technical analyis of banking stocks

8/10/2019 technical analyis of banking stocks

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EXECUTIVE SUMMARY

The Indian Economy, one of the emerging markets of the world, today has a record

rate of return which is substantially better when compared to the markets of

Developed western countries. Thus Indian Equity markets today are attracting

investors from around the world to take advantage of India`s growth story.

The reason for this can be attributed to the image of equity markets being speculative

in the eyes of investors. This is because they are not adequately educated to make

their investment decisions in the equity markets.

This report is meant to narrow down this gap between retail investors and equity

markets by simplifying the basic investment strategies and give a basic understanding

of utures and !ptions and their use for hedging the risk of equity investment.

Indian Economy being one of the developing economies in the world, companies in

India are growing at a faster as compared to their growth rate a decade back. "any

Indian #ompanies are e$panding their business globally with "ergers and

%cquisitions.

%s companies grow their shareholders are benefitted with good dividend and capitalappreciation on investment in equity shares of such companies. &umber of companies

listed in stock e$change '()E and &)E* has been increasing every year with the new

I+!s coming in the market.

Investment in equity shares based on tips is not the true investment but it is clear

gambling with your money which many of us would not like to do with our hard

earned money.

Equity valuation beings with analysis of sector in which one wants to make

investment if the sector looks positive then analy-e various companies in the sector.

% company is analy-ed fundamentally to check its performance and financial

strength. Technical analysis is used to decide the right price to buy a stock so that

higher return on investment can be generated

In this report I have e$plained how to do undamental analysis and Technical analysis

with analysis of (anking )tocks.

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INTRODUCTION TO TOPIC

FUNDAMENTAL ANALYSIS

WHAT DOES FUNDAMENTAL ANALYSIS MEAN?

% method of evaluating a security that entails attempting to measure its intrinsic value

by e$amining related economic, financial and other qualitative and quantitative

factors. undamental analysis attempts to study everything that can affect the

security`s value, including macroeconomic factors 'like the overall economy and

industry conditions* and company specific factors ' like financial condition and

management*

The end goal of performing fundamental analysis is to produce a value that an

investor can compare with the security`s current price with the aim of figuring out

what sort of position to take with that security ' underpriced buy, overpriced sell

or short*

undamental analysis is all about using real data to evaluate a security`s value.

%lthough most analysts use fundamental analysis to value stocks this method of

valuation can be used for /ust about any type of security.

or e$ample an investor can use fundamental analysis on a bonds value by looking at

economic factors, such as interest rates and the overall state of the economy, and

information about the bond issuer, such as potential changes in credit ratings. or

assessing stocks, this method uses revenues, earnings, future growth, return on

equity, profit margin, and other data to determine a company`s underlying value and

potential for future growth. In terms of stock fundamental analysis focuses on the

financial statements of the company being evaluated.

!ne of the most famous and successful fundamental analyst is the !racle of !maha,

"r. 0arren (uffet, who is well known for successfully employing fundamental

analysis to pick securities. 1is abilities have turned him into a billionaire.

undamental analysis is a technique that attempts to determine a security`s value by

focusing on underlying factors that affect a company`s actual business and its future

prospects.

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undamental analysis attempts to study everything that can affect the

security`s value, including macroeconomic factors ' like the overall

economy and industry conditions* and company2specific factors 'like

financial condition and management*

undamental analysis of a business involves analy-ing its financial statements and

health, its management and competitive advantages, and its competitors and markets.

undamental analysis is performed on historical and present data but with the goal of

making financial forecast. % fundamental analyst believes that analy-ing strategy,

management, product, financial stats, and many other readily and not so readily

quantifiable numbers will help choose stocks that will outperform the market.

There are several possible ob/ectives3

To conduct a company stock valuation and to predict its probable price evolution,

To make a pro/ection on its business performance,

To evaluate its management and to make internal business decisions,

To calculate its credit risk.

undamental %nalysis serves to answer questions such as 3

Is the company`s revenue growing4

Is it actually making a profit4 Is it in a strong enough position to beat out its competitors in the future4

Is it able to repay its debt4

Is management trying to 5cook the books6

%s mentioned in the introduction, fundamentals can include anything related to the

economic well being of a company. !bvious items including things like revenue and

profit, but fundamental also includes everything from a company`s market share to

the quality of its management.

TECHNICAL ANALYSIS

)hould I buy today4 0hat will be the prices tomorrow, ne$t week or ne$t year4

0ouldn7t investing be easy if we knew the answers to these seemingly simple

questions 4 Technical analysis has the answers to these questions.

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Technical %nalysis is the process of analy-ing a security`s historical prices in an

effort to determine probable future prices. This is done by comparing current price

action 'i.e. current e$pectations * with comparable historical price action to predict a

reasonable outcome.

)imply put, technical analysis is the study of prices, with charts being the primary

tool.

Technical analysts are sometime referred to as chartists because they rely almost

e$clusively on charts on their analysis.

Technical analysis is applicable to stocks, indices, commodities, futures or any

tradable instrument where the price is influenced by the forces of supply and demand.

+rice refers to any combination of the open, high, low or close for a given security

over a specific timeframe. The timeframe can be based on intraday 'tick, 8 mins, 98

mins, or hourly* , daily, weekly or monthly priced data and last a few hours or many

years.

Technicians as Technical analysts are called are only concerned with : things3

9* 0hat is the current price 4

:* 0hat is the history of the price moments4

WHAT DOES TECHNICAL ANALYSIS MEAN?

% method of evaluating securities by analy-ing statistics generated generated by

market activity, such as past prices and volumes. 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.

Technical analysts believe that historical performance of stocks and markets are

indications of future performance.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. (y contrast, a technical

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analyst would sit on a bench and watch people go into the stores. Disregarding the

intrinsic value of the products in the store the technical analyst`s decision would be

based on the patterns or activity of people going into each store.% method of evaluating securities by relying on the assumption that market data, such

as charts of price, volume, and open interest can help predict future 'usually short

term* market trends. ;nlike undamental analysis the intrinsic value of the security is

not considered. Technical analysts believe that they can accurately predict the future

price of a stock by looking at its historical prices and the other trading variables.

Technical analysis assumes the market psychology influences trading in a way that

enables predicting when a stock will rise or fall. or that reason many technical

analysts are also market timers, who believe that technical analysis can be applied /ust

as easily to the market as a whole as to an individual stock.

WHAT ARE THE DIFFERENT CHARTS USED IN TECHNICAL ANALYSIS?

LINE CHART

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The line chart is one of the simplest charts. It is formed by plotting one price point,

usually the close of a security over a period of time. #onnecting the dots or price

point over a period of time, creates the line.

Investors and traders consider to be the closing level to be more important than the

open, high or low. (y paying attention to only the close, intraday swings can be

ignored.


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+erhaps the most popular charting method is the bar chart. The high, low and close

are required to form the price plot for each period of the bar chart. The high and low

are represented by the top and bottom of the vertical bar and the close is the short

hori-ontal line crossing the vertical bar. !n the daily chat each bar represents the

high, low and close for a particular day. 0eekly charts would have a bar for each

week based on riday`s close and the high and low for that week.

