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INTERNSHIP REPORT

ON
EQUITY RESEARCH ON BANKING SECTOR

Submitted in partial fulfilment of the requirement for the award of degree of Bachelor of Business Studies of Shaheed Sukhdev College of Business studies, Delhi University By
by

Bhaskar Prasad (50043) Under The guidance of Mr.Rajanish Kumar (Assistant branch manager Sharekhan, Rajouri garden)

ACKNOWLEDGEMENT

I Take This Opportunity To Sincerely Thanks And Express My Gratitude To My Project Guide And Mentor Mr. Rajanish Kumar For Guiding Me Throughout The Project. The Experience And The Knowledge Acquired Over The Interactions With The Guide Have Been Invaluable To Say The Least And Will Help Me A Great Deal In My Future Education And Career. My Project Was Completed In A Very Supportive And Interactive Environment And Has Been Great Learning Experience. Last But Not The Least I Would Like To Thanks My Family And Friends For All The Support They Have Provided Me.

BHASKAR PRASAD

TABLE OF CONTENTS
SERIAL NO.
1

CONTENTS
INTRODUCTION

PAGE .NO
3

PROFILE OF THEORGANISATION

DISCUSSION ON TRAINING

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STUDY OF SELECTED RESEARCH TOPIC

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BIBLIOGRABHY

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ANNEXTURE

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Introduction

INTRODUCTION

Indian brokerage industry


In India, Broking firms primarily works as aagent of buying and selling of stocks and other financial instruments for the investors and charge commission for each transaction done by them..

Evolution of the Indian Brokerage Market


The Indian broking industry is one of the oldest trading industries that had been around even before the establishment of the BSE in 1875. Despite passing through a number of changes in the post liberalization period, the industry has found its way towards sustainable growth. The evolution of the brokerage market is explained in three phases: pre1990, 1990-2000, post 2000.

Early Years
The equity brokerage industry in India is one of the oldest in the Asia region. India had an active stock market for about 150 years that played a significant role in developing risk markets as also promoting enterprise and supporting the growth of industry. The roots of a stock market in India began in the 1860s during the American Civil War that led to a sudden surge in the demand for cotton from India resulting in setting up of a number of joint stock companies that issued securities to raise finance. This trend was akin to the rapid growth of securities markets in Europe and the North America in the background of expansion of railroads and exploration of natural resources and land development. Bombay, at that time, was a major financial centre having housed 31 banks, 20 insurance companies and 62 joint stock companies. In the aftermath of the crash, banks, on whose building steps share brokers used to gather to seek stock tips and share news, disallowed them to gather there, thus forcing them to find a place of their own, which later turned into the Dalal Street. A group of about 300 brokers formed the stock exchange in Jul 1875, which led to the formation of a trust in 1887 known as the Native Share and Stock Brokers Association. A unique feature of the stock market development in India was that that it was entirely driven by local enterprise, unlike the banks which during the pre-independence period were owned and run by the British. Following the establishment of the first stock exchange in Mumbai, other stock exchanges came into being in major cities in India, namely Ahmedabad (1894),

Calcutta (1908), Madras (1937), Uttar Pradesh and Nagpur (1940) and Hyderabad (1944). The stock markets gained from surge and boom in several industries such as jute (1870s), tea (1880s and 1890s), coal (1904 and 1908) etc, at different points of time.

Beginning of a new equity culture


A new phase in the Indian stock markets began in the 1970s, with the introduction of Foreign Exchange Regulation Act (FERA) that led to divestment of foreign equity by the multinational companies, which created a surge in retail investing. The early 1980s witnessed another surge in stock markets when major companies such as Reliance accessed equity markets for resource mobilisation that evinced huge interest from retail investors. A new set of economic and financial sector reforms that began in the early 1990s gave further impetus to the growth of the stock markets in India. As a part of the reform process, it became imperative to strengthen the role of the capital markets that could play an important role in efficient mobilisation and allocation of financial resources to the real economy. Towards this end, several measures were taken to streamline the processes and systems including setting up an efficient market infrastructure to enable Indian finance to grow further and mature. The importance of an efficient micro market infrastructure came into focus following the incidence of market abuses in securities and banking markets in 1991 and 2001 that led to extensive investigations by two respective Joint Parliamentary Committees. The Securities and Exchange Board of India (SEBI), which was set up in 1988 as an administrative arrangement, was given statutory powers with the enactment of the SEBI Act, 1992. The broad objectives of the SEBI include

to protect the interests of the investors in securities to promote the development of securities markets and to regulate the securities markets

The scope and functioning of the SEBI has greatly expanded with the rapid growth of securities markets in India in the last fifteen years. Following the recommendations of the High Powered Study Group on Establishment of New Stock Exchanges, the National Stock Exchange of India (NSE) was promoted by financial institutions with an aim to provide access to investors all over the country. NSE was incorporated in Nov 1992 as a tax paying company, the first of such stock exchanges in India, since stock exchanges earlier were trusts, being run on no-profit basis. NSE was recognized as a stock exchange under the Securities Contracts (Regulations) Act 1956 in Apr 1993. It commenced operations in wholesale debt segment in Jun 1994 and capital market segment (equities) in Nov 1994. The setting up of the National Stock Exchange brought to Indian capital markets several innovations and modern practices and procedures such as nationwide trading network, electronic trading, greater transparency in price discovery and process driven operations that had significant bearing on further growth of the stock markets in India. Faster and efficient securities settlement system is an important ingredient of a successful stock market. To speed the securities settlement process, The Depositories Act 1996 was passed that allowed for dematerialisation (and rematerialisation) of securities in depositories and the transfer of securities through electronic book entry. The National Securities

Depository Limited (NSDL) set up by leading financial institutions, commenced operations in Oct 1996. Regulations governing selection of various types of market intermediaries as depository participations were made. Subsequently, Central Depository Services (India) Limited promoted by Bombay Stock Exchange and other financial institutions came into being.

Rapid Growth
The last decade has been exceptionally good for the stock markets in India. In the back of wide ranging reforms in regulation and market practice as also the growing participation of foreign institutional investment, stock markets in India have showed phenomenal growth in the early 1990s. The stock market capitalization in mid-2007 is nearly the same size as that of the gross domestic product as compared to about 25 percent of the latter in the early 2000s. Investor base continued to grow from domestic and international markets. The value of share trading witnessed a sharp jump too. Foreign institutional investment in Indian stock markets showed continuous rise reaching about USD10 bn in each of these years between FY04 to FY06. Stock markets became intensely technology and process driven, giving little scope for manual intervention that has been the source of market abuse in the past. Electronic trading, digital certification, straight through processing, electronic contract notes, online broking have emerged as major trends in technology. Risk management became robust reducing the recurrence of payment defaults. Product expansion took place in a speedy manner. Indian equity markets now offer, in addition to trading in equities, opportunities in trading of derivatives in futures and options in index and stocks. ETFs are showing gradual growth. Within five years of introduction of derivatives, Indian stock markets now are ranked first in stock futures and fourth in index futures. Indian stock markets are transaction intensive and thus rank among the top five markets in this regard. Stock exchange reforms brought in professional management separating conflicts of interest between brokers as owners of the exchanges and traders/dealers. The demutualisation and corporatisation of all stock exchanges is nearing completion and the boards of the stock exchanges now have majority of independent directors. Foreign institutions took stake in Indias two leading domestic stock exchanges. While NYSE Group led consortium took stake in the National Stock Exchange, Deutsche Borse and Singapore Stock Exchange bought equity in the Bombay Stock Exchange Ltd.

Achievement India in Global Markets


The stature and significance of India is growing in the world capital markets. India is not only attracting greater interest from world markets, but is also assuming increasing importance in global finance.

India is a major recipient of foreign institutional flows amongst the emerging markets. Since the opening up of domestic stock markets to foreign investors, cumulative net FII investments reached Rs 517 Bn by 2008 end. India is major destination of private equity flows into the emerging markets India was host to the annual meetings/conference of the World Federation of Exchanges (2005) and International Organization of Securities Commission (IOSCO) (2007)

India emerged a trillion dollar market capitalisation market in 2007, and was among the top 10 stock exchanges in the world in terms of market capitalisation India is amongst the top fifteen stock exchanges in the world in respect of equity turnover India emerged as a leading player in commodities futures market India is amongst the top five in the number of transactions India is among the top five in respect of volume traded in Stock Index Futures and Stock Futures India is one of the few markets with extensive dematerialization of shares Indias T+2 securities settlement cycle is at par with the global standards Indian stock markets have the largest number of listings, with trading taking place in about 2,500-3,000 stocks Indias most popular stock index (Sensex) is constructed on the basis of full float methodology, one of the firsts in the Asian region and a global standard Indian market indices such as Sensex and CNX Nifty are listed in foreign exchanges for trading as ETFs.

Current scenario
The Indian retail brokerage market, is going through a wonderful phase with high growth rate. The total trading volume of the Indian brokerage companies stood at US$ 1239.1 billion in the year 2004, which increased to US$ 1492.1 billion in 2005. It is further expected to reach US$ 6535.7 billion by the year 2015.this has resulted in a cut throat competition between the existing market leaders and new entrants. The top 10 broking houses in India are 1. Kotak securities 2. Sharekhan 3. Angel money 4. India infoline 5. Kravy 6. Reliance money 7. Motilaloswal securities 8. Religare 9. Indiabulls 10. Anandrathi securities

PROFILE OF THE ORGANISATION

Company profile
SHAREKHAN LIMITED Vision
To be the best retail broking brand in the retail business of the stock market.

Mission
To educate and empower the individual investor to make better investment decisions through quality advices and superior services.

