FUNDAMENTAL ANALYSIS OF THE INDIAN

PRIVATE BANKING INDUSTRY (2008)

TABLE OF CONTENTS
CHAPTER

FUNDAMENTAL ANALYSIS OF THE INDIAN PRIVATE

BANKING INDUSTRY

PAGE

List of Tables
1

3
4

5
6

List of Figures
List Of Abbreviations
INTRODUCTION
1.1 Industry Profile
1.2 Company Profile
RESEARCH METHODOLOGY
2.1 Need For The Study
2.2 Scope Of The Study
2.3 Primary Objective
2.4 Secondary Objective
2.5 Data Collection Method
2.7 Techniques Used
LITERATURE REVIEW
DATA ANALYSIS AND INTERPRETATION
4.1 Fundamental Analysis
4.2 Technical Analysis
FINDINGS AND SUGGESTIONS
CONCLUSION
REFERENCES

1
1
2
3
3
3
3
3
3
3
4
7
7
23
46
47
48

LIST OF TABLES

S.NO

TABLE NO

4.1.1

4.1.2

4.1.3

4.1.4

4.1.5

4.1.6

4.1.7

TITLE
Porters model for Banking Industry
ICICI Bank Company Profile
Kotak Mahindra Bank Company Profile
HDFC Bank Bank Company Profile
AXIS Bank Company Profile
Comparison of these four companies
financials
Comparison of ratios of four companies

PAGE
NO
11
15
16
17
18
19
20

Summary of SMA as an Example

8

4.2.1

9
10

4.2.2
4.2.3

28
Summary of EMA as an Example
Summary of BOL as an Example

31
33

LIST OF FIGURES
S.NO
1
2

FIGURE NO
4.1.1
4.2.1

TITLE
Growth Rate of GDP (%)
10-Day Simple Moving Average
10-Day Exponential Moving
Average

PAGE NO
7
29

4.2.2

4.2.3

Bollinger Bands

35

4.2.4

Relative Strength Index

36

4.2.5

4.2.6

4.2.7

4.2.8

10

4.2.9

11

4.2.10

12

4.2.11

13

4.2.12

14

4.2.13

15

4.2.14

16

4.2.15

17

4.2.16

18
19

4.2.17
4.2.18

20

4.2.19

21

4.2.20

Simple Moving Average for ICICI

Bank
Simple Moving Average for HDFC
Bank
Simple Moving Average for Kotak
Mahindra Bank
Simple Moving Average for AXIS
Bank
Exponential Moving Average for
ICICI Bank
Exponential Moving Average for
HDFC Bank
Exponential Moving Average for
Kotak Mahindra Bank
Exponential Moving Average for
AXIS Bank
Relative Strength Index for ICICI
Bank
Relative Strength Index for HDFC
Bank
Relative Strength Index for Kotak
Mahindra Bank
Relative Strength Index for AXIS
Bank
Bollinger bands for ICICI Bank
Bollinger bands for HDFC Bank
Bollinger bands for Kotak Mahindra
Bank
Bollinger bands for AXIS Bank

32

37
37
38
38
39
40
40
41
42
42
43
43
39
40
40
41

LIST OF FIGURES
S.NO
12

FIG NO
5.12

13
14

5.13
5.14

15

5.15

TITLE
Information provided during induction
process
Quality of training
Supervisors discussion with employees
on their performance
Overall feedback

PAGE NO

CHAPTER 1

INTRODUCTION
INDUSTRY PROFILE
FINANCIAL SERVICES KPO BUSINESS IN INDIA

The evolution of the Indian Business Process Outsourcing (BPO) sector has given
birth to a new trend in the global outsourcing scene: KPO or Knowledge Process
Outsourcing. In BPO, clients provide the business process requirements and the
outsourcing service provider in India follows the needs of the client. KPO is significantly
higher on the value chain and involves processes that demand advanced information
search, analytical, interpretation and technical skills as well as some judgment and
decision making. For example, Financial Services KPO usually deals with areas such as
insurance underwriting, fund management, risk assessment, equity research, financial
data mining, corporate & market research. Cost savings, operational efficiencies, access
to a highly talented workforce and improved quality are the major drivers behind
knowledge process outsourcing to India.
In the case of knowledge, there is never a pre-defined process or a structured,
rules based manner to reach a conclusion or solve a problem. Instead the term KPO can
be interpreted to mean outsourcing of knowledge intensive business processes that
require specialized domain expertise.
A few of the prominent Indian players in the financial services KPO domain are
OfficeTiger, Smart Analyst, The Smart Cube. In addition to these, a number of MNC
KPOs such as EvalueServe, GE Capital as well as captive arms of global firms such as JP
Morgan, HSBC, Reuters, Fidelity, Morgan Stanley and Citigroup also operate in India.
India will continue to be the preferred location for the global knowledge process
outsourcing (KPO) industry which is projected to be worth anywhere between $10 billion
and $17 billion by the year 2010, a consultancy firm's new report has said. The financial
services sector will account for a major proportion of the KPO industry and its worth will
be in excess of $5 billion by 2010.

CHAPTER 2
RESEARCH METHODOLOGY

2.1 NEED FOR THE STUDY

The need for the study is to provide an insight of the banking industry for the
investors to invest. This project helps the investors to make a decision to invest in a good
banking company.

2.2 SCOPE OF THE STUDY

0The study is focused on four major Banks in the Banking Industry that are listed
in National Stock Exchange.

2.3 OBJECTIVE OF THE STUDY

To analyze the volatility of the scrip of Banking Industry by using Fundamental
and Technical analysis.