CANDLESTICK CHART

!riginating in =apan over >?? years ago, candlestick charts have become quite

popular in recent years. or a candlestick chart the open, high, low and close are all

required. % daily candlestick is based on the open price, the intraday high and low and

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the close. % weekly candlestick is based on "onday`s open, the weekly high2low

range and riday`s close.

"any traders believe that candlestick charts are easy to read, especially the

relationship between the open and the close. 0hite 'clear* candlesticks form when the

close is higher than the open and black 'solid* candlesticks form when the close is

lower than the open.

The white and black portion formed from the open and the close is called the body

'white body or black body* . The lines above and below are called shadows and

represent the high and low.

THE INDIAN BANKING SECTOR

0ithout a sound and effective banking system in India there cannot be a healthy

economy. The banking system of India should not onle be hassel free but it should be

able to meet new challenges posed by the technology and any other e$ternal andinternal factors.

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or the past three decades India`s banking system has several outstanding

achievements to its credit. It is no longer confined to the metropolitians or

cosmopolitians in India infact, 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

governments regular policy for Indian banks since 9@A@ has paid rich dividends with

the nationali-ation of 9B ma/or private banks of India. &ot long ago an account holder

had to wait hours at the bank counter for getting a draft or for withdrawing his own

money. Today he has a choice. Cone are those days when the most efficient bank

transferred money from one branch to other in two days. &ow it is simple as instant

messaging or dialing for a pi--a. "oney has become the order of the day.

POST INDEPENDENCE

In 9@B, The eserve (ank of India, India`s central banking authority, was

nationali-ed and it became an institution owned by the Covernment of India.

In 9@B@, the banking regulation act was enacted which empowered the eserve (ank

of India 5to regulate, control and inspect the banks in India.6

The banking regulation act also provided that no new bank or branch of an e$isting

bank can be opened without a license from the (I, and no two banks could have

common directors.

LIBERALIZATION

The new policy shook the banking sector in India completely. (ankers, till this time,

were used to B2A2B method '(orrow at BF lend at AF, go home at B* of functioning.

In the early 9@@?`s the then &arashima ao Covernment embarked on a policy of

liberali-ation and gave licenses to a small number of private banks which came to be

known as new generation tech savvy banks, which included banks such as Clobal

Trust (ank 'which later amalgamated with !riental bank of commerce*,;TI (ank

'now renamed as %$is (ank*, I#I#I (ank and 1D# (ank.

India is one of the top 9? economies globally, with vast potential for the banking

sector to grow. The last decade witnessed a tremendous upsurge in transactions

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through %T"s, and Internet and mobile banking. In :?9B, the country7s s 9

trillion ';)G 9.>B trillion* banking industry is set for a greater change. Two new

banks have already received licences from the government. urthermore, the

eserve (ank of India7s '(I* new norms will provide incentives to banks to spotpotential bad loans and take corrective steps that will curb the practices of rogue

borrowers.

The Indian government7s role in e$panding the banking industry has been

significant. Through the inancial Inclusion +lan 'H 9?9>*, banking

connectivity in the country increased more than three2fold to :99,:>B villages in

:?9> from AJ,A@B at the beginning of the plan.

(anks are also looking at new ways to attract customers. In )eptember, :?9>,

I#I#I bank leveraged the popularity of the social platform, and launched its

acebook banking service, +ockets. The service enables customers to transfer

funds and pay bills from within the website.

MARKET SIZE

The revenue of Indian banks increased four2fold from ;)G 99. billion to ;)G

BA.@ billion during the period :??9:?9?. In the same period, the profit after ta$

increased from ;)G 9.B billion to ;)G 9: billion.

In :?9:9>, Indian banks had 9J? overseas branches '9A> in :?999:* while

foreign banks had >9A branches in India '>?@ in :?999:*.

#redit to housing sector grew at a compound annual growth rate '#%C* of 99.9

per cent during the period H :??9>. Total banking sector credit is e$pected to

grow at a #%C of 9.9 per cent 'in terms of I&* to touch ;)G :.B trillion by

:?9J

RECENT DEVELOPMENT

Infrastructure Development inance #ompany 'ID#* and (andhan inancial

)ervices +vt


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infrastructure finance company, Lolkata2based (andhan is a microfinance

establishment.

(andhan covers 8.8 million customers, nearly all of them women whose loans

average s 9?,???. The bank seeks to continue catering to a rural and unbankedcustomer base from its current branch network. M0hy go after the same person

and ask him to get another account4 0hy not /ust go after those who do not have

any bank accounts,M said "r #handra )hekhar Chosh, the bank7s "anaging

Director.

(anks and housing finance companies '1#s* together en/oyed a :? per cent

growth in home loans in H :?9>9B, according to "r N Nerma, #hairman and

"anaging Director, &ational 1ousing (ank. 1ome loans disbursed by banks and

1#s collectively grew by s 9.A? trillion ';)G :A.8@ billion* in H :?9>9B to

reach s @.A? trillion ';)G [email protected] billion* at the end of the fiscal. 50e e$pect the

growth 'in home loans* to continue. There is every reason to believe that,6 said "r

Nerma.

=ammu and Lashmir '=OL* (ank is looking at opportunities to increase its

presence outside the country. The bank is likely to establish branches in . %ccording to the survey, growth of credit e$tended

by Indian banks7 branches operating overseas grew by >9.J per cent to s 88,8J?

crore ';)G @J.>A billion* credit e$tended by foreign banks based in India

increased :J.8 per cent to touch s >?J,J?? crore 'G89.98 billion*.

)trong growth in agriculture and services sectors as well as the personal loans

segment has helped push bank credit growth during the period %pril&ovember,

:?9> to J.: per cent, compared to A.A per cent during the same period of :?9:,

according to a report by credit rating agency #%E atings. During the period,

loans to the agri sector grew by 8.: per cent compared to :.> per cent in :?9:.

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M1igher growth in credit to agriculture may be attributed to the e$pected better

kharif crop which has been announced by the "inistry of %griculture,M according

to the report.

I#I#I (ank is looking at different ways to ma$imise the digital opportunity forgrowth. The bank is doubling the number of cities it covers with Ptablet bankingP

and offering its customers services such as video conferencing, so they can talk to

the money managers from the comfort of their homes. MThe idea is thinking ahead

of your customer. &ot /ust what they may want today but what could they want

tomorrow,M said "r a/iv )abharwal, E$ecutive Director, I#I#I.

(ank of India '(oI* launched its card2less cash withdrawal facility in "arch :?9B.

;nder this service, a (!I customer can transfer money to anyone, using the bank7s

%T"s or through Internet banking. The sender has to provide the beneficiary7s

mobile number, a sender code, and the amount through internet banking or te$t

message. The beneficiary, after receiving a code from the bank can visit any (!I

%T" with instant money transfer facility and withdraw the money within a

fortnight of the transfer.

