXTERNAL FACTORS
INTERNAL FACTORS:
As the name suggests, Internal Factors are those which affect the share prices
internally, i.e. they are internal to the company or more specifically bank. Some of
the major internal factors that affect the share prices of a bank are as follows:
27
Market capitalization:
Generally we commit one mistake that we guess the company’s worth from the price
of its stock. It is the market capitalization of the company, rather than the stock price,
that is more
Important when it comes to determining the worth of the company. We need to
multiply the stock price with the total number of outstanding stocks in the market to
get the market capitalization of a company and that is the worth of the company.
Thus, a company or bank with high Market Capitalization turns out to be more
popular amonginvestors. For example, HDFC BANK, ICICI BANK and SBI are more
popular among investors than other banks because they have huge market share
and market capitalization. As market capitalization increases, the share price tends
to increase and as market capitalization decreases, the share price tends to
decrease.
Price/earnings ratio:
Price/Earnings ratio or the P/E ratio gives us a fair idea of how a company's share
price compares to its earnings. If the price of the share is too much lower than the
earning of the company, the stock is undervalued and it has the potential to rise in
the near future. On the other hand, if the price is way too much higher than the
actual earning of the company and then the stock is said to overvalued and the price
can fall at any point. The earnings also have a direct relation with price which is
already explained above.
Interest rates:
Interest rates play a major role in determining stock market trends. Bull markets
(those in an upward market) are usually associated with low interest rates and high
Capital Gains, and bear markets (those in a downward trend) with high interest rates
28
and low Capital gains. Interest rates are determined by the demand for capital –
pushes them up and normally indicates that the economy is thriving and that shares
probably expensive. Low interest indicate low demand for capital, thus liquidity builds
up on the economy, driving share price down. Other interest rates like that of on
Deposits and Borrowings also have impact on share prices.
Other factors:
Other factors like Growth of the company, figures of deposits, advances, balance
sheet, Profit and Loss Account, etc. Also affect the share prices drastically. A
discussion for the same is done in later part of the report.
EXTERNAL FACTORS:
After studying the internal factors, let’s take a look at some External Factors which
affect the Share Prices.
Sentiments:
Investor sentiment is almost impossible to predict and can be infuriating if, for
example, you have bought shares in a company that you think is a good „buy‟ but
the price remains flat. Investor sentiment is influenced by a wide variety of factors.
Share prices can, for example, be flat during the summer simply because so many
major investors are on holiday or attending major sporting events such as Royal
Ascot and Wimbledon, hence the adage „sell in May and go away‟ . Investor
sentiment can lead to irrational buying or selling of shares and result in bull and bear
markets. A bull market is when share prices rise while a bear market is when they
fall. In the technology boom of the late 1990s, for example, investors paid extremely
high prices for shares and ignored traditional valuation measures, such as P/E ratios.
This carried on until 2000 when investors belatedly realized these shares has risen
too far and resulted in a three year bear market in shares. Thus, Sentiments of
investors affect the share prices a lot and this is something unpredictable and
immeasurable factor, but still the most important one.
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Company news and other news:
The way investors interpret news coming out of companies is also a major influence
on share prices. If, for example, a company puts out a warning that business
conditions are tough, shares will often drop in value. If, however, a director buys
shares in the firm, it may be a signal that the company’s prospects are improving.
Companies put out a great deal of news and most of the major announcements are
covered by the financial press. But some announcements not regarded as so
important and sometimes, particularly among smaller firms that are monitored less
by investors and financial journalists, indicators of the company’s health can be
missed. Takeovers or even rumours of takeovers also have a big influence on prices.
This is because investors expect the bidder to pay a premium to shareholders. Also
any other news or speculation about factors like change in Repo Rate, Cash
Reserve Ratio, Reverse Repo Rate, any change or likely change in the policies of
government or RBI or SEBI, any new guidelines issued by the concerned authority,
etc. affect the price of the share. A positive news in any of these respects leads to a
rise in price and a negative takes it to the other side.
Thus, news in any respect is undoubtedly a huge factor when it comes to stock price.
Positive news about a company can increase buying interest in the market while a
negative press release can ruin the prospect of a stock. Having said that, we must
always remember that often times, despite amazingly good news, a stock can show
least movement. It is the overall performance of the company that matters more than
news. It is always wise to take a wait and watch policy in a volatile market or when
there is mixed reaction about a particular stock.