2.4 DATA COLLECTION

Secondary data:

Company financial reports

Websites- www.nseindia.com
www.moneycontrol.com

Materials related to Banking sector

2.5 TECHNIQUES USED

Fundamental Analysis

Technical Analysis

CHAPTER 3
LITERATURE REVIEW
FUNDAMENTAL ANALYSIS
Fundamental analysis is a technique that attempts to determine a securitys value
by focusing on underlying factors that affect a company's actual business and its future
prospects. On a broader scope, you can perform fundamental analysis on industries or the
economy as a whole. The term simply refers to the analysis of the economic well-being
of a financial entity as opposed to only its price movements. Fundamental analysis is
researching the fundamentals.
The FA is done on the EIC Framework where it represents Economy Analysis,
Industry Analysis and Company Analysis. However, here it is restricted for Company
Analysis.
Economy Analysis is an attempt to predict the course of the national economy as the
economic activities affects corporate profits, investors attitudes and also share prices.
Economy Analysis would include study of macro-economic variables like GNP, GDP
growth rate, Industrial Policy, Monetary Policy, Fiscal Policy, Exports, Imports, etc.
Industry Analysis is an attempt to study the variables which affect a particular industry
and its business environment. The characteristics of the industry are studied upon. It may
be competition scene, market share, characteristic feature of the industry, etc.
Company Analysis is purely based on studying financial statement and predicting the
financial health of an individual company. Financial Statements are the basic and formal
means through which the corporate management communicate financial information to
the various users. The users of the financial information need information on the aspects
such as Liquidity, Profitability, Solvency, Turnover and Valuation.
(Source:jatin.pancholi.googlepages.com/analyzing_financial_statements.pdf)

TECHNICAL ANALYSIS
Technical analysis is a method of evaluating securities by analyzing the statistics
generated by market activity, such as past prices and volume. They use charts and other
tools to identify patterns that can suggest future activity.
The field of technical analysis is based on three assumptions:
1. The market discounts everything.
2. Price moves in trends.
3. History tends to repeat itself.
1. The Market Discounts Everything A major criticism of technical analysis is that it
only considers price movement, ignoring the fundamental factors of the company.
However, technical analysis assumes that, at any given time, a stock's price reflects
everything that has or could affect the company - including fundamental factors.
Technical analysts believe that the company's fundamentals, along with broader
economic factors and market psychology, are all priced into the stock, removing the need
to actually consider these factors separately. This only leaves the analysis of price
movement, which technical theory views as a product of the supply and demand for a
particular stock in the market.
2. Price Moves in Trends In technical analysis, price movements are believed to follow
trends. This means that after a trend has been established, the future price movement is
more likely to be in the same direction as the trend than to be against it. Most technical
trading strategies are based on this assumption.
3. History Tends To Repeat Itself Another important idea in technical analysis is that
history tends to repeat itself, mainly in terms of price movement. The repetitive nature of
price movements is attributed to market psychology; in other words, market participants
tend to provide a consistent reaction to similar market stimuli over time. Technical
analysis uses chart patterns to analyze market movements and understand trends.
Although many of these charts have been used for more than 100 years, they are still
believed to be relevant because they illustrate patterns in price movements that often
repeat themselves.

8
FUNDAMENTAL VS. TECHNICAL ANALYSIS

Technical analysis and fundamental analysis are the two main schools of thought
in the financial markets. As we've mentioned, technical analysis looks at the price
movement of a security and uses this data to predict its future price movements.
Fundamental analysis, on the other hand, looks at economic factors, known as
fundamentals.
(Source: www.investopedia.com)

CHAPTER 4
DATA ANALYSIS AND INTERPRETATION
4.1 FUNDAMENTAL ANALYSIS
INDIAN GDP
GDP indicates the rate of growth of the economy. Economy Statistics on Indias
Economy has shown that the country's economy has experienced a robust growth. The
Gross Domestic Product in the country increased at an impressive rate of 9 percent per
annum. The GDP Growth was mainly led by the fast rising industrial production as well
as the growth in the services sector.
The Real growth rate of Gross Domestic Product of India over various quarters
for the year 2006-07 is as follows:
Figure 4.1.1 Growth Rate of GDP (%)

For the second quarter of the year 2006-07, the agriculture and allied activities
grew at a rate of 1.7 Percent, industries grew by 10.5 Percent, and the services sector
grew by 10.7 Percent. The infrastructure industry in the market economy like India grew
at a rate of 7.8 percent during the period of April-Nov 2006. This growth is favorable for
the stock market.

10
BANKING SECTOR IN INDIA
With the Indian economy moving on to a high growth trajectory, consumption
levels soaring and investment riding high, the Indian banking sector is at a watershed.
Further, as Indian companies globalize and people of Indian origin increase their
investment in India, several Indian banks are pursuing global strategies.
The industry has been growing faster than the real economy, resulting in the ratio of
assets of commercial banks to GDP increasing to 92.5 per cent at end-March 2007. The
Indian banks have also been doing exceptionally well in the financial sector with the
price-to-book value being second only to china, according to a report by Boston
Consultancy Group.

GROWTH
A burgeoning economy, financial sector reforms, rising foreign investment,
favorable regulatory climate and demographic profile has led to India becoming one of
the fastest growing banking market in the world. The overall banking industry's business
grew at a CAGR of about 20 per cent from US$ 469.4 billion as of March 2002, to US$
1171.29 billion by March 2007.
Aggregate bank deposits of banks increased by US$ 129.26 billion (22.1 per cent)
at the end of March 2007 over the corresponding in 2006. In the current fiscal, aggregate
bank deposits increased by 23.8 per cent, year-on-year, as of January 4, 2008 as against
21.5 per cent a year ago. While aggregate demand deposits increased by 15.6 per cent,
aggregate time deposits increased by 25.3 per cent in the same period, indicating
migration from small savings schemes of the Government.
Similarly, aggregate deposits of the scheduled commercial banks (SCB), after
growing by 17.8 per cent and 24.6 per cent in 2005-06 and 2006-07, rose by 25.2 per
cent, year-on-year, as on January 4, 2008. In fact, the absolute increase of US$ 96.34
billion (14.6 per cent) in the current fiscal year up to January 4 2008 was higher than the
US$ 70.59 billion (13.2 per cent) increase in the same period last year.
Simultaneously, loans and advances of SCBs rose by over 30 per cent (i.e. 33.2
per cent in 2004-05, 31.8 per cent in 2005-06 and 30.6 per cent in 2006-07) in the last
three financial years, underpinned by the robust macroeconomic performance. The

11
growth has continued in the current fiscal with non-food credit by SCBs increasing by
22.2 per cent, year-on-year, as on January 4, 2008.
Significantly, the asset quality of the banks has also improved over this period.
The gross non-performing assets (NPA) as a per cent of total assets have declined from 4
per cent as of March 2002 to 1.46 per cent as of March 2006. Simultaneously, the capital
adequacy ratio of all SCBs has improved from 11.1 per cent as of March 2002 to 12.3 per
cent by March 2007.

POTENTIAL BANKING MARKET

While this growth has been very impressive, the potential banking market waiting
to be tapped in India is still fairly huge. Out of the 203 million Indian households, three
fourths, or 147 million, are in rural areas and 89 million are farmer households. In this
segment, 51.4 per cent have no access to formal or informal sources of credit, while 73
per cent have no access to formal sources of credit.
In fact, according to a report by Boston Consultancy Group, India has the second
largest financially excluded households of about 135 million, which is next to china.
Also, about 60 million new households are expected to be added to India's bankable pool
between 2005 and 2009. With such a large untapped market, the Indian banking industry
is estimated to grow rapidly, faster than even china in the long run.