)imple steps such as memorising onePs +I&, lowering credit limits on cards, using

virtual cards and deactivating transactional services connected to a mobile number

could bring down bank frauds, says e$perts. egular changing of the password can

also save an account from attacks. 5If there is a change in the email or phone

number, it should be immediately updated with the bank,M said a cyber2crime

investigation specialist.

FUNCTIONS OF BANKS

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A. Primar F!"#$i%"& %' Ba"(&

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The primary functions of a bank are also known as banking functions. They are the

main functions of a bank.

These primary functions of banks are e$plained below.

). A##*+$i", D*+%&i$&

The bank collects deposits from the public. These deposits can be of different types,

such as 32

a. )aving Deposits

b. i$ed Deposits

c. #urrent Deposits

d. ecurring Deposits

a. Sa-i", D*+%&i$&

This type of deposits encourages saving habit among the public. The rate of interest is

low. %t present it is about 8F p.a. 0ithdrawals of deposits are allowed sub/ect to

certain restrictions. This account is suitable to salary and wage earners. This account

can be opened in single name or in /oint names.

. Fi/*0 D*+%&i$&


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This type of account is operated by salaried persons and petty traders. % certain sum

of money is periodically deposited into the bank. 0ithdrawals are permitted only after

the e$piry of certain period. % higher rate of interest is paid.

1. Gra"$i", %' L%a"& a"0 A0-a"#*&

The bank advances loans to the business community and other members of the public.

The rate charged is higher than what it pays on deposits. The difference in the interest

rates 'lending rate and the deposit rate* is its profit.

The types of bank loans and advances are 3

a. !verdraft

b. #ash #redits

c.


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#. L%a"&

It is normally for short term say a period of one year or medium term say a period of

five years. &ow2a2days, banks do lend money for long term. epayment of money can

be in the form of installments spread over a period of time or in a lumpsum amount.

Interest is charged on the actual amount sanctioned, whether withdrawn or not. The

rate of interest may be slightly lower than what is charged on overdrafts and cash

credits.


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a. Tra"&'*r %' F!"0&

The bank transfer funds from one branch to another or from one place to another.

. C%33*#$i%" %' C2*5!*&

The bank collects the money of the cheques through clearing section of its customers.

The bank also collects money of the bills of e$change.

#. P*ri%0i# Pam*"$&

!n standing instructions of the client, the bank makes periodic payments in respect of

electricity bills, rent, etc.

0. P%r$'%3i% Ma"a,*m*"$

The banks also undertakes to purchase and sell the shares and debentures on behalf of

the clients and accordingly debits or credits the account. This facility is called

portfolio management.

*. P*ri%0i# C%33*#$i%"&

The bank collects salary, pension, dividend and such other periodic collections on

behalf of the client.

'. O$2*r A,*"# F!"#$i%"&

They act as trustees, e$ecutors, advisers and administrators on behalf of its clients.

They act as representatives of clients to deal with other banks and institutions.

1. G*"*ra3 U$i3i$ F!"#$i%"&

The bank also performs general utility functions, such as 32

a. Issue of Drafts,


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d. Dealing in oreign E$change

e. +ro/ect eports

f. )ocial 0elfare +rogrammes

g. !ther ;tility unctions

a. I&&!* %' Dra'$& a"0 L*$$*r %' Cr*0i$&

(anks issue drafts for transferring money from one place to another. It also

issues letter of credit, especially in case of, import trade. It also issues

travellersP cheques.

. L%#(*r Fa#i3i$

The bank provides a locker facility for the safe custody of valuable documents, gold

ornaments and other valuables.

#. U"0*r6ri$i", %' S2ar*&The bank underwrites shares and debentures through

its merchant banking division.

0. D*a3i", i" F%r*i," E/#2a",*

The commercial banks are allowed by (I to deal in foreign e$change.

*. Pr%7*#$ R*+%r$&

The bank may also undertake to prepare pro/ect reports on behalf of its clients.

'. S%#ia3 W*3'ar* Pr%,ramm*&

It undertakes social welfare programmes, such as adult literacy programmes, public

welfare campaigns, etc.

,. O$2*r U$i3i$ F!"#$i%"&

It acts as a referee to financial standing of customers. It collects creditworthiness

information about clients of its customers. It provides market information to its

customers, etc. It provides travellersP cheque facility

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SWOT ANALYSIS OF THE INDIAN BANKING INDUSTRY

)8 STRENGTHS Indian banks have compared favorably with growth, asset quality and profitability

with other regional banks over the last few years. The banking inde$ has grown at a

compounded annual rate of over 89 percent since %pril :??9 as compared to a :J

percent growth in the market inde$ for the same period.

(ank lending has been a significant driver of CD+ growth and employment

E$tensive reach the vast network and growing number of branches and %T"s Indian

banking system has reached even to the remote corners of the country.

In terms of quality of assets and capital adequacy, Indian banks are considered to

have clean strong and transparent balance sheets relative to other banks in comparable

economies in its region.

India has scheduled commercial banks ')#(s* :J public sector banks, :@ private

sector banks 'these do not have government stake they maybe publicly listed and

traded on stock e$changes* and >9 foreign banks. They have a combined network of

over 8>??? branches and 9J??? %T"s.

18 WEAKNESSES +)(s need to fundamentally strengthen institutional skill levels as especially in sales

and marketing, service operations, risk management and the overall organi-ational

performance ethic and strengthen human capital.

!ld private sector banks also have the need to fundamentally strengthen skill level.

The cost of intermedation remains high and bank penetration is limited to only a few

customer segment and geographies.

)tructural weakness such as fragmented industry structure, restriction on capital

availability and deployment, lack of institutional support infrastructure, restrictive

labour laws, weak corporate governance and ineffective regulations.

The government has refused to dilute its stake in +); banks below 89 percent thuschoking the headroom available to these banks for raining equity capital impediments

in sectoral reforms.

98 OPPORTUNITIES The market is seeing discontinuous growth driven by new products and services that

include new opportunities in credit cards, consumer finance and wealth management

on the retail side and in2fee based income and investment banking on the wholesale

banking side. These require new skills in sales and marketing, credit and operations.

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0ith increased interest in India, competition from foreign banks will only intensify.

&ew private banks could reach the ne$t level of their growth in the Indian banking

sector by continuing to innovate and develop differentiated business models to

profitably serve segments like the ruralQlow and affluentQ1&I segments.

oreign banks committed to making a play in India will need to adopt alternative

approaches to win the 5race for customer6 and build a value creating customer

franchise.

0ith the growth in the Indian economy e$pected to be strong for quite sometime

especially in its services sector the demand for banking services, especially retail

banking, mortgages an investment services are e$pected to be strong.

The eserve (ank !f India '(I* has approved a proposal from the government to

amend the (anking egulation %ct to permit banks to trade in commodities and

commodity Derivatives.

% number of industrial houses like Tatas, (irlas, eliance etc are entering the banking

sector.

