DECLARATION

I SAIRAM PRASAD EETURI hereby declare that this project report entitled EQUITY ANALYSIS ON SPECIFIC BANKING SCRIPS has been prepared by me in partial fulfillment of the requirements of POST GRADUATE DIPLOMA IN MANAGEMENT Degree 2010 2012 of SIVA SIVANI INSTITUTE OF MANAGEMENT.I also declare that this project has not been submitted by me fully or partially for the award of any Degree, Diploma and Title of Recognition earlier.

ACKNOWLEDGMENT I sincerely feel the credit of the project work could not be narrowed to only one individual. This work is an integrated effort of all those concerned with it, it would have been quite difficult without their direct & indirect co-operation. I wish to express my appreciation and gratitude to all the concerned people. It is my privilege to thank Sri. K.SUNEEL whose guidance has made me learn and understand the finer and complicated aspects of banking, in general and of Credit Appraisal Process, in particular. The help and guidance which he has extended to me has made me feel as being an integral part of the organization. First and the foremost my intellectual debt is to Sri. M.Pardhasaradhi who have contributed significantly towards the completion of the project. They have provided the guidelines on which this project was made. I am thankful to all the people who have given their precious time and provided me with requisite data without which this project would not have completed .I also thank them for giving their valuable suggestions during the entire period of research. However, I accept the sole responsibility for any errors of omission and commission. Sairam Prasad Eeturi B4-41

TABLE OF THE CONTENTS Chapter 1 INTRODUCTION 1.1 Introduction of the Study 1.2 Research methodology 1.3 Literature review 1.4 Objectives of the Study 1.5 Scope of the study Chapter 2 ECONOMY INDUSTRY AND COMPANY PROFILE 2.1 Indian economy 2.2 Banking industry 2.3 Banking scrips Chapter 3 THEORITICAL REVIEW EQUITY ANALYSIS Chapter 4 DATA ANALASYS AND INTERPRETATION FUNDAMENTAL ANALYSIS AND TECHNICAL ANALYSIS Chapter 5 FINDINGS and Recommendations. Conclusion and Bibliography.

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Chapter 1 INTRODUCTION

INTRODUCTION

An analysis of securities and the organization and operation of their markets. The determination of the risk reward structure of equity and debt securities and their valuation. Special emphasis on common stocks. Other topics include options, mutual fluids and technical analysis. Technical analysis is a method of predicting price movements and future market trends by studying charts of past market action which take into account price of instruments, volume of trading and, where applicable, open interest in the instruments. 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. Research Methodology The study being equity analysis of select bank scrips has been conducted by majorly using secondary data available in official website of the companies and other related financial portals. Further, wherever possible personal interviews were under taken with investors and executives of the financial services entities. For financial performance and fundamental analysis

Companies previous annual reports

Technical analysis: closing prices of specific scrips data from NSE (National Stock Exchange) website Bank nifty and S&P CNX (standard and poor)

Literature review
Financial performance of banks. Ratio analysis
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Study of stock price responses to earnings announcements of selected companies listed on BSE IQBAL from finance India September 2010. Operational efficiency of selected private banks of India. (P.S.Vohra) from Finance India march 2011.

Objective of the study:

The study has been primarily taken up with a objective of applying the theory of security analysis and portfolio management on bank scrips and understand the concept of equity analysis. The primary objective of the study is applying the select concept of fundamental and technical analysis for select bank scrips. The secondary objective is to understand the investor behavior for stock market dynamics. Selected scrips are 2 from public sector and 2 from private sector STATE BANK OF INDIA PUNJAB NATIONAL BANK HDFC BANK ICICI BANK

Scope of the Study

To measure the financial position of the banks which have been specified SBI , PNB , HDFC And ICIC BANK ltd. The study may provide exact status and position of the organiszations in the industries. It may vary from time to time and situation to situation.

CHAPTER 2 2.1 INDIAN ECONOMY

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The Indian Economy is consistently posting robust growth numbers in all sectors leading to impressive growth in Indian GDP. The Indian economy has been stable and reliable in recent times, while in the last few years its experienced a positive upward growth trend. A consistent 8-9% growth rate has been supported by a number of favorable economic indicators including a huge inflow of foreign funds, growing reserves in the foreign exchange sector, both an IT and real estate boom, and a flourishing capital market. All of these positive changes have resulted in establishing the Indian economy as one of the largest and fastest growing in the world. The process of globalization has been an integral part of the recent economic progress made by India. Globalization has played a major role in export-led growth, leading to the enlargement of the job market in India. As a new Indian middle class has developed around the wealth that the IT and BPO industries have brought to the country, a new consumer base has developed. International companies are also expanding their operations in India to service this massive growth opportunity. The same thing has followed by international banks that are entering in Indian market and pulling their huge investments in Indian economy. This is helping to accelerate the growth of Indian economy. Economy can be studied from two points of views
MICRO ECONOMIC POINT OF VIEW