AMONG THE BEST

Indian banks are one of the most technologically advanced with vast networks of
branches empowered by strong banking systems, and their product and channel
distribution capabilities are on par with those of the leading banks in the world, says a
survey by McKinsey. It also reveals that IT effectiveness at the top Indian banks is world
class.
With the economy in overdrive and buoyancy in consumption and investment
demand, nine Indian banks, led by HDFC Bank and ICICI bank, have made it to the top
50 Asian Banks list in Asian Bankers 300 report. Simultaneously, State Bank of India has
become the top loan arranger in the Asia-Pacific region in 2007, according to UK based

12
Project Finance International (PFI). Also, India emerged as the top provider of
educational loans worth US$ 3.67 billion till September in 2007.

PRIVATE SECTOR
Ever since the banking operations had been opened to the private sector in 1990s,
the new private banks have been increasing its role in the Indian banking industry.
Against the industry average growth of about 20 per cent in the past five years, the new
private sector banks registered a growth of about 35 per cent per annum, growing from
US$ 41.63 billion as of March 2002 to US$ 186.71 billion by March 2007.
Consequently, new private banks market share has increased from about 9 per
cent in 2001-02 to 16 per cent as of March 2006-07. Foreign banks, which totaled 29 in
June 2007, have also been expanding at a rapid pace. For example, India was the fastest
growing market for Global banking major HSBC in 2006-07, with a growth rate of 64
percent.
The balance sheet of private banks and foreign banks in India expanded by 38.7
per cent and 39.5 per cent during 2006-07, taking their combined share (along with
private banks) in total assets of the banking sector to grow from 22.3 per cent at the end
of March 2006 to 24.9 per cent by March 2007.

ROAD AHEAD
Banks aspiring to become global must have a presence in India and other merging
markets, says a report of consultancy major Ernst & Young, as they are set to become a
major source of financial sector revenue and profit growth.
As the Indian banking industry continues its rapid growth along with rise in
financial services penetration in the Indian economy, the industry's profit is likely to
simultaneously surge ahead. According to a report by Boston Consultancy Group, the
profit pool of the Indian banking industry is estimated to increase from US$ 4.8 billion in
2005 to US$ 20 billion in 2010 and further to US$ 40 billion by 2015.
Simultaneously, driven by the expansion of the middle class population, increase
in private banks and the burgeoning national economy, the domestic credit market of
India is estimated to grow from US$ 0.4 trillion in 2004 to US$ 23 trillion by 2050. With

13
such a favorable scenario, India is likely to emerge as the third largest banking hub in the
world by 2040, says a pricewaterhouse Coopers report.

KEY POINTS IN BANKING INDUSTRY

Table 4.1.1 Porters model for Banking Industry
Supply

Liquidity is controlled by the Reserve Bank of India (RBI).

Demand

India is a growing economy and demand for credit is high though

it could be cyclical.

Barriers to entry

Licensing requirement, investment in technology and branch

network.

Bargaining power

High during periods of tight liquidity. Trade unions in public

of suppliers

sector banks can be anti reforms. Depositors may invest elsewhere

if interest rates fall.

Bargaining power

For good creditworthy borrowers bargaining power is high due to

of customers

the availability of large number of banks

Competition

High- There are public sector banks, private sector and foreign
banks along with non banking finance companies competing in
similar business segments.

14
COMPANY ANALYSIS:
The companies analyzed in the banking industry are,

ICICI Bank Ltd

HDFC Bank Ltd

Kotak Mahindra Bank Limited

Axis Bank Limited

For the analysis of these companies some basic information about these
companies are collected and various ratios were used. Some of ratios used are,

Operating Profit Margin

Net Profit Margin

Return on Equity

P/E Ratio

P/BV Ratio

Enterprise Multiple

OPERATING PROFIT MARGIN

A financial metric used to assess a firm's financial health by revealing
the proportion of money left over from revenues after accounting for the cost of goods
sold. Operating Profit Margin serves as the source for paying additional expenses and
future savings.
Operating Profit Margin = Operating Income/ Revenue

NET PROFIT MARGIN

A ratio of profitability calculated as net income divided by revenues, or net profits
divided by sales. It measures how much out of every dollar of sales a company actually
keeps in earnings. A higher profit margin indicates a more profitable company that has
better control over its costs compared to its competitors.
Net Profit Margin = Net profit/ Revenue

15
RETURN ON EQUITY
A measure of a corporation's profitability that reveals how much profit a company
generates with the money shareholders have invested. It measures the rate of return on
the ownership interest (shareholders' equity) of the common stock owners. ROE is
viewed as one of the most important financial ratios.
It measures a firm's efficiency at generating profits from every dollar of net
assets (assets minus liabilities), and shows how well a company uses investment dollars
to generate earnings growth.
Return on Equity = Net income/Shareholders equity

PRICE-EARNINGS RATIO (P/E RATIO)

A valuation ratio of a company's current share price compared to its per-share
earnings.
P/E = Price per share/Earnings per share
In

general,

high

P/E suggests

that

investors

are

expecting higher

earnings growth in the future compared to companies with a lower P/E. However, the P/E
ratio doesn't tell us the whole story by itself. It's usually more useful to compare the P/E
ratios of one company to other companies in the same industry, to the market in general
or against the company's own historical P/E. It would not be useful for investors using the
P/E ratio as a basis for their investment to compare the P/E of a technology company
(high P/E) to a utility company (low P/E) as each industry has much different growth
prospects.
The P/E is sometimes referred to as the "multiple", because it shows how much
investors are willing to pay per dollar of earnings. If a company were currently trading at
a multiple (P/E) of 20, the interpretation is that an investor is willing to pay Rs.20 for
Rs.1 of current earnings.

PRICE TO BOOK RATIO

A ratio used to compare a stock's market value to its book value. A lower P/B
ratio could mean that the stock is undervalued. However, it could also mean that
something is fundamentally wrong with the company. As with most ratios, be aware that

16
this varies by industry. This ratio also gives some idea of whether you're paying too much
for what would be left if the company went bankrupt immediately.
Price to Book Ratio = market price/book value
The higher the ratio, the higher the premium the market is willing to pay for the
company above its hard assets. A low ratio may signal a good investment opportunity,
but the ratio is less meaningful for some types of companies, such as those in technology
sectors. This is because such companies have hidden assets such as intellectual property
which are of great value, but not reflected in the book value.