COMPANY HISTORY
Sharekhan is one of the top retail brokerage houses in India with a strong online trading platform. The company provides equity based products (research, equities, derivatives, depository, margin funding, etc.). It has one of the largest networks in the country with 704 share shops in 280 cities and Indias premier online trading portal www.sharekhan.com. With their research expertise, customer commitment and superior technology, they provide investors with end-to-end solutions in investments. They provide trade execution services through multiple channels - an Internet platform, telephone and retail outlets. Sharekhan is one of the leading retail broking House of SSKI Group[SHANTILAL SHEWANTILAL KANTILAL ISWARNATH LIMITED] which was running successfully since 1922 in the country. SHAREKHAN is a retail broking arm of the Mumbai-based SSKI Group, which has over eight decades of experience in the stock broking business. Sharekhan was established by Morakhia family in 1999-2000 and Morakhia family, continues to remain a major shareholder.With a legacy of more than 80 years in the stock markets, the SSKI group ventured into institutional broking and corporate finance over a decade ago. Presently SSKI is one of the leading players in institutional broking and corporate finance activities. Sharekhan offers its customers a wide range of equity related services including trade execution on BSE, NSE, and Derivatives. Depository services, online trading, Investment advice, Commodities, etc. Sharekhan Ltd. is a brokerage firm which is established on 8th February 2000 and now it is having all the rights of SSKI. The company was awarded the 2005 Most Preferred Stock Broking Brand by Awwaz Consumer Vote. It is first brokerage Company to go online. The Company's online trading and investment site - www.Sharekhan.com- was also launched on Feb 8, 2000. This site gives access to superior content and transaction facility to retail customers across the country. Known for its jargon-free, investor friendly language and high quality research, the content-rich and research oriented portal has stood out among its

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contemporaries because of its steadfast dedication to offering customers best-of-breed technology and superior market information. Share khan has one of the best state of art web portal TRADE TIGER providing fundamental and statistical information across equity, mutual funds and IPOs all at one platform. One can surf across 5,500 companies for in-depth information, details about more than 1,500 mutual fund schemes and IPO data. One can also access other market related details such as board meetings, result announcements, FII transactions, buying/selling by mutual funds and much more. Sharekhan's management team is one of the strongest in the sector and has positioned Sharekhan to take advantage of the growing consumer demand for financial services products in India through investments in research, pan-Indian branch network and an outstanding technology platform. Further, Sharekhan's lineage and relationship with SSKI Group provide it a unique position to understand and leverage the growth of the financial services sector. We look forward to providing strategic counsel to Sharekhan's management as they continue their expansion for the benefit of all shareholders." SSKI Corporate Finance Private Limited (SSKI) is a leading India-based investment bank with strong research-driven focus. Their team members are widely respected for their commitment to transactions and their specialized knowledge in their areas of strength. The team has completed over US$5 billion worth of deals in the last 5 years - making it among the most significant players raising equity in the Indian market. SSKI, a veteran equities solutions company has over 8 decades of experience in the Indian stock markets. Sharekhan has always believed in investing in technology to build its business. The company has used some of the best-known names in the IT industry, like Sun Microsystems, Oracle, Microsoft, Cambridge Technologies, Nexgenix, Vignette, Verisign Financial Technologies India Ltd, Spider Software Pvt Ltd. to build its trading engine and content. Previously the Morakiya family holed a majority stake in the company but now a world famous brand CITI VENTURE GROUP has taken a majority stake in the company. HSBC, Intel & Carlyle are the other investors There is a common thread in experience of Sharekhans language, presentation style, content or for that matter the online trading facility,; one that helps us make informed decisions and simplifies investing in stocks.The common thread of empowerment is what Sharekhan's all about! "Sharekhan has always believed in collaborating with like-minded Corporate into forming strategic associations for mutual benefit relationships" says JaideepArora, Director - Sharekhan Limited. Sharekhan is also about focus. Sharekhan does not claim expertise in too many things. Sharekhan's expertise lies in stocks and that's what he talks about with authority. So when he says that investing in stocks should not be confused with trading in stocks or a portfolio-

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based strategy is better than betting on a single horse, it is something that is spoken with years of focused learning and experience in the stock markets. And these beliefs are reflected in everything Sharekhan does for us! Sharekhan is a part of the SSKI group, an Indian financial services power house, with strong presence in Retail equities Institutional equities Investment banking

Product and Services

Sharekhan let its customers invest in Mutual Funds Equity Derivatives(both future and options) IPOs Commodity

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NSEL Life Insurance

Through the following products and services

CLASSIC ACCOUNT
This account allow the client to trade through company website www.sharekhan.com and is suitable for the retail investor who is risk averse and hence and prefers to invest in stocks and who do not trade very frequently. Features classic screen serves hot. Online trading account for investing In Equities and Derivatives Integration of the On-line trading, Saving bank and Demat Account Instant cash transfer facility against purchase and the sale of share Competitive transaction charge Instant order and the trade conformation by E-mail Streaming quotes (cash and derivatives) Personalized market watch Single screen interface for cash and derivatives and more Provision to enter price trigger and view the same online in the market watch Live terminal(NSE online and BSE offline)

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TRADETIGER
TRADE TIGER is an internet based software application that enables you to buy and sell in an instant. It is ideal for active traders and jobbers who transect frequently during day session to capitalize on intraday price movement. Features A single platform for multiple exchange BSE & NSE (Cash & F&O), MCX, NCDEX, Mutual Funds, IPOs Multiple Market Watch available on a Single Screen Multiple Charts with Tick by Tick Intraday and End of Day Charting powered with various Studies Graph Studies include Average, Band-Bollinger, Know SureThing, MACD etc Apply studies such as Vertical, Horizontal, Trend, Retracement & Free lines User can save his own defined screen as well as graph template, that is, saving the layout for future use. User-defined alert settings on an input Stock Price trigger Tools available to guage market such as Tick Query, Ticker, Market Summary, Action Watch, Option Premium Calculator, Span Calculator Shortcut key for FAST access to order placements & reports Online fund transfer activated with 12 Bank

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Fast trade
Features Streaming quotes. Personalised market watch. Single screen interface for cash, derivatives and more. Provision to enter price trigger and view the same online in market watch It's a scientific system powered by a trend evolution algorithm which captures the changing trend pattern for each stock. This helps investors /traders to get a clear and simple "call to action" for profitable trades.

Fortune Finder It's a simple decision making system to generate high probability calls with only 3 action cues: BUY SELL HOLD No jargons, No indecision

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Share shop
Sharekhan offers 1950 'Share Shops' across over 575 cities in India,. to help customers get a host of trading and investment related services. Its friendly customer service staff will also help customers with any account related queries that they may have. It is India's largest network of branded shops A Sharekhan outlet offers the following services: Online BSE and NSE executions (through BOLT & NEAT terminals) Free access to investment advice from Sharekhan's Research team Sharekhan ValueLine (a monthly publication with reviews of recommendations, stocks to watch out for etc) Daily research reports and market review (High Noon & Eagle Eye) Pre-market Report (Morning Cuppa) Daily trading calls based on Technical Analysis Cool trading products (Daring Derivatives and Market Strategy) Personalised Advice Live Market Information Depository Services: Demat&Remat Transactions Derivatives Trading (Futures and Options) Commodities Trading IPOs & Mutual Funds Distribution Internet-based Online Trading: Trade tiger

Dial and trade


Along with enabling access for your trade online, the classic and tradetiger account also gives you our dial-n-trade services. With this services, all you have to do is dial our dedicated phone line 1-800-22-7500 IPO ONLINE Can apply all the forthcoming IPO online hassle-free.

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Online Fund Transfer


Sharekhan has got a tie-up with 12 banks for online transfer of funds. These banks are HDFC, Citibank, IDBI Bank, Axis Bank, OBC, UBI, INDUSIND Bank, Yes bank, ICICI bank, Bank of India, DEUTSCHE Bank and Federal Bank. This means that if you are having a bank account with any of these banks, you can link it with your Sharekhan trading account which will enable you to place an online request for transfer and withdrawal of funds.

PORTFOLIO MANAGEMENT SERVICES


Sharekhan is also having Portfolio Management Services for Exclusive clients. 1. PROPRIME Research & Fundamental Analysis.Ideal for investors looking at steady and superior returns with low to medium risk appetite. This portfolio consists of a blend of quality blue-chip and growth stocks ensuring a balanced portfolio with relatively medium risk profile. The portfolio will mostly have large capitalization stocks based on sectors & themes that have medium to long term growth potential. 2. PROTECH - Technical Analysis.Protech uses the knowledge of technical analysis and the power of derivatives market to identify trading opportunities in the market. The Protech lines of products are designed around various risk/reward/ volatility profiles for different kinds of investment needs. THRIFTY NIFTY: Nifty futures are bought and sold on the basis of an automated trading system that generates calls to go long/short. The exposure never exceeds value of portfolio i.e. there is no leveraging; but being short in Nifty allows you to earn even in falling markets and there by generates linear BETA PORTFOLIO: Positional trading opportunities are identified in the futures segment based on technical analysis. Inflection points in the momentum cycles are identified to go long/short on stock/index futures with 1-2 month time horizon. The idea is to generate the best possible returns in the medium term irrespective of the direction of the market without really leveraging beyond the portfolio value. Risk protection is done based on stop losses on daily closing prices. STAR NIFTY: Trailing Stops Momentum trading techniques are used to spot short term momentum of 5-10 days in stocks and stocks/index futures. Trailing

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stop loss method of risk management or profit protection is used to lower the portfolio volatility and maximize returns. Trading opportunities are explored both on the long and the short side as the market demands to get the best of both upwards & downward trends. 3. PROARBITRAGE Exploit price analysis ONLINE IPO'S AND MUTUAL FUNDS ADVISORY IS AVAILABLE

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Account opening procedures and Brokerage charges


Minimum Margin of Rs.5,000/- is required for Demat Account Opening. Annual Maintenance Charges will NIL for 1st year and Rs. 400/- from 2nd year. EXPOSURE ON MARGIN MONEY: upto 4 to 6 TIMES on Delivery for 5 days and 10 Times For Intraday. Online ipo's and mutual funds advisory is available. Life insurance through icici prodential is also available

CHARGE STRUCTURE 1) Normal Demat Account Margin


Rs. 5,000 Rs. 50,000

Intraday
0.05% 0.02% 0.01% 0.03% 0.02% 0.01%

Delivery
0.25% 0.20% 0.10% 0.03% 0.02% 0.01%

Cash Trading Brokerage

Rs. 50,000 Rs. 1,00,000 Above Rs. 2,00,000 Rs. 5,000 Rs. 50,000

Commodities Trading Brokerage


Note:

Rs. 50,000 Rs. 1,00,000 Above Rs. 2,00,000

Minimum Brokerage Charge Rs. 16/- per scrip on Cash Trading Futures - 0.10% (First Leg) 0.02% (2nd Leg if square off same day) 0.10% (2nd Leg) Options 2.5% or Rs. 100/- which ever is higher.