:8 THREATS Threat of stability of the system failure of some weak banks has often threatened the

stability of the system.

ise in inflation figures which would lead to increase in interest rates.

Increase in number of foreign players would pose a threat to the +)( as well as the

private players.

Increase in # rates

CHAPTER 9.9

PEST ANALYSIS OF THE INDIAN BANKING

SECTOR

POLITICAL

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ECONOMIC

SOCIAL

TECHNOLOGICAL

POLITICAL ANALYSIS

rom 9@@? the banking industry has strong support from the Indian government.

The Indian (anking industry is dominated by political factors.

(anking industry is regulated by eserve (ank of India.

ECONOMIC ANALYSIS India is encouraging DI and IIs for investment in India.

The banking sector saw a huge growth in employment of youth

The percentage of employment in the banking sector increased significantly

SOCIAL ANALYSIS

(anks are now providing value added services to customers, and not only basic

banking services.

To help the lower level of the economy, Indian banks have now started entering

in micro finance. They are giving importance to rural banking.

0omen employment is been given a lot of importance by the banking sector

TECHNOLOGICAL ANALYSIS

(ecause of IT revolution all banks went for automation.

)") and Internet banking has been started by all banks today

0ith the help of technology banks started online procedure

INFORMATION ON BIRLA SUNLIFE INSURANCE

Established in :???, (irla )un


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Lnown for its innovation and creating industry benchmarks, ()


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)peed

A%!$ A0i$a Bir3a Fi"a"#ia3 S*r-i#*& Gr%!+ 8 billion corporation, the %ditya (irla Croup is in the league of ortune 8??.

It is anchored by an e$traordinary force of 9>>,??? employees, belonging to B:

different nationalities. The group operated in >A countries across si$ continents truly

Indian7s first multinational corporation.

A%!$ A0i$a Bir3a Fi"a"#ia3 S*r-i#*& Gr%!+;

%ditya (irla inancial )ervices Croup '%()C* ranks among the top 8 fund

managers in India 'e$cluding banks and


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Indonesia, India, #hina and (ermuda. %s of "arch >9, :?9:, the )un


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"r. +ramod Lrishnamurthy 1ead Information Technology

"r. )aurov Chosh 1ead 1uman esource O Training

"r.


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Training process of the company is very strong.

Different plan for different peoples.

%ccording to the change in surrounding environment like changes in customer

requirement.

W*a("*&&;

#ompany does not penetrate on the rural market at a time.

There is no plan for the low income group.

ees for the advisor is high than the other company.

O++%r$!"i$;

Insurance market is very big, where company can e$pand its hori-on in insurance

industry. Though good investment and insurance it is easy to top Indian customers.

The huge insurance market 'JJF* is left so company has opportunity to e$pand our

products.

T2r*a$&;

K!


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METHODOLOGY

LITERATURE REVIEW

The pro/ect presented is a form of research review. This is mainly

because it gets into the detail of a company`s strength and weakness

which is possible throught the research of its financial staements and

ratios for the previous years. It also puts light on the history of the

company showing its performance in the past. 0ith the help of such

analyses future stock prices of the company can be predicted. The

pro/ect is prepared through secondary data collected from the

company`s annual reports and its websites. The data is analysed by

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OBECTIVE OF THE STUDY

The !b/ective of the pro/ect is to study and apply the two parallel and

co2e$isting investment philosophies of undamental analysis and

Technical analysis adopted by retail investors for investing in

)econdary market and give basic knowledge about utures and !ptions

markets.

PRIMARY OBECTIVE

The primary ob/ective of this pro/ect is to know the basics of the stock

market and to focus on the analysis of stocks i.e research which

includes undamental and technical analysis

SECONDARY OBECTIVE

The )econdary ob/ective of this pro/ect is to know the working of a

particular sector in detail. It shows the basic functions of the banking

sector and its operations.This pro/ect also focuses on understanding how the future prices of a

stock are predicted through research.It also focuses on to give a call whether it is beneficial to invest in a

particular company`s share.

CHAPTER :.)

SCOPE OF THE STUDY

The scope of this pro/ect is limited to understanding the basics of

undamental and technical analysis and apply it to take a decision of

investing in banking sector and O! strategies for the same.

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(anks play an important role in development of Indian economy. %fter

liberali-ation, the banking industry underwent ma/or changes. The

economic reforms totally have changed the banking sector. (I

permitted new banks to be started in the private sector as per the

recommendation of the &arasimham #ommittee. The Indian banking

industry was dominated by public sector banks. (ut now the situations

have changed. &ew generation banks with the use of technology and

professional management has gained a reasonable position in the

banking industry. In this pro/ect we look at few banks roles and their

functioning.It also puts focus on the Indian banking sector and the recent banking

reforms.

The most significant achievement of the financial sector reforms has

been marked improvement in the financial health of commercial banks

in terms of capital adequacy, profitability and asset quality, as also

greater attention to risk management. urther deregulation has opened

up new opportunities for banks to increase revenues by diversifying

into investment banking, insurance, credit cards, depository services,

mortgage financing, securiti-ation etc.

%t the same time liberali-ation has brought greater competition among

banks, both domestic and foreign as well as competition from mutual

funds, &(#s, post office, etc +ost2 0T!, competition will only get

intensified, as large global players emerge on the scene. Increasing

competition is squee-ing profitability and forcing banks to work

efficiently on shrinking spreads.

% positive fallout of competition is a greater choice available to

consumers and the increased level of sophistication and technology in

banks. %s banks benchmark themselves against global standards there

has been a marked increase in disclosures and transparency in the

banks balance sheets are also greater focus on corporate governance.

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CHAPTER :.1

LIMITATIONS TO THE STUDY

The study conducted was for a short period, leaving little time for

getting into the details of the sub/ect. %nalysis requires a lof of

e$perience in this field and fundamental analysis require a deep study

of the sub/ect which was not possible in such a short duration.

The data was not easily available especially the financial statements of

the past years. Therefore it was difficult to get past records of the

company easily because of which the financial statements and ratios

were not upto the mark.

)tocks are analy-ed through the analyses of the company`s ratios and

different companies can apply different accounting policies. Thus, it

was difficult to compare the growth over the years.

%n analysis is based on outdated information presented in the financial

statements. +rice level changes can make the comparision of figures

difficult over a period of time. Effect of window dressing by prepares

of financial statements. Interpreting historical cost was difficult.The pro/ect has been limited to investment analysis of banking stocks

only. %nd also the time constraints.

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RESEARCH METHODOLOGY

The data so collected in order to carry out the pro/ect is +rimary Data

and also the secondary data. The research gets into details of the India

banking sector . Therefore it can be concluded that it is an e$ploratoryresearch. The pro/ect depicting the banking sector and few banks is

quantitative research.

The first part e$plains about the Indian (anking sector and the current

reforms made by the government along with its impact on the banking

sector as a whole.

It is e$ploratory because it e$plains how the company`s current

position has an impact on its stock price and its future predictions.