ENTERPRISE MULTIPLE
A ratio used to determine the value of a company. The enterprise multiple looks at
a firm as a potential acquirer would, because it takes debt into account - an item which
other multiples like the P/E ratio do not include. Enterprise multiple is calculated as:
EV/EBITDA = Enterprise value/EBITDA**
**EBITDA- Earnings before interest, tax, depreciation and amortization
A low ratio indicates that a company might be undervalued. The enterprise
multiple is used for several reasons:
1) It's useful for transnational comparisons because it ignores the distorting effects
of individual countries' taxation policies.
2) It's used to find attractive takeover candidates. Enterprise value is a better
metric than market cap for takeovers. It takes into account the debt which the acquirer
will have to assume. Therefore, a company with a low enterprise multiple can be viewed
as a good takeover candidate.
Enterprise multiples can vary depending on the industry. Therefore, it's important
to compare the multiple to other companies or to the industry in general. Expect higher
enterprise multiples in high growth industries (like biotech) and lower multiples in
industries with slow growth (like railways).

17
Table 4.1.2 ICICI Bank Company Profile
ICICI Bank Ltd
1

Name of the company

Established year

ICICI Bank Ltd

1994
ICICI Bank, 9th Floor, South Towers, ICICI

Head office

Towers, Bandra Kurla Complex, Bandra (E),

Mumbai

Business group

ICICI Limited

Paid up capital

Rs.8,897,796,000

Promoter's share in equity Cap

Leadership

Position

Location in India

950 branches in India

10

Location abroad

17 countries in abroad

11

Bank has no promoters

K.V. KAMATH
Managing Director & CEO

Market capitalisation as on
15/02/08

132527.35

12

Share price as on 15/02/08

14

Recent mergers & acquisitions

Merger with Sangli Bank Limited

15

Name of the company acquired

Sangli Bank Limited

16

Purpose

1190.9

Additional
Capacity

190 Branches
In the state of

New markets
17

No. of employees

Maharashtra
61,697

Second largest bank and largest private sector bank in India in terms of assets.
Highest market cap among financial services company at around Rs.80,000 crore. It is a
leader in retail lending, with more than 30% market share in all consumer finance
segments, and now has shifted focus to international banking and rural operations as key
focus areas.

18
Table 4.1.3 Kotak Mahindra Bank Company Profile
Kotak Mahindra Bank Limited
1

Name of the company

Kotak Mahindra Bank Limited

Established year

1985

Business group

Kotak Mahindra Group

Paid up capital

Rs.592100000

Promoter's share in equity Cap

Leadership
Position

8
10

Location in India

52.62%
Uday Kotak
Chairman
100

Market capitalisation as on
21/02/08

11 Share price as on 21/02/08

13 No. of employees

Rs.287181100
Rs.834.95
61,697

The Kotak Mahindra Group was born in 1985 as Kotak Capital Management
Finance Limited. This company was promoted by Uday Kotak, Sidney A. A. Pinto and
Kotak & Company. Industrialists Harish Mahindra and Anand Mahindra took a stake in
1986, and that's when the company changed its name to Kotak Mahindra Finance
Limited.
Kotak Mahindra is one of India's leading financial conglomerates, offering
complete financial solutions that encompass every sphere of life. From commercial
banking, to stock broking, to mutual funds, to life insurance, to investment banking, the
group caters to the financial needs of individuals and corporates. They have offices in
New York, London, Dubai, Mauritius and Singapore.

19
Table 4.1.4 HDFC Bank Bank Company Profile
HDFC Bank
1

Name of the company

Established year

Head office

Business group

HDFC

Paid up capital

Rs. 282 crore

Promoter's share in equity Cap

Leadership
Position

8
10

Location in India

HDFC Bank Ltd

1994
Mumbai

23.28%
Jagdish Capoor
Chairman / Chair Person
684

Market capitalisation as on
21/02/08

11 Share price as on 21/02/08

14 No. of employees

545,577,000
1,540.85
21,477

The authorised capital of HDFC Bank is Rs.450 crore (Rs.4.5 billion). The paidup capital is Rs.311.9 crore (Rs.3.1 billion). The HDFC Group holds 22.1% of the bank's
equity and about 19.4% of the equity is held by the ADS Depository (in respect of the
bank's American Depository Shares (ADS) Issue). Roughly 31.3% of the equity is held
by Foreign Institutional Investors (FIIs) and the bank has about 190,000 shareholders.
The shares are listed on the The Stock Exchange, Mumbai and the National Stock
Exchange. The bank's American Depository Shares are listed on the New York Stock
Exchange (NYSE) under the symbol "HDB".
The Housing Development Finance Corporation Limited (HDFC) was amongst
the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set
up a bank in the private sector, as part of the RBI's liberalisation of the Indian Banking
Industry in 1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank
Limited'.

20
Table 4.1.5 AXIS Bank Company Profile

AXIS Bank
1

Name of the company

Established year

Head office

Business group

Paid up capital (Rs. Crore)

281.63

Promoter's share in equity Cap

42.97%

Leadership
Position

Location in India

Location abroad

10

Axis Bank Limited

1993
Maker Towers 'F', 13th Floor, Cuffe Parade,
Colaba, Mumbai - 400 005.
UTI

P J Nayak
Chairman and Managing director
508
Branches at Singapore and Hong Kong and a
representative office in Shanghai.

Market capitalisation as on
21/02/08

357,891,000

11 Share price as on 21/02/08

1000.7

13 No. of employees

9,980

UTI Bank has rebranded itself as AXIS Bank today. Axis Bank was the first of
the new private banks to have begun operations after the Government of India allowed
new private banks to be established. The Bank was promoted jointly by the Administrator
of the specified undertaking of the Unit Trust of India (UTI - I), Life Insurance
Corporation of India (LIC) and General Insurance Corporation of India (GIC) and other
four PSU insurance companies.

21
Table 4.1.6 Comparison of these four companies financials
(Rs. In Crore)
Kotak Mahindra
Bank Ltd.
Year End

HDFC Bank Ltd.

Axis Bank Ltd.

ICICI Bank Ltd.