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2) Pre Paid Account:Advance Amount which will be fully adjusted against your brokerage you paid in One year.Following Schemes Are Available:

Brokerage Charges (in %) For Intraday For Delievery


750/- Scheme 1000/- Scheme 2,000/- Scheme: 6,000/- Scheme: 10000/- Scheme 18,000/- Scheme: 30,000/- Scheme: 60,000/- Scheme: 1,00,000/- Scheme: 2,00,000/- Scheme

0.10 0.09 0.07 0.05 0.0045 0.02 0.015 0.010 0.020 0.015

0.50 0.45 0.40 0.25 0.22 0.20 0.15 0.10 0.004 0.10

*INTRADAY charges will be one side only i.e. on selling side only in prepaid accounts.

Depository charges
Account opening charges Rs NIL RS NIL first year RS 400/- p.a. from second calendar year onward

Account maintenance charges

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PROCESS OF ACCOUNT OPENING


LEAD MANAGEMENT SYSTEM (LMS) / REFERENCES

CONTACT

TELEPHONE AND PRESONAL VISIT

APPOINTMENT

DEMONSTRATION

AGREE

DISAGREE (CLOSE)

DOCUMANTATION

FILLING THE FORM

SUBMISSION THE FORM

LOGIN OF THE FORM

SENDING THE ACCOUNT OPENING KIT TO THE CUSTOMER FOR TRADING

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FOLLOWING DOCUMENTS ARE REQUIRED FOR A/C OPENING: Photo ID Proof Residence Proof (Permanent or Correspondence) Any one of them

Pan Card (Mandatory) Passport (valid) Passport Driving License Voter's ID MAPIN UIN Card Voter's ID Card Driving License (valid) Letter verified by Bank Bank Statement & Bank Passbook (latest) Telephone Bill (latest) Electricity Bill (latest) Ration Card Latest Insurance Policy with Bond Copy Letter from Employer (Only in case of Army People) --1 Photographs (Passport size & front face) --1 Cheque of Margin Amount in the favor of SHAREKHAN LTD.

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REASON TO CHOOSE SHAREKHAN LIMITED 1. Experience


SSKI has more than eight decade of trust and credibility in the Indian stock market. In Asia money market poll held recently, SSKI won the India best broking house for 2004 award. Ever since it launch Sharekhan as its retail broking division in February in 2000.it has been providing institutional level research and broking service to individual level investor.

2. Technology
With our online trading account you can by and sell share in the intent from any PC with an internet connection. You will get assess to our powerful online trading tool that will help you take complete control over your investment in share. 3. Accessibility Sharekhan provides ADVICE, EDUCATION, TOOL AND EXECUTION service for investors. These service are accessible throw our center across the country. (Over 588 location in148 cities) over the internet (throw the website www.sharekhan.com) as well as over the voice tool.

4. Knowledge
In a business where the right information at the right time translates into the direct profit, you get access to a wide range of information on our content rich portal, Sharekhan. You will also get a useful set of knowledge-based tools that will empower you to take informed decisions.

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5. Convenience
You can call our dial and trade number to get investment advice and execute your transaction. We have a dedicated call center to provide this service via a toll free number 1800-22-7500 form anywhere in India.

6. Customer Service
Our customer service team assists you for any help that you need relating to the transaction, billing d-mat and other queries. Our customer service can be contracted via a toll-free number email or live chat on www.sharekhan.com.

7. Investment Advice
Sharekhan has dedicated research team of more than 30 people for fundamental and the technical research. Our analysis constantly tracks the pulse of the market and provides the timely investment advice to you in the form of daily research email. Online chat, printed report and sms on your mobile phone.

Benefits
1.

Free Depository A/c Secure Order by Voice Tool Dial-n-Trade. Automated Portfolio to keep track of the value of your actual purchases. 24x7 Voice Tool access to your trading account. Personalised Price and Account Alerts delivered instantly to your Cell Phone & E-

2. 3. 4. 5.

mail address. 6. 7. Special Personal Inbox for order and trade confirmations. On-line Customer Service via Web Chat.

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8. 9. 10. 11. 12.

Anytime Ordering. Instant Cash Transfer. Multiple Bank Option. Enjoy Automated Portfolio. Buy or sell even single share.

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DISCUSSION ON TRAINING

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Our group of 6 interns were given the following objectives to meet in 6 weeks of training To project Sharekhan as an authority in the retail stock trading business. To execute business for the company by selling demat accounts To study the various products of the company. To know how to open and close the calls. To learn the online terminal used for trading. To know the various policies of the company. To know how to handle various types of customers. To know various reasons for market fluctuations. To learn to manage time. To gain practical knowledge of the market. To have a practical experience of working in a reputed organization.

TARGETS / TASKS:
TARGETS To sell 10 Demat accounts individually for Sharekhan limited To induce first trade in the account opened by us through encouraging customers giving them calls and useful insights about the market.

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MY SIP IN SHAREKHAN
Before my Summer Internship Programme, I had very little knowledge about the stock market and its fundamentals. And now after undergoing training for six weeks at Sharekhan there is a tremendous increase in my knowledge about the stock market. I have also gained a lot of knowledge about the Sharekhan Company and its various products, schemes and policies and also about its competitors. The products which I have sold up till now are Demat accounts. And I am confident about my knowledge about demat accounts. Although nobody can claim complete expertise but there is a sea change at least from my point of view. I have learnt what are the various indices and their significance in market. I have also learnt the impact of Sensex and Nifty on overall stock market. I have learnt about various fundamentals and technical aspects, which affect the stock prices in short, run and long run. At Sharekhan we have also been taught to use the online terminal.

Sharekhan is one of the top retail brokerage houses in India with a strong online trading platform. The company provides equity based products (research, equities, derivatives, depository, margin funding, etc.). It has one of the largest networks in the country with 1000 share shops in 375 cities and Indias premier online trading portal www.sharekhan.com.

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STUDY OF SELECTED RESEARCH TOPIC

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Research methodlogy
Research Methodology is a way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. In it we study the various steps that are generally adopted by researcher in studying his research problem s along with logic behind him. My topic of research is Equity research .Equity research is what an equity research analyst does. Well, to start with, equity research is a study of equities or stocks for the purpose of investments. Equities or common stock comprises a big chunk in any companys capital and shareholders need to know whether to stay invested in the company or sale the shares and come out. As an individual, it is time consuming to do equity research - that is to study the company, its financial statements, products, management and take a decision about investment.Theseresearches help investors to make informed decisions.

Purpose
Purpose of equity research is to study companies, analyze financials, and look at quantitative and qualitative aspects mainly for making a fundamental decision: Whether to invest or not in the particular share.

Research objective
I have decided to take Indian banking industry for equity research .My plan is to take top 4 performing banks and analyze their performance and giving my suggestions about which strategy should be adopted by investors.

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Analysis Process of Equity Research


Economy analysis

Industry analysis

Company analysis

Financial statement analysis

Report writing

Recommendations and Presentatiion

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Economy Analysis
Indian economy is facing aa challenging times. After enjoying a high growth rates 8% for the better past 2 years its GDP growth estimated at 6.9 per cent in real terms in 2011-12. Slowdown in comparison to preceding two years is primarily due to deceleration in industrial growth. Headline inflation expected to moderate further in next few months and remain stable thereafter. Developments in Indias external trade in the first half of current year have been encouraging. Diversification in export and import market achieved. Current account deficit at 3.6 per cent of GDP for 2011-12 and reduced net capital inflow in the 2nd and 3rd quarters put pressure on exchange rate. Indias GDP growth in 2012-13 expected to be 7.6 per cent +/- 0.25 per cent.Deterioration in fiscal balance in 2011-12 due to slippages in direct tax revenue and increased subsidies. The recovery of Indian economy has been stalled due to host of factors like The intensification of sovereign debt crisis in the Euro zone, political turmoil in Middle East injected widespread uncertainty, crude oil prices rose, an earthquake struck Japan and the overall gloom refused to lift. A number of scams and scandal(common wealth scam,adarsh society scam,tetra scam,2G,3G scams etc) have come forward which has not only tanish indias shining image in the world but also reduce the confidence of retail investors. Certain policies (like FDI in insurance,retail, etc.) aimed at improving growth prospect of the economy have been stalled in the parliament like foreign investment in multichain outlets etc.

but still if certain step are taken to remove indecision of the government and cure the policy paralysis .there is no reason why india cannot repeat the same success story of the past.

Industry Outlook
Without a sound and effective banking system in India it cannot have a healthy economy. The banking system of India should not only be hassle free but it should be able to meet new challenges posed by the technology and any other external and internal factors. For the past three decades India's banking system has several outstanding achievements to its credit. It is no longer confined to only metropolitans or cosmopolitans in India; in fact, Indian banking system has reached even to the remote corners of the country. This is one of the main reasons of India's growth process. The government's regular policy for Indian bank since 1969 has paid rich dividends with the nationalization of 14 major private banks of India. Not long ago, an account holder had to wait for hours at the bank counters for getting a draft or for withdrawing his own money. Today, he has a choice. Gone are days when the most efficient bank transferred money from one branch to other in two days. Now it is simple as instant messaging or dial a pizza. Client satisfaction has become the order of the day.

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Post-Independence
In 1948, the Reserve Bank of India, India's central banking authority, was nationalized, and it became an institution owned by the Government of India. In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India." The Banking Regulation Act also provided that no new bank or branch of an existing bank may be opened without a license from the RBI, and no two banks could have common directors.