Sam+3i", 0a$a a"a3&i& $*#2"i5!*&;

%nalysis of (anking Industry.

%nalysis of (anks namely %$is (ank, Indusind (ank, Hes (ank,

Lotak "ahindra (ank, ;nion (ank of India, I#I#I (ank.

%nalysis of #ompany "anagement, )hareholders pattern, future

growth prospects.

%nalysis of financial statements, financial ratios and key indicators

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DATA ANALYSIS

)8 %re you willing to invest in the (anking )ector4

%s per the questions asked to various people, 8AF of them said Hes

and BBF said &o

18 If yes then on basis of which analysis

%s per the questions asked J? percent opted for Technical

analysis and t he balance >?F for fundamental analysis.

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98 isk associated with (anking sector is4

%s per the questions asked 88F said the risk is 1igh, B?F opted for moderate

risk and the balance 9? F for low risk.

:8 1ow much return do you e$pect 4

%s per the questions asked 88F opted for 98F returns, :8F opted for :?F

returns and the balance :?F opted for :8F returns.

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8 1ow liquid is the investment in the (anking )ector4

%s per the questions asked >? F opted for high returns, :?F

opted for moderate returns and the balance for low returns

8 1ow often do you change your portfolio4

%s per the questions asked BAF said they mostly change their

portfolio, >F said that they change their portfolio sometimes

and the rest 9AF said that they never change their portfolio.

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8 1ow is the (anking sector doing as compared to the other sector

% per the questions asked, J: F said that the (anking )ector is

doing good, 9? F said that the performance is %verage and the

balance said that the sector is doing bad.

8 #an you get better returns if you switch to other sectors4

%s per the questions asked AF agreed that they get good returns if the switch

sectors, 9F said no n the rest were not sure.

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8 1ow has the (anking sector performed over the years4

%s per the questions asked J8F of the people said that the

banking sector has performed good, :?F said that it has given

average performance and the res 8F said it performed badly.

PRIMARY DATA ANALYSIS;

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The primary data analysis is based on the data provided by the people

through the questionaires

SECONDARY DATA ANALYSIS

F!"0am*"$a3 A"a3&i&

undamental analysis is performed on historical an present data, but

with the goal of making financial forecast. There are several possible

ob/ectives3

To conduct a company stock valuation and predict its portable

price evolution

To make a pro/ection on its business performance

To evaluate its management and make internal business

decisions

To calculate its credit risk.

F!"0am*"$a3 a"a3&i& i"#3!0*&

Economy %nalysis Industry %nalysis

#ompany %nalysis

RATIOS AND ANALYSIS OF BANKS

)8 CURRENT RATIO

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#urrent ratio is calculated in order to work out firms ability to pay of

its short term liabilities. This ratio is also called working capital ratio.

This ratio e$plains the relationship between the current assets and

current liabilities of a business. #urrent assets are those assets which

are either in the form of cash or are easily convertible into cash within

a year. )imilarly liabilities which are to be paid within a year are called

current liabilities.

#urrent atio #urrent %ssets#urrent


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0here


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:8 INTEREST COVERAGE RATIO

Interest #overage atio &et +rofit (efore Interest and Ta$

Interest on


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)tock is the most important component of working capital. This ratio

provides guidelines to the management while framing stock policy. It

measures how fast the stock is moving through the firm and generating

sales. It helps to maintain a proper amount of stock to fulfill the

requirements of the concern. % proper inventory turnover makes the

business to earn a reasonable margin of profit.

8 DEBTORS TURNOVER RATIO

Debtors turnover ratio indicated the relation between net credit sales

and average accounts receivable of the year. This ratio is also known as

Debtors Nelocity.

Debtors turnover ratio &et #redit )ales %verage %ccounts receivable

0here %verage accounts receivables !pening Debtors or ( S

. closing debtors or ( .

:

#redit )ales Total )ales #ash )ales.

!(=E#TINE O )IC&II#%E

This ratio indicates the efficiency of the concern to collect the amount

due from debtors. It determines the efficiency with which the trade

debtors are managed. 1igher the ratio better it is as it proves that thedebts are being collected very quickly.

8 DEBT COLLECTION PERIOD

Debt collection period is the period over which the debtors are

collected on an average basis. It indicates the rapidity or slowness with

which the money is collected from debtors.

Debt #ollection period 9: monthsQ >A8 days

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Debtors Turnover atio

It may be noted that some authors prefer to use >A? days instead of >A8

days for the sake of convenience.

!(=E#TINE O )IC&II#%E

This ratio indicates how quickly and efficiently the debts are collected.

The shorter the period better it is and more longer the period the more

chances of bad debts. %lthough no standard period is prescribed

anywhere, it depends upon the nature of the industry.

INTRODUCTION TO EJUITY

WHAT IS EJUITY?

In accounting and finance, equity is the residual claim or interest of the

most /unior class of investors in assets after all liabilities are paid. If

valuations placed on assets do not e$ceed liabilities, negative equity

e$ists. In an accounting conte$t )hareholder`s equity ' or stockholders

equity, shareholders funds, shareholder`s capital or similar terms*

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represents the remaining interest in assets of a company, spread among

individual shareholders of common or preferred stock.

%t the start of a business owners put some funding into the business to

finance assets. This creates liability on the business in the shape of

capital as the business is a separate entity from its owners. (usiness

can be considered to be for accounting purposes, sums of liabilities and

assets this is the accounting equation. %fter liabilities have been

accounted for the positive remainder is deemed the owners interest in

the business.

This definition is helpful to understand the liquidation process incase

of bankruptcy. %t first all the second creditors are paid against proceeds

from assets. %fterwards a series of creditors ranked in priority

sequence, hence the ne$t claim or right on the residual proceeds.

!wnership equity is the last or residual claim against assets paid only

after all other creditors are paid. In such cases where even creditors

could not get enough money to pay their bills, nothing is left over to

reimburse owners equity. Thus owners equity is reduced to -ero.

!wnership equity is also known as risk capital, liable capital and

equity.

WHAT IS EJUITY SHARE?

Equity shares are those shares which are ordinary in the course of

company`s business. They are also called as ordinary shares. These

shareholders do not en/oy preference regarding payment of dividend

and repayment of capital. Equity shareholders are paid dividend out of

the profits made by the company. 1igher the profits higher will be the

dividends and lower the profits, lower will be the dividend. Total

equity capital of a company is divided into equal units of small

denominations, each called a share. or e$ample in a company the totalequity capital of s. :??,??,??? is divided into s.:?,??,??? units of

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s. 9? each. Each us unit of s. 9? is called a share. Thus, the company

is then said to have :?,??,??? equity shares of s. 9? each. The holders

of such shares are members of the company and have voting rights.

WHAT IS EJUITY INVESTMENT?

"oney that is invested in a firm by its owner's* or holder's* of

common stock 'ordinary shares* but which is not returned in the

normal course of the business. Investors recover it only when they sell

their shareholdings to other investors, or when the assets of the firm are

liquidated and proceeds distributed amongst them after satisfying the

firms obligation.