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Analysts’ reports:
Reports produced by independent analysts also influence share prices. If an analyst
changes their recommendation from „sell‟ to „buy‟ , for example, the shares will
often rise in value. Analysts‟ reports are produced primarily by investment banks for
professional investors, although some stockbrokers will make their research
available to private investors. We may find summaries of some reports published on
financial news websites or in newspapers and magazines. Some investment banks
also publish their reports on their websites for free. We should remember that the
recommendation an analyst puts on a company will affect its share price very quickly
and can become irrelevant within hours. This is because the analyst will usually say
a stock is a „buy‟ within a particular price range. If the price moves above their
targets the improvements the analyst expects may be „priced in‟ and so the shares
are not worth buying. But analysts‟ reports are always worth reading, even if the
recommendation is out of date. The reports usually contain a great deal of useful
information on the company and how its business is developing. They also often look
at how the company rates against its competitors.
The economy:
The health of the global economy has a fundamental influence on share prices
because it is ultimately responsible for driving company profits. Broadly speaking, if
the economy is growing, company profits improve and shares will become more
highly valued. If the economy is weakening, company profits will fall and share prices
will go down. Investors look at a vast amount of data to try and work out what is
going to happen to the economy and shift their portfolios before the events occur.
This is why we will often see markets move well ahead of an actual event occurring.
For example, we could get little reaction from the stock market when interest rates
rise. This is because investors have already anticipated the shift months in advance
and adjusted their portfolios beforehand. We can usually assume that the stock
market will anticipate moves in the economy by around six to nine months. So if we
want to stay ahead of the game we need to follow economic data as closely as the
professionals. The kind of information we need to play close attention to is:
employment data, the reports put out by the Monetary Policy Committee (to get an
idea where interest rates are headed), trade with other countries, retail sales and
manufacturing. Sentiment surveys produced by trade bodies such as the
31
Confederation of British Industry are also important indicators of where the economy
is heading.
It is not only news about the US and UK economy that will impact on share prices.
The signals coming out of other major economies, particularly the US and UK‟ s
major trading partners, such as the Europe and Asia will also affect US and UK
shares as what happens in these economies will have an impact on our own. When
looking at economic data, we need to think not only how the wider economy will be
affected but whether certain areas will be more affected than others. A rise in interest
rates is, for example, often bad news for house builders as people feel less confident
about taking on debt. Retailers are often badly affected too as people spend less.
Pharmaceutical companies are, however, usually unaffected as people’s demand for
drugs is not influenced by the state of the economy. Companies whose profits are
closely tied to the health of the economy are known as “cyclical” stocks. Those
businesses that aren’t too affected by the economy are called “defensive” stocks. If
economic conditions deteriorate you will often see investors shift from cyclical stocks
to defensives. Thus, the economic health of an Economy affects the Share Prices.
Technical influences:
Share prices can rise and fall for a variety of technical reasons that may have
nothing to do with the actual outlook for an individual company or the outlook for the
market. It is, for example, a common occurrence for share prices to drop back after a
strong rally. This happens because investors take profits on some of the shares that
have risen in value, protecting their gains just in case the shares start to slip back.
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Investors often refer to this as market consolidation. Another technical reason for
share prices to rise or fall is the quarterly adjustment in the FTSE 100™ index.
Shares that are expected to enter the FTSE 100™ may experience a sharper rise
than one would expect in the weeks beforehand while shares that leave the index
can fall more sharply. This happens because funds that simply track the index have
to match the composition of the index. Some professional fund managers who hold
the affected stocks also adjust their portfolios as they do not want their holding to be
too far above or below the company’s weighting in the index. Share prices can also
be affected by investors who use technical analysis to drive their investment
techniques. Technical analysis, also known as Chartism, is simply the study of past
share price movements and stock market index trends, which are then used to
forecast how shares and stock markets will behave in future. Market makers can
also influence prices. If they, for example, do not own enough shares to balance their
books they will have to buy more. Market makers also influence prices if the market
is looking flat, reducing prices to attract buyers. Thus, technical reasons can also be
a cause for the rise or fall in the prices of shares.
OTHER FACTORS:
Some other factors which influence share prices are as follows:
Global changes:
Any change in the global economy or in other words global changes also affects
Indian economy. Thus, the performance of an economy and its banks is affected by
these global changes. For example: The recession was first observed in the USA
and later on it caught its lead in other countries too. When it entered India, the share
market crashed literally. So, a careful and logical investor always keeps this in mind
33
that what global changes affect the market and thus leads to rise or fall in share
prices.
34
Literature review
A lot of investors trading in the financial markets with securities and stocks are trying
to foresee the market movements with the help of accessible information of the
press. This may concern the question will securities with higher prospective benefits
get greater revenues to securities with lower prospective benefits? These ideas can
be investigated using time research and deeper analysis. If a security is determined
precisely, the future return of the security will come to the beta at the securities
market line. Nevertheless, if it goes down that line then that states the security is
understated and it is overrated if it goes above the line. In any situation, regulations
have to be implemented.