Liberalization
The new policy shook the Banking sector in India completely. Bankers, till this time, were used to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4) of functioning. In the early 1990s the then NarsimhaRaogovernment embarked on a policy of liberalizationand 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 Global Trust Bank (the first of such new generation banks to be set up) which later amalgamated with Oriental Bank of Commerce, UTI Bank(now re-named as Axis Bank), ICICI Bank and HDFC Bank

RECENT DEVELOPMENT IN BANKING SECTOR


A retrospect of the events clearly indicates that the Indian banking sector has come far away from the days of nationalization. The Narasimhan Committee laid the foundation for the reformation of the Indian banking sector. Constituted in 1991, the Committee submitted two reports, in 1992 and 1998, which laid significant thrust on enhancing the efficiency and viability of the banking sector. As the international standards became prevalent, banks had to unlearn their traditional operational methods of directed credit, directed investments and fixed interest rates, all of which led to deterioration in the quality of loan portfolios, inadequacy of capital and the erosion of profitability. The recent international consensus on preserving the soundness of the banking system has veered around certain core themes. These are: effective risk management systems, adequate capital provision, sound practices of supervision and regulation, transparency of operation, conducive public policy intervention and maintenance of macroeconomicstability in the economy. Until recently, the lack of competitiveness vis--vis global standards, low technological level in operations, over staffing, high NPAs and low levels of motivation had shackled the

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performance of the banking industry. However, the banking sector reforms have provided the necessary platform for the Indian banks to operate on the basis of operational flexibility and functional autonomy, thereby enhancing efficiency, productivity and profitability. The reforms also brought about structural changes in the financial sector and succeeded in easing external constraints on its operation, i.e. reduction in CRR and SLR reserves, capital adequacy norms, restructuring and recapitulating banks and enhancing the competitive element in the market through the entry of new banks. The reforms also include increase in the number of banks due to the entry of new private and foreign banks, increase in the transparency of the banks balance sheets through the introduction of prudential norms and increase in the role of the market forces due to the deregulated interest rates. These have significantly affected the operational environment of the Indian banking sector. To encourage speedy recovery of Non-performing assets, the Narasimhan committee laid directions to introduce Special Tribunals and also lead to the creation of an Asset Reconstruction Fund. For revival of weak banks, the Verma Committee recommendations have laid the foundation. Lastly, to maintain macroeconomic stability, RBI has introduced the Asset Liability Management System. The competitive environment created by financial sector reforms has nonetheless compelled the banks to gradually adopt modern technology to maintain their market share. Thus, the declaration of the Voluntary Retirement Scheme accounts for a positive development reducing the administrative costs of Public Sector banks. The developments, in general, have an emphasis on service and technology; for the first time that Indian public sector banks are being challenged by the foreign banks and private sector banks. Branch size has been reduced considerably by using technology thus saving manpower. The deregulation process has resulted in delivery of innovative financial products at competitive rates; this has been proved by the increasing divergence of banks in retail banking for their development and survival. In order to survive and maintain strong presence, mergers and acquisitions has been the most common development all around the world. In order to ensure healthy competition, giving customer the best of the services, the banking sector reforms have lead to the development of a diversifying portfolio in retail banking, and insurance, trend of mergers for better stability and also the concept of virtual banking.

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SWOT ANALYSIS OF BANKING SECTOR

STRENGTH
Indian banks have compared favorably on growth, asset quality and profitability with other regional banks over the last few years. The banking index has grown at a compounded annual rate of over 51 per cent since April 2001 as compared to a 27 per cent growth in the market index for the same period. Policy makers have made some notable changes in policy and regulation to help strengthen the sector. These changes include strengthening prudential norms, enhancing the payments system and integrating regulations between commercial and co-operative banks. Bank lending has been a significant driver of GDP growth and employment. Extensive reach: the vast networking & growing number of branches & ATMs. 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.

WEAKNESS
Public Sector Banks need to fundamentally strengthen institutional skill levels especially in sales and marketing, service operations, risk management and the overall organisational performance ethic & strengthen human capital. Old private sector banks also have the need to fundamentally strengthen skill levels. The cost of intermediation remains high and bank penetration is limited to only a few customer segments and geographies. Structural weaknesses such as a fragmented industry structure, restrictions on capital availability and deployment, lack of institutional support infrastructure, restrictive labour laws, weak corporate governance and ineffective regulations beyond Scheduled Commercial Banks (SCBs), unless industry utilities and service bureaus. Refusal to dilute stake in PSU banks: The government has refused to dilute its stake in PSU banks below 51% thus choking the headroom available to these banks for raining equity capital. Impediments in sectoral reforms: Opposition from Left and resultant cautious approach from the North Block in terms of approving merger of PSU banks may hamper their growth prospects in the medium term.

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OPPORTUNITY
The market is seeing discontinuous growth driven by new products and services that include opportunities in credit cards, consumer finance and wealth management on the retail side, and in fee-based income and investment banking on the wholesale banking side. These require new skills in sales & marketing, credit and operations. With increased interest in India, competition from foreign banks will only intensify. Given the demographic shifts resulting from changes in age profile and household income, consumers will increasingly demand enhanced institutional capabilities and service levels from banks. New private banks could reach the next level of their growth in the Indian banking sector by continuing to innovate and develop differentiated business models to profitably serve segments like the rural/low income and affluent/HNI segments; actively adopting acquisitions as a means to grow and reaching the next level of performance in their service platforms. Attracting, developing and retaining more leadership capacity Foreign banks committed to making a play in India will need to adopt alternative approaches to win the race for the customer and build a value-creating customer franchise in advance of regulations potentially opening up post 2009. Reach in rural India for the private sector and foreign banks. Liberalization of ECB norms: The government also liberalised the ECB norms to permit financial sector entities engaged in infrastructure funding to raise ECBs. This enabled banks and financial institutions, which were earlier not permitted to raise such funds, explore this route for raising cheaper funds in the overseas markets. Hybrid capital: In an attempt to relieve banks of their capital crunch, the RBI has allowed them to raise perpetual bonds and other hybrid capital securities to shore up their capital. If the new instruments find takers, it would help PSU banks, left with little headroom for raising equity.

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THREATS
Threat of stability of the system: failure of some weak banks has often threatened the stability of the system. Rise in inflation figures which would lead to increase in interest rates. Increase in the number of foreign players would pose a threat to the Public Sector Bank as well as the private players.

Key players in banking industry


1. State Bank of India (SBI) 2. HDFC Bank 3. Punjab National Bank (PNB) 4. ICICI Bank 5. Axis Bank 6. Bank of Baroda (BoB) 7. Citi Bank 8. IDBI Bank 9. Bank of India (BOI) 10. Canara Bank

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I have taken the following banks for my analysis

Punjab National Bank

State Bank of India

ICICI BANK

HDFC Bank

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FUNDAMENTAL ANALYSIS
Fundamental analysis of a business involves analyzing its financial statements and health, its management and competitive advantages, and its competitors and markets.

RATIO ANALYSIS Financial ratios are tools for interpreting financial statements to provide a basis for valuing securities and appraising financial and management performance. In general, there are 4 kinds of financial ratios that a financial analyst will use most frequently, these are:

Performance ratios Working capital ratios Liquidity ratios Solvency ratios

These 4 financial ratios allow a good financial analyst to quickly and efficiently address the following questions or concerns: Performance ratios

What return is the company making on its capital investment? What are its profit margins?

Working capital ratios


How quickly are debts paid? How many times is inventory turned?

Liquidity ratios

Can the company continue to pay its liabilities and debts?

Solvency ratios (Longer term)


What is the level of debt in relation to other assets and to equity? Is the level of interest payable out of profits?

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Following are some ratios which are used to analyze companies performance Return on capital employed :A ratio that indicates the efficiency and profitability of a company's capital investments Calculated as: Return on capital employed = EBIT /TOTAL AASETS-CURRENT LIABITLITIES Where ebit is earning before interest and taxes Objective and Significance Return on capital employed ratio is considered to be the best measure of profitability in order to assess the overall performance of the business. It indicates how well the management has used the investment made by owners and creditors into the business. It is commonly used as a basis for various managerial decisions. As the primary objective of business is to earn profit, higher the return on capital employed, the more efficient the firm is in using its funds. The ratio can be found for a number of years so as to find a trend as to whether the profitability of the company is improving or otherwise. Current Ratio: Current ratio is calculated in order to work out firms ability to pay off its short-term liabilities. This ratio is also called working capital ratio. This ratio explains the relationship between current assets and current liabilities of a business. Where current assets are those assets which are either in the form of cash or easily convertible into cash within a year. Similarly, liabilities, which are to be paid within an accounting year, are called current liabilities. Current Ratio = Current Assets/Current Liabilities Current Assets include Cash in hand, Cash at Bank, Sundry Debtors, Bills Receivable, Stock of Goods, Short-term Investments, Prepaid Expenses, Accrued Incomes etc. Current Liabilities include Sundry Creditors, Bills Payable, Bank Overdraft, Outstanding Expenses etc. Objective and Significance: Current ratio shows the short-term financial position of the business. This ratio measures the ability of the business to pay its current liabilities. The ideal current ratio is supposed to be 2:1 i.e. current assets must be twice the current liabilities. In case, this ratio is less than 2:1, the short-term financial position is not supposed to be very sound and in case, it is more than 2:1, it indicates idleness of working capital. Liquid Ratio: Liquid ratio shows short-term solvency of a business in a true manner. It is also called acid-test ratio and quick ratio. It is calculated in order to know how quickly current liabilities can be paid with the help of quick assets. Quick assets mean those assets, which are quickly convertible into cash. Liquid Ratio = Liquid Assets/Current Liabilities

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Where liquid assets include Cash in hand, Cash at Bank, Sundry Debtors, Bills Receivable, Short-term Investments etc. In other words, all current assets are liquid assets except stock and prepaid expenses. Current liabilities include Sundry Creditors, Bills Payable, Bank Overdraft, Outstanding Expenses etc Debt-Equity Ratio: Debt equity ratio shows the relationship between long-term debts and shareholders funds. It is also known as External-Internal equity ratio. Debt Equity Ratio = Debt/Equity Where Debt (long term loans) include Debentures, Mortgage Loan, Bank Loan, Public Deposits, Loan from financial institution etc. Equity (Shareholders Funds) = Share Capital (Equity + Preference) + Reserves and Surplus Fictitious Assets Objective and Significance: This ratio is a measure of owners stock in the business. Proprietors are always keen to have more funds from borrowings because: (i) Their stake in the business is reduced and subsequently their risk too (ii) Interest on loans or borrowings is a deductible expenditure while computing taxable profits. Dividend on shares is not so allowed by Income Tax Authorities. The normally acceptable debt-equity ratio is 2:1. Fixed Assets Ratio: Fixed Assets Ratio establishes the relationship of Fixed Assets to Longterm Funds. Fixed Assets Ratio = Long-term Funds/Net Fixed Assets Where Long-term Funds = Share Capital (Equity + Preference) + Reserves and Surplus + Long- term Loans Fictitious Assets Net Fixed Assets means Fixed Assets at cost less depreciation. It will also include trade investments. Objective and Significance: This ratio indicates as to what extent fixed assets are financed out of long-term funds. It is well established that fixed assets should be financed only out of long-term funds. This ratio workout the proportion of investment of funds from the point of view of long-term financial soundness. This ratio should be equal to 1. If the ratio is less than 1, it means the firm has adopted the impudent policy of using short-term funds for acquiring fixed assets. On the other hand, a very high ratio would indicate that long-term funds are being used for short-term purposes, i.e. for financing working capital..