HOW TO INVEST IN SAHRE MARKET?

SHARE MARKET

)hare market is a place where everyone takes a bath in order to taste

the money but it purely depends on the fundamentals, luck, global

cues, behavior of other country markets, currency rate, fore$ rates,

currency trading etc. Trading is done in terms of the shares These

shares are the names of those companies which gets listed, generally.

%lso the share price varies time to time even second by second, if the

variation graph is critical.

TYPES OF SECTORS

There are various sectors in the share market. )ome of the known

sectors are oil, eality mining, eal2estate, construction, (anking,

inance, Telecommunication, efineries, steel, broking firms, ood

and beverages, "etals, /ewellery, packing, consumer goods, etc. The

best sector to invest is the decision taken by the investors

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understanding the fundamentals of the company, turnover and the

volumes traded, balance sheets and so on.

IDENTIFY THE BEST SECTOR

%s we saw above there are lot of sectors available in front of the

investors. (ut which sector one should choose that will give god

returns in the short term and long term investments. If the economy is

weak and the world is facning a financial pressure or crisis then it is

tough to identify the sector as every sector would get affected.

)o it is better to pick up the mid cap stocks that will not go worse in

near future. (ecause large cap stocks will plunge and surge drastically

like anything. If you were caught at the peak say =anuary :??@ then it

is tough to get to that level.

TERMS OF INVESTMENT

(asically investors should go for two types of investments, short term

and long term. )hort term investments are the ones where the investor

will buy the stock and keep in his portfolio for atleast >2A months.


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)hare tips, trading tips are provided by these houses to their customers

regularly.

WHY SHOULD ONE INVEST IN EJUITY IN PARTICULAR

0hen you buy a share of a company you become a shareholder in that

company. Equity have to potential to increase in value over time. It also

provides your portfolio with your growth necessary to reach your long

term investment goals. esearch studies have proved that the equities

have outperformed most other forms of investment in the long term.

Equities are considered the most challenging and rewarding, when

compared to other investment options. esearch studies have proved

that investments in some shares with a longer tenure of investment

have yielded far superior returns than any other investments. 1owever

this does not mean that all equity investments would gurantee similar

higher returns. Equities are high risk investments. !ne needs to study

them carefully before investing.

It is important for investors to note that while equity shares give

highest returns as compared to other investments avenues it also carries

highest riks therefore it is important to find 5real value6 or 5interesting

value6 of the security before investing in it.

To be able to value equity we need to first understand how equity has

to be analy-ed.

Equity share of any company can be analy-ed through .

9* ;&D%"E&T%< %&%


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ANALYSIS OF BANKS

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AXIS BANK

Axis Bank began its operations in 1994, after the Government of

Indiaallowed new private banks to be established. The Bank was

promoted in 1993jointly by the Administrator of the Unit Trst ofIndia!UTI"I#, $ife Insran%e &orporation of India!$I, General

Insran%e &orporation $td., 'ational Insran%e &ompany $td., The

'ew India Assran%e &ompany, The (riental Insran%e &orporation

andUnited India Insran%e &ompany. The Unit Trst of India holds a

spe%ial position in the Indian %apital markets and has promoted many

leading finan%ial instittions in the %ontry.

Axis Bank !erstwhile UTI Bank# opened its registered offi%e in

Ahmedabad and %orporate offi%e in )mbai in *e%ember +-. The

first bran%h was inagrated on April +/ inAhmedabadby

*r. )anmohan 0ingh, the then 1inan%e )inister of India.

Axis Bank operates in for segments2 Treasryoperations, 3etailbanking, &orporate45holesale bankingand other banking bsiness.

49
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Treasury operations2 The Bank6s treasry operation servi%es

in%lde investments in sovereign and %orporate debt, e7ity and

mtal fnds, trading operations, derivative trading and foreign

ex%hange operations on the a%%ont, and for %stomers and %entral

fnding.8-9

Retail banking2 In the retail banking %ategory, the bank offers

servi%es s%h as lending to individals4small bsinesses sbje%t to

the orientation, prod%t and granlarity %riterion, along with liability

prod%ts, %ard servi%es, Internet banking, atomated teller

ma%hines!AT)# servi%es, depository, finan%ial advisory servi%es,

and 'on"resident Indian!'3I# servi%es.

Corporate/wholesale banking2 The Bank offers to %orporate and

other organisations servi%es in%lding %orporate relationship not

in%lded nder retail banking, %orporate advisory servi%es,

pla%ements and syndi%ation, management of pbli% isses, proje%t

appraisals, %apital marketrelated servi%es and %ash

managementservi%es.

NRI services2 :rod%ts and servi%es for '3Is that fa%ilitate

investments in India.

Business banking2 The Bank a%%epts in%ome and other dire%t

taxes throgh its +/ athorised bran%hes at +-; lo%ations and

%entral ex%ise and servi%e taxes !in%lding e":ayments# throgh 7ity &apital )arkets, )ergers and

A%7isitionsand :rivate >7ity Advisory. The bank is a 0>BI"

registered &ategory I )er%hant Bankerand has been a%tive in

advising Indian %ompanies in raising e7ity throgh I:(s, ?I:s,

and 3ights isses et%. *ring the finan%ial year ended -+ )ar%h

@+, Axis Bank ndertook transa%tions in%lding < I:(s and

(pen (ffers. 9

50
http://en.wikipedia.org/wiki/Axis_Bank#cite_note-AR201213-3http://en.wikipedia.org/wiki/Automated_teller_machinehttp://en.wikipedia.org/wiki/Automated_teller_machinehttp://en.wikipedia.org/wiki/Non-resident_Indian_and_person_of_Indian_originhttp://en.wikipedia.org/wiki/Project_appraisalhttp://en.wikipedia.org/wiki/Project_appraisalhttp://en.wikipedia.org/wiki/Capital_markethttp://en.wikipedia.org/wiki/Cash_managementhttp://en.wikipedia.org/wiki/Cash_managementhttp://en.wikipedia.org/wiki/Axis_Bank#cite_note-AR201213-3http://en.wikipedia.org/wiki/Investment_Bankinghttp://en.wikipedia.org/wiki/Equity_Capital_Marketshttp://en.wikipedia.org/wiki/Mergers_and_Acquisitionshttp://en.wikipedia.org/wiki/Mergers_and_Acquisitionshttp://en.wikipedia.org/wiki/Securities_and_Exchange_Board_of_Indiahttp://en.wikipedia.org/wiki/Merchant_bankhttp://en.wikipedia.org/wiki/Initial_public_offeringhttp://en.wikipedia.org/wiki/Qualified_Institutional_Placementhttp://en.wikipedia.org/wiki/Rights_issuehttp://en.wikipedia.org/wiki/Axis_Bank#cite_note-AR201213-3http://en.wikipedia.org/wiki/Axis_Bank#cite_note-AR201213-3http://en.wikipedia.org/wiki/Automated_teller_machinehttp://en.wikipedia.org/wiki/Automated_teller_machinehttp://en.wikipedia.org/wiki/Non-resident_Indian_and_person_of_Indian_originhttp://en.wikipedia.org/wiki/Project_appraisalhttp://en.wikipedia.org/wiki/Project_appraisalhttp://en.wikipedia.org/wiki/Capital_markethttp://en.wikipedia.org/wiki/Cash_managementhttp://en.wikipedia.org/wiki/Cash_managementhttp://en.wikipedia.org/wiki/Axis_Bank#cite_note-AR201213-3http://en.wikipedia.org/wiki/Investment_Bankinghttp://en.wikipedia.org/wiki/Equity_Capital_Marketshttp://en.wikipedia.org/wiki/Mergers_and_Acquisitionshttp://en.wikipedia.org/wiki/Mergers_and_Acquisitionshttp://en.wikipedia.org/wiki/Securities_and_Exchange_Board_of_Indiahttp://en.wikipedia.org/wiki/Merchant_bankhttp://en.wikipedia.org/wiki/Initial_public_offeringhttp://en.wikipedia.org/wiki/Qualified_Institutional_Placementhttp://en.wikipedia.org/wiki/Rights_issuehttp://en.wikipedia.org/wiki/Axis_Bank#cite_note-AR201213-3


