INTRODUCTION

India is a developing country. Nowadays many people are interested to invest in financial markets especially on equities to get high returns, and to save tax in honest way. Equities are playing a major role in contribution of capital to the business from the beginning. Since the introduction of shares concept, large numbers of investors are showing interest to invest in stock market. In an industry plagued with skepticism and a stock market increasingly difficult to predict and contend with, if one looks hard enough there may still be a genuine aid for the Day Trader and Short Term Investor. The price of a security represents a consensus. It is the price at which one person agrees to buy and another agrees to sell. The price at which an investor is willing to buy or sell depends primarily on his expectations. If he expects the security's price to rise, he will buy it; if the investor expects the price to fall, he will sell it. These simple statements are the cause of a major challenge in forecasting security prices, because they refer to human expectations. As we all know firsthand, humans expectations are neither easily quantifiable nor predictable. If prices are based on investor expectations, then knowing what a security should sell for (i.e., fundamental analysis) becomes less important than knowing what other investors expect it to sell for. That's not to say that knowing what a security should sell for isn't important--it is. But there is usually a fairly strong consensus of a stock's future earnings that the average investor cannot disprove.

EQUITY ANALYSIS
In financial markets, stock is the capital raised by a corporation through the issuance and distribution of shares. A person or organization which holds shares of stocks is called a shareholder. The aggregate value of a corporation's issued shares is its market capitalization. When one buys a share of a company he becomes a shareholder in that company. Shares are also known as Equities. Equities have the potential to increase in value over time. It also provides the portfolio with the growth necessary to reach the long-term investment goals. Research studies have proved that the equities have outperformed than most other forms of investments in the long term. Equities are considered the most challenging and the rewarding, when compared to other investment options. Research studies have proved that investments in some shares with a longer tenure of investment have yielded far superior returns than any other investment. Fundamental analysis and technical analysis can co-exist in peace and complement each other. Since all the investors in the stock market want to make the maximum profits possible, they just cannot afford to ignore either fundamental or technical analysis. SHARE PRICE A share price is the price of a single share of a number of saleable stocks of a company, derivative or other financial asset. REASONS FOR THE PRICE MOVEMENT OF SHARES A specific may have a temporarily high price when for whatever reason, there has been a high demand for it. This demand may have nothing to do with the company it self but may rather relate to, for example an institute investor trying to diversify out risk. There are various reasons for the price movement of the shares : The market expects the earnings to rise rapidly in the future. For example a

gold mining company which has just begun to mine may not have made money yet but next quarter it will most likely find the gold and make a lot of money. The same applies to pharmaceutical companies often a large amount of their revenue comes

from the best few patented products, so when a promising new product is approved, investors may buy up the stock. The company was previously making a lot of money, but in the last year or

quarter it had a special one time expense (called a charge) which lowered the earnings significantly. Stock holders understanding (possibly incorrectly) that this was a one time issue, will still buy stock at the same price as before, and only sell at the least that same price. Hype for the stock has caused people to buy the stock for a higher price than

they normally would. This is called bubble. One of the most important uses of the P/E metric is to decide whether a stock is undergoing a bubble or anti-bubble by the comparing its P/E to similar companies. Historically, bubbles have been followed by crashes. As such prudent investors try to stay out of them The P/E ratio (price-to-earnings ratio) of a stock (also called its "earnings

multiple", or simply "multiple", "P/E", or "PE") is a measure of the price paid for a share relative to the income or profit earned by the firm per share. A higher P/E ratio means that investors are paying more for each unit of income. It is a valuation ratio included in other financial ratios. The reciprocal of the P/E ratio is known as the earnings yield. The price per share (numerator) is the market price of a single share of the

stock. The earnings per share (denominator) is the net income of the company for the most recent 12 month period, divided by number of shares outstanding. The EPS used can also be the "diluted EPS" or the "comprehensive EPS". For example, if stock A is trading at $24 and the Earnings Per Share for the

most recent 12 month period is $3, then the P/E ratio is 24/3=8. Stock A said to have a P/E of 8 (or a multiple of 8). Put another way, the purchaser is paying $8 for every one dollar of earnings. By relating price and earnings per share for a company, one can analyze the

market's valuation of a company's shares relative to the wealth the company is actually creating.

One reason to calculate P/Es is for investors to compare the value of stocks. If

one stock has a P/E twice that of another stock, all things being equal, it is a less attractive investment. Companies are rarely equal, however, and comparisons between industries, countries, and time periods may be misleading. The company has some sort of business advantage which seems to ensure that

it will continue make money for a long time with very little risk. Thus investors are willing to buy the stock even at a higher price for the piece of mind that they all not loose their money. A large amount of money has been inserted into the stock market, out of

proportion of the growth of the companies across the same time period. Since there are only limited amount of stocks to buy, supply and demand dictate that the price of the stocks must go up. This factor can make comparing P/E ratios over time difficult. NEED OF THE STUDY To start any business capital plays major role. Capital can be acquired in two ways by issuing shares or by taking debt from financial institutions or borrowing money from financial institutions. The owners of the company have to pay regular interest and principal amount at the end. Stock is ownership in a company, with each share of stock representing a tiny piece of ownership. The more shares you own, the more of the company you own. The more shares you own, the more dividends you earn when the company makes a profit. In the financial world, ownership is called Equity. The role of equity analysis is to provide information to the market. An efficient market relies on information: a lack of information creates inefficiencies that result in stocks being misrepresented (over or under valued). This is valuable because it fills information gaps so that each individual investor does not need to analyze every stock thereby making the markets more efficient. Investors wealth is precious. Hence needs to analyze the prevailing economic conditions of the country and also the shares of the respective companies.

OBJECTIVES OF THE STUDY The objective of this project is to deeply analyze the companies selected like ICICI Bank, HDFC Bank and Axis Bank for investment purpose by monitoring the growth rate and performance on the basis of historical data. The main objectives of the Project study are: 1. To know about the equity performance of the banks selected viz. ICICI Bank, HDFC Bank and Axis Bank. 2. 3. 4. To study about the price movements of the securities selected. To know about the profile of the company selected i.e., Religare securities. To identify the correlation between price movement of the equity corresponding with dividend declaration. 5. To show the beta and volatility calculation for measuring the risk and variability of different companies share. 6. To help the investor for decision making in equity investment.

SCOPE OF THE STUDY The scope of the study is identified after and during the study is conducted. The project is based on tools like fundamental analysis and ratio analysis. Further, the study is based on information of last five years. METHODOLOGY Research design or research methodology is the procedure of collecting, analyzing and interpreting the data to diagnose the problem and react to the opportunity in such a way where the costs can be minimized and the desired level of accuracy can be achieved to arrive at a particular conclusion. The methodology used in the study for the completion of the project and the fulfillment of the project objectives. The sample of the stocks for the purpose of collecting secondary data has been selected on the basis of Random Sampling. The stocks are chosen in an unbiased manner and each stock is chosen independent of the other stocks chosen.

The sample size for the number of stocks is taken as 3 for fundamental analysis of stocks as fundamental analysis is very exhaustive and requires detailed study. DATA SOURCES: The proposed study is carried with the help of both primary and secondary sources of data. PRIMARY DATA: Relevant primary data would be collected with the help of the interview method. SECONDARY DATA: All the secondary data used for the study would be extracted from the annual reports, manuals, websites and other published materials of the company. LIMITATIONS OF STUDY 1. This study has been conducted purely to understand Equity analysis for investors. 2. 3. The study is restricted to 3 banks based on Fundamental analysis. Detailed study of the topic was not possible due to limited size of the project. 4. There was a constraint with regard to time allocation for the research study i.e. for a period of 45 days. 5. 6. Suggestions and conclusions are based on the study conducted. The analysis is made by taking into consideration three banks i.e. ICICI Bank, HDFC Bank and Axis Bank. 7. The scope of the study is limited for a period of five years.

EQUITY ANALYSIS
Professional investor will make more money & less loss than, who let their heart rule. Their head eliminate all emotions for decision making. Be ruthless & calculating, you are out to make money. Decision should be based on actual movement of share price measured both in money & percentage term & nothing else. Greed must be avoided patience may be a virtue, but impatience can frequently be profitable. In Equity Analysis anticipated growth, calculations are based on considered FACTS & not on HOPE. Equity analysis is basically a combination of two independent analyses, namely fundamental analysis & Technical analysis. The subject of Equity analysis, i.e. the attempt to determine future share price movement & its reliability by references to historical data is a vast one, covering many aspect from the calculating various FINANCIAL RATIOS, plotting of CHARTS to extremely sophisticated indicators. A general investor can apply the principles by using the simplest of tools: pocket calculator, pencil, ruler, chart paper & your cautious mind, watchful attention. It should be pointed out that, this equity analysis does not discuss how to buy & sell shares, but does discuss a method which enables the investor to arrive at buying & selling decision. The financial analysts always need yardsticks to evaluate the efficiency & performances of any business unit at the time of investment. Fundamental analysis is useful in long term investment decision. In Fundamental analysis a company s goodwill, its performances, liquidity, leverage, turnover, profitability & financial health was checked & analysis with the help of ratio analysis for the purpose of long term successful investment. Technical analysis refers to the study of market generated data like prices & volume to determine the future direction of prices movements. Technical analysis mainly seeks to predict the short term price travels. The focus of technical analysis is mainly on the internal market data, i.e. prices & volume data. It appeals mainly to short term traders.

It is the oldest approach to equity investment dating back to the late 19th century. Assumptions for the Equity Analysis 1. Works only in normal share-market conditions with great reliability, it also works in abnormal share-market conditions, but with low reliability. 2. Equity analysis is purely based on the INVESTMENT PHILOSOPHY, so the investment object has vital importance associated to return along with risk. 3. Cash management gets the magnitude role, because the scenario of equity analysis is revolving around the term money 4. Portfolio management, risk management was up to the investor s knowledge. 5. Capital market trend is always a friend, whether it is short run or long run. 6. You are buying stock & not companies, so don t be curious or panic to do postmortem of companies performances. 7. History repeats: investors & speculators react the same way to the same types of events homogeneously. 8. Capital market has a typical market psychology along with other issues like; perceptions, the crowd Vc the individual, tradition s & trust. 9. An individual perceptions about the investment return & associated risk may differ from individual to individual. 10. Although the equity analysis is art as well as sciences so, it also has some exceptions.

SECURITY ANALYSIS
Investment success is pretty much a matter of careful selection and timing of stock purchases coupled with perfect matching to an individuals risk tolerance. In order to carry out selection, timing and matching actions an investor must conduct deep security analysis. Investors purchase equity shares with two basic objectives; 1. To make capital profits by selling shares at higher prices. 2. To earn dividend income. These two factors are affected by a host of factors. An investor has to carefully understand and analyze all these factors. There are basically two approaches to study security prices and valuation i.e. fundamental analysis and technical analysis The value of common stock is determined in large measure by the performance of the firm that issued the stock. If the company is healthy and can demonstrate strength and growth, the value of the stock will increase. When values increase then prices follow and returns on an investment will increase. However, just to keep the savvy investor on their toes, the mix is complicated by the risk factors involved. Fundamental analysis examines all the dimensions of risk exposure and the probabilities of return, and merges them with broader economic analysis and greater industry analysis to formulate the valuation of a stock.