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Net Profit Ratio: Net Profit Ratio shows the relationship between Net Profit of the concern and Its Net Sales. Net Profit Ratio can be calculated in the following manner: Net Profit Ratio = Net Profit/Net Sales x 100 Where Net Profit = Gross Profit Selling and Distribution Expenses Office and Administration Expenses Financial Expenses Non Operating Expenses + Non Operating Incomes. And Net Sales = Total Sales Sales Return Objective and Significance: In order to work out overall efficiency of the concern Net Profit ratio is calculated. This ratio is helpful to determine the operational ability of the concern. While comparing the ratio to previous years ratios, the increment shows the efficiency of the concern. Return on Investment or Return on Capital Employed: This ratio shows the relationship between the profit earned before interest and tax and the capital employed to earn such profit. Return on Capital Employed = Net Profit before Interest, Tax and Dividend/Capital Employed x 100 Where Capital Employed = Share Capital (Equity + Preference) + Reserves and Surplus + Long-term Loans Fictitious Assets Or Capital Employed = Fixed Assets + Current Assets Current Liabilities Objective and Significance: Return on capital employed measures the profit, which a firm earns on investing a unit of capital. The profit being the net result of all operations, the return on capital expresses all efficiencies and inefficiencies of a business. This ratio has a great importance to the shareholders and investors and also to management. To shareholders it indicates how much their capital is earning and to the management as to how efficiently it has been working. This ratio influences the market price of the shares. The higher the ratio, the better it is. Return on Equity: Return on equity is also known as return on shareholders investment. The ratio establishes relationship between profit available to equity shareholders with equity shareholders funds. Return on Equity = Net Profit after Interest, Tax and Preference Dividend/Equity Shareholders Funds x 100

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Where Equity Shareholders Funds = Equity Share Capital + Reserves and Surplus Fictitious Assets Objective and Significance: Return on Equity judges the profitability from the point of view of equity shareholders. This ratio has great interest to equity shareholders. The return on equity measures the profitability of equity funds invested in the firm. The investors favour the company with higher ROE. Earning Per Share: Earning per share is calculated by dividing the net profit (after interest, tax and preference dividend) by the number of equity shares. Earning Per Share = Net Profit after Interest, Tax and Preference Dividend/No. Of Equity Shares Objective and Significance: Earning per share helps in determining the market price of the equity share of the company. It also helps to know whether the company is able to use its equity share capital effectively with compare to other companies. It also tells about the capacity of the company to pay dividends to its equity shareholders. .Price/Earning Ratio: This ratio shows the relationship between market price per share and earning per share. In other words, if a company is reporting a profit of Rs.200 per share, and the stock is selling for Rs.2000 per share, the P/E ratio is 10 because you are paying ten-times earnings (Rs.2000 per share divided by Rs.200 per share earnings = 10 P/E.) This ratio is calculated to find out the possibility of capital appreciation in future. Price Earning Ratio = Market Price per Equity Share/ Earning per Share.

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PUNJAB NATIONAL BANK (PNB)


Punjab National Bank (PNB) (BSE: 532461, NSE: PNB) is an Indian financial services company based in New Delhi, India. PNB is the third largest bank in India by assets. It was founded in 1894 and is currently the second largest state-owned commercial bank in India ahead of Bank of Baroda with about 5000 branches across 764 cities. It serves over 37 million customers. The bank has been ranked 248th biggest bank in the world by the Bankers Almanac, London. The bank's total assets for financial year 2007 were about US$60 billion. PNB has a banking subsidiary in the UK, as well as branches in Hong Kong, Dubai and Kabul, and representative offices in Almaty, Dubai, Oslo, and Shanghai.

KEY RATIOS Mar12 Operational & Financial Ratios


Earnings Per Share (Rs) DPS(Rs) Book NAV/Share(Rs) Performance Ratios ROA(%) ROE(%) ROCE(%) Efficiency Ratios Cost Income Ratio Core Cost Income Ratio Operating Costs to Assets 39.75 40.55 1.53 41.27 42.09 1.68 39.39 42.20 1.61 1.17 21.05 7.21 1.31 24.45 6.47 1.44 26.59 6.97 144.00 22.00 777.39 139.94 22.00 632.48 123.86 22.00 514.77

Mar11

Mar10

Valuation Parameters
PER(x) PCE(x) Price/Book(x) Yield(%) EV/Net Sales(x) 6.43 6.07 1.19 2.38 1.89 8.72 8.24 1.93 1.80 2.60 8.18 7.74 1.97 2.17 2.39

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EV/Core EBITDA(x) EV/EBIT(x) EV/CE(x) M Cap / Sales

6.47 2.29 0.15 0.86

7.76 3.23 0.19 1.43

6.99 2.72 0.17 1.49

Growth Ratios
Core Operating Income Growth Operating Profit Growth Net Profit Growth BVPS Growth Advances Growth EPS Growth(%) 13.61 17.21 10.17 22.91 21.34 2.90 39.27 58.21 13.52 22.87 29.75 12.98 24.10 11.48 26.35 23.52 20.62 26.35

Liquidity Ratios
Loans/Deposits(x) Total Debt/Equity(x) Current Ratio(x) Quick Ratio(x) 0.10 0.05 0.32 9.82 0.10 0.08 0.30 10.10 0.08 0.07 0.31 7.73

Current Ratio of PNB has been less than 1 for all the 3 years taken for analysis. As the standard of current ratio is 1:1 for banking industry. This implies that working capital of PNB is always negative. This is generally considered an aggressive strategy i.e. to financing its long term asset by short term sources that increases profitability because current liabilities are non-interest bearing items. The liquidity ratios have increase from previous year which shows a good trend. Debt to equity ratio was between 0.08 to 0.10 for previous 3 year as taken to comparison Moreover it is showing a upward trend this means that the company has taken huge amount of loan to finance it business. Analyzing the EPS and DPS, which are profit distributing ability ratios, for HUL we can see that it has been generating more than 500% times profit for its shareholders over the years. The EPS increased over the years from Rs.123.86 in year 2010 to Rs. 144 in year 2012. It has been distributing the profit in a constant manner with maintaining the level of Rs 22.

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If you multiply EPS & PER of 2012 you get Rs 925.92 and the current market share of PNB is Rs 845 this means that the company is undervalued.

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State bank of India (SBI)


State Bank of India (SBI) (NSE: SBIN, BSE: 500112, LSE: SBID) is the largest banking and financial services company in India by revenue, assets and market capitalisation. It is a stateowned corporation with its headquarters in Mumbai, Maharashtra. As of March 2011, it had assets of US$370 billion with over 13,577 outlets including 157 overseas branches and agents globally. The bank traces its ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta, making it the oldest commercial bank in the Indian Subcontinent. Bank of Madras merged into the other two presidency banksBank of Calcutta and Bank of Bombayto form the Imperial Bank of India, which in turn became the State Bank of India. The Government of India nationalised the Imperial Bank of India in 1955, with the Reserve Bank of India taking a 60% stake, and renamed it the State Bank of India. In 2008, the government took over the stake held by the Reserve Bank of India. SBI is ranked No. 292 globally in Fortune Global 500 list in 2011. SBI provides a range of banking products through its vast network of branches in India and overseas, including products aimed at non-resident Indians (NRIs). The State Bank Group, with over 18,324 branches, has the largest banking branch network in India. SBI has 14 local head offices situated at Chandigarh, Delhi, Lucknow, Patna, Kolkata, Guwahati (North East Circle), Bhubaneswar, Hyderabad, Chennai, Trivandrum, Bangalore, Mumbai, Bhopal & Ahmedabad and 57 Zonal Offices that are located at important cities throughout the country. It also has 157 branches overseas. SBI is a regional banking behemoth and is one of the largest financial institutions in the world. It has a market share among Indian commercial banks of about 20% in deposits and loans.[3] The State Bank of India is the 29th most reputed company in the world according to Forbes.[4] Also, SBI is the only bank featured in the coveted "top 10 brands of India" list in an annual survey conducted by Brand Finance and The Economic Times in 2010.[5] The State Bank of India is the largest of the Big Four banks of India, along with ICICI Bank, Punjab National Bank and HDFC Bankits main competitors

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Key Ratios MAR 2012 Operational & Financial Ratios