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!en"ing to sall an" e"iu enterprises2 Axis

Bank 0)>bsiness is segmented in three grops2 0mall

>nterprises, )edim >nterprises and 0pply &hain 1inan%e. Under

the 0mall Bsiness Grop a sbgrop for finan%ing mi%ro

enterprisesis also set p.8-9Axis bank is the first Indian Bank having

T&*& %ards in ++ %rren%ies

#griculture banking2 ;


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INDUSIND BANK

I"0!&I"0 Ba"( Limi$*0is "umbai based Indian new generation bank, established in

9@@B. The bank offers commercial, transactional and electronic banking products and

services. Indusind (ank was innaugarated in %pril 9@@B by then ;nion inance

"inister"anmohan )ingh. Indusind (ank is the first among the new2generation

private banks in India.

The bank started its operations with a capital amount of s. 9 billion among which

s. A?? million was donated by the Indian esidents and s. B?? million was raised

by the &on2esident Indians. The bank has speciali-ed in retail banking services andcontinuously upgrades its support systems by introducing newer technologies. It is

also working on e$panding its network of branches all across the country along with

meeting the global benchmark. %ccording to the bank, its name is derived from the

rich and vivid Indus Nalley #ivilisation.

IndusInd (ank has 8J> branches, and 9?88 %T"s spread across >@: geographic

locations of the country as on >? )eptember :?9: with : representative offices, one

each in


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Mi&&i%"

0e will consistently add value to all our stakeholders and emerge as the Kbest2in2

class7 in the chosen parameters amongst the comity of banks, by doubling our profits,

clients and branches within the ne$t three years.

YES BANK

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YES BANKis a private bank in India with headquarters in "umbai. It was founded

in :??B by promoters %shok Lapur and ana Lapoor, which had a collective

shareholding of :@F.%shok Lapur was killed in a terrorist attack in :?? in "umbai.

In :?9?, the bank announced the roll2out of a strategic blueprint, named Nersion :.?

of the bank, to further accelerate its business growth in the retail banking space, with

the ob/ective to achieve by :?98, a balance sheet si-e of 9,8?? billion, deposits of

9,:8? billion, advances of 9,??? billion, a pan India network of @?? branches and a

human capital base of 9:,J8? by :?98.

Vi&i%";

To be recogni-ed as the K(est Ruality (ank of the 0orld in India7 by :?98

To evolve as the +rofessionals7 (ank of India

Mi&&i%"

To establish a high quality, customer centric, service driven, private Indian (ank

catering to the Kuture (usinesses of India7. The Nersion :.? launched in %pril :?9?

aims to achieve the following by "arch :?983

1uman #apital 9:,J8?

(ranch &etwork @??

(alance )heet I& 98?,??? crore

PRODUCTS AND SERVICES

C%r+%ra$* a"0 I"&$i$!$i%"a3 Ba"(i",3

HE) (%&L deals in corporate investment services. This involves providing, for a fee,

financial advice to customers, generally corporate or individual investors.

C%mm*r#ia3 Ba"(i",3

HE) (%&L also competes in the )outh %sian commercial banking market.

#ommercial banking is essentially the equivalent of retail banking for commercial

55
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entities, but is however generally more e$pensive and accounts yield less interest,

since corporate firms donPt generally regard earning interest as a ma/or component of

their need for banking services.

I"-*&$m*"$ Ba"(i",3

HE) (%&LPs Investment (anking division consists of domestic and cross2border

"ergers and %cquisitions, =oint Nenture %dvisory )ervices, +rivate Equity +lacement

as well as "erchant (anking )ervices across select industry verticals.

#orporate inance2 HE) (%&LPs #orporate inance practice offers a combination of

advisory services and customised products to optimi-e risk based on MLnowledge

%rbitrageM

inancial "arketing2 The inancial "arkets '"* business model provides isk

"anagement solutions related to foreign currency and interest rate e$posures of

clients.

Bra"#2 Ba"(i",3

(usiness (anking3 HE) (%&L is a ma/or competitor in the business banking

sector of the Indian economy, especially amongst smaller2 and medium2si-ed

clients. (usiness banking is centred primarily around #ash 1andling,

+ayment, Direct (anking, @

%T"s, and Internet (anking facilities.

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ICICI BANK

I#I#I (ank was established by the I"0!&$ria3 Cr*0i$ a"0 I"-*&$m*"$ C%r+%ra$i%"

%' I"0ia times the offer si-e.

In !ctober :??9, the (oards of Directors of I#I#I and I#I#I (ank approved the

merger of I#I#I and two of its wholly owned retail finance subsidiaries, I#I#I

+ersonal inancial )ervices


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In :??, following the :?? financial crisis, customers rushed to I#I#I %T"s and

branches in some locations due to rumours of adverse financial position of I#I#I

(ank. The eserve (ank of India issued a clarification on the financial strength of

I#I#I (ank to dispel the rumours.

A#5!i&i$i%"&

9@@A3 )#I#I


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ICICI& r%3* i" I"0ia" 'i"a"#ia3 i"'ra&$r!#$!r*

The bank has contributed to the set up of a number of Indian institutions to establish

financial infrastructure in the country over the years

&ational )tock E$change 2 The&ational )tock E$changewas promoted by

IndiaPs leading financial institutions 'including I#I#I


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ID(I, I#I#I, I#I and )(I with the support of the Covernment of Cu/aratas a

national resource organisation committed to entrepreneurship development,

education, training and research.::U

&orth Eastern Development inance #orporation 2 &orth Eastern

Development inance #orporation '&EDI* was promoted by national level

financial institutions like I#I#I U

%sset econstruction #ompany India


63/77

data, research and commentary. It provides recommendations on resolutions

placed before shareholders of over >?? companies.