FUNDAMENTAL ANALYSIS
Fundamental analysis is a method of forecasting the future price movements of a financial instrument based on economic, political, environmental and other relevant factors and statistics that will affect the basic supply and demand of whatever underlies the financial instrument. It is the study of economic, industry and company conditions in an effort to determine the value of a companys stock. Fundamental analysis typically focuses on key statistics in companys financial statements to determine if the stock price is correctly valued. The term simply refers to the analysis of the economic well-being of a financial entity as opposed to only its price movements. Fundamental analysis is the cornerstone of investing. The basic philosophy underlying the fundamental analysis is that if an investor invests Re.1 in buying a share of a company, how much expected returns from this investment he has. The fundamental analysis is to appraise the intrinsic value of a security. It insists that no one should purchase or sell a share on the basis of tips and rumors. The fundamental approach calls upon the investors to make his buy or sell decision on the basis of a detailed analysis of the information about the company, about the industry, and the economy. It is also known as top-down approach. This approach attempts to study the economic scenario, industry position and the company expectations and is also known as economic-industry-company approach (EIC approach). Thus the EIC approach involves three steps: 1. Economic analysis 2. Industry analysis 3. Company analysis

1. ECONOMIC ANALYSIS The level of economic activity has an impact on investment in many ways. If the economy grows rapidly, the industry can also be expected to show rapid growth and vice versa. When the level of economic activity is low, stock prices are low, and when the level of economic activity is high, stock prices are high reflecting the prosperous outlook for sales and profits of the firms. The analysis of macro economic environment is essential to understand the behavior of the stock prices. The commonly analyzed macro economic factors are as follows: Gross Domestic Product (GDP): GDP indicates the rate of growth of the economy. It represents the aggregate value of the goods and services produced in the economy. It consists of personal consumption expenditure, gross private domestic investment and government expenditure on goods and services and net exports of goods and services. The growth rate of economy points out the prospects for the industrial sector and the return investors can expect from investment in shares. The higher growth rate is more favorable to the stock market. Savings and investment: It is obvious that growth requires investment which in turn requires substantial amount of domestic savings. Stock market is a channel through which the savings are made available to the corporate bodies. Savings are distributed over various assets like equity shares, deposits, mutual funds, real estate and bullion. The savings and investment patterns of the public affect the stock to a great extent. Inflation: Along with the growth of GDP, if the inflation rate also increases, then the real growth would be very little. The effects of inflation on capital markets are numerous. An increase in the expected rate of inflation is expected to cause a nominal rise in interest rates. Also, it increases uncertainty of future business and investment decisions. As inflation increases, it results in extra costs to businesses, thereby squeezing their profit margins and leading to real declines in profitability. Interest rates: The interest rate affects the cost of financing to the firms. A decrease in interest rate implies lower cost of finance for firms and more profitability. More money is available at a lower interest rate for the brokers who are doing business with

borrowed money. Availability of cheap funds encourages speculation and rise in the price of shares. Tax structure: Every year in March, the business community eagerly awaits the Governments announcement regarding the tax policy. Concessions and incentives given to a certain industry encourage investment in that particular industry. Tax reliefs given to savings encourage savings. The type of tax exemption has impact on the profitability of the industries. Infrastructure facilities: Infrastructure facilities are essential for the growth of industrial and agricultural sector. A wide network of communication system is a must for the growth of the economy. Regular supply of power without any power cut would boost the production. Banking and financial sectors also should be sound enough to provide adequate support to the industry. Good infrastructure facilities affect the stock market favorably. 2. INDUSTRY ANALYSIS An industry is a group of firms that have similar technological structure of production and produce similar products and Industry analysis is a type of business research that focuses on the status of an industry or an industrial sector (a broad industry classification, like "manufacturing"). Irrespective of specific economic situations, some industries might be expected to perform better, and share prices in these industries may not decline as much as in other industries. This identification of economic and industry specific factors influencing share prices will help investors to identify the shares that fit individual expectations Industry Life Cycle: The industry life cycle theory is generally attributed to Julius Grodensky. The life cycle of the industry is separated into four well defined stages. Pioneering stage: The prospective demand for the product is promising in this stage and the technology of the product is low. The demand for the product attracts many producers to produce the particular product. There would be severe competition and only fittest companies survive this stage. The producers try to develop brand name, differentiate the product and create a product image. In this situation, it is difficult to select companies for investment because the survival

rate is unknown. Rapid growth stage: This stage starts with the appearance of surviving firms from the pioneering stage. The companies that have withstood the competition grow strongly in market share and financial performance. The technology of the production would have improved resulting in low cost of production and good quality products. The companies have stable growth rate in this stage and they declare dividend to the shareholders. It is advisable to invest in the shares of these companies. Maturity and stabilization stage: the growth rate tends to moderate and the rate of growth would be more or less equal to the industrial growth rate or the gross domestic product growth rate. Symptoms of obsolescence may appear in the technology. To keep going, technological innovations in the production process and products should be introduced. The investors have to closely monitor the events that take place in the maturity stage of the industry. Decline stage: demand for the particular product and the earnings of the companies in the industry decline. It is better to avoid investing in the shares of the low growth industry even in the boom period. Investment in the shares of these types of companies leads to erosion of capital. Growth of the industry: The historical performance of the industry in terms of growth and profitability should be analyzed. The past variability in return and growth in reaction to macro economic factors provide an insight into the future. Nature of competition: Nature of competition is an essential factor that determines the demand for the particular product, its profitability and the price of the concerned company scrips. The companies' ability to withstand the local as well as the multinational competition counts much. If too many firms are present in the organized sector, the competition would be severe. The competition would lead to a decline in the price of the product. The investor before investing in the scrip of a company should analyze the market share of the particular company's product and should compare it with the top five companies.

SWOT analysis: SWOT analysis represents the strength, weakness, opportunity and threat for an industry. Every investor should carry out a SWOT analysis for the chosen industry. Take for instance, increase in demand for the industrys product becomes its strength, presence of numerous players in the market, i.e. competition becomes the threat to a particular company. The progress in R & D in that industry is an opportunity and entry of multinationals in the industry is a threat. In this way the factors are to be arranged and analyzed. 3. COMPANY ANALYSIS In the company analysis the investor assimilates the several bits of information related to the company and evaluates the present and future values of the stock. The risk and return associated with the purchase of the stock is analyzed to take better investment decisions. The present and future values are affected by a number of factors. Competitive edge of the company: Major industries in India are composed of hundreds of individual companies. Though the number of companies is large, only few companies control the major market share. The competitiveness of the company can be studied with the help of the following; Market share: The market share of the annual sales helps to determine a companys relative competitive position within the industry. If the market share is high, the company would be able to meet the competition successfully. The companies in the market should be compared with like product groups otherwise, the results will be misleading. Growth of sales: The rapid growth in sales would keep the shareholder in a better position than one with stagnant growth rate. Investors generally prefer size and growth in sales because the larger size companies may be able to withstand the business cycle rather than the company of smaller size. Stability of sales: If a firm has stable sales revenue, it will have more stable earnings. The fall in the market share indicates the declining trend of company, even if the sales are stable. Hence the stability of sales should be compared with its market share and the competitors market share.

Earnings of the company: Sales alone do not increase the earnings but the costs and expenses of the company also influence the earnings. Further, earnings do not always increase with increase in sales. The companys sales mi ght have increased but its earnings per share may decline due to rise in costs. Hence, the investor should not only depend on the sales, but should analyze the earnings of the company. Financial analysis: The best source of financial information about a company is its own financial statements. This is a primary source of information for evaluating the investment prospects in the particular companys stock. Financial statement analysis is the study of a companys financial statement from various viewpoints. The statement gives the historical and current information about the companys operations. Historical financial statement helps to predict the future and the current information aids to analyze the present status of the company. The two main statements used in the analysis are Balance sheet and Profit and Loss Account. The balance sheet is one of the financial statements that companies prepare every year for their shareholders. It is like a financial snapshot, the company's financial situation at a moment in time. It is prepared at the year end, listing the company's current assets and liabilities. It helps to study the capital structure of the company. It is better for the investor to avoid a company with excessive debt component in its capital structure. From the balance sheet, liquidity position of the company can also be assessed with the information on current assets and current liabilities. Ratio analysis: Ratio is a relationship between two figures expressed mathematically. Financial ratios provide numerical relationship between two relevant financial data. Financial ratios are calculated from the balance sheet and profit and loss account. The relationship can be either expressed as a percent or as a quotient. Ratios summarize the data for easy understanding, comparison and interpretations. Ratios for investment purposes can be classified into profitability ratios, turnover ratios, and leverage ratios. Profitability ratios are the most popular ratios since investors prefer to measure the present profit performance and use this information to forecast the future strength of the company. The most often used profitability ratios are return on assets, price earnings multiplier, price to book value,

price to cash flow, and price to sales, dividend yield, return on equity, present value of cash flows, and profit margins. a) Return on Assets (ROA) ROA is computed as the product of the net profit margin and the total asset turnover ratios. ROA = (Net Profit/Total income) x (Total income/Total Assets) This ratio indicates the firm's strategic success. Companies can have one of two strategies: cost leadership, or product differentiation. ROA should be rising or keeping pace with the company's competitors if the company is successfully pursuing either of these strategies, but how ROA rises will depend on the company's strategy. ROA should rise with a successful cost leadership strategy because the companys increasing operating efficiency. An example is an increasing, total asset, turnover ratio as the company expands into new markets, increasing its market share. The company may achieve leadership by using its assets more efficiently. With a successful product differentiation strategy, ROA will rise because of a rising profit margin. b) Return on Investment (ROI) ROI is the return on capital invested in business, i.e., if an investment Rs 1 crore in men, machines, land and material is made to generate Rs. 25 lakhs of net profit, then the ROI is 25%. The computation of return on investment is as follows: Return on Investment (ROI) = (Net profit/Equity investments) x 100 As this ratio reveals how well the resources of a firm are being used, higher the ratio, better are the results. The return on shareholders investment should be compared with the return of other similar firms in the same industry. The inert-firm comparison of this ratio determines whether the investments in the firm are attractive or not as the investors would like to invest only where the return is higher.

c) Return on Equity Return on equity measures how much an equity shareholder's investment is actually earning. The return on equity tells the investor how much the invested rupee is earning from the company. The higher the number, the better is the performance of the company and suggests the usefulness of the projects the company has invested in. The computation of return on equity is as follows: Return on equity = (Net profit to owners/value of the specific owner's contribution to the business) x 100 The ratio is more meaningful to the equity shareholders who are invested to know profits earned by the company and those profits which can be made available to pay dividend to them. d) Earnings per Share (EPS) This ratio determines what the company is earning for every share. For many investors, earnings are the most important tool. EPS is calculated by dividing the earnings (net profit) by the total number of equity shares. The computation of EPS is as follows: Earnings per share = Net profit/Number of shares outstanding The EPS is a good measure of profitability and when compared with EPS of similar other companies, it gives a view of the comparative earnings or earnings power of a firm. EPS calculated for a number of years indicates whether or not earning power of the company has increased. e) Dividend per Share (DPS) The extent of payment of dividend to the shareholders is measured in the form of dividend per share. The dividend per share gives the amount of cash flow from the company to the owners and is calculated as follows: Dividend per share = Total dividend payment / Number of shares outstanding