Earnings Per Share (Rs) DPS(Rs) Book NAV/Share(Rs) ROA(%) ROE(%) ROCE(%) Efficiency Ratios Cost Income Ratio Core Cost Income Ratio Operating Costs to Assets Valuation Parameters PER(x) PCE(x) Price/Book(x) Yield(%) EV/Net Sales(x) EV/Core EBITDA(x) EV/EBIT(x) EV/CE(x) M Cap / Sales 12.01 11.06 1.67 1.67 2.51 8.48 3.27 0.20 1.32 21.27 18.99 2.70 1.08 3.63 11.66 4.63 0.24 2.16 14.40 13.07 2.00 1.44 3.31 12.83 3.84 0.22 1.86 45.23 44.51 1.95 47.60 48.53 1.88 52.59 55.63 1.93 174.46 35.00 1251.05 0.91 15.72 6.39 130.15 30.00 1023.40 0.73 12.62 5.61 144.37 30.00 1038.76 0.91 14.80 6.07

MAR 2011

MAR 2010

Growth Ratio
Core Operating Income Growth 33.10 37.41 13.41

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Operating Profit Growth Net Profit Growth EPS Growth(%)

24.62 41.66 34.05

62.16 -9.84 -9.85

17.96 0.49 0.49

Liquidity Ratios
Total Debt/Equity(x) Current Ratio(x) Quick Ratio(x) 0.05 0.30 12.17 0.10 0.32 12.80 0.08 0.37 12.81

Current Ratio of SBI for last 3 year has remained between 0.30 to 0.37 which is against the standard of 1:1. This should be an area of concern for the bank. Debt/Equity ratio means the ratio of finance coming from Debts compared to shareholders. A ratio exceeding 1 may be cause for concern. As it can be seen that the Debt/Equity ratio is near to 0.05 to 0.10 for the last three year this means that company operate the business mainly through owner funds. FACE value of SBI share is Rs10.Analyzing the EPS and DPS, which are profit distributing ability ratios. The EPS increased over the years from Rs. 144.37 in year 2010 to Rs. 174.46 in year 2012. It has been generous in distributing the profit in form of dividend with DPS Rs. 30 in year 2010,2011 and Rs. 35 in year 2012. Multiplying EPS & PER for 2012 you get Rs 2095.7 and the current market share of SBI is Rs 2233, this means that the company is overvalued.

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HDFC
HDFC Bank Limited (BSE: 500180, NSE: HDFCBANK, NYSE: HDB) is an Indian financial services company that was incorporated in August 1994. HDFC Bank is the fifth or sixth largest bank in India by assets and the second largest bank by market capitalization as of February 24, 2012. The bank was promoted by the Housing Development Finance Corporation, a premier housing finance company (set up in 1977) of India. HDFC Bank has 1,986 branches and over 5,471 ATMs, in 996 cities in India, and all branches of the bank are linked on an online real-time basis. As of 30 September 2008 the bank had total assets of Rs.1006.82 billion.[3] For the fiscal year 2010-11, the bank has reported net profit of 3,926.30 crore (US$783.3 million), up 33.1% from the previous fiscal. Total annual earnings of the bank increased by 20.37% reaching at 24,263.4 crore (US$4.84 billion) in 2010-11.

KEY RATIOS

MAR 2012 Operational & Financial Ratios


Earnings Per Share (Rs) DPS(Rs) Book NAV/Share(Rs) 22.02 4.30 127.52

MAR 2011

MAR 2010

84.40 16.50 545.46

64.42 12.00 470.12

Margin Ratios
Yield on Advances Yield on Investments Cost of Liabilities 13.96 6.56 5.54 12.46 6.47 4.21 12.85 7.39 4.32

Performance Ratio
ROA(%) ROE(%) ROCE(%) 1.68 18.69 7.32 1.57 16.75 6.08 1.45 16.31 5.95

Efficiency Ratios

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Cost Income Ratio Core Cost Income Ratio Operating Costs to Assets

48.97 48.43 2.54

48.08 47.91 2.58

48.02 49.40 2.67

Growth Ratio
Core Operating Income Growth Operating Profit Growth Net Profit Growth BVPS Growth Advances Growth EPS Growth(%) 16.63 15.86 31.60 -76.62 22.15 -73.91 25.72 48.09 33.16 16.03 27.14 31.02 13.01 5.44 31.35 36.54 27.25 22.06

Liquidity Ratios
Loans/Deposits(x) Total Debt/Equity(x) Current Ratio(x) Quick Ratio(x) 0.10 0.06 0.40 9.67 0.07 0.12 0.34 6.90 0.08 0.09 0.35 7.72

Current Ratio of HDFC for last 3 year has increased from 0.35 to 0.40 which is a good position to have. Debt/Equity ratio means the ratio of finance coming from Debts compared to shareholders. A ratio exceeding 1 may be cause for concern. As it can be seen that the Debt/Equity ratio is near to 0.06 to 0.12 for the last three year this means that company operate the business mainly through owner funds. FACE value of HDFC share is Rs2.Analyzing the EPS and DPS, the EPS has significantly dropped in 2012 from Rs 84.40 in 2011 to 22.02 in 2012 year 2010 to Rs. 174.46 in year.this shows there is a significant reduction in profits. It has been not so generous in distributing the profit in form of dividend with DPS Rs. 12.00 in year 2010 and Rs. 4.30 in year 2012. Multiplying EPS & PER for 2012 you get Rs 584.85 and the current market share of HDFC is Rs 584.10, this means that the company is near about fairly valued.

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ICICI BANK
ICICI Bank Limited (NSE: ICICIBANK, BSE: 532174, NYSE: IBN) is an Indian diversified financial services company headquartered in Mumbai, Maharashtra. It is the second largest bank in India by assets and third largest by market capitalization. It offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries in the areas of investment banking, life and non-life insurance, venture capital and asset management. The Bank has a network of 2,630 branches and 8,003 ATM's in India, and has a presence in 19 countries, including India. The bank has subsidiaries in the United Kingdom, Russia, and Canada; branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre; and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. The company's UK subsidiary has established branches in Belgium and Germany.

Key Ratios Mar 2012 Mar 2011 Mar 2010 Operational & Financial Ratios
Earnings Per Share (Rs) DPS(Rs) 56.09 16.50 44.73 14.00 36.10 12.00

Performance Ratios
ROA(%) ROE(%) ROCE(%) 1.47 11.20 7.19 1.34 9.66 6.16 1.08 7.96 6.18

Efficiency Ratios
Cost Income Ratio Core Cost Income Ratio Operating Costs to Assets 43.05 42.87 1.66 42.24 41.60 1.63 37.58 39.43 1.61

Valuation Parameters
PER(x) PCE(x) Price/Book(x) 15.82 14.72 1.69 24.88 22.74 2.33 26.39 23.59 2.06

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Yield(%) EV/Net Sales(x) EV/Core EBITDA(x) EV/EBIT(x) EV/CE(x) M Cap / Sales

1.86 7.23 23.34 7.67 0.51 3.05

1.26 9.15 26.27 10.02 0.59 4.93

1.26 7.80 20.60 8.74 0.55 4.13

Growth Ratio
Core Operating Income Growth Operating Profit Growth Net Profit Growth Advances Growth EPS Growth(%) 19.04 14.80 25.51 17.27 25.40 11.12 0.81 27.99 19.40 23.88 -3.01 -11.23 7.10 -17.00 6.95

Liquidity Ratios
Total Debt/Equity(x) Current Ratio(x) Quick Ratio(x) 0.08 0.62 54.86 0.09 0.60 48.56 0.14 0.60 46.66

Current Ratio of ICICI Bank is the most healthy compared to other banks taken for comparision.It has abled to maintain the current ratio near or above 0.60 for last 3 year,which is near to the standard of 1:1. Debt/Equity ratio means the ratio of finance coming from Debts compared to shareholders. A ratio exceeding 1 may be cause for concern. As it can be seen that the Debt/Equity ratio has varied from 0.14 to 0.08 for the last three year this means that company operate the business mainly through owner funds. FACE value of ICICI Bank share is Rs10.Analyzing the EPS and DPS, the EPS has steadily moved upward from Rs 36.10 in 2010 to Rs 56.09 in 2012 . It has been not so generous in distributing the profit in form of dividend with DPS Rs. 12.00 in year 2010 and Rs. 16.50 in year 2012. Keeping a big chunk of profit with it. Multiplying EPS & PER for 2012 you get Rs 887.34 and the current market share of ICICI Bank is Rs 920.85, this means that the company is over valued.

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SUGGESTIONS AND RECOMMENDATIONS

BANK P/E P/BV ROE EPS Market cap(in crores)

PNB 5.56 1 21.1 140.4 26,437.39

SBI 12.78 1.74 15.7 170.1 146,149.16 Hold

ICICI 15.70 1.62 11.2 54.2 98,057.36 Sell

HDFC 25.55 4.27 18.7 21.3 127,808.63 Hold

RECOMMENDATION Buy

As per P/E ratio,PNB is undervalued and SBI and ICICI are overvalued meanwhile HDFC is fairly valued PNB provides the maximum ROE% among other banks. SBI has the maximum EPS as well as maintained a constant dps of Rs 30 and above.

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TECHNICAL ANALYSIS

INTRODUCTION Should I buy today? What will prices be tomorrow, next week, or next year? Wouldn't investing be easy if we knew the answers to these seemingly simple questions? technical analysis has the answers to these questions. Technical analysis is the process of analyzing a security's historical prices in an effort to determine probable future prices. This is done by comparing current price action (i.e., current expectations) with comparable historical price action to predict a reasonable outcome. Simply put, technical analysis is the study of prices, with charts being the primary tool.Technical analysts are sometimes referred to as chartists because they rely almost exclusively on charts for 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. Price refers to any combination of the open, high, low or close for a given security over a specific timeframe. The time frame can be based on intraday (tick, 5-minute, 15-minute or hourly), daily, weekly or monthly price data and last a few hours or many years. Technicians, as technical analysts are called, are only concerned with two things: 1. What is the current price? 2. What is the history of the price movement? The price is the end result of the battle between the forces of supply and demand for the company's stock. The objective of analysis is to forecast the direction of the future price. By focusing on price and only price, technical analysis represents a direct approach. Technicians believe it is best to concentrate on what and never mind why. Why did the price go up? It is simple, more buyers (demand) than sellers (supply). After all, the value of any asset is only what someone is willing to pay for it.

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What is Chart? A price chart is a sequence of prices plotted over a specific timeframe. In statistical terms, charts are referred to as time series plots.