Security market line is a line that shows the risks against revenue in the trading
market at a specified time and can expose all the securities that are in a good
demand. It is also called characteristic line or SML. Security market line really shows
the outcomes of the financial capital asset pricing model. It is also called CAPM
formula. Risk on the market is represented through the X-axis also called beta.
Prospective revenue is represented through the Y-axis. Securities risk premium is
identified with the help of security market line.
Security market line turns out to be an effective instrument in identifying if a security
involved in your Security market gives sensible prospective revenue for specified
risks. Your securities are represented on the chart with security market line. So, if the
securities risks against the prospective profits are situated above the line it is
undervalued security. It is so, as the trader supposes to get higher revenue for
specified risk. The asset that is situated below the line is overvalued. This can
happen when the trader can take less profit for the considered risk. Take this
effective knowledge for your consideration and use for earning profits.
35
CHAPTER-3
RESEARCH METHODOLOGY
The process used to collect information and data for the purpose for making
business decisions. The methodology may include publication research ,
interviews , surveys and other research techniques, and could include present
and historical information.
The data has been collected through primary and secondary sources
primary data :-
Discussion with branch manager
Live trading in the market
secondary data:-
Books related to financial management
Web sites can be used as vital information source
36
OBJECTIVES:
• To study and compare the performance of the banks in the banking sector.
SCOPE
The scopes of the project are limited to understanding the basics of fundamental
analysis and technical analysis and apply it to take a decision of investing in banking
sector
LIMITATIONS
The study is based on the data is given by the investors and the employee
which may not be 100% correct.
Moreover, very few investors and agents have a detail knowledge of the
study.
The study is confined to only one sector.
The project has been limited to investment analysis of banking sector only.
37
CHAPTER-4
DATA COLLECTION
Fundamental Analysis:
Fundamental analysisrefers to the study of the core underlying elements that
influence the economy of a particular entity. It is a method of study that attempts to
predict price action and market trends by analyzing economic indicators, government
policy and societal factors within a business cycle framework. The fundamental
analysis of a company involves the following parameters:
1. Macroeconomic Analysis
2. Industry Analysis
3.Company analysis
1. Macroeconomic Analysis:
38
Global Analysis:
Any change in global economy or in other words, global changes also affects Indian
Economy. For example: The recession was first observed in USA and later on it
caught its lead in other countries too. When it entered India, the share market
crashed literally. It affected many banks as ICICI and others, resulting in loss of
people’s confidence towards banks.
Monetary policy affects banking sector in many ways. One way is through
creditMarkets. Because of imperfect information, incomplete contracts and imperfect
bankCompetition, monetary policy may affect banks’ loan supply. In particular,
expansive Monetary policy may increase banks’ loan supply directly (bank lending
channel), or Indirectly by improving borrowers’ net worth and, hence, by reducing the
agency costs of lending.
39
2. Industry Analysis:
Life Cycle Analysis:
Bank plays an important role in the economic development of the country. The entire
commercial and industrial activities are well knitted with the banks. One cannot
imagine the cessation of the banking activities even for a day. There may be an
economic crisis in the country if the banks stop functioning for some days.
In the early days, the banking business was confined to receiving of deposits and
lending of money. But the modern bankers undertake wide variety of functions to
assist their customers. Banks are like any other business in that they produce goods
and services to customers. Like any other businesses, their products have life
cycles. Cheques are in a decline phase of their life cycle and use of cheques is
declining rapidly and being replaced by electronic bill pay and debit cards. Internet
Banking and Electronic Bill pay are in their growth phase as more and more
customers are using these services. Cards or Cheque Cards are in their maturity
phase as they are accepted by nearly everyone. So overall, the banking industry is in
a GROWTH PHASE, as new measures are being adopted overtime so as to make
transactions speedy and easy.
1. Threat of New Entrants. The average person can't come along and start up a
bank, but there are services, such as internet bill payment, on which entrepreneurs
can capitalize. Banks are fearful of being squeezed out of the payments business,
because it is a good source of fee-based revenue. Another trend that poses a threat
is companies offering other financial services. Also, the possibility of a mega bank
entering into the market poses a real threat.
2.Power of Suppliers. The suppliers of capital might not pose a big threat, but the
threat of suppliers luring away human capital does. If a talented individual is working
in a smaller regional bank, there is the chance that person will be enticed away by
bigger banks, investment firms, etc.
40
3. Power of Buyers. The individual doesn't pose much of a threat to the banking
industry, but one major factor affecting the power of buyers is relatively high
switching costs. If a person has a mortgage, car loan, credit card, checking account
and mutual funds with one particular bank, it can be extremely tough for that person
to switch to another bank. In an attempt to lure in customers, banks try to lower the
price of switching, but many people would still rather stick with their current bank. On
the other hand, large corporate clients have banks wrapped around their little fingers.
Financial institutions - by offering better exchange rates, more services, and
exposure to foreign capital markets - work extremely hard to get high-margin
corporate clients.