2007

2006

2007

2006

2007

2006

2007

2006

1,592.06

909.83

8,303.34

5,567.67

5,461.60

3,594.46

28,457.13

17,517.83

231.50

201.32

2,752.83

1,645.91

1,193.09

950.9

3,793.56

3,269.94

PBT

202.7

173.32

1,640.20

1,253.54

1,080.76

733.13

3,979.25

3,089.49

PAT

141.37

118.23

1,141.45

870.78

659.03

485.08

3,110.22

2,540.07

7.00

70.00

55

45.00

35

100.00

85

326.16

309.29

319.39

313.14

281.63

278.69

899.34

889.83

0.00

0.00

0.00

350.00

350

1,335.77

555.3

6,113.76

4,986.39

3,111.60

2,593.50

23,413.92

21,316.16

Loan Funds

11,000.09

6,565.92

68,297.9

55,796.82

58,785.60

40113.53

230,510.19

165,083.17

Investments

6,861.96

2,855.53

30,564.8

28,393.9

26,897.1

21527.3

91,257.84

71,547.39

692.33

273.31

3,605.48

2,277.09

1,892.07

1,679.98

23,551.85

15,642.79

Operating
Income
Operating
Profit

Equity
Dividend
Equity
Capital
Preference
Capital
Res And
Surplus

Tot Current
Assets

22
Table 4.1.7 Comparison of ratios of four companies

Kotak Mahindra
Bank Ltd.

HDFC Bank Ltd.

Axis Bank Ltd.

Year End

2007

2006

2007

2006

2007

OPM

14.54

22.12

33.15

29.56

21.84

NPM

8.84

12.97

13.57

15.55

Reported EPS

4.33

3.82

35.74

8.5

13.67

Coverage Ratio

1.34

Current Ratio

2006

ICICI Bank Ltd.

2007

2006

26.45

13.33

18.66

12.01

13.47

10.81

14.12

27.81

23.4

17.41

34.59

28.55

17.74

16.43

19.42

16.88

12.79

11.43

1.6

1.9

1.87

1.41

1.53

1.25

1.39

0.32

0.24

0.26

0.29

0.32

0.41

0.61

0.62

0.7

0.6

5.5

4.5

3.5

74.53

50.75

27.48

28.61

21.67

21.12

30.92

30.96

10.08

5.59

4.71

4.57

4.07

3.46

3.16

2.36

32.49

29.85

18.32

22.6

17.28

18.63

15.64

17.95

Return on Net
worth
Financial charges

Dividend per share

10

8.5

P/E Ratio

Price to Book
EV/EBIDTA

Inference:

Operating margin gives analysts an idea of how much a company makes on

each rupee of sales. By comparing these companies we can see HDFC is making 0.33Rs
for each rupee of sales which is the best when comparing with its competitors.

23

A higher net profit margin indicates a more profitable company that has better

control over its costs compared to its competitors. So HDFC Bank shows good control
over its costs when compared with its peers.

EPS serves as an indicator of a company's profitability. By seeing the table we

can see both HDFC and ICICI have good EPS of more than 30 but HDFC is considered
to be efficient because of its high earnings with less equity when compared with ICICI.

Return on net worth is a measure of a corporation's profitability that reveals

how much profit a company generates with the money shareholders have invested. For
this AXIS Bank shows good returns of 19.42% when compared to others.

Coverage ratio helps in the measure of a company's ability to meet its

obligations satisfactorily. The better the assets cover the liabilities, the better off the
company is. We can see HDFC has a good coverage ratio when compared with other
banks.

Current ratio is mainly used to give an idea of the company's ability to pay

back its short-term liabilities with its short-term assets. The higher the current ratio, the
more capable the company is of paying its obligations. Here ICICI shows a healthy ratio
because of its large current assets.

HDFC Bank proportion of declared dividends for every ordinary share issued.

ICICI has a good record of dividend pay which is good from the point of the investors.

Kotak Bank has a high P/E ratio which denotes investors high expectations on

the growth of future earnings of the company. They have the highest of 74.53 when
compared with its peers. But Axis bank and HDFC show a less P/E which means their
avails an opportunity to invest.

Kotak Bank has a high Price to Book ratio of 10.08 which denotes the stock is

overvalued. This is due to the expectation in the growth of future earnings of the
company. But ICICI has a low Price to Book ratio of 3.16 stocks which denotes the stock
is undervalued

ICICI is showing a low EV/EBITA of 15.6 which means their stocks are

undervalued when compared with their competitors. While Kotak shows the high
EV/EBITA of 32.49 which means the shares are overpriced.

24
For more comprehensive analysis let us review the chief elements of performance.
1. Profitability
All the companies show satisfactory earnings when compared with the
previous years, but the figures for ICICI is much higher than their competitors. This is
because of their largest market share. To arrive at the profit figure per rupee of revenue
and to find the comparative strength and weakness, we can use profit margin ratio to
compare. Thus by comparing this ratio for all four companies, we can see really
impressive showing by HDFC Bank.
2. Stability
This we measure by the maximum decline in per share earnings. No major
decline in these shares shows a good stability. But the shrinkage in the earning per share
for Kotak Bank in the year 2006 amounting decline of 7.08 to 3.83 shows little bit
volatility in Kotak Bank.
3. Growth
The low multiplier companies (i.e.) all three except Kotak show quite
satisfactory growth rates. While the HDFC is quite impressive when set growth against
its low price/earnings ratio.
4. Financial Position
All the companies have similar current ratio which shows a similar financial
soundness of the company. While ICICI shows an impressive figure of 0.6 which denotes
its strong financial soundness when compared with its competitors.
5. Dividends
A history of continuous dividend without interruption is good. All companies
show a consistent dividend over a period of time. HDFC and ICICI show a good
percentage of dividends. While Kotak show a cut in their dividends which is not good
from the investors point of view.
6. Price History
The percentage advance in the price of all four of these companies is good, as
measured from the lowest to the highest points during the past 5 years. This gives a great
opportunity of profit that has existed in the stock markets of the past.

25

4.2 TECHNICAL ANALYSIS OVERVIEW

Introduction:

Technical analysis is research approach, using only historical prices and the study
of prices, with charts being the primary tool and self-fulfilling prophesy and is attempt to
forecast stock prices on the basis of market derived data. It is the study of price using
charts in order to anticipate their future performance. Here important data to look at price,
volume and psychological indicators overtime and also looking for trends and patterns in
data that indicate future price movements. The basic assumptions of technical analysis
are
A securitys market value is based on supply and demand, where supply and
demand based on rational and irrational factors.
Security prices are tending to move in persistent trends.
Change in trends occurs due to shifts in supply and demand. This shift can be
detected using charts of market transactions but some chart patterns tend to
repeat themselves.