(Current Chart for Minnesota Mining & Manufacturing)

On the chart, the y-axis (vertical axis) represents the price scale and the x-axis (horizontal axis) represents the time scale. Prices are plotted from left to right across the x-axis with the most recent plot being the furthest right. The price plot for MMM extends from January 1, 1999 to March 13, 2000.

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What are the different Charts used in Technical Analysis? 1. Line Chart 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. Connecting the dots, or price points, over a period of time, creates the line.

(Current Chart for Sun Microsystems)

Some investors and traders consider the closing level to be more important than the open, high or low. By paying attention to only the close, intraday swings can be ignored. Line charts are also used when open, high and low data points are not available. Sometimes only closing data are available for certain indices, thinly traded stocks and intraday prices

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2. Bar Chart Perhaps 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 a bar chart. The high and low are represented by the top and bottom of the vertical bar and the close is the short horizontal line crossing the vertical bar. On a daily chart, each bar represents the high, low and close for a particular day. Weekly charts would have a bar for each week based on Friday's close and the high and low for that week.

3. Candlestick Chart Originating in Japan over 300 years ago, candlestick charts have become quite popular in recent years. For a candlestick chart, the open, high, low and close are all required. A daily candlestick is based on the open price, the intraday high and low, and the close. A weekly candlestick is based on Monday's open, the weekly high-low range and Friday's close.

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Many traders and investors believe that candlestick charts are easy to read, especially the relationship between the open and the close. White (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 close is called the body (white body or black body). The lines above and below are called shadows and represent the high and low.

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INTRODUCTION TO TRENDLINE

Trend lines are an important tool in technical analysis for both trend identification and confirmation. A trend line is a straight line that connects two or more price points and then extends into the future to act as a line of support or resistance. Trends in charts are found to take decision regarding buying, selling or holding the stock. When a stock is in uptrend it is good stock to buy and when a stock is in down trend it is advisable to sell that particular stock or wait for trend in the stock to change before taking buying decision.

Following charts show Uptrend and Downtrend movement in stocks

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The above chart of GoodYear Tire shows uptrend movement in stock. The trendline is formed by joining previous lowest closing prices of the stock.

The above chart of MERK&CO shows downtrend movement in stock. The trendline is formed by joining previous highest closing prices of the stock. Note: Trendline as it shows the uptrend or downtrend movement in stock, breakout in the trendline indicates the trend reversal in the stock. Breakout in downtrend line give bullish signal and it is the time to buy that particular stock whereas breakout in uptrend line give bearish signal, it is advisable to sell the stock as the trend in the stock has changed and the stock may further fall in price.

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INTRODUCTION TO SUPPORT AND RESISTANCE

Support and resistance represent key junctures where the forces of supply and demand meet. In the financial markets, prices are driven by excessive supply (down) and demand (up). Supply is synonymous with bearish, bears and selling. As demand increases, prices advance and as supply increases, prices decline. When supply and demand are equal, prices move sideways as bulls and bears slug it out for control.

What is Support?

Support is the price level at which demand is thought to be strong enough to prevent the price from declining further. The logic dictates that as the price declines towards support and gets cheaper, buyers become more inclined to buy and sellers become less inclined to sell. By the time the price reaches the support level, it is believed that demand will overcome supply and prevent the price from falling below support.

What is Resistance?

Resistance is the price level at which selling is thought to be strong enough to prevent the price from rising further. The logic dictates that as the price advances towards resistance, sellers become more inclined to sell and buyers become less inclined to buy. By the time the price reaches the resistance level, it is believed that supply will overcome demand and prevent the price from rising above resistance . The above chart of PHILLIP MORRIS shows that the stock has Resistance at 51.5 with double top confirmation and it has Support at 45.5 with double bottom confirmation. Breakout in the resistance level gives bullish signal, it is the right time to buy the stock as the stock is expected to rise further whereas breakout in the support level is bearish sign for the stock and investors are advised to sell the stock when its price goes below support level as it is expected that the stock may further fall in price.

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Note: When a resistance level is successfully penetrated, that level becomes a support level. Similarly when a support level is successfully penetrated, that level becomes a resistance level.

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Technical analysis of banks

PUNJAB NATIONAL BANK (PNB from Jan 2011 to July 2012)

In the above chart of Punjab National Bank shows downtrend in stock. The stock is currently (6/7/2012) trading at Rs.840.90. It has resistance at Rs.1291 and Support at Rs. 813. As the stock is in downturn it is good stock to buy as it is moving close to its support price.

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STATE BANK OF INDIA (SBI from Jan 2011 to July 2012)

The above chart of State Bank of India shows a uptrend in the year 2012,. The stock is currently trading at Rs.2222.65 (on 6/7/2012).It is advisable to maintain your position (Hold) the stock as it is expected to rise in near future.

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HDFC Bank (from Jan 2011 to July 2012)

In the above chart of HDFC Bank shows uptrend in period between January 2012 to July 2012 stock. The stock rose from Rs 426.25(jan 2012) to current level of Rs.581.50(6/7/2012). It is time to hold the position for the investors in the stock as some more upward movement in the price of the stock is expected.

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ICICI Bank (from Jan 2011 to July 2012)

From the above chart of ICICI Bank we can see that the stock has moved in downward direction in past however it is moving in sideways direction since November 2012. Currently the stock has crossed its 13 day Exponential Moving average line which indicates that current price of the stock is the right price to Buy ICICI Banks Shares as there is a distinct possibility of price of the stock rising in near future.

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CONCLUSION

We all have personal biases, and every analyst has some sort of bias. There is nothing wrong with this, and the research can still be of great value. Check the track record of an analyst before taking any decision based on his recommendation.

Corporate statements and press releases offer good information, but they should be read with a healthy degree of skepticism to separate the facts from the spin.

Investors should become skilled readers to weed out the important information and
ignore the hype. Keep long term horizon for investment but book profits at the right times. Always keep diversified investment, do not invest all your money in the same sector or in the same company.

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Bibliography

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Bibliography
During the completion of the project following resources were used Websites
Books MY Khan, Financial Management Rustugi, Financial management www.sharekhan .com www.moneycontrol.com Wikipedia www.yahoofinance.com www.nse.in www.sebi.in www.indianranker.com www.daulatguru.com www.iifl.com www.icici.com www.sbi.com www.hdfc.com www.pnb.com

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ANNEXTURE

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Balance sheets and P&L accounts Balance Sheet of PNB ------------------- in Rs. Cr. -----------------Mar '12 12 mths Capital and Liabilities: Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Net Worth Deposits Borrowings Total Debt Other Liabilities & Provisions Total Liabilities 339.18 339.18 0 0 26,028.37 1,449.53 27,817.08 379,588.48 37,264.27 416,852.75 13,524.18 458,194.01 Mar '12 12 mths Assets Cash & Balances with RBI Balance with Banks, Money at Call Advances Investments Gross Block Accumulated Depreciation 18,492.90 10,335.14 293,774.76 122,629.47 5,265.08 2,096.22 23,776.90 5,914.32 242,106.67 95,162.35 4,981.60 1,876.01 18,327.58 5,145.99 186,601.21 77,724.47 4,215.21 1,701.74 316.81 316.81 0 0 19,720.99 1,470.76 21,508.56 312,898.73 31,589.69 344,488.42 12,328.27 378,325.25 Mar '11 12 mths 315.3 315.3 0 0 15,915.63 1,491.99 17,722.92 249,329.80 19,262.37 268,592.17 10,317.69 296,632.78 Mar '10 12 mths Mar '11 12 mths Mar '10 12 mths

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Net Block Capital Work In Progress Other Assets Total Assets Contingent Liabilities Bills for collection Book Value (Rs)

3,168.86 0 9,792.88 458,194.01 173,768.84 50,981.22 777.39

3,105.59 0 8,259.42 378,325.25 101,465.73 37,449.53 632.48

2,513.47 0 6,320.07 296,632.79 68,124.47 33,215.78 514.77

PROFIT AND LOSS STATEMENT OF PNB Punjab National Bank Profit & Loss account Previous Years ------------------- in Rs. Cr. -----------------Mar '12 12 mths Income Interest Earned Other Income Total Income Expenditure Interest expended Employee Cost Selling and Admin Expenses Depreciation Miscellaneous Expenses Preoperative ExpCapitalised Operating Expenses Provisions & Contingencies Total Expenses 23,013.59 4,723.48 3,353.59 292.26 4,363.51 0.00 9,405.85 3,326.99 35,746.43 15,179.14 4,461.10 2,813.45 255.85 3,456.02 0.00 8,367.96 2,618.46 26,165.56 12,944.02 3,121.14 1,701.46 222.83 3,137.42 0.00 5,761.36 2,421.49 21,126.87 36,428.03 4,202.60 40,630.63 26,986.48 3,612.58 30,599.06 21,466.91 3,565.31 25,032.22 Mar '11 12 mths Mar '10 12 mths

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Mar '12 12 mths Net Profit for the Year Extraordionary Items Profit brought forward Total Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs) Appropriations Transfer to Statutory Reserves Transfer to Other Reserves Proposed Dividend/Transfer to Govt Balance c/f to Balance Sheet Total 1,390.32 2,634.53 867.24 0 4,892.09 144.00 220.00 777.39 4,884.20 7.88 0.00 4,892.08 0.00 746.19 121.05

Mar '11 12 mths 4,433.50 0.00 0.00 4,433.50 0.00 696.99 113.07

Mar '10 12 mths 3,905.36 0.00 7.64 3,913.00 0.00 693.67 116.43

139.94 220.00 632.48

123.86 220.00 514.77

1,258.39 2,365.05 810.06 0 4,433.50

1,532.46 1,570.44 810.1 0 3,913.00

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BALANCE SHEET AND PROFIT AND LOSS ACCOUNT OF SBI BALANCE SHEET Mar '12 12 mths Capital and Liabilities: Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Net Worth Deposits Borrowings Total Debt Other Liabilities & Provisions Total Liabilities 671.04 671.04 0.00 0.00 83,280.16 0.00 83,951.20 635 635.00 0.00 0.00 64,351.04 0.00 64,986.04 634.88 634.88 0.00 0.00 65,314.32 0.00 65,949.20 804,116.23 103,011.60 Mar '11 12 mths Mar '10 12 mths