41
DATA ANALYSIS
Company Profile
Company Information
State Bank of India (SBI) is the India’s oldest and largest bank by revenue,
assets and market capitalization. SBI has launched various cost-effective
channels, such as SBI Tiny Card(biometrically enabled card), Kiosk banking
(internet enabled kiosk/computer
with biometric validation) and cell phonemessaging channel. The bank also has
more than 170branches in ~30 foreigncountries, including multiple locations inthe
US, Canada, and Nigeria.
“The objective of the lending rate cut is to improve demand for assets which in our
view could have a positive cascading effect on related industries”
KEY MANAGEMENT
42
The State Bank Group includes a network of eight banking subsidiaries and several
nonbanking
Subsidiaries
The Eight Banking subsidiaries are as follows:
COMPANY PROFILE:
COMPANY INFORMATION:
43
BUSINESS OVERVIEW:
“The strategy of focusing on profitability, growth and risk management for fiscal
2012 resulted in better than the
expected results.”
KEY MANAGEMENT:
Company Information
44
Business Overview:
Key Management:
Chairman & MD: Mr. K. R. Kamath
Executive Director: Mr. RakeshSethi
Executive Director: Mr. UshaA Subramanian
Executive Director: Mr. S. R. Bansal
Canara Bank
Company Profile
Company Information:
45
BUSINESS OVERVIEW:
Over the years, Canara Bank has been scaling up its market position to
emerge as a major 'Financial Conglomerate' with as many as nine
subsidiaries/sponsored institutions/joint ventures in India and abroad
Besides commercial banking, the Bank has also carved a distinctive mark in
various corporate social responsibilities areas, namely, serving national
priorities, promoting rural development and enhancing rural self-employment
through several training institutes
It is the first bank to introduce Centralized Solution for Service
Units(CSSU), developed in-house adopting the latest technology in the IT
Industry’
Key Management
COMPANY PROFILE
COMPANY INFORMATION:
46
BUSINESS OVERVIEW:
Bank of Baroda is a 103 year old State owned Bank with a good mix of
modern &contemporary personality, offering banking products and services to
large industrial, SME, retail & agricultural customers across the country
The Bank has developed an Integrated Global Treasury Solution in its major
territories such as the UK, UAE, Bahamas Bahrain, Honkong, Singapore,
Belgium, USA and India to reduce the cost of operations and improve funds
management.
“The Indian banking industry has always been resilient in facing challenges”
KEY MANAGEMENT:
Chairman & MD: Mr. M. D. Mallya
Executive Director: Mr. S. K. Jain
Executive Director: Mr. P. Srinivas
Executive Director: Mr. RanjanDhawan
BANK OF INDIA
COMPANY PROFILE
COMPANY INFORMATION:
BUSINESS OVERVIEW:
47
The Bank has a sizable presence abroad, with a network of 29 branches
(including five representative office) at key banking and financial centers
such as London, New York, Paris, Tokyo, Hong-Kong an Singapore.
International business accounts for around 17.82% of the Bank's total
business
The bank is always looking forward to being more consumers centric and
reaching out especially in the rural belts of the country.
KEY MANAGEMENT:
48
DATA ANALYSIS AND INTERPRETATION
.TABLE 1.1
49
CHART 1.1 shows the net profit ratio of selected banks which are as follows:-
20
18
16
2009
14
2010
12
2011
10
8 2012
0
STATE BANK ICICI BANK LTD PUNJAB CANARA BANK BANK OF BANK OF
OF INDIA NATIONAL BARODA INDIA
BANK
INTERPRETATION:
The net profit margin is a good way of comparing companies in the same industry,
since such companies are generally subject to similar business conditions. However,
the net profit margins are also a good way to compare companies in different
industries in order to gauge which industries are relatively more profitable. Also
called net margin. A higher profit margin indicates a more profitable company
that has better control over its costs compared to its competitors. Profit margin. The
profit margin ratio, also known as the operating performance ratio, measures the
company’s ability to turn its sales into net income. To evaluate the profit margin, it
must be compared to competitors and industry statistics. It is calculated by dividing
net income by net sales
50
STATE BANK OF INDIA: In table 1.1 chart shows decreasing trend till 2011 and
from 2012 it shows increasing trend .
ICICI BANK: Its shows increasing trend.In 2011 and 2012 it has
slightly increase which indicate more profit margin.
PUNJAB NATIONAL BANK : Every year its fluctuating but only in 2010 it increases.
CANARA BANK: It shows increasing trend at increasing rate.
BANK OF BARODA: It has increases till 2011 but in 2012 it has decreases.
BANK OF INDIA: Every year it has fluctuate.