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COMPARISION OF FINANCIAL RATIOS

RATI

OS

%VI)

(%&L

I&;D

)I&D

(%&L

HE)

(%

&L

I#I#I

(%&

L

ace

Nalue

9?.?? 9?.?? 9?.?

?

9?.??

#urren

t atio

?.?> ?.?B ?.JJ ?.?@

9

%ssets

turnov

er

?.?@ ?.99 ?.9? ?.?

E+) 9>:.>> :A.? BB.

A

B.@8

Divide

nd per

share

:? >.8? .?? :>.?

TECHNICAL ANALYSIS OF BANKS

AXIS BANK

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%s you can see the above mentioned is the weekly chart of %$is (ank which shows

the bank`s trend since it started its operation before 9@@@. If you observe carefully

since 9@@@ to :??> the chart was sideways. There were no ups and downs. The stock

was in the range of s. @? and s 9?? and only after the year :??B it gave a positive

breakout.

The stock gave a lifetime high of s.9>?? but that was before the year :??@ this is

only because in the year :?? there was a 5 H*a0 a"0 &2%!30*r +a$$*r"6 formed .

&ot only %$is bank but all the stocks in all the sectors were fell down drastically as

the )E&)EV had plunged upto a great e$tent.

%fter a drastic fall from the levels of 9>?? to the levels of >??, the stock then

performed very well breaking the all resistances in the way.

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The first resistance it broke was of s. J9 in the year :??@ followed in the year :?9?

breaking the resistance of @9@.:?. In the same year it also broke the resistance of

99@B.?? and 9:@?.?? but till date it has not broken the resistance of 9A??.??

If you observe carefully the stock goes till 9A?? but then again comes down. %fter this

it facing a critical resistance at the 98?? levels.

The right time to buy this stock will be only after it breaks the resistance of 9A??

levels with a huge volume. !nce it breaks this resistance it will again come down to

test the resistance and further go up till 9J?? or more as this time it has broken a

critical resistance which it was trying to break since many years.

J9.?? seems to be a very good support level as it has come down till that level but

has not gone down below that level. )o it is better to sell if it crosses this mark of

J9.??

1owever this depends from investor to investor as some investors prefer having a stop

loss.

INDUSIND BANK

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This is the technical chart if Indusind bank. )ince the year it has began its operations

you will see that the chart has performed very well. It has always been on an uptrend

and investors claim that they have got good returns from this particular stock.

The stock was trading in the range of s. :? and s. ?. In the year :?? it tried to

break the first resistance of 9>8.:8 but it failed to do so. It was in the year :??@ that it

broke the resistance of 9>8.:8 came down tested the resistance and then was on a

uptrend till it faced the second resistance at the mark of >??.

The stock was sideways for : years, that is from :?99 to :?9> and then finally it could

break the resistance of of >?? and go up till 8>?.A? levels.

s. >B8 seems to be a good support level as it has formed a 5 0%!3* %$$%m6 at that

level which is a trend reversal pattern. The stock was facing some difficulty at the the

B8? mark but it managed to break that resistance and eventually it also broke the

resistance at of 8>?.A?

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I feel it7s a good time to buy this stock as it was facing a great difficulty in breaking

the resistance of 8>?.A? for a year and now it as succeeded in doing so.

%s mentioned earlier on breaking the resistance it has come down to test the

resistance and now it shall go up further till J?? and above .

The chart had also formed a 5$ria",3* +a$$*r" in mid :?9>. It gave a positive

breakout from this triangle in this year and the calculations show that the chart will

now go upto s.J?? and above.

YES BANK

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The chart of Hes (ank clearly shows that it is on an uptrend since it began its

operations. The chart performed very well from :??8 to :?? but because of the crisis

that happened in :?? it fell down till s. A? from s. :J?

1aving formed a good support at the s. A? levels the chart then went uptill s. >?

levels. % close look indicates a form of a huge black candle at this level which forced

the prices to come down till s. :B?. It was trading in betweens the levels of :J? and

>B? for a year.

% resistance had been formed at the >B? levels and it was a bit hard to break this

resistance. The stock price came down till s.::? and there was a 50%!3* %$$%m

and then went uptill the levels of s.B?A.8A

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The B?A seems to be a critical resistance as whenever it touches this resistance it falls

down but now it has managed to break this resistance.

&ow if you observe carefully it is coming down back to test the resistance and after it

has tested the resistance it will further go up.

The right time to buy this stock is only when it again breaks the previous high of

s.8B? which it had given in the year :?9>.

Investors are adviced to keep a stop loss to avid uncessary losses and book good

profits.

ICICI BANK

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I#I#I (ank is that bank whose stocks are seen in almost every investors portfolio.

The stock was an uptrend and gave a lifetime high of s.9B?? but then because of the

crisis that took place in :?? it fell drastically.

In the year :??@ it formed a good support level and went upto s.9:?? but then again

came down as there was a formation of the 52*a0 a"0 &2%!30*r +a$$*r" .

The stock price fell down it s.A?? after which investors started buying it and then it

was on an uptrend. s. J8? seems to be a good support level in this chart as twice it

has bounced back when it comes down to this level, once in the year :?9: and ne$t in

mid :?9>. 0hen to buy this chart is not known as it as to still set a good support line

at the @?? levels only after which one will be able to predict the charts further trends.

)o I would advice the investors to wait for sometime or if some investors are having

this stock then they should sell half of their holdings and wait till they get an

indication.

RESULTS AND FINDINGS

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The pro/ect is on undamental and Technical analysis of (anking )tocks and hence a

lot can be learned from this pro/ect. )peaking about the findings many people want to

invest in the stock market but they are not sure as to whether invest or not

The only reason why people are confused is that they do not have any basis to do so.

undamental or Technical analysis mainly helps an investor to predict the stock prices

and then invest the that particular stock. Hes there is market risk but one needs to

master the art of %nalysis and then the investor will be able to earn a good profit.

%bout the banking sector, (anks stocks are very important in the economy. This is

because of the fact that they are the ones that are running the economy to a ma/or

e$tent. The banks are the ones that provide the loans in any countries. They are the

developed nations that have various non banking financial companies that do the /ob

that banks do.

To invest in the bank stocks and other financial stocks is one of the best methods of

making money. It is true as investment in banking sector can give good returns which

I have mentioned in the Technical charts.

% word of caution would be to analy-e the liabilities of these banks before investing

in their stocks.

CONCLUSION

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%fter reading this report one can learn the basics of ;&D%"E&T%< %&D

TE#1&I#%< %&%


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www.icicibank.com

NEWSPAPER

The Economic Times The (usiness


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ANNEXURE

JUESTIONNAIRE

)8 %re you willing to invest in the (anking )ector4 HE)

&!))8 If yes then on basis of which analysis

undamental %nalysis

Technical %nalysis

)18 isk associated with banking sector is4

1igh

"oderate


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&o

#an`t )ay

)8 1ow has the (anking sector performed over the years4

Cood

%verage

(ad

)8 0hat is your investment philosophy4

technical analyis of banking stocks

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