The payment of dividend can have several interpretations to the shareholder. The distribution of dividend could be thought of as the distribution of excess profits/abnormal profits by the company. On the other hand, it could also be negatively interpreted as lack of investment opportunities. In all, dividend payout gives the extent of inflows to the shareholders from the company. f) Dividend Payout Ratio From the profits of each company a cash flow called dividend is distributed among its shareholders. This is the continuous stream of cash flow to the owners of shares, apart from the price differentials (capital gains) in the market. The return to the shareholders, in the form of dividend, out of the company's profit is measured through the payout ratio. The payout ratio is computed as follows: Payout Ratio = (Dividend per share / Earnings per share) * 100 The percentage of payout ratio can also be used to compute the percentage of retained earnings. The profits available for distribution are either paid as dividends or retained internally for business growth opportunities. Hence, when dividends are not declared, the entire profit is ploughed back into the business for its future investments. g) Dividend Yield Dividend yield is computed by relating the dividend per share to the market price of the share. The market place provides opportunities for the investor to buy the company's share at any point of time. The price at which the share has been bought from the market is the actual cost of the investment to the shareholder. The market price is to be taken as the cum-dividend price. Dividend yield relates the actual cost to the cash flows received from the company. The computation of dividend yield is as follows Dividend yield = (Dividend per share / Market price per share) * 100 High dividend yield ratios are usually interpreted as undervalued companies in the market. The market price is a measure of future discounted values, while the dividend per share is the present return from the investment. Hence, a high dividend yield implies that the share has been under priced in the market. On the other hand a

low dividend yield need not be interpreted as overvaluation of shares. A company that does not pay out dividends will not have a dividend yield and the real measure of the market price will be in terms of earnings per share and not through the dividend payments. h) Price/Earnings Ratio (P/E) The P/E multiplier or the price earnings ratio relates the current market price of the share to the earnings per share. This is computed as follows: Price/earnings ratio = Current market price / Earnings per share This ratio is calculated to make an estimate of appreciation in the value of a share of a company and is widely used by investors to decide whether or not to buy shares in a particular company. Many investors prefer to buy the company's shares at a low P/E ratio since the general interpretation is that the market is undervaluing the share and there will be a correction in the market price sooner or later. A very high P/E ratio on the other hand implies that the company's shares are overvalued and the investor can benefit by selling the shares at this high market price. i) Debt-to-Equity Ratio Debt-Equity ratio is used to measure the claims of outsiders and the owners against the firms assets. Debt-to-equity ratio = Outsiders Funds / Shareholders Funds The debt-equity ratio is calculated to measure the extent to which debt financing has been used in a business. It indicates the proportionate claims of owners and the outsiders against the firms assets. The purpose is to get an idea of the cushion available to outsiders on the liquidation of the firm. J) Return on long term fund A unit investment trust's estimated return over the life of the portfolio, calculated according to formulas proposed by the Securities and Exchange Commission (SEC). The return is calculated as the annual percentage return based on the yields of all the underlying securities in the portfolio, but is weighted to account for each security's

market value and maturity. The return is presented net of estimated fees and the maximum offering price, but does not account for delays in income distributions from the fund. Return on long term funds = (Net profit to owners/long term funds contributed to the business) x 100 k) Current ratio The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts over the next 12 months. It compares a firm's current assets to its current liabilities. It is expressed as follows: Current Ratio = Current assets / Current liabilities

INDIAN BANKING INDUSTRY ANALYSIS

BANK: A bank is a financial institution and a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly by loaning or indirectly through capital markets. A bank connects customers that have capital deficits to customers with capital surpluses. Origin of banking in India The first bank was probably the religious temples of the ancient world wherein gold was stored in the form of easy-to-carry compressed plates. Their owners justly felt that temples were the safest places to store their gold as they were constantly attended, well built and were sacred, thus deterring would-be thieves. There are extent records of loans from the 18th century BC in Babylon that were made by temple priests to merchants. Ancient Greece holds further evidence of banking. Greek temples as well as private and civic entities conducted financial transactions such as loans, deposits, currency exchange, and validation of coinage. There is evidence too of credit, whereby in return for a payment from a client, a moneylender in one Greek port would write a credit note for the client who could cash the note in another city, saving the client the danger of carting coinage with him on his journey. Ancient Rome perfected the administrative aspect of banking and saw greater regulation of financial institutions and financial practices. Charging interest on loans and paying interest on deposits became more highly developed and competitive. The origin of banking in India can be traced back to almost the Vedic period. The transformation from pure money lending to proper banking appears to have taken place before the times of Manu. Manu, a great Hindu jurist, had devoted a section of his work explaining the deposits and advances and he even laid down certain rules on rates of interest. Through out Mauryan period and later on desi bankers played some role in the economy of the country. However, it was during the Moghul period that indigenous bankers started playing a vital role in lending money and financing of the foreign trade and commerce. Banking during british period before independence.

The banking scenario in India has been changing at fast pace from being just the borrowers and lenders traditionally, the focus has shifted to more differentiated and customized product/service provider from regulation to liberalization in the year 1991, from planned economy to market. Economy, from licensing to integration with Global Economics, the changes have been swift. All most all the sector operating in the economy was affected and banking sector is no exception to this. Thus the whole of the banking system in the country has undergone a radical change. Let us see how banking has evolved in the past 57 years of independence. After independence in 1947 and proclamation in 1950 the country set about drawing its road map for the future public ownership of banks was seen inevitable and SBI was created in 1955 to spearhead the expansion of banking into rural India and speed up the process of magnetization. Political compulsions brought about nationalization of bank in 1969 and lobbying by bank employees and their unions added to the list of nationalized banks a few years later. Slowly the unions grew in strength, while bank management stagnated. The casualty was to the customer service declined, complaints increased and bank management was unable to item the rot. In the meantime, technology was becoming a global phenomenon lacking a vision of the future and the banks erred badly in opposing the technology up gradation of banks. They mistakenly believed the technology would lead to retrenchment and eventually the marginalization of unions. The problem faced by the banking industry soon surfaced in their balance sheets. But the prevailing accounting practices unable banks to dodge the issue. The rules of the game under which banks operated changed in 1993. Norms or income Recognition, Assets classification and loan loss provisioning were put in place and capital adequacy ratio become mandatory. The cumulative impact of all these

changes has been on the concept of state ownership in banks. It is increasingly becoming clear that the state ownership in bank is no longer sustainable. The amendment of banking regulation act in 1993 saw the entry of new private sector banks and foreign banks. Banking in India Central Bank

Reserve Bank of India

State Bank of India, Allahabad Bank, Andhra Bank, Bank of Baroda, Bank of India, Bank of Maharastra,Canara Bank, Nationalised Banks Central Bank of India, Corporation Bank, Dena Bank, Indian Bank, Indian overseas Bank,Oriental Bank of Commerce, Punjab and Sind Bank, Punjab National Bank, Syndicate Bank, Union Bank of India, United Bank of India, UCO Bank,and Vijaya Bank. Bank of Rajastan, Bharath overseas Bank, Catholic Syrian Bank, Centurion Bank of Punjab, City Union Bank, Development Credit Bank, Dhanalaxmi Bank, Federal Bank, Ganesh Bank of Kurundwad, HDFC Bank, ICICI Bank, IDBI, Private Banks IndusInd Bank, ING Vysya Bank, Jammu and Kashmir Bank, Karnataka Bank Limited, Karur Vysya Bank, Kotek Mahindra Bank, Lakshmivilas Bank, Lord Krishna Bank, Nainitak Bank, Ratnakar Bank,Sangli Bank, SBI Commercial and International Bank, South Indian Bank, Tamil Nadu Merchantile Bank Ltd., United Western Bank, UTI Bank, YES Bank.

Present scenario of banking in India Currently (2010), banking in India is generally fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. 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. The Reserve Bank of India is an autonomous body, with minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage volatility but without any fixed exchange rate-and this has mostly been true. With the growth in the Indian economy expected to be strong for quite some timeespecially in its services sector-the demand for banking services, especially retail banking, mortgages and investment services are expected to be strong. One may also expect M&As, takeovers, and asset sales. In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been allowed to hold more than 5% in a private sector bank since the RBI announced norms in 2005 that any stake exceeding 5% in the private sector banks would need to be vetted by them. In recent years critics have charged that the non-government owned banks are too aggressive in their loan recovery efforts in connection with housing, vehicle and personal loans. There are press reports that the banks' loan recovery efforts have driven defaulting borrowers to suicide. Adoption of banking technology The IT revolution had a great impact in the Indian banking system. The use of computers had led to introduction of online banking in India. The use of the modern innovation and computerisation of the banking sector of India has increased many fold after the economic liberalisation of 1991 as the country's banking sector has been exposed to the world's market. The Indian banks were finding it difficult to compete

with the international banks in terms of the customer service without the use of the information technology and computers. Apart from the above mentioned innovations the banks have been selling the third party products like Mutual Funds, insurances to its clients.Total numbers of ATMs installed in India by various banks as on end March 2005 is 17,642.[12] The New Private Sector Banks in India is having the largest numbers of ATMs which is fol off site ATM is highest for the SBI and its subsidiaries and then it is followed by New Private Banks, Nationalised banks and Foreign banks. While on site is highest for the Nationalised banks of India. TYPES OF BANKS The focus of banking is varied, the needs diverse and methods different. Thus, we need distinctive kinds of banks to cater to the above-mentioned complexities. Deposittaking institutions take the form of commercial banks, which accept deposits and make commercial, real estate, and other loans. There are also mutual savings banks, which accept deposits and make mortgage and other types of loans. Another type is credit unions, which are cooperative organizations that issue share certificates and make member (consumer) and other loans. The banking industry can be divided into following sectors, based on the clientele served and products and services offered: 1. Retail Banks 2. Commercial banks 3. Cooperative banks 4. Investment Banks 5. Specialized banks 6. Central banks

Retail Banks: Retail banks provide basic banking services to individual consumers. Examples include savings banks, savings and loan associations, and recurring and fixed deposits. Products and services include safe deposit boxes, checking and savings accounting, certificates of deposit (CDs), mortgages, personal, consumer and car loans. Commercial Banks: Banking means accepting deposits of money from the public for the purpose of lending or investment. Commercial Banks provide financial services to businesses, including credit and debit cards, bank accounts, deposits and loans, and secured and unsecured loans. Due to deregulation, commercial banks are also competing more with investment banks in money market operations, bond underwriting, and financial advisory work. Commercial banks in modern capitalist societies act as financial intermediaries, raising funds from depositors and lending the same funds to borrowers. The depositors claims against the bank, their deposits, are liquid, meaning banks are expected to redeem deposits on demand, instantly. Banks claims against their borrowers are much less liquid, giving borro wers a much longer span of time to repay money owed banks. Because a bank cannot immediately reclaim money lent to borrowers, it may face bankruptcy if all its depositors show up on a given day to withdraw all their money. There are two types of commercial banks, public sector and private sector banks. Public Sector Banks: Public sectors banks are those in which the government has a major stake and they usually need to emphasize on social objectives than on profitability. Private sector banks: Private sector banks are owned, managed and controlled by private promoters and they are free to operate as per market forces.