1,043,647.36 933,932.81 127,005.57 119,568.96

1,170,652.93 1,053,501.77 907,127.83 80,915.09 105,248.39 80,336.70

1,335,519.22 1,223,736.20 1,053,413.73 Mar '12 12 mths Mar '11 12 mths Mar '10 12 mths

Assets Cash & Balances with RBI Balance with Banks, Money at Call Advances Investments Gross Block Accumulated Depreciation Net Block Capital Work In Progress 54,075.94 43,087.23 867,578.89 312,197.61 14,792.33 9,658.46 5,133.87 332.68 94,395.50 28,478.65 756,719.45 295,600.57 13,189.28 8,757.33 4,431.95 332.23 61,290.87 34,892.98 631,914.15 285,790.07 11,831.63 7,713.90 4,117.73 295.18

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Other Assets Total Assets Contingent Liabilities Bills for collection Book Value (Rs)

53,113.02

43,777.85

35,112.76

1,335,519.24 1,223,736.20 1,053,413.74 698,064.74 201,500.44 1,251.05 585,294.50 205,092.29 1,023.40 429,917.37 166,449.04 1,038.76

Profit & Loss account of State Bank of India

------------------- in Rs. Cr. -----------------Mar '12 12 mths Mar '11 12 mths Mar '10 12 mths

Income Interest Earned Other Income Total Income Expenditure Interest expended Employee Cost Selling and Admin Expenses Depreciation Miscellaneous Expenses Preoperative ExpCapitalised Operating Expenses Provisions & Contingencies Total Expenses 63,230.37 16,974.04 15,625.18 1,007.17 12,350.13 0.00 37,563.09 8,393.43 109,186.89 Mar '12 12 mths Net Profit for the Year 11,686.01 48,867.96 14,480.17 12,141.19 990.50 12,479.30 0.00 31,430.88 8,660.28 88,959.12 Mar '11 12 mths 7,370.35 47,322.48 12,754.65 7,898.23 932.66 7,888.00 0.00 24,941.01 4,532.53 76,796.02 Mar '10 12 mths 9,166.05 106,521.45 14,351.45 120,872.90 81,394.36 14,935.09 96,329.45 70,993.92 14,968.15 85,962.07

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Extraordionary Items Profit brought forward Total Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs) Appropriations Transfer to Statutory Reserves Transfer to Other Reserves Proposed Dividend/Transfer to Govt Balance c/f to Balance Sheet Total

21.28 6.05 11,713.34 0.00 2,348.66 296.49

0.00 0.34 7,370.69 0.00 1,905.00 246.52

0.00 0.34 9,166.39 0.00 1,904.65 236.76

174.15 350.00 1,251.05

116.07 300.00 1,023.40

144.37 300.00 1,038.76

3,531.35 5,536.50 2,645.15 0.34 11,713.34

2,488.96 2,729.87 2,151.52 0.34 7,370.69

6,495.14 529.50 2,141.41 0.34 9,166.39

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BALANCE SHEET AND PROFIT AND LOSS ACCOUUNT FOR ICICI BANK Balance Sheet of ICICI Bank ------------------- in Rs. Cr. -----------------Mar '12 12 mths Capital and Liabilities: Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Net Worth Deposits Borrowings Total Debt Other Liabilities & Provisions Total Liabilities 1,152.77 1,152.77 2.39 0.00 59,250.09 0.00 60,405.25 255,499.96 140,164.91 395,664.87 17,576.98 473,647.10 Mar '12 12 mths Assets Cash & Balances with RBI Balance with Banks, Money at Call Advances 20,461.29 15,768.02 253,727.66 20,906.97 13,183.11 216,365.90 27,514.29 11,359.40 181,205.60 1,151.82 1,151.82 0.29 0.00 53,938.82 0.00 55,090.93 225,602.11 109,554.28 335,156.39 15,986.35 406,233.67 Mar '11 12 mths 1,114.89 1,114.89 0.00 0.00 50,503.48 0.00 51,618.37 202,016.60 94,263.57 296,280.17 15,501.18 363,399.72 Mar '10 12 mths Mar '11 12 mths Mar '10 12 mths

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Investments Gross Block Accumulated Depreciation Net Block Capital Work In Progress Other Assets Total Assets Contingent Liabilities Bills for collection Book Value (Rs)

159,560.04 9,424.39 4,809.70 4,614.69 0.00 19,515.39 473,647.09 858,566.64 64,457.72 524.01

134,685.96 9,107.47 4,363.21 4,744.26 0.00 16,347.47 406,233.67 883,774.77 47,864.06 478.31

120,892.80 7,114.12 3,901.43 3,212.69 0.00 19,214.93 363,399.71 694,948.84 38,597.36 463.01

Profit & Loss account of ICICI Bank

------------------- in Rs. Cr. -----------------Mar '12 12 mths Mar '11 12 mths Mar '10 12 mths

Income Interest Earned Other Income Total Income Expenditure Interest expended Employee Cost Selling and Admin Expenses Depreciation Miscellaneous Expenses Preoperative ExpCapitalised 22,808.50 3,515.28 2,888.22 524.53 5,248.97 0.00 16,957.15 2,816.93 3,785.13 562.44 3,809.93 0.00 17,592.57 1,925.79 6,056.48 619.50 2,780.03 0.00 33,542.65 7,908.10 41,450.75 25,974.05 7,108.91 33,082.96 25,706.93 7,292.43 32,999.36

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Operating Expenses Provisions & Contingencies Total Expenses

8,843.63 3,333.37 34,985.50 Mar '12 12 mths

8,594.16 2,380.27 27,931.58 Mar '11 12 mths 5,151.38 -2.17 3,464.38 8,613.59 0.00 1,612.58 202.28

10,221.99 1,159.81 28,974.37 Mar '10 12 mths 4,024.98 -0.09 2,809.65 6,834.54 0.00 1,337.86 164.04

Net Profit for the Year Extraordionary Items Profit brought forward Total Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs) Appropriations Transfer to Statutory Reserves Transfer to Other Reserves Proposed Dividend/Transfer to Govt Balance c/f to Balance Sheet Total

6,465.26 -0.43 5,018.18 11,483.01 0.00 1,902.04 220.35

56.09 165.00 524.01

44.73 140.00 478.31

36.10 120.00 463.01

2,306.07 0.32 2,122.39 7,054.23 11,483.01

1,780.29 0.26 1,814.86 5,018.18 8,613.59

1,867.22 1.04 1,501.90 3,464.38 6,834.54

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BALANCE SHEET AND PROFIT AND LOSS STATEMENT OF HDFC BANK Balance Sheet of HDFC Bank ------------------- in Rs. Cr. -----------------Mar '12 12 mths Capital and Liabilities: Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Net Worth Deposits Borrowings Total Debt Other Liabilities & Provisions Total Liabilities 469.34 469.34 0.30 0.00 29,455.04 0.00 29,924.68 246,706.45 23,846.51 270,552.96 37,431.87 337,909.51 Mar '12 12 mths Assets Cash & Balances with RBI Balance with Banks, Money at Call Advances 14,991.09 5,946.63 195,420.03 25,100.82 4,568.02 159,982.67 15,483.28 14,459.11 125,830.59 465.23 465.23 0.00 0.00 24,914.04 0.00 25,379.27 208,586.41 14,394.06 222,980.47 28,992.86 277,352.60 Mar '11 12 mths 457.74 457.74 0.00 0.00 21,064.75 0.00 21,522.49 167,404.44 12,915.69 180,320.13 20,615.94 222,458.56 Mar '10 12 mths Mar '11 12 mths Mar '10 12 mths

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Investments Gross Block Accumulated Depreciation Net Block Capital Work In Progress Other Assets Total Assets Contingent Liabilities Bills for collection Book Value (Rs)

97,482.91 5,930.24 3,583.05 2,347.19 0.00 21,721.64 337,909.49 844,374.61 39,610.71 127.52

70,929.37 5,244.21 3,073.56 2,170.65 0.00 14,601.08 277,352.61 559,681.87 28,869.10 545.53

58,607.62 4,707.97 2,585.16 2,122.81 0.00 5,955.15 222,458.56 466,236.24 20,940.13 470.19

Profit & Loss account of HDFC Bank

------------------- in Rs. Cr. -----------------Mar '12 12 mths Mar '11 12 mths Mar '10 12 mths

Income Interest Earned Other Income Total Income Expenditure Interest expended Employee Cost Selling and Admin Expenses Depreciation Miscellaneous Expenses Preoperative ExpCapitalised 14,989.58 3,399.91 2,647.25 542.52 5,873.42 0.00 9,385.08 2,836.04 2,510.82 497.41 5,205.97 0.00 7,786.30 2,289.18 3,395.83 394.39 3,169.12 0.00 27,286.35 5,333.41 32,619.76 19,928.21 4,433.51 24,361.72 16,172.90 3,810.62 19,983.52

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Operating Expenses Provisions & Contingencies Total Expenses

9,241.64 3,221.46 27,452.68 Mar '12 12 mths

8,045.36 3,004.88 20,435.32 Mar '11 12 mths 3,926.40 -2.65 4,532.79 8,456.54 0.00 767.62 124.53

7,703.41 1,545.11 17,034.82 Mar '10 12 mths 2,948.70 -0.93 3,455.57 6,403.34 0.00 549.29 91.23

Net Profit for the Year Extraordionary Items Profit brought forward Total Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs) Appropriations Transfer to Statutory Reserves Transfer to Other Reserves Proposed Dividend/Transfer to Govt Balance c/f to Balance Sheet Total

5,167.09 -2.12 6,174.24 11,339.21 0.00 1,009.08 163.70

22.02 215.00 127.52

84.40 165.00 545.53

64.42 120.00 470.19

1,250.08 516.70 1,172.78 8,399.65 11,339.21

997.52 392.64 892.15 6,174.24 8,456.55

935.15 294.87 640.52 4,532.79 6,403.33

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