TABLE 1.2:-
DIVIDEND PAYOUT RATIO 2009 2010 2011 2012
NET PROFIT
51
Chart 1.2 which shows the dividend payout ratio of selected banks:-
40
35
30
25
20 2009
2010
15
2011
10 2012
0
STATE BANK OF ICICI BANK LTD PUNJAB CANARA BANK BANK OF BANK OF INDIA
INDIA NATIONAL BARODA
BANK
INTERPRETATION:
The part of the earnings not paid to investors is left for investment to provide for
future earnings growth. Investors seeking high current income and limited capital
growth prefer companies with high Dividend payout ratio. However investors seeking
capital growth may prefer lower payout ratio because capital gains are taxed at a
lower rate. High growth firms in early life generally have low or zero payout ratios. As
they mature, they tend to return more of the earnings back to investors
STATE BANK OF INDIA: There is a slightly increase inyear 2011 and decrease in
2012
ICICI BANK LTD:There is a decrease from year 2010 to 2012
PUNJAB NATIONAL BANK: There is decreasing trend in the following year
CANARA BANK:There is decreasing trend at faster rate
BANK OF BARODA:There is decrease in the year from 2010
BANK OF INDIA: There is increasing trend before the year 2011 but decrease in
year 2012.
52
EARNING PER SHARE:
Chart 1.3 shows the position of EPS ratio of selected banks which are as follows:
200
180
160
140
120
100 2009
2010
80
2011
60
2012
40
20
0
STATE BANK OF ICICI BANK PUNJAB CANARA BANK BANK OF BANK OF INDIA
INDIA NATIONAL BARODA
BANK
53
INTERPRETATION:-
The portion of a company’s profit allocated to each outstanding share of common
stock. Earnings per share serves as an indicator of a company’s profitability.
Earningsper share is generally considered to be the single most important variable
in determining a share’s price. It is also a major component used to calculate the
price-to-earnings valuation ratio
This chart shows that all selected banks are increasing, STATE BANK OF INDIA
reduced 144 in year 2010 to 116 in yr 2011 then again by 58 in year 2012 . ICICI
BANK, PUNJAB NATIONAL BANK ,CANARA BANK , BANK OF BARODA Shows
increasing trend but again bank of India reduced in year 2010 then again increase
gradually from year 2011.
STATE BANK OF 29 30 30 35
INDIA
ICICI BANK LTD 11 12 14 16.50
PUNJAB NATIONAL 20 22 22 22
BANK
CANARA BANK 8 8 10 11
BANK OF INDIA 4 8 7 7
54
Chart 1.4 shows from the following:-
40
35
30
25
20 2009
2010
15
2011
10 2012
0
STATE BANK ICICI BANK LTD PUNJAB CANARA BANK BANK OF BANK OF
OF INDIA NATIONAL BARODA INDIA
BANK
INTERPRETATION:
The sum of declared dividends for every ordinary share issued. Dividend per share
(DPS) is the total dividends paid out over an entire year (including interim dividends
but not including special dividends) divided by the number of outstanding ordinary
shares issued
This chart1.4 indicates a positive trend as all are increasing except BANK OF
INDIA.
55
CURRENT RATIO:
0.16
0.14
0.12
0.1
0.08 2009
2010
0.06
2011
0.04
2012
0.02
0
STATE BANK ICICI BANK PUNJAB CANARA BANK BANK OF BANK OF INDIA
OF INDIA NATIONAL BARODA
BANK
56
INTERPRETATION:
This chart 1.5 indicates that there is frequent fluctuations except State Bank Of
India and Bank Of Baroda which has gradually increase in year 2012.
QUICK RATIO:
TABLE 1.6 SHOWS THE quick ratio of selected banks which are as follows:-
57
CHART 1.6 SHOWS the position of selected banks:-
35
30
25
20
2009
2010
15
2011
2012
10
0
STATE BANK OF ICICI BANK LTD P & B BANK CANARA BANK BANK OF BANK OF INDIA
INDIA BARODA
INTERPRETATION:
This chart 1.6 indicates increasing or positive trend except BANK OF INDIA which
shows the downfall in year 2012.
58
TABLE 1.7shows the gross non-performing assets: -
45000
40000
35000
30000
25000
2009
20000 2010
15000 2011
10000 2012
5000
0
STATE BANK ICICI BANK LTD PUNJAB CANARA BANK BANK OF BANK OF INDIA
OF INDIA NATIONAL BARODA
BANK
DATA INTERPRETATION:-
A debt obligation where the borrower has not paid any previously agreed upon
interest and principal repayments to the designated lender for an extended period of
time. The nonperforming asset is therefore not yielding any income to the lender in
the form of principal and interest payments. Chart 1.7 shows a positive trend for
every selected banks except ICICI BANK LTD which shows fluctuations in every
year.