Investment Banks: An investment bank is a financial institution that assists individuals, corporations and governments in raising capital by underwriting and/or acting as the client's agent in the issuance of securities. An investment bank may also assist companies involved in mergers and acquisitions, and provide ancillary services such as market making, trading of derivatives, fixed income instruments, foreign exchange, commodities, and equity securities. Investment banks aid companies in acquiring funds and they provide advice for a wide range of transactions. These banks also offer financial consulting services to companies and give advice on mergers and acquisitions and management of public assets. Cooperative Banks: Cooperative Banks are governed by the provisions of State Cooperative Societies Act and meant essentially for providing cheap credit to their members. It is an important source of rural credit i.e., agricultural financing in India. Specialized Banks: Specialized banks are foreign exchange banks, industrial banks, development banks, export-import banks catering to specific needs of these unique activities. These banks provide financial aid to industries, heavy turnkey projects and foreign trade. Central Banks: Central banks are bankers banks, and these banks trace their history from the Bank of England. They guarantee stable monetary and financial policy from country to country and play an important role in the economy of the country. Typical functions include implementing monetary policy, managing foreign exchange and gold reserves, making decisions regarding official interest rates, acting as banker to the government and other banks, and regulating and supervising the banking industry.

ICICI BANK

Type Industry Founded

Private BSE & NSE:ICICI, NYSE: IBN Banking, Insurance, Capital Markets and allied industries 1955 (as Industrial Credit and Investment Corporation of India)

Headquarters ICICI Bank Ltd., ICICI Bank Towers, Bandra Kurla, Mumbai, India Key people K.V. Kamath,Chairman, Chanda Kochhar, Managing Director & CEO, Sandeep Bakhshi, Deputy Managing Director, N.S. Kannan, Executive Director & CFO, K. Ramkumar, Executive Director Sonjoy Chatterjee, Executive Director Loans, Credit Cards, Savings, Investment vehicles, Insurance etc. USD 15.06 billion USD 120.61 billion (at March 31, 2009.) www.icicibank.com

Products Revenue Total assets Website

ICICI Bank (BSE: ICICI) (formerly Industrial Credit and Investment Corporation of India) is India's largest private sector bank by market capitalisation and second largest overall in terms of assets. Trotal assets of Rs. 3,562.28 billion (US$ 77 billion) at December 31, 2009 and profit after tax Rs. 30.19 billion (US$ 648.8 million) for the nine months ended December 31, 2009. The Bank also has a network of 1,640+ branches (as on February 11, 2010) and about 4,721 ATMs in India and presence in 18 countries, as well as some 24 million customers (at the end of July 2007). ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and specialised subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. (These data are dynamic.)

BOARD MEMBERS 1. Mr. K. V. Kamath, Chairman 2. Mr. Sridar Iyengar 3. Dr. Swati Piramal 4. Mr. Homi R. Khusrokhan 5. Mr. Arvind Kumar 6. Mr. M.S. Ramachandran 7. Dr. Tushaar Shah 8. Mr. V. Sridar 9. Ms. Chanda Kochhar, Managing Director & CEO 10. Mr. N. S. Kannan, Executive Director & CFO 11. Mr. K. Ramkumar, Executive Director 12. Mr. Rajiv Sabharwal, Executive Director

VISION To be the leading provider of financial services in India and a major global bank. MISSION We will leverage our people, technology, speed and financial capital to: be the banker of first choice for our customers by delivering high quality, world-class service. Expand the frontiers of our business globally. Play a proactive role in the full realisation of Indias potential. Maintain a healthy financial profile and diversify our earnings across businesses and geographies. Maintain high standards of governance and ethics. Contribute positively to the various countries and markets in which we operate. Create value for our stakeholders.

HDFC BANK The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of the RBI's liberalization of the Indian Banking Industry in 1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995. HDFC Bank began operations in 1995 with a simple mission: to be a World Class Indian Bank. We realized that only a single minded focus on product quality and service excellence would help us get there. Today, we are proud to say that we are well on our way towards that goal. SNAPSHOT Company Background Industry Business Group Incorporation Date Public Issue Date Face Value Company/Business Registration No Key Officials CEO Aditya Puri Finance - Banks - Private Sector. HDFC Group 31/12/1994 31/12/1995 10.0000 INE040A01018

FOUNDERS If ever there was a man with a mission it was Hasmukhbhai Parekh, our Founder and Chairman-Emeritus, who left this earthly abode on November 18, 994. Deepak Parekh is the Chairman of HDFC, the countrys leading housing finance company. A pioneer in mortgage finance, he has enabled scores of Indian middle class people owning their houses or apartments through affordable loans. MANAGEMENT Mr. C.M. Vasudev has been appointed as the Chairman of the Bank with effect from 6th July 2010. Mr. Vasudev has been a Director of the Bank since October 2006. A retired IAS officer, Mr. Vasudev has had an illustrious career in the civil services and has held several key positions in India and overseas, including Finance Secretary, Government of India, Executive Director, World Bank and Government nominee on the Boards of many companies in the financial sector. The Managing Director, Mr. Aditya Puri, has been a professional banker for over 25 years, and before joining HDFC Bank in 1994 was heading Citibank's operations in Malaysia. The Bank's Board of Directors is composed of eminent individuals with a wealth of experience in public policy, administration, industry and commercial banking. Senior executives representing HDFC are also on the Board. Senior banking professionals with substantial experience in India and abroad head various businesses and functions and report to the Managing Director. Given the professional expertise of the management team and the overall focus on recruiting and retaining the best talent in the industry, the bank believes that its people are a significant competitive strength.

MISSION 1. World Class Indian Bank 2. Benchmarking against international standards. 3. To build sound customer franchises across distinct businesses 4. Best practices in terms of product offerings, technology, service levels, risk management and audit & compliance

VISION STATEMENT OF HDFC BANK The HDFC Bank is committed to maintain the highest level of ethical standards, professional integrity and regulatory compliance. HDFC Banks business philosophy is based on four core values such as:1. Operational excellence. 2. Customer Focus. 3. Product leadership. 4. People.

AXIS BANK Axis Bank was the first of the new private banks to have begun operations in 1994, after the Government of India allowed new private banks to be established. The Bank was promoted jointly by the Administrator of the specified undertaking of the Unit Trust of India (UTI - I), Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC) and other four PSU insurance companies, i.e. National Insurance Company Ltd., The New India Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India Insurance Company Ltd. The Bank as on 30th September, 2012 is capitalized to the extent of Rs. 414.53 crores with the public holding (other than promoters and GDRs) at 53.80%. The Bank's Registered Office is at Ahmedabad and its Central Office is located at Mumbai. The Bank has a very wide network of more than 1600 branches (including 169 Service Branches/CPCs as on 30th June, 2012). The Bank has a network of over 10000 ATMs (as on 30th June, 2012) providing 24 hrs a day banking convenience to its customers. This is one of the largest ATM networks in the country. The Bank has strengths in both retail and corporate banking and is committed to adopting the best industry practices internationally in order to achieve excellence. VISION 2015: To be the preferred financial solutions provider excelling in customer delivery through insight, empowered employees and smart use of technology Core Values Customer Centricity Ethics Transparency Teamwork Ownership

BOARD OF DIRECTORS 1. 2. Adarsh Kishore, Chairman Shikha Sharma,

MD & CEO 3. 4. 5. 6. 7. 8. 9. 10. 11. Rama Bijapurkar, Director K. N. Prithviraj, Director V. R. Kaundinya, Director S. B. Mathur, Director Prasad Menon, Director Rabindranath Bhattacharyya, Director Prof. Samir K Barua, Director A.K. Dasgupta, Director Som Mittal, Director

COMPANY ANALYSIS Table No.1 1. DIVIDEND PER SHARE YEARS BANKS ICICI Bank HDFC Bank

Mar' 12 16.50 4.30

Mar' 11 14.00 16.50 14.00

Mar' 10 12.00 12.00 12.00

Mar' 09 11.00 10.00 10.00

Mar' 08 11.00 8.50 6.00

16.00 Axis Bank Source: www.moneycontrol.com FORMULA:

Dividend per share = DIVIDEND PER SHARE Graph No. 1

DIVIDEND PER SHARE

18 16 14 14 12 12 12 12 RATIO 10 8 6 6 4 2 0 Mar'12 Mar'11 Mar'10 YEARS Mar'09 Mar'08 4.3 11 10 10 8.5 ICICI Bank HDFC Bank Axis Bank 11 14 16.5 16 16.5

INTERPRETATION The above analysis explains the dividend per share of Private sector banks for the period of 2008-2012. The dividend per share gives the amount of cash flow from the company to the owners. The dividend per share of ICICI Bank is in fluctuating trend. Its dividend per share is 11 in the year 2008. It increased to 16.5 in the year 2011. HDFC Bank paid 8.5 as dividend per share in the year 2008. After many fluctuations, it reached to 4.3 in the current year i.e., 2012. Axis Bank paid the increasing dividend year by year. In the year 2008, it paid 6 as dividend per share and in the year 2012, the dividend per share reached to 16.

Table No. 2 2. RETURN ON LONG TERM FUND YEARS Mar'12 BANKS ICICI Bank HDFC Bank Axis Bank 52.09 76.06 88.75 42.97 59.91 72.29 44.72 56.08 66.34 56.72 83.31 97.35 62.34 62.34 71.17 Mar'11 Mar'10 Mar'09 Mar'08

Source: www.moneycontrol.com Return on Long Term Fund = Graph No. 2

RETURN ON LONG TERM FUND

120 100 80 RATIO 60 40 20 0 Mar'12 Mar'11 Mar'10 YEAR Mar'09 Mar'08 97.35 88.75 76.06 52.09 42.97 72.29 59.91 66.34 56.08 44.72 83.31 62.34 71.17 62.34 ICICI Bank HDFC Bank Axis Bank

56.72

INTERPRETATION The above analysis explains the return on long term funds of Private sector banks for the period of 2008-2012. The return on long term funds is the amount of cash flow from the long term investments. The returns of ICICI Bank are in decreasing trend till the year 2011. Its return is 62.34 in the year 2008. It decreased to 52.09 in the year 2012. HDFC Bank had 62.34 as returns on long term funds in the year 2008. After many fluctuations, it reached to 76.06 in the current year i.e., 2012. Axis Bank also received fluctuating returns year by year. In the year 2008, it got the returns of 71.17 and in the year 2012, the return on long term fund reached to 88.75.

Table No. 3 3. Return on Net Worth (%)

YEARS Mar'12 BANKS ICICI Bank HDFC Bank Axis Bank 10.70 17.26 18.59 9.35 15.47 17.83 7.79 13.70 15.67 7.58 15.32 17.77 8.94 13.83 12.21 Mar'11 Mar'10 Mar'09 Mar'08

Source: www.moneycontrol.com Return on Net worth =

Graph No. 3

RETURN ON NETWORTH
20 18 16 14 RATIO 12 10 8 6 4 2 0 Mar'12 Mar'11 Mar'10 YEAR Mar'09 Mar'08 10.7 9.35 7.79 7.58 8.94 Axis Bank 18.59 17.26 17.83 15.47 15.67 13.7 17.77 15.32 13.83 12.21 ICICI Bank HDFC Bank

INTERPRETATION The above analysis explains the return on net worth of Private sector banks for the period of 2008-2012. The returns of ICICI Bank are in fluctuating trend during the study period. Its return is 8.94 in the year 2008. It increased to 10.7 in the year 2012. HDFC Bank had 13.83 as returns on networth in the year 2008. After many fluctuations, it reached to 17.26 in the current year i.e., 2012. Axis Bank also received fluctuating returns year by year. In the year 2008, it got the returns of 12.21 and in the year 2012, the return on long term fund reached to 18.59.