Technical analysts believe that the historical performance of stocks and markets
are indications of future performance. Technical analysts do not attempt to measure a
security's intrinsic value, but instead use charts and other tools to identify patterns that
can suggest future activity. Technicians claim technical analysis is easier, faster and can
be applied simultaneously to more stocks than the fundamental analysis.
Analysis of investment can be done through fundamental analysis and technical
analysis. Fundamental analysis examines the economic environment, industry
performance and company performance before making an investment decision. If
fundamental analysis explains the market price behavior fully, then all investors would
be able to quote a single price for the company. Besides this fundamental information,
the market price may also be influenced by other psychological factors such as
perception, sentiment and so on, of investors.

26
The proxy measure of this psychological factor is the past share price of the
company itself. A study of past share price behavior to predict the future trend is
termed as technical analysis. Technical analysis is based on the economic premise that
forces of demand and supply determine the pattern of market price and the volume of
trading in a share. The greater the demand for a company's shares, the higher its market
price. The triggers for this demand and supply could also be the fundamental news on
the company. Technical analysis hopes to capture a price trend from the previous traded
prices and uses this trend to make an investment decision. Depending only on technical
analysis to make an investment used as a supplement to fundamental analysis.
When using fundamental analysis we must wait until market realizes a stock
undervalued, must rely on inadequate accounts statement, and must be ambiguous
estimated of growth. Most agree that technical analysis is much more effective when
combined with technical analysis, where technical analysts estimate prices, whereas
fundamental analysts estimate value.
For example, in a shopping mall, a fundamental analyst would go to each store,
study the product that was being sold, and then decide whether to buy it or not. By
contrast, a technical analyst would sit on a bench in the mall and watch people go into the
stores. Disregarding the intrinsic value of the products in the store, his or her decision
would be based on the patterns or activity of people going into each store
The scope of the project is restricted to Banking sector stocks of Nifty index. They
are as follows

ICICI Bank Ltd

Kotak Mahindra Bank Limited

HDFC Bank Ltd

Axis Bank Limited

Technical analysis of stocks has been done by using indicators are as follows (i)
Simple moving average (ii) Exponential Moving Average (iii) Bollinger bands
(iv) Relative Strength Index.

27
When doing a stocks trade, the investor should to follow the some important things
to minimize the loss and maximize the profit are as follows.
Do not fall in love with any stock
Know everything about the company and its competitors
Fundamentals are key to long term investing but technical analysis is just a
tool
Avoid companies with too much debt
Look for companies whose products are hot today and will be hot
tomorrow
Know the industry outlook
Know who is managing the company and where they are taking the
company
Never stop researching the economy
Read about the market daily

STOCK EXCHANGE
The stock exchanges in India, under the overall supervision of the regulatory
authority, the Securities and Exchange Board of India (SEBI), provide a trading platform,
where buyers and sellers can meet to transact in securities. The trading platform provided
by the National Stock Exchange (NSE) is an electronic one and there is no need for
buyers and sellers to meet at a physical location to trade. They can trade through the
computerized trading screens available with the NSE trading members or the Internet
based trading facility provided by the trading members of NSE.

THE NATIONAL STOCK EXCHANGE

The National Stock Exchange of India Limited was set up to provide access to
investors from across the country on an equal looting. NSE was promoted by leading
financial institutions at the behest of the Government of India and was incorporated in
November 1992 as a tax-paying company, unlike other stock exchanges in the country.

28
NSE is a securities exchange, which marks a radical break with the past. The regime in
which trading on NSE operates is characterized by four key innovations:
The physical floor was replaced by anonymous computerized order matching
with strict price-time priority.
The limitations of being in Bombay, and the limitations of India's public
telecom network, were avoided by using satellite communication. Today,
NSE is a network of 2.000 satellite terminals at locations all over India. On
a typical day, 3,500 traders login to the trading computers over this
network. This is the larger than the capacity of the largest trading floors in
the world.
The conflicts of interest and lack of focus, associated with exchanges run by
brokers were eliminated using a new form of exchange organization.

CHART AND TECHNICAL INDICATORS- BIRD EYE VIEW

CHART:
Chart monitoring is based on the premise that history will repeat itself in
patterned movements, which can be identified in advance based on previous price
behavior. Analysis of past market and stock actions, as illustrated by charts, helps to
predict the investment in future. In theory, if the stock market or a particular stock is
strong or weak, a properly constructed chart will reflect that situation.
Chart patterns appear endless with head and shoulders, double tops and double
bottoms, ascending tops, reversals, saucers, break outs, support and resistance levels
and consolidation formations representing some of the more familiar types. But the
most commonly used charts are line charts, bar charts, point and figure charts and
candlestick charts.

TECHNICAL INDICATORS
Technical indicators are a mathematical instrument which used to calculate the
future prices with help historical prices of the stocks. There are number of technical
indicators used in technical analysis of stocks, here we can see some important technical

29
indicators which frequently used to identify the price of the stocks. These indicators are
not 100% correct, in order to predict the future performance of the stocks. With the help
of these indicators, we can react based on the market. Some indicators are discussed
below.

SIMPLE MOVING AVERAGE

A simple moving average is formed by computing the average (mean) price of a
security over a specified number of periods. While it is possible to create moving
averages from the Open, the High, and the Low data points, most moving averages are
created using the closing price. For example: a 5-day simple moving average is calculated
by adding the closing prices for the last 5 days and dividing the total by 5.
10+ 11 + 12 + 13 + 14 = 60
(60 / 5) = 12
The calculation is repeated for each price bar on the chart. The averages are then
joined to form a smooth curving line - the moving average line. Continuing our example,
if the next closing price in the average is 15, then this new period would be added and the
oldest day, which is 10, would be dropped. The new 5-day simple moving average would
be calculated as follows:
11 + 12 + 13 + 14 +15 = 65
(65 / 5) = 13
Over the last 2 days, the SMA moved from 12 to 13. As new days are added, the
old days will be subtracted and the moving average will continue to move over time.
In the example below, using closing prices from Eastman Kodak (EK), day 10 is
the first day possible to calculate a 10-day simple moving average. As the calculation
continues, the newest day is added and the oldest day is subtracted. The 10-day SMA for
day 11 is calculated by adding the prices of day 2 through day 11 and dividing by 10. The
averaging process then moves on to the next day where the 10-day SMA for day 12 is
calculated by adding the prices of day 3 through day 12 and dividing by 10.