59
CHAPTER-5
FINDINGS
From the data analysis and interpretations of the ratios of six selected banks the
following findings have been given:
1. State bank of India: - In net profit margin ratio 2011 it has decrease in year
2011 from 10.54 to 8.55 i.e 1.99 times and again it has increased in 2012 1.18 times.
In dividend payout ratio it has gradually increase in year 2010 by 0.46 times, in tear
2011 by 2.67 times which has reduced again in year 2012 by 3.47 times. Earnings
per share have increase in year 2012 by 58.08 times which has decrease in year
2011 by 28.30 times. Dividend per share and Non-performing assets has also
increase in every year. Current ratio has increase form 0.1 times in year 2012 and
quick ratio has also frequently increases.
2. ICICI BANK LTD: -net profit margin, it has gradually increases in every year. In
2010 dividend payout ratio increases by 1 times but again it slowly it starts
decreasing. Earnings per share, dividend per share & quick ratio increases
frequently in every year. Current ratio there is frequent fluctuations. Non-performing
assets fluctuates in every year.
3. PUNJAB NATIONAL BANK: - From year 2009 net profit margin has gradually
increase but in year 2012 it has reduced to 2.47 times. Dividend payout ratio has
decreased in every year frequently but Earning per share, Dividend per share , Quick
ratio& Non-performing assets has increase frequently in every year. Current ratio
has increase in year 2011 by 0.01 times and remains same in every 3 years.
60
4. CANARA BANK: -net profit margin ratio, Earnings per share has frequently
increased in every year but dividend payout ratio has decreased gradually in every
year. Dividend per share increases by 1 times in year 2012. In 2011 current ratio has
decrease by 0.01 times and remains same in all the 3 years. Quick ratio has
increases slowly in every year.
5. BANK OF BARODA: -net profit margin ratio has slowly increases in year 2009
but in 2012 it has decreases by 2 times in year 2012.dividend payout ratio has
frequent fluctuates in every year. Earnings per share Quick ratio, dividend per
share& Non-performing assets has increases slowly in every year. Current ratio
increases in year 2012 by 0.01 times.
6. BANK OF INDIA: - Net profit margin ratio has gradually increase but in year 2011
it has reduced to 7 times and again it has increase. Dividend payout ratio has slowly
increased but in 2012 it decreases by 7 times. Earnings per share have decrease in
year 2010 by 24 times and again started increasing. Dividend per share has
increased by 4 times in year 2010and form year 2011 it started decreasing.
Currentratio has frequent fluctuations by 0.01 times and quick ratio has increases
every year slowly. Non – performing assets has increases in every year.
61
SUGGESTIONS
62
CONCLUSION
The economic growth of the country is an apt indicator for the growth of the
banking sector. The Indian economy is projected to grow at a rate of 5-6
percent34 and the country’s banking industry is expected to reflect this
growth.
The onus for this lies in the capabilities of the Reserve Bank of India as an
able central regulatory authority, whose policies have shielded Indian banks
from excessive leveraging and making high risk investments.
During 2011-12, majority of public sector banks failed to meet the priority
sector target. Though at an aggregate level, foreign banks’ performance was
better as compared to domestic banks, bank-wise data revealed that some
foreign banks also failed to meet the priority sector lending target.
The Indian banking sector has been relatively well shielded by the central
bank and has managed to sail through most of the crisis. But, currently in light
of slowing domestic GDP growth, persistent inflation, asset quality concerns
and elevated interest rates, the investment cycle has been wavering in the
country.