Table No. 4 4. Return on assets excluding revaluations YEARS Mar'12 BANKS ICICI Bank HDFC Bank Axis Bank 524.01 127.52 551.99 478.31 545.53 462.77 463.01 470.19 395.99 444.94 344.44 284.50 417.64 324.38 245.13 Mar'11 Mar'10 Mar'09 Mar'08

Source: www.moneycontrol.com Return on Assets excluding revaluation = Graph No. 4

RETURN ON ASSETS
600 524.01 500 400 RATIO 300 551.99 545.53 478.31 470.19 462.77 463.01 395.99 344.44 284.5 245.13 Axis Bank ICICI Bank 417.64 324.38 HDFC Bank

444.94

200 127.52 100

0 Mar'12 Mar'11 Mar'10 YEAR Mar'09 Mar'08

INTERPRETATION The above analysis explains the return on assets excluding revaluation of Private sector banks for the period of 2008-2012. Return on assets financial ratio reveals how asset intensive a business is. The returns of ICICI Bank are in increasing trend during the study period. Its return is 417.64 in the year 2008. It increased to 524.01 in the year 2012. HDFC Bank had 324.78 as returns on assets in the year 2008. After many fluctuations, it reached to 127.52 in the current year i.e., 2012. Axis Bank also received increasing returns year by year. In the year 2008, it got the returns of 245.13 and in the year 2012, the return on long term fund reached to 551.99.

Table No. 5 5. Total Assets Turnover Ratios YEARS Mar'12 BANKS ICICI Bank HDFC Bank Axis Bank 0.09 0.11 0.10 0.08 0.10 0.09 0.09 0.10 0.09 0.10 0.13 0.11 0.11 0.11 0.10 Mar'11 Mar'10 Mar'09 Mar'08

Source: www.moneycontrol.com Total assets turnover ratio =

Graph No. 5

TOTAL ASSETS TURNOVER RATIO

0.14 0.12 0.1 RATIO 0.08 0.06 0.04 0.02 0 Mar'12 Mar'11 Mar'10 YEAR Mar'09 Mar'08 0.11 0.1 0.09 0.13 0.11 0.1 0.08 0.1 0.09 0.09 0.09 0.1 0.11 0.11 0.1 ICICI Bank HDFC Bank Axis Bank

INTERPRETATION The above analysis explains the assets turnover ratio of Private sector banks for the period of 2008-2012. The asset turnover ratio calculates the total sales for each dollar of asset a company owns. It measures a company's efficiency in using its assets. The assets turnover ratios of ICICI Bank are in fluctuating trend during the study period. Its ratio is 0.11 in the year 2008. It increased to 0.09 in the year 2012. HDFC Bank had 0.11 as assets turnover ratio in the year 2008. After many fluctuations, it reached to 0.11 in the current year i.e., 2012. Axis Bank also had increasing ratios year by year. In the year 2008, the assets turnover ratio is 0.1 and in the year 2012, the assets turnover ratio reached to 0.1.

Table No. 6 6. Total Debt to Owners Fund YEARS Mar'12 BANKS ICICI Bank HDFC Bank Axis Bank 4.23 8.24 9.65 4.10 8.22 9.96 3.91 7.78 8.81 4.42 9.75 11.49 5.27 8.76 9.99 Mar'11 Mar'10 Mar'09 Mar'08

Source: www.moneycontrol.com Total debt to owners fund =

Graph No. 6

TOTAL DEBT TO OWNERS FUND

14 12 10 8 6 4.23 4 2 0 Mar'12 Mar'11 Mar'10 YEAR Mar'09 Mar'08 4.1 3.91 4.42 9.65 8.24 RATIO 9.96 8.22 8.81 7.78 11.49 9.75 9.99 8.76 HDFC Bank Axis Bank ICICI Bank

5.27

INTERPRETATION The above analysis explains the total debt to owners fund of Private sector banks for the period of 2008-2012. The total debt to owners fund of ICICI Bank is in fluctuating trend during the study period. Its ratio is 5.27 in the year 2008. It increased to 4.23 in the year 2012. HDFC Bank had 8.76 as total debt to owners fund in the year 2008. After many fluctuations, it reached to 8.24 in the current year i.e., 2012. Axis Bank also had increasing ratios year by year. In the year 2008, the total debt to owners fund is 9.99 and in the year 2012, the assets turnover ratio reached to 9.65.

Table No. 7 7. Current Ratio

YEARS Mar'12 BANKS ICICI Bank HDFC Bank Axis Bank 0.13 0.08 0.03 0.11 0.06 0.02 0.14 0.03 0.03 0.13 0.04 0.03 0.11 0.04 0.03 Mar'11 Mar'10 Mar'09 Mar'08

Source: www.moneycontrol.com Current Ratio = Current

Current Assets iabilities

Graph No. 7

0.16 0.14 0.12 RATIO 0.1 0.08 0.13 0.11

CURRENT RATIO
0.14 0.13 0.11 ICICI Bank HDFC Bank 0.06 Axis Bank

0.08 0.06 0.04 0.02 0 Mar'12 Mar'11 Mar'10 YEAR Mar'09 Mar'08 0.03 0.02 0.03 0.03 0.04 0.03 0.04 0.03

INTERPRETATION The above analysis explains the current ratio of Private sector banks for the period of 2008-2012. Current ratio explains the liquidity position of the company. The current ratio of ICICI Bank is in fluctuating trend during the study period. Its ratio is 0.11 in the year 2008. It increased to 0.13 in the year 2012. HDFC Bank had 0.04 as current ratio in the year 2008. After many fluctuations, it reached to 0.08 in the current year i.e., 2012. Axis Banks current ratio for all the years is 0.03 except in the year 2010 0.02.

Table No. 8 8. Dividend Payout Ratio Net Profit YEARS Mar'12 BANKS ICICI Bank HDFC Bank Axis Bank 32.82 22.69 18.15 35.23 22.72 19.78 37.31 21.72 22.56 36.60 22.16 23.16 33.12 22.16 23.49 Mar'11 Mar'10 Mar'09 Mar'08

Source: www.moneycontrol.com Dividend payout ratio = Graph No. 8

40 35 30 25 RATIO 20 15 10 5 0 Mar'12 22.69 18.15 32.82

DIVIDEND PAYOUT RATIO

37.31 35.23 36.6 33.12 ICICI Bank 22.72 19.78 22.56 21.72 23.16 22.16 23.49 22.16 HDFC Bank Axis Bank

Mar'11

Mar'10 YEAR

Mar'09

Mar'08

INTERPRETATION The above analysis explains the dividend payout ratio of Private sector banks for the period of 2008-2012. This is the continuous stream of cash flow to the owners of shares, apart from the price differentials (capital gains) in the market. The return to the shareholders, in the form of dividend, out of the company's profit is measured through the payout ratio. The dividend payout ratio of ICICI Bank is in fluctuating trend during the study period. Its ratio is 33.12 in the year 2008. It decreased to 32.82 in the year 2012. HDFC Bank had 22.16 as dividend payout ratio in the year 2008. After many fluctuations, it reached to 22.69 in the current year i.e., 2012. Axis Banks dividend payout ratio is 23.49 in the year 2008 and it decreased to 18.15.

Table No. 9 9. Earnings per Share

YEARS Mar' 12 BANKS ICICI Bank HDFC Bank Axis Bank 56.09 22.02 102.67 44.73 84.40 82.54 36.10 64.42 62.06 33.76 52.77 50.57 37.37 44.87 29.94 Mar' 11 Mar' 10 Mar' 09 Mar' 08

Source: www.moneycontrol.com Earnings per share =

et profit o of shares outstanding

Graph No. 9

EARNINGS PER SHARE

120 102.67 100 84.4 82.54 80 RATIO 64.4262.06 56.09 44.73 40 22.02 20 36.1 33.76 52.77 50.57 44.87 37.37 29.94 HDFC Bank ICICI Bank

60

Axis Bank

0 Mar'12 Mar'11 Mar'10 YEAR Mar'09 Mar'08

INTERPRETATION The above analysis explains the Earning per share of banks for the period of 2008-2012. This ratio determines what the company is earning for every share. The earning per share of ICICI Bank is in fluctuating trend during the study period. Its earning per share is 37.37 in the year 2008. It increased to 56.09 in the year 2012. HDFC Bank had 44.87 as earning per share in the year 2008. After many fluctuations, it reached to 22.02 in the current year i.e., 2012. Axis Banks earnings per share is in increasing trend during the study period. The earnings per share is 29.94 in the year 2008 and it increased to 102.67.

TABLE NO. 10 MOVEMENT OF PRICE AND RETURNS OF BANKING STOCKS FOR THE PERIOD 1ST APRIL 2011 TO 30TH JUNE 2011 DATE 1/4/11 4/4/11 5/4/11 6/4/11 7/4/11 8/4/11 11/4/11 13/04/11 15/04/11 18/04/11 19/04/11 20/04/11 21/04/11 25/04/11 26/04/11 27/04/11 28/04/11 29/04/11 2/5/11 3/5/11 4/5/11 5/5/11 6/5/11 9/5/11 10/5/11 11/5/11 12/5/11 13/05/11 16/05/11 17/05/11 18/05/11 19/05/11 20/05/11 23/05/11 24/05/11 25/05/11 26/05/11 27/05/11 30/05/11 31/05/11 ICICI BANK
PRICE RETURNS

HFDC BANK
PRICE RETURNS

AXIS BANK
PRICE RETURNS

NIFTY
INDEX RETURNS

1,114.80 1,105.25 1,124.75 1,108.80 1,100.00 1,104.50 1,085.00 1,093.80 1,119.95 1,102.10 1,084.00 1,103.70 1,121.70 1,114.50 1,118.50 1,127.95 1,118.00 1,116.00 1,113.80 1,096.00 1,059.75 1,057.00 1,033.00 1,093.40 1,081.00 1,078.00 1,070.00 1,055.00 1,063.50 1,058.00 1,045.00 1,044.00 1,038.00 1,036.90 1,008.10 1,021.00 1,018.60 1,030.25 1,072.00 1,080.80

-0.86 1.76 -1.42 -0.79 0.41 -1.77 0.81 2.39 -1.59 -1.64 1.82 1.63 -0.64 0.36 0.84 -0.88 -0.18 -0.20 -1.60 -3.31 -0.26 -2.27 5.85 -1.13 -0.28 -0.74 -1.40 0.81 -0.52 -1.23 -0.10 -0.57 -0.11 -2.78 1.28 -0.24 1.14 4.05 0.82