30
Table 4.2.1 Summary of SMA as an Example
Day

Daily Close

10-Day SMA

60.33

59.44

59.38

59.38

59.22

58.88

59.55

59.5

58.66

10

59.05

59.34

11

57.15

59.02

12

57.32

58.81

13

57.65

58.64

14

56.14

58.31

15

55.31

57.92

16

55.86

57.62

17

54.92

57.16

18

53.74

56.58

19

54.80

56.19

20

54.86

55.78

31
The chart above is a plot that contains the data sequence in the table. The simple
moving average begins on day 10 and continues.
Figure 4.2.1 10-Day Simple Moving Average

This simple illustration highlights the fact that all moving averages are lagging
indicators and will always be "behind" the price. The price of above stocks is trending
down, but the simple moving average, which is based on the previous 10 days of data,
remains above the price. If the price were rising, the SMA would most likely be below.
Because moving averages are lagging indicators, they fit in the category of trend
following indicators. When prices are trending, moving averages work well. However,
when prices are not trending, moving averages can give misleading signals.

32
EXPONENTIAL MOVING AVERAGE
In order to reduce the lag in simple moving averages, technicians often use
exponential moving averages (also called exponentially weighted moving averages).
EMA's reduce the lag by applying more weight to recent prices relative to older prices.
The weighting applied to the most recent price depends on the specified period of the
moving average. The shorter the EMA's period, the more weight that will be applied to
the most recent price. For example: a 10-period exponential moving average weighs the
most recent price 18.18% while a 20-period EMA weighs the most recent price 9.52%.
As we'll see, the calculating and EMA is much harder than calculating an SMA. The
important thing to remember is that the exponential moving average puts more weight on
recent prices. As such, it will react quicker to recent price changes than a simple moving
average. Here's the calculation formula

EMA CALCULATION
Exponential Moving Averages can be specified in two ways - as a percentbased EMA or as a period-based EMA. A percent-based EMA has a percentage as
its single parameter while a period-based EMA has a parameter that represents the
duration of the EMA.
The formula for an exponential moving average is:
EMA (current) = ((Price(current) - EMA(prev) ) x Multiplier) + EMA(prev))
For a percentage-based EMA, "Multiplier" is equal to the EMA's specified
percentage. For a period-based EMA, "Multiplier" is equal to 2 / (1 + N) where N is the
specified number of periods.
For example, a 10-period EMA's Multiplier is calculated like this:
(2 / (Time periods + 1)) = (2 / (10 + 1) ) = 0.1818 (18.18%)
This means that a 10-period EMA is equivalent to an 18.18% EMA.

33
Below is a table with the results of an exponential moving average calculation for
Eastman Kodak. For the first period's exponential moving average, the simple moving
average was used as the previous period's exponential moving average (yellow highlight
for the 10th period). From period 11 onward, the previous period's EMA was used. The
calculation in period 11 breaks down as follows:
(C - P) = (57.15 - 59.439) = -2.289
(C - P) x K = -2.289 x .181818 = -0.4162
((C - P) x K) + P = -0.4162 + 59.439 = 59.023
Table 4.2.2 Summary of EMA as an Example
Period

Close

Previous Periods

10-Day

EMA (P)
(C)

EMA (X)

60.33

59.44

59.38

59.38

59.22

59.88

59.55

59.50

58.66

10

59.05

11

57.15

59.439

59.023

12

57.32

59.023

58.713

13

57.65

58.713

58.520

14

56.14

58.520

58.087

15

55.31

58.087

57.582

16

55.86

57.582

57.269

59.439*

34
17

54.92

57.269

56.842

18

53.74

56.842

56.278

19

54.80

56.278

56.009

20

54.86

56.009

55.800

*The 10-period simple moving average is used for the first calculation only. After
that the previous period's EMA is used.

Figure 4.2.2 10-Day Exponential Moving Average

Note that, in theory, every previous closing price in the data set is used in the
calculation of each EMA that makes up the EMA line. While the impact of older data
points diminishes over time, it never fully disappears. This is true regardless of the
EMA's specified period. The effects of older data diminish rapidly for shorter EMA's.
Than for longer ones but, again, they never completely disappear.
.

35
BOLLINGER BANDS
Developed by John Bollinger, Bollinger Bands are an indicator that allows users to
compare volatility and relative price levels over a period time. The indicator consists of
three bands designed to encompass the majority of a security's price action.

A simple moving average in the middle

An upper band (SMA plus 2 standard deviations)

A lower band (SMA minus 2 standard deviations)

Standard deviation is a statistical unit of measure that provides a good assessment of a

price plot's volatility. Using the standard deviation ensures that the bands will react
quickly to price movements and reflect periods of high and low volatility. Sharp price
increases (or decreases), and hence volatility, will lead to a widening of the bands.

Table 4.2.3 Summary of BOL as an Example

Period

Close

20-day
SMA

103.13

109.00

103.06

102.75

108.00

107.56

105.25

107.69

108.63

10

107.00

11

109.00

12

110.00

SD

2*SD

Upper

Middle

Lower

Band

Band

Band

36
13

112.75

14

113.50

15

114.25

16

115.25

17

121.50

18

126.88

19

122.50

20

119.00

111.33

6.64

13.29

124.63

111.33

98.05

21

122.50

112.30

6.79

13.57

125.88

112.30

98.73

22

118.00

112.75

6.85

13.70

126.46

112.75

99.05

23

122.00

113.70

6.75

13.51

127.21

113.70

100.19

24

121.19

114.62

6.45

12.90

127.52

114.62

101.19

25

123.63

115.40

6.54

13.09

128.49

115.40

102.31

26

122.75

116.16

6.47

12.94

129.11

116.16

103.22

27

123.13

117.06

6.13

12.26

129.31

117.06

104.80

28

122.13

117.78

5.82

11.65

129.43

117.78

106.13

29

119.00

118.30

5.44

10.87

129.17

118.30

107.43

30

112.69

118.58

4.97

9.93

128.51

118.65

108.65

31

110.63

118.66

4.82

9.64

128.30

118.66

The center band is the 20-day simple moving average. The upper band is the 20day simple moving average plus 2 standard deviations. The lower band is the 20-day
simple moving average less 2 standard deviations.

37
Figure 4.2.3 Bollinger Bands

Even though Bollinger Bands can help generate buy and sell signals, they are not
designed to determine the future direction of a security. The bands were designed to
augment other analysis techniques and indicators. By themselves, Bollinger Bands serve
two primary functions:

To identify periods of high and low volatility

To identify periods when prices are at extreme, and possibly unsustainable, levels.