63
ANNEXURE
64
Progress
Other Assets 37,733.27 35,112.76 43,777.85 53,113.02
Total Assets 964,432.08 1,053,413.74 1,223,736.20 1,335,519.24
Contingent
614,603.47 429,917.37 585,294.50 698,064.74
Liabilities
Bills for collection 152,964.06 166,449.04 205,092.29 201,500.44
Book Value (Rs) 912.73 1,038.76 1,023.40 1,251.05
Income
Expenditure
65
Provisions & Contingencies 8,393.43 8,660.28 4,532.53 6,319.60
Appropriations
66
Balance Sheet of Punjab National
------------------- in Rs. Cr. -------------------
Bank
Capital and liabilities Mar '12 Mar '11 Mar '10 Mar '09
12 mths 12 mths 12 mths 12 mths
Total Share Capital 339.18 316.81 315.30 315.30
Equity Share Capital 339.18 316.81 315.30 315.30
Share Application Money 0.00 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00 0.00
Reserves 26,028.37 19,720.99 15,915.63 12,824.59
Revaluation Reserves 1,449.53 1,470.76 1,491.99 1,513.74
Net Worth 27,817.08 21,508.56 17,722.92 14,653.63
Deposits 379,588.48 312,898.73 249,329.80 209,760.50
Borrowings 37,264.27 31,589.69 19,262.37 4,374.36
Total Debt 416,852.75 344,488.42 268,592.17 214,134.86
Other Liabilities & Provisions 13,524.18 12,328.27 10,317.69 18,130.13
Total Liabilities 458,194.01 378,325.25 296,632.78 246,918.62
Mar '12 Mar '11 Mar '10 Mar '09
Assets 12 mths 12 mths 12 mths 12 mths
Cash & Balances with RBI 18,492.90 23,776.90 18,327.58 17,058.25
Balance with Banks, Money at Call 10,335.14 5,914.32 5,145.99 4,354.89
Advances 293,774.76 242,106.67 186,601.21 154,702.99
Investments 122,629.47 95,162.35 77,724.47 63,385.18
Gross Block 5,265.08 4,981.60 4,215.21 3,930.36
Accumulated Depreciation 2,096.22 1,876.01 1,701.74 1,533.25
Net Block 3,168.86 3,105.59 2,513.47 2,397.11
Capital Work In Progress 0.00 0.00 0.00 0.00
Other Assets 9,792.88 8,259.42 6,320.07 5,020.20
Total Assets 458,194.01 378,325.25 296,632.79 246,918.62
173,768.84 101,465.73 68,124.47 79,270.65
Contingent Liabilities
Bills for collection 50,981.22 37,449.53 33,215.78 31,941.43
Book Value (Rs) 777.39 632.48 514.77 416.74
67
Profit & Loss account of Punjab
------------------- in Rs. Cr. -------------------
National Bank
Mar '12 Mar '11 Mar '10 Mar '09
Income
Interest Earned 36,428.03 26,986.48 21,466.91 19,326.16
Other Income 4,202.60 3,612.58 3,565.31 2,919.69
Total Income 40,630.63 30,599.06 25,032.22 22,245.85
Expenses
Interest expended 23,013.59 15,179.14 12,944.02 12,295.30
Employee Cost 4,723.48 4,461.10 3,121.14 2,924.38
Selling and Admin Expenses 3,353.59 2,813.45 1,701.46 1,406.42
Depreciation 292.26 255.85 222.83 191.06
Miscellaneous Expenses 4,363.51 3,456.02 3,137.42 2,337.80
Preoperative ExpCapitalised 0.00 0.00 0.00 0.00
Operating Expenses 9,405.85 8,367.96 5,761.36 5,026.81
Provisions & Contingencies 3,326.99 2,618.46 2,421.49 1,832.85
Total Expenses 35,746.43 26,165.56 21,126.87 19,154.96
Mar '12 Mar '11 Mar '10 Mar '09
68
Proposed Dividend/Transfer to
867.24 810.06 810.10 737.78
Govt
Balance c/f to Balance Sheet 0.00 0.00 0.00 7.64
Total 4,892.09 4,433.50 3,913.00 3,090.88
Assets
Cash & Balances with RBI 17,795.14 22,014.79 15,719.46 10,036.79
Balance with Banks, Money at
10,384.27 8,693.32 3,933.75 6,622.99
Call
Advances 232,489.82 212,467.17 169,334.63 138,219.40
Investments 102,057.43 83,699.92 69,676.95 57,776.90
Gross Block 4,858.37 4,686.15 4,480.37 4,440.07
Accumulated Depreciation 2,000.84 1,841.74 1,620.99 1,510.61
Net Block 2,857.53 2,844.41 2,859.38 2,929.46
Capital Work In Progress 0.00 0.00 0.00 0.00
Other Assets 8,576.01 6,359.15 3,216.92 4,060.26
69
Total Assets 374,160.20 336,078.76 264,741.09 219,645.80
Income
Interest Earned 30,850.62 23,064.01 18,751.96 17,119.05
Other Income 2,949.75 2,826.98 3,000.82 2,427.10
Total Income 33,800.37 25,890.99 21,752.78 19,546.15
Expenditure
Interest expended 23,161.31 15,240.74 13,071.43 12,401.25
Employee Cost 2,973.09 2,954.84 2,193.70 1,877.15
Selling and Admin Expenses 2,245.56 1,817.82 2,164.65 1,540.27
Depreciation 156.89 151.36 155.13 173.64
Miscellaneous Expenses 1,980.82 1,700.34 1,146.44 1,481.42