2,353.00 2,340.00 2,400.00 2,391.00 2,375.00 2,354.00 2,325.20 2,279.45 2,375.00 2,378.80 2,340.00 2,360.55 2,382.00 2,423.00 2,386.55 2,376.00 2,363.15 2,325.00 2,306.00 2,288.55 2,244.00 2,255.85 2,225.00 2,302.00 2,278.00 2,260.00 2,250.00 2,232.00 2,245.00 2,252.00 2,258.10 2,270.50 2,270.00 2,295.00 2,254.00 2,250.00 2,255.00 2,264.90 2,304.00 2,324.90

-0.55 2.56 -0.38 -0.67 -0.88 -1.22 -1.97 4.19 0.16 -1.63 0.88 0.91 1.72 -1.50 -0.44 -0.54 -1.61 -0.82 -0.76 -1.95 0.53 -1.37 3.46 -1.04 -0.79 -0.44 -0.80 0.58 0.31 0.27 0.55 -0.02 1.10 -1.79 -0.18 0.22 0.44 1.73 0.91

1,410.30 1,411.10 1,448.00 1,420.00 1,430.00 1,446.00 1,437.20 1,395.00 1,426.05 1,430.00 1,384.00 1,422.00 1,449.00 1,398.00 1,387.80 1,371.20 1,354.90 1,338.00 1,297.90 1,273.70 1,229.50 1,239.90 1,212.00 1,260.10 1,239.95 1,225.00 1,223.00 1,210.50 1,241.60 1,226.10 1,223.00 1,230.00 1,224.00 1,215.00 1,195.00 1,203.90 1,194.50 1,214.95 1,224.00 1,251.90

0.06 2.61 -1.93 0.70 1.12 -0.61 -2.94 2.23 0.28 -3.22 2.75 1.90 -3.52 -0.73 -1.20 -1.19 -1.25 -3.00 -1.86 -3.47 0.85 -2.25 3.97 -1.60 -1.21 -0.16 -1.02 2.57 -1.25 -0.25 0.57 -0.49 -0.74 -1.65 0.74 -0.78 1.71 0.74 2.28

5835 5842 5923.9 5908 5888.6 5886.8 5805.4 5748 5898.8 5824.4 5716 5786.1 5882.9 5859.6 5876.9 5884.2 5851.4 5782.5 5766.9 5689.7 5567.7 5531.6 5477.7 5575.2 5555.6 5547.2 5537.8 5492.4 5541.7 5496.1 5448.2 5448.2 5450.7 5456.7 5385.1 5389.1 5372.8 5413.7 5493.8 5492

0.12 1.401 -0.268 -0.329 -0.031 -1.383 -0.989 2.624 -1.261 -1.86 1.226 1.673 -0.395 0.294 0.125 -0.558 -1.177 -0.27 -1.339 -2.144 -0.648 -0.975 1.781 -0.352 -0.15 -0.169 -0.821 0.899 -0.823 -0.872 -0.001 0.046 0.111 -1.312 0.074 -0.303 0.762 1.479 -0.032

1/6/11 2/6/11 3/6/11 6/6/11 7/6/11 8/6/11 9/6/11 10/6/11 13/06/11 14/06/11 15/06/11 16/06/11 17/06/11 20/06/11 21/06/11 22/06/11 23/06/11 24/06/11 27/06/11 28/06/11 29/06/11 30/06/11 AVG. RETURN

1,083.80 1,061.70 1,055.00 1,040.00 1,050.30 1,050.15 1,045.00 1,050.00 1,030.20 1,041.00 1,051.00 1,020.00 1,039.90 1,030.90 1,026.70 1,024.35 1,016.00 1,035.10 1,054.40 1,080.00 1,089.90 1,091.00 -

0.28 -2.04 -0.63 -1.42 0.99 -0.01 -0.49 0.48 -1.89 1.05 0.96 -2.95 1.95 -0.87 -0.41 -0.23 -0.82 1.88 1.86 2.43 0.92 0.10 -0.02

2,390.00 2,355.05 2,359.95 2,345.30 2,365.10 2,356.20 2,354.75 2,368.00 2,353.15 2,378.00 2,380.00 2,364.00 2,350.50 2,342.15 2,302.00 2,332.45 2,319.00 2,349.00 2,383.00 2,429.40 2,435.00 2,499.00 -

2.80 -1.46 0.21 -0.62 0.84 -0.38 -0.06 0.56 -0.63 1.06 0.08 -0.67 -0.57 -0.36 -1.71 1.32 -0.58 1.29 1.45 1.95 0.23 2.63 0.11

1,282.25 1,255.10 1,272.00 1,242.00 1,227.00 1,230.90 1,229.90 1,242.00 1,230.20 1,235.00 1,259.70 1,219.95 1,244.70 1,225.00 1,231.00 1,253.00 1,247.35 1,251.00 1,267.00 1,311.05 1,312.00 1,295.70 -

2.42 -2.12 1.35 -2.36 -1.21 0.32 -0.08 0.98 -0.95 0.39 2.00 -3.16 2.03 -1.58 0.49 1.79 -0.45 0.29 1.28 3.48 0.07 -1.24 -0.12

5561.1 5529.9 5565.7 5504.3 5509.2 5535.3 5523.6 5518.1 5469.9 5485.6 5494.5 5419.7 5412.5 5372.2 5280.8 5304.7 5269.1 5343.4 5441.2 5548.9 5566.5 5614.5 -

1.257 -0.56 0.647 -1.103 0.088 0.474 -0.211 -0.1 -0.873 0.288 0.161 -1.361 -0.132 -0.745 -1.701 0.452 -0.67 1.41 1.83 1.978 0.318 0.862 -0.058

MOVEMENTS OF RETURNS OF STOCKS

8.00 6.00 RETURNS 4.00 2.00 0.00 -2.00 -4.00 1/4/2011 6/4/2011 11/4/2011 18/04/2011 21/04/2011 27/04/2011 2/5/2011 5/5/2011 10/5/2011 13/05/2011 18/05/2011 23/05/2011 26/05/2011 31/05/2011 3/6/2011 8/6/2011 13/06/2011 16/06/2011 21/06/2011 24/06/2011 29/06/2011 DATE ICICI BANK HDFC BANK AXIS BANK NIFTY

INTERPRETATION: It is clear from the above table that average return of ICICI Bank is -0.02. Return of HDFC Bank is 0.11. average return of Axis Bank is -0.12.

TABLE NO. 11 MOVEMENT OF PRICE AND RETURNS OF BANKING STOCKS FOR THE PERIOD 1ST JULY 2011 TO 30TH SEPTEMBER 2011 ICICI BANK DATE 1/7/11 4/7/11 5/7/11 6/7/11 7/7/11 8/7/11 11/7/11 12/7/11 13/07/11 14/07/11 15/07/11 18/07/11 19/07/11 20/07/11 21/07/11 22/07/11 25/07/11 26/07/11 27/07/11 28/07/11 29/07/11 1/8/11 2/8/11 3/8/11 4/8/11 5/8/11 8/8/11 9/8/11 10/8/11 11/8/11 12/8/11 16/08/11 17/08/11 18/08/11 19/08/11 22/08/11 23/08/11 24/08/11 25/08/11 26/08/11
PRICE RETU RN

HDFC BANK
PRICE RETU RN

AXIS BANK
PRICE RETU RN

NIFTY
INDEX RETURN

1,111.35 1,110.00 1,101.85 1,092.30 1,079.40 1,091.15 1,060.00 1,042.00 1,050.00 1,049.90 1,065.00 1,057.00 1,045.95 1,066.00 1,042.00 1,048.00 1,067.90 1,075.95 1,041.45 1,012.10 1,011.00 1,052.80 1,039.90 1,012.45 1,008.50 970 940.05 915 963.95 958.5 959.3 962.1 933 915 845 835 857 845 849.9 832.55

-0.12 -0.73 -0.87 -1.18 1.09 -2.85 -1.70 0.77 -0.01 1.44 -0.75 -1.05 1.92 -2.25 0.58 1.90 0.75 -3.21 -2.82 -0.11 4.13 -1.23 -2.64 -0.39 -3.82 -3.09 -2.66 5.35 -0.57 0.08 0.29 -3.02 -1.93 -7.65 -1.18 2.63 -1.40 0.58 -2.04

2,540.00 2,535.00 2,522.00 2,535.00 2,546.10 2,566.00 2,559.00 2,510.00 2,490.00 505.1 506.45 511.95 517.5 516.4 504.8 500 501.55 505.35 499.35 499.5 489.9 493.45 487.9 478.7 484.1 465 463 450 494.8 478.7 485.1 478.4 456.05 468.3 455 460.05 457.4 458 459.4 444

-0.20 -0.51 0.52 0.44 0.78 -0.27 -1.91 -0.80 -79.71 0.27 1.09 1.08 -0.21 -2.25 -0.95 0.31 0.76 -1.19 0.03 -1.92 0.72 -1.12 -1.89 1.13 -3.95 -0.43 -2.81 9.96 -3.25 1.34 -1.38 -4.67 2.69 -2.84 1.11 -0.58 0.13 0.31 -3.35

1,314.00 1,323.90 0.75 1,339.50 1.18 1,326.25 -0.99 1,312.95 -1.00 1,334.10 1.61 1,306.00 -2.11 1,254.40 -3.95 1,269.00 1.16 1,266.60 -0.19 1,281.00 1.14 1,265.25 -1.23 1,267.70 0.19 1,279.20 0.91 1,259.30 -1.56 1,247.25 -0.96 1,294.70 3.80 1,335.00 3.11 1,322.00 -0.97 1,285.00 -2.80 1,300.00 1.17 1,349.00 3.77 1,345.00 -0.30 1,330.70 -1.06 1,303.60 -2.04 1,245.00 -4.50 1,205.20 -3.20 1,190.50 -1.22 1,242.00 4.33 1,237.00 -0.40 1,229.50 -0.61 1,226.95 -0.21 1,207.25 -1.61 1,171.80 -2.94 1,098.15 -6.29 1,075.15 -2.09 1,058.00 -1.60 1,078.55 1.94 1,055.00 -2.18 1,025.95 -2.75

5705.8 5679.6 5659.9 5622.7 5633.4 5734.7 5648.1 5556.9 5542.1 5569 5603 5581.8 5569.9 5642.1 5554.6 5577 5633.8 5688.5 5588.6 5492.4 5479 5527.5 5493.2 5402 5412.4 5204.4 5083.9 4947.9 5196.6 5128 5194.4 5125.8 5030.3 5078 4859.3 4843.7 4925.2 4934.4 4914.7 4839.3

-0.459 -0.347 -0.656 0.189 1.798 -1.510 -1.614 -0.267 0.486 0.610 -0.378 -0.213 1.296 -1.550 0.402 1.019 0.970 -1.756 -1.720 -0.244 0.885 -0.621 -1.660 0.193 -3.844 -2.315 -2.674 5.025 -1.319 1.295 -1.322 -1.862 0.947 -4.306 -0.321 1.682 0.187 -0.399 -1.534

29/08/11 30/08/11 2/9/11 5/9/11 6/9/11 7/9/11 8/9/11 9/9/11 12/9/11 13/09/11 14/09/11 15/09/11 16/09/11 19/09/11 20/09/11 21/09/11 22/09/11 23/09/11 26/09/11 27/09/11 28/09/11 29/09/11 30/09/11
AVG. RETURN