As stated above, securities can fluctuate between periods of high volatility and low
volatility. Being able to identify a period of low volatility can serve as an alert to monitor
the price action of a security. Other aspects of technical analysis, such as momentum,
moving averages and retracements, can then be employed to help determine the direction
of the potential breakout.
Remember that buy and sell signals are not given when prices reach the upper
or lower bands. Such levels merely indicate that prices are high or low on a relative
basis. A security can become overbought or oversold for an extended period of time.

38
RELATIVE STRENGTH INDEX (RSI)
A technical momentum indicator that compares the magnitude of recent gains to
recent losses in an attempt to determine overbought and oversold conditions of an asset.
It is calculated using the following formula:
100
RSI = 100 - ______
1 + RS

RS = Average of x days' up closes / Average of x days' down closes

As we can see from the chart below, the RSI ranges from 0 to 100. An asset is
deemed to be overbought once the RSI approaches the 70 level, meaning that it may be
getting overvalued and is a good candidate for a pullback. Likewise, if the RSI
approaches 30, it is an indication that the asset may be getting oversold and therefore
likely to become undervalued
Figure 4.2.4 Relative Strength Index

39
ANALYSIS OF STOCKS USING TECHNICAL INDICATORS
SIMPLE MOVING AVERAGE

Figure 4.2.5 Simple Moving Average for ICICI Bank

Figure 4.2.6 Simple Moving Average for HDFC Bank

40
Figure 4.2.7 Simple Moving Average for Kotak Mahindra Bank

Figure 4.2.8 Simple Moving Average for AXIS Bank

Price crossovers are used to identify shifts in momentum and can be used as a

basic entry or exit strategy. As we can see from the charts, a cross below a moving
average can signal the beginning of a downtrend and would likely be used by traders as a
signal to close out any existing long positions. All companies shows this signals in the
mid of Jan08 which is due to the market downtrend.

41

The second type of crossover occurs when a short-term average crosses through

a long-term average. This signal is used by traders to identify that momentum is shifting
in one direction and that a strong move is likely approaching.

A buy signal is generated when the short-term average crosses above the long-

term average, while a sell signal is triggered by a short-term average crossing below a
long-term average. All companies show a similar pattern of signals over a period of time.

EXPONENTIAL MOVING AVERAGE

Figure 4.2.9 Exponential Moving Average for ICICI Bank

42

Figure 4.2.10 Exponential Moving Average for HDFC Bank

Figure 4.2.11 Exponential Moving Average for Kotak Mahindra Bank

43

Figure 4.2.12 Exponential Moving Average for Axis Bank

Exponential moving average also shows similar kind of buy/sell signal as that

of the simple moving average but the only difference is that exponential moving average
emphasis more on the recent data points, making it a type of weighted average.

Thus EMA respond better than SMA with respect to the price

movements, which can be seen by the higher value of EMA when the price is
rising, and falls faster than the SMA when the price is declining. Here all
companies show a similar pattern of signals over a period of time.

44

Relative Strength Index

Figure 4.2.13 Relative Strength Index for ICICI Bank

Figure 4.2.14 Relative Strength Index for HDFC Bank

45

Figure 4.2.15 Relative Strength Index for Kotak Mahindra Bank

Figure 4.2.16 Relative Strength Index for AXIS Bank

Generally RSI recommends overbought and oversold levels. If the RSI rises

above 30 it is considered bullish for the underlying stock. Conversely, if the RSI falls
below 70, it is a bearish signal.

46

By seeing the RSI for these companies we can say that ICICI and AXIS stays in

overbought level for a quite a long time than other banks showing a quite bullish stocks
most of the time.

Bollinger bands

Figure 4.2.17 Bollinger bands for ICICI Bank

Figure 4.2.18 Bollinger bands for HDFC Bank

47
Figure 4.2.19 Bollinger bands for Kotak Mahindra Bank

Figure 4.2.20 Bollinger bands for AXIS Bank

Bollinger bands can be used to identify periods of high and low volatility. Tight

bands indicate low volatility and wide bands indicate high volatility.

Thus by comparing these companies we can say that ICICI Bank and Kotak

Bank have more wide bands denoting their high volatile nature.

While HDFC Bank and AXIS Bank have more tight bands indicating their low

volatile nature.

48

CHAPTER 5
FINDINGS AND SUGGESTIONS

ICICI Bank has an enormous total market value. It shows solid growth over

the past few years. It grows by a rate 35 per cent per annum. Market share has gone up
from 9 per cent (2002) to 16 per cent (2007). Their market share growth shows a good
prospect for investment. They show growing profits and dividends over a period of time.
So ICICI Bank is good for the defensive investor.

HDFC Bank's competitive strength clearly lies in the use of technology and

the ability to deliver world-class service with rapid response time which can be
understood by their use of various core banking technologies. The bank has consistently
gaining its market share while maintaining healthy profitability and asset quality. This
company will be the most promising bank which is giving good returns for their
investors.

AXIS Bank shows a low Price Earnings ratio when compared with its

competitors which means the investors are not ready to pay more money to get a rupee of
earning. This is due to companys slow growth in their revenue when compared with
others.

Kotak Bank shows a less returns for the investor which is 0.7. This less

returns is mainly due to their habit of retaining the profit as reserves and surplus. They
nearly doubled their reserves which results in less returns to the shareholders. Thus for a
investor who need a good return, this company will not be right choice.

From analyzing all these companies we can find HDFC will be more

interesting because of their good returns with low multiples. While ICICI also performs
well as we can see from its high market share and good returns.

49

CHAPTER 6
CONCLUSION
The study helped in applying the fundamental analysis for the four companies in
the private banking sector and to find the fundamentals of these companies which can be
useful in the long term on these companies.
The technical analysis can be used in arriving at the right time for investment.
Using technical analysis can be used to figure out the best time to enter into an
undervalued security. By timing entry into a security, the gains on the investment can be
greatly improved. Thus using fundamental analysis with technical analysis will be more
effective.

50
REFERENCES

Books:

The Intelligent Investor: The Definitive Book on Value Investing. By

Benjamin Graham. Published by Collins Business Essentials.

Donald E.Fischer & Ronald J.Jordan, Security Analysis & Portfolio

Management Prentice Hall of India Private Ltd.

Punithavathy Pandian, Security Analysis & Portfolio Management Vikas

Publishing House Pvt. Ltd.,

Websites:

http://www.nseindia.com/
http://www.moneycontrol.com/
http://www.moneypore.com/
http://www.investopedia.com/
http://www.bollingerbands.com/