Preoperative ExpCapitalised 0.00 0.00 0.00 0.00
Operating Expenses 5,967.81 5,420.49 4,903.79 3,965.24
Provisions & Contingencies 1,388.55 1,203.87 756.13 1,107.24
Total Expenses 30,517.67 21,865.10 18,731.35 17,473.73
Mar '12 Mar '11 Mar '10 Mar '09
70
Per share data (annualised)
Earning Per Share (Rs) 74.10 90.88 73.69 50.55
Equity Dividend (%) 110.00 110.00 100.00 80.00
Book Value (Rs) 465.57 405.00 305.83 244.87
Appropriations
Transfer to Statutory Reserves 1,530.15 1,765.29 1,676.35 1,508.64
Transfer to Other Reserves 1,185.26 1,693.30 865.08 180.03
Proposed Dividend/Transfer to
567.30 567.30 480.00 383.75
Govt
Balance c/f to Balance Sheet 0.00 0.00 0.00 0.00
Total 3,282.71 4,025.89 3,021.43 2,072.42
71
Net Worth 27,476.85 20,993.11 15,106.39 12,835.54
Assets
72
Book Value (Rs) 668.34 536.16 414.71 352.37
Income
Interest Earned 29,673.72 21,885.92 16,698.34 15,091.58
Other Income 3,422.33 2,809.19 2,806.36 2,757.66
Total Income 33,096.05 24,695.11 19,504.70 17,849.24
Expenditure
Interest expended 19,356.71 13,083.66 10,758.86 9,968.17
Employee Cost 2,985.58 2,916.78 2,350.88 2,348.13
Selling and Admin Expenses 2,589.44 1,885.00 1,627.56 885.24
Depreciation 276.57 243.04 230.86 230.50
Miscellaneous Expenses 2,880.80 2,324.94 1,478.21 2,189.99
Preoperative ExpCapitalised 0.00 0.00 0.00 0.00
Operating Expenses 6,727.59 5,669.88 4,711.23 3,844.66
Provisions & Contingencies 2,004.80 1,699.88 976.28 1,809.20
Total Expenses 28,089.10 20,453.42 16,446.37 15,622.03
Mar '12 Mar '11 Mar '10 Mar '09
73
Total 5,006.96 4,241.68 3,058.33 2,227.20
Preference Dividend 0.00 0.00 0.00 0.00
Appropriations
Proposed Dividend/Transfer to
812.29 753.35 639.26 383.56
Govt
74
Capital and liabilities
Total Share Capital 574.52 547.22 525.91 525.91
Equity Share Capital 574.52 547.22 525.91 525.91
Share Application Money 0.00 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00 0.00
Reserves 19,151.38 15,423.99 12,275.46 11,258.72
Revaluation Reserves 1,235.89 1,319.47 1,428.62 1,710.29
Net Worth 20,961.79 17,290.68 14,229.99 13,494.92
Deposits 318,216.03 298,885.81 229,761.94 189,708.48
Borrowings 32,114.23 22,021.38 22,399.90 9,486.98
Total Debt 350,330.26 320,907.19 252,161.84 199,195.46
Other Liabilities & Provisions 13,243.43 12,974.69 8,574.63 12,811.39
Total Liabilities 384,535.48 351,172.56 274,966.46 225,501.77
Mar '12 Mar '11 Mar '10 Mar '09
assets
Cash & Balances with RBI 14,986.71 21,782.43 15,602.62 8,915.28
Balance with Banks, Money at
19,724.54 15,527.56 15,627.51 12,845.97
Call
Advances 248,833.34 213,096.18 168,490.71 142,909.37
Investments 86,753.59 85,872.42 67,080.18 52,607.18
Gross Block 4,628.22 4,020.12 3,790.81 3,578.23
Accumulated Depreciation 1,905.26 1,654.19 1,504.07 1,156.75
Net Block 2,722.96 2,365.93 2,286.74 2,421.48
Capital Work In Progress 48.64 114.81 65.07 110.45
Other Assets 11,465.69 12,413.22 5,813.63 5,692.02
Total Assets 384,535.47 351,172.55 274,966.46 225,501.75
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Profit & Loss account of Bank
------------------- in Rs. Cr. -------------------
Of India
Mar '12 Mar '11 Mar '10 Mar '09
Income
Interest Earned 28,480.67 21,751.72 17,877.99 16,347.36
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Preference Dividend 0.00 0.00 0.00 0.00
appropriations
Proposed Dividend/Transfer to
465.98 444.30 428.65 491.54
Govt
Balance c/f to Balance Sheet 0.00 0.00 0.00 0.00
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BIBLIOGRAPHY
The following articles from internet have been used for the study purpose:
(a) www.nseindia.com
(b) www.bseindia.com
(c) www.sharegyan.com
(d) www.moneycontrol.com
(e) www.statebankofindia.com
(f)www.icicibank.com
(g)www.punjabnationalbank.com
(h)www.canarabank.com
(i)www.bankofindia.com
(j)www.bankofbaroda.com
(k) Guidance from company mentor Mr. Aatish Gupta
(l)http://www.indiainfoline.com/Markets/News/Indian-Banking-Sector-Outlook-2013-
Dun-and-Bradstreet/5571598340
(m)www.livemint.com
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