835 870 891.5 877 875 894 901.9 925.75 880.3 872.5 856.85 875 891 877.7 862.25 886.9 880.1 848.3 844 874.5 890.5 862.15 889.2
-

0.29 4.19 2.47 -1.63 -0.23 2.17 0.88 2.64 -4.91 -0.89 -1.79 2.12 1.83 -1.49 -1.76 2.86 -0.77 -3.61 -0.51 3.61 1.83 -3.18 3.14
-0.33

444.5 461.95 484 469.8 468.6 476 489.7 483.9 467 471 467.4 485.9 486.25 481.9 485 492.75 487.9 468.55 456 458 462.4 457.55 465.85
-

0.11 3.93 4.77 -2.93 -0.26 1.58 2.88 -1.18 -3.49 0.86 -0.76 3.96 0.07 -0.89 0.64 1.60 -0.98 -3.97 -2.68 0.44 0.96 -1.05 1.81
-1.42

1,019.00 1,060.00 1,104.00 1,073.60 1,109.00 1,141.50 1,141.55 1,147.20 1,090.00 1,055.30 1,055.00 1,096.70 1,131.00 1,124.80 1,101.30 1,143.10 1,131.00 1,100.10 1,083.40 1,074.00 1,091.00 1,064.00 1,062.20
-

-0.68 4.02 4.15 -2.75 3.30 2.93 0.00 0.49 -4.99 -3.18 -0.03 3.95 3.13 -0.55 -2.09 3.80 -1.06 -2.73 -1.52 -0.87 1.58 -2.47 -0.17
-0.31

4806.2 4973.3 5109.8 4998.9 4993.4 5080.2 5139.2 5161.3 4981.7 4977.8 4965.1 5062.4 5123.4 5068.4 5042.6 5153.8 5054.5 4873.8 4878.6 4905.2 5005.5 4924.2 4990.2
-

-0.683 3.476 2.746 -2.170 -0.111 1.738 1.162 0.430 -3.480 -0.078 -0.256 1.960 1.205 -1.073 -0.510 2.205 -1.927 -3.575 0.100 0.544 2.046 -1.624 1.339
-0.201

MOVEMENTS OF RETURNS OF STOCKS

20 0 RETURNS -20 -40 -60 -80 -100 DATE ICICI BANK HDFC BANK AXIS BANK NIFTY 4/7/2011 7/7/2011 12/7/2011 15/07/11 20/07/11 25/07/11 28/07/11 2/8/2011 5/8/2011 10/8/2011 16/08/11 19/08/11 24/08/11 29/08/11 5/9/2011 8/9/2011 13/09/11 16/09/11 21/09/11 26/09/11 29/09/11

INTERPRETATION: It is clear from the above table that average return of ICICI Bank is -0.33. Return of HDFC Bank is -1.42. Average return of Axis Bank is -0.31.

TABLE NO. 12 MOVEMENT OF PRICE AND RETURNS OF BANKING STOCKS FOR THE PERIOD 1ST OCTOBER 2011 TO 31TH DECEMBER 2011 DATE 3/10/11 4/10/11 5/10/11 7/10/11 10/10/11 11/10/11 12/10/11 13/10/11 14/10/11 17/10/11 18/10/11 19/10/11 20/10/11 21/10/11 24/10/11 25/10/11 26/10/11 28/10/11 31/10/11 1/11/11 2/11/11 3/11/11 4/11/11 8/11/11 9/11/11 11/11/11 14/11/11 15/11/11 16/11/11 17/11/11 18/11/11 21/11/11 22/11/11 23/11/11 24/11/11 25/11/11 28/11/11 29/11/11 30/11/11 1/12/11 2/12/11 ICICI BANK
PRICE RETURN

HDFC BANK
PRICE PRICE

AXIS BANK
RETURN PRICE

NIFTY
INDEX RETURN

860 834 801 817.1 824.9 852 840 875.5 877 895 888 888 885.35 880 884.8 879 885 911.65 935 917.95 885.7 880 889.6 884.5 886.75 856.25 837.9 819 787 790.5 770 762.9 740.05 739.95 726 725.3 730 750.5 724 754 765.3

-3.02 -3.96 2.01 0.95 3.29 -1.41 4.23 0.17 2.05 -0.78 0.00 -0.30 -0.60 0.55 -0.66 0.68 3.01 2.56 -1.82 -3.51 -0.64 1.09 -0.57 0.25 -3.44 -2.14 -2.26 -3.91 0.44 -2.59 -0.92 -3.00 -0.01 -1.89 -0.10 0.65 2.81 -3.53 4.14 1.50

460.15 452.5 448.95 452.7 452 460.7 461.95 475 469 476.6 473.9 482.95 488 490.05 492.75 487.85 472 486 483 485.1 478.7 481 486.7 483 485 475.65 469.9 470.7 470 463.15 455.2 456 447 441.75 428.8 427.75 436 444 429.2 458.95 455.15

-1.66 -0.78 0.84 -0.15 1.92 0.27 2.82 -1.26 1.62 -0.57 1.91 1.05 0.42 0.55 -0.99 -3.25 2.97 -0.62 0.43 -1.32 0.48 1.19 -0.76 0.41 -1.93 -1.21 0.17 -0.15 -1.46 -1.72 0.18 -1.97 -1.17 -2.93 -0.24 1.93 1.83 -3.33 6.93 -0.83

1,003.00 984.4 972 977.15 1,030.00 1,060.25 1,056.00 1,100.00 1,075.55 1,111.90 1,100.00 1,105.00 1,116.00 1,136.80 1,158.10 1,172.25 1,127.00 1,161.00 1,150.00 1,150.00 1,124.00 1,119.90 1,135.80 1,139.00 1,149.00 1,103.00 1,073.00 1,044.00 1,008.50 1,004.00 978.1 960 951.5 937 940 954.95 981.2 993 961 985.1 978.65

-1.85 -1.26 0.53 5.41 2.94 -0.40 4.17 -2.22 3.38 -1.07 0.45 1.00 1.86 1.87 1.22 -3.86 3.02 -0.95 0.00 -2.26 -0.36 1.42 0.28 0.88 -4.00 -2.72 -2.70 -3.40 -0.45 -2.58 -1.85 -0.89 -1.52 0.32 1.59 2.75 1.20 -3.22 2.51 -0.65

4874.4 4823.5 4791.3 4883.7 4886.9 5019.9 5011.2 5130.8 5057.4 5156.2 5049.5 5080.5 5086.6 5106.6 5114.7 5137.9 5215 5341.9 5358.9 5278.6 5216.8 5241.6 5325.4 5292.3 5309.7 5159.8 5217.4 5131.2 5059.1 5027.1 4899.2 4873.8 4794.9 4779.5 4707.6 4731.3 4769.3 4864.2 4766.2 4970.9 4940.9

-1.044 -0.668 1.927 0.066 2.723 -0.173 2.387 -1.432 1.955 -2.070 0.614 0.120 0.394 0.159 0.454 1.500 2.434 0.318 -1.498 -1.172 0.475 1.600 -0.622 0.330 -2.824 1.116 -1.651 -1.405 -0.633 -2.545 -0.517 -1.620 -0.320 -1.505 0.505 0.803 1.990 -2.016 4.295 -0.604

5/12/11 7/12/11 8/12/11 9/12/11 12/12/11 13/12/11 14/12/11 15/12/11 16/12/11 19/12/11 20/12/11 21/12/11 22/12/11 23/12/11 26/12/11 27/12/11 28/12/11 29/12/11 30/12/11
AVG. RETURN

786 784 758.5 731 744 700 700 698 699.2 672 662 675.9 690 728.4 721 727.1 720.7 691.4 690.35
-

2.70 -0.25 -3.25 -3.63 1.78 -5.91 0.00 -0.29 0.17 -3.89 -1.49 2.10 2.09 5.57 -1.02 0.85 -0.88 -4.07 -0.15
-0.34

463.7 470 467 447 448.1 428 439 429 434.1 412.05 406 426 431.5 444.2 439 440.3 442.5 435.65 433.8
-

1.88 1.36 -0.64 -4.28 0.25 -4.49 2.57 -2.28 1.19 -5.08 -1.47 4.93 1.29 2.94 -1.17 0.30 0.50 -1.55 -0.42
-0.08

1,005.00 1,033.00 1,035.00 981.35 1,005.00 962 959 948 955 897.95 857.7 845.2 842.25 885 880 872.4 841 824.45 816
-

2.69 2.79 0.19 -5.18 2.41 -4.28 -0.31 -1.15 0.74 -5.97 -4.48 -1.46 -0.35 5.08 -0.56 -0.86 -3.60 -1.97 -1.02
-0.32

5036.5 5050.1 5037.4 4870.8 4906.9 4733.6 4788.7 4712.8 4752.5 4623.2 4635.8 4636.5 4636.9 4763.2 4718.2 4780.2 4756.2 4681.2 4660
-

1.936 0.270 -0.251 -3.308 0.741 -3.531 1.164 -1.585 0.842 -2.722 0.274 0.014 0.010 2.724 -0.946 1.315 -0.502 -1.578 -0.453
-0.063

MOVEMENTS OF RETURNS OF STOCKS

8 6 4 RETURN 2 0 12/10/2011 17/10/2011 20/10/2011 31/10/2011 15/11/2011 18/11/2011 23/11/2011 28/11/2011

7/12/2011

3/10/2011

7/10/2011

3/11/2011

9/11/2011

1/12/2011

12/12/2011

15/12/2011

20/12/2011

23/12/2011

-2 -4 -6 -8

DATE ICICI BANK HDFC BANK AXIS BANK

INTERPRETATION: It is clear from the above table that average return of ICICI Bank is -0.34. Return of HDFC Bank is -0.08. Average return of Axis Bank is -0.32.

28/12/2011

25/10/2011

TABLE NO. 13 MOVEMENT OF PRICE AND RETURNS OF BANKING STOCKS FOR THE PERIOD 1ST JANUARY 2012 TO 31TH MARCH 2012 ICICI BANK DATE
PRICE RETU RN

HDFC BANK
PRICE RETURN

AXIS BANK
PRICE RETURN

NIFTY
INDEX RETURN

2/1/12 690.15 428.9 3/1/12 705 2.15 431.4 4/1/12 733.4 4.03 441.9 5/1/12 745 1.58 444 6/1/12 742 -0.40 441 7/1/12 748.5 0.88 453 9/1/12 746 -0.33 451.9 10/1/12 750.7 0.63 460 11/1/12 778.1 3.65 460.5 12/1/12 779.9 0.23 461.7 13/01/12 787.8 1.01 470 16/01/12 782 -0.74 466.8 17/01/12 800 2.30 463.9 18/01/12 779.8 -2.53 472.9 19/01/12 780.5 0.09 486 20/01/12 814 4.29 490 23/01/12 843 3.56 486 24/01/12 860 2.02 485.25 25/01/12 891.8 3.70 490.25 27/01/12 888 -0.43 503.9 30/01/12 877 -1.24 482.95 31/01/12 859.75 -1.97 483.5 1/2/12 908 5.61 494.5 2/2/12 899 -0.99 499 3/2/12 904 0.56 497.5 6/2/12 925 2.32 510 7/2/12 939.7 1.59 514 8/2/12 927.9 -1.26 510.7 9/2/12 916.1 -1.27 505.7 10/2/12 933 1.84 522.8 13/02/12 929 -0.43 518.65 14/02/12 927 -0.22 522.5 15/02/12 952.1 2.71 520.5 16/02/12 981 3.04 531 17/02/12 984.8 0.39 531.25 21/02/12 977 -0.79 526 22/02/12 990 1.33 530 23/02/12 952 -3.84 527.2 24/02/12 941.2 -1.13 527.2 27/02/12 932.4 -0.93 526.9

0.58 2.43 0.48 -0.68 2.72 -0.24 1.79 0.11 0.26 1.80 -0.68 -0.62 1.94 2.77 0.82 -0.82 -0.15 1.03 2.78 -4.16 0.11 2.28 0.91 -0.30 2.51 0.78 -0.64 -0.98 3.38 -0.79 0.74 -0.38 2.02 0.05 -0.99 0.76 -0.53 0.00 -0.06

810 805.1 844.8 849 862.8 850.1 851 869 898 931 948.85 934 943 964 945 962.1 1,017.00 997 1,038.80 1,074.00 1,069.80 1,035.00 1,074.50 1,094.00 1,076.70 1,114.00 1,124.90 1,118.00 1,114.70 1,126.00 1,120.00 1,118.00 1,142.00 1,205.15 1,248.00 1,269.00 1,286.30 1,210.00 1,217.80 1,185.00

-0.60 4.93 0.50 1.63 -1.47 0.11 2.12 3.34 3.67 1.92 -1.57 0.96 2.23 -1.97 1.81 5.71 -1.97 4.19 3.39 -0.39 -3.25 3.82 1.81 -1.58 3.46 0.98 -0.61 -0.30 1.01 -0.53 -0.18 2.15 5.53 3.56 1.68 1.36 -5.93 0.64 -2.69

4640.2 4675.8 4775 4749 4724.2 4755.6 4747.6 4771.9 4863.2 4841 4862 4844 4904.5 4977.8 4995 5044.9 5025.4 5064.8 5151.5 5216.8 5163.6 5125.3 5198.2 5272.1 5276.1 5379.5 5413 5343.8 5343.1 5399.8 5382.1 5380.8 5460.6 5513.8 5574.2 5561.9 5609.8 5490.1 5479.2 5448.1

0.767 2.120 -0.543 -0.523 0.666 -0.169 0.512 1.913 -0.456 0.434 -0.369 1.249 1.494 0.347 0.998 -0.387 0.785 1.712 1.267 -1.020 -0.742 1.422 1.423 0.076 1.959 0.623 -1.277 -0.014 1.062 -0.328 -0.024 1.483 0.973 1.096 -0.221 0.860 -2.134 -0.199 -0.567

28/02/12 29/02/12 1/3/12 2/3/12 3/3/12 5/3/12 6/3/12 7/3/12 9/3/12 12/3/12 13/03/12 14/03/12 15/03/12 16/03/12 19/03/12 20/03/12 21/03/12 22/03/12 23/03/12 26/03/12 27/03/12 28/03/12 29/03/12 30/03/12
AVG. RETURN

896 915 902.5 891 903.05 896.8 870 851 876.95 944 935.3 946.8 955 936 927 909.75 902.1 936.05 906.8 903.7 887 874.75 851 864 -

-3.90 519.25 2.12 533.9 -1.37 517 -1.27 514 1.35 518 -0.69 520 -2.99 509.8 -2.18 506.85 3.05 522 7.65 534 -0.92 523 1.23 528.1 0.87 528 -1.99 510 -0.96 510.05 -1.86 496 -0.84 503 3.76 513.9 -3.12 509.5 -0.34 513.5 -1.85 515 -1.38 518.5 -2.72 508 1.53 512 0.38 -

-1.45 2.82 -3.17 -0.58 0.78 0.39 -1.96 -0.58 2.99 2.30 -2.06 0.98 -0.02 -3.41 0.01 -2.75 1.41 2.17 -0.86 0.79 0.29 0.68 -2.03 0.79 0.29

1,129.50 1,190.00 1,175.00 1,164.95 1,171.00 1,165.00 1,148.90 1,140.00 1,189.00 1,250.00 1,240.00 1,265.00 1,275.00 1,234.50 1,227.95 1,200.00 1,185.00 1,235.25 1,188.80 1,174.90 1,154.00 1,130.00 1,098.15 1,132.50 -

-4.68 5.36 -1.26 -0.86 0.52 -0.51 -1.38 -0.77 4.30 5.13 -0.80 2.02 0.79 -3.18 -0.53 -2.28 -1.25 4.24 -3.76 -1.17 -1.78 -2.08 -2.82 3.13 0.57

5310.5 5425 5366 5369.5 5360.1 5342.6 5266 5207.1 5294.1 5420.1 5391.1 5490.6 5462.5 5380.4 5337.4 5257.2 5267.2 5361.1 5255.7 5274.4 5243 5231.7 5146 5206.6 -

-2.526 2.155 -1.087 0.064 -0.175 -0.326 -1.433 -1.119 1.672 2.380 -0.536 1.846 -0.511 -1.504 -0.799 -1.503 0.191 1.783 -1.967 0.356 -0.595 -0.215 -1.639 1.179 0.190

MOVEMENTS OF RETURNS OF STOCKS

10 8 6 4 2 0 -2 -4 -6 -8

RETURNS

INTERPRETATION: It is clear from the above table that average return of ICICI Bank is 0.38. Return of HDFC Bank is 0.29. Average return of Axis Bank is 0.57.

2/1/2012 5/1/2012 9/1/2012 12/1/2012 17/01/2012 20/01/2012 25/01/2012 31/01/2012 3/2/2012 8/2/2012 13/02/2012 16/02/2012 22/02/2012 27/02/2012 1/3/2012 5/3/2012 9/3/2012 14/03/2012 19/03/2012 22/03/2012 27/03/2012 30/03/2012 PRICE ICICI BANK HDFC BANK AXIS BANK

FINDINGS
From the data analysis and interpretations of Indian economy, Banking industry and company analysis of banks selected, the following findings have been given: 1. In comparison of the dividend paid per share among (3) private sector banks, it is found that Axis Bank is highest dividend per share i.e., average for all the five years is 11.6. HDFC Bank pays least dividend per share i.e., with the average of 10.26 for five years. 2. When compared to return on long term funds of public and private banks, it is clear that Axis Bank is getting highest return on long term fund with the average of 79.18. ICICI Bank get low return on long term funds when compared to other banks with the average of 51.768. 3. Return on networth is the highest in case of Axis Bank with the average of 16.41 for all the five years. ICICI Bank got lowest return on networth when compared to other banks i.e., the average is 8.87. 4. Return on assets is high in case of ICICI Bank i.e., the average is 465.58. HDFC Bank has lowest return on assets with the average of 362.41 for five years. 5. When compared to total assets turnover ratio of banks, it is clear that HDFC Bank is getting highest total assets turnover ratio with the average of 0.11. ICICI Bank get low total assets turnover ratio when compared to other banks with the average of 0.094. 6. In comparison of total debt to owners fund among banks, it is found that Axis bank has highest total debt to owners fund i.e., average for all the five years is 9.98. ICICI Bank pays least dividend per share i.e., with the average of 4.386for five years. 7. Current ratio is the highest in case of ICICI Bank with the average of 0.124 for all the five years. HDFC Bank has lowest current ratio when compared to other banks i.e., the average is 0.05.

8. Dividend payout ratio on net profit is high in case of ICICI Bank i.e., the average is 35.016. Axis Bank has lowest return on assets with the average of 21.428 for five years. 9. Earnings per share are the highest in case of Axis Bank with the average of 65.55 for all the five years. ICICI Bank has lowest earnings per share when compared to other banks i.e., the average is 41.61.

CONCLUSIONS
Add conclusions of industry and economy from net ICICI Bank is paying increasing dividends per share year by year. Return on networth and return on long term funds are in fluctuating trend during the study period. It is getting maximum return on assets. The total debt to owners fund is decreasing. Its liquidity position is not satisfactory but when compared to other banks it is better. The bank is getting increasing earnings per share year by year. HDFC banks dividend paid per share is in increasing trend. Return on long term funds and networth are fluctuating year by year. The return on total assets on turnover is increasing every year after 2010. The liquidity performance is not satisfactory and its earnings per share is increasing. Axis bank is paying low dividend per share when compared to other banks. They are very careful while using their resources in order to safeguard their future. It has got good return on long term fund. Its return on net worth is low when compared to other banks. It gets good return on assets and the value of turnover on assets is also good. The liquidity position is not satisfactory. It pays stable dividend on net profit. The earnings per share are increased more than that of other banks during the study period. It is maintaining stable earnings per share.

SUGGESTIONS
By analyzing the current trend of Indian Economy and these companies, I have found that being a developing economy there is lot of scope for growth and this still has to cross many levels so there are huge opportunities to invest in and this is being proved as more and more foreign companies are setting up there ventures in India. By analyzing the three companies with the help of fundamental analysis, it has been revealed that it has a lot of potential to grow. The two giants ICICI Bank and HDFC Bank have outperformed in the industry. Holding the shares for long time could be a wrong step and at this point of time those who invested earlier can book their profits. Increase in income level, increase in consumer demand, technology development, globalization, foreign investments are few of the opportunities which the industry has to explore for developing the economy. A continuous effort at cost cutting and improving productivity will help the companies in making reasonable profits despite the impact of higher commodity prices and weaker rupee. The analysis gives an optimistic view about the industry and its growth which recommends the investors to keep a good watch on the major players to benefit in terms of returns on their investments. Few Suggestions for Right Stock Selection There are three factors which an investor must consider for selecting the right stocks. Business: An investor must look into what kind of business the company is doing, visibility of the business, its past track record, capital needs of the company for expansion etc. Balance Sheet: The investor must focus on its key financial ratios such as earnings per share, price-earning ratio; debt-equity ratio, dividends per share etc and he must also check whether the company is generating cash flows.

Bargaining: This is the most important factor which shows the true worth of the company. An investor needs to choose valuation parameters which suit its business.

Investment rules Invest for long term in equity markets Align your thought process with the business cycle of the company. Set the purpose for investment. Long term goals should be the objective of equity investment. Disciplined investment during market volatility helps attains profits. Planning, Knowledge and Discipline are very crucial for investment.

BIBLIOGRAPHY
Text Books 1. Security Analysis and Portfolio Management by Punithavathy Pandian, Vikas Publications. 2. Security analysis and portfolio management by V.A. Avadhani 3. Financial Markets and Services by Gordon and Natarajan, Himalaya Publications. 4. Financial Management by Shashi K Gupta and R. K Sharma, Kalyani Publications. Websites 1. www.nseindia.com 2. www.investopedia.com 3. www.sebi.gov.in 4. http://www.moneycontrol.com/financials/icicibank/ratios/ICI02 5. http://www.moneycontrol.com/financials/hdfcbank/ratios/HDF01 6. http://www.moneycontrol.com/financials/axisbank/ratios/AB16