The branch of economics that analyzes the market behavior of individual consumers and firms in an attempt to understand the decision-making process of firms and households. It is concerned with the interaction between individual buyers and sellers and the factors that influence the choices made by buyers and sellers. In particular, microeconomics focuses on patterns of supply and demand and the determination of price and output in individual markets. Microeconomics looks at the smaller picture and focuses more on basic theories of supply and demand and how individual businesses decide how much of something to produce and how much to charge for it.
MACRO ECONOMIC POINT OF VIEW

It is a field of economics that studies the behavior of the aggregate economy. Macroeconomics examines economy-wide phenomena such as changes in unemployment,
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national income, rate of growth, gross domestic product, inflation and price levels. Macroeconomics looks at the big picture (hence "macro"). It focuses on the national economy as a whole and provides a basic knowledge of how things work in the business world. For example, people who study this branch of economics would be able to interpret the latest Gross Domestic Product figures or explain why a 6% rate of unemployment is not necessarily a bad thing. Thus, for an overall perspective of how the entire economy works, you need to have an understanding of economics at both the micro and macro levels. ECONOMIC SYSTEMS An economic system is loosely defined as countrys plan for its services, goods produced, and the exact way in which its economic plan is carried out. In general, there are three major types of economic systems prevailing around the world they are... Market Economy Planned Economy Mixed Economy
MARKET ECONOMY

In a market economy, national and state governments play a minor role. Instead, consumers and their buying decisions drive the economy. In this type of economic system, the assumptions of the market play a major role in deciding the right path for a countrys economic development. Market economies aim to reduce or eliminate entirely subsidies for a particular industry, the pre-determination of prices for different commodities, and the amount of regulation controlling different industrial sectors. The absence of central planning is one of the major features of this economic system. Market decisions are mainly dominated by supply and demand. The role of the government in a market economy is to simply make sure that the market is stable enough to carry out its economic activities properly.

PLANNED ECONOMY

A planned economy is also sometimes called a command economy. The most important aspect of this type of economy is that all major decisions related to the production, distribution,
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commodity and service prices, are all made by the government. The planned economy is government directed, and market forces have very little say in such an economy. This type of economy lacks the kind of flexibility that is present a market economy, and because of this, the planned economy reacts slower to changes in consumer needs and fluctuating patterns of supply and demand. On the other hand, a planned economy aims at using all available resources for developing production instead of allotting the resources for advertising or marketing.
MIXED ECONOMY

A mixed economy combines elements of both the planned and the market economies in one cohesive system. This means that certain features from both market and planned economic systems are taken to form this type of economy. This system prevails in many countries where neither the government nor the business entities control the economic activities of that country both sectors play an important role in the economic decision-making of the country. In a mixed economy there is flexibility in some areas and government control in others. Mixed economies include both capitalist and socialist economic policies and often arise in societies that seek to balance a wide range of political and economic views.

2.2INDUSTRY ANALYSIS
The predicament of the banks in the developed countries owing to excessive leverage and lax regulatory system has time and again been compared with somewhat unscathed Indian Banking Sector. An attempt has been made to understand the general sentiment with regards to the performance, the challenges and the opportunities ahead for the Indian Banking Sector. A majority of the respondents, almost 69% of them, felt that the Indian banking Industry was in a very good to excellent shape, with a further 25% feeling it was in good shape and only 6% of the respondents feeling that the performance of the industry was just average. In fact, an overwhelming majority (93.33%) of the respondents felt that the banking industry compared with the best of the sectors of the economy, including pharmaceuticals, infrastructure, etc. Most of the respondents were positive with regard to the growth rate (Fig. 1) attainable by the Indian banking industry for the year 2009-10 and 2014-15, with 53.33% of the view that growth would be between 15-20% for the year 2009-10 and greater than 20% for 2014-15.
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On being asked what is the major strength of the Indian banking industry, which makes it resilient in the current economic climate; 93.75% respondents feel the regulatory system to be the major strength, 75% economic growth, 68.75% relative insulation from external market, 56.25% credit quality, 25% technological advancement and 43.75% our risk assessment systems. Change is the only constant feature in this dynamic world and banking is not an exception

FINANCIAL INCLUSION AND EXPANSION OF BANKING SERVICES

Transition from class banking to mass banking and increased customer focus is drastically changing the landscape of Indian banking. Expansion of retail banking has a lot of potential as retail assets are just 22% of the total banking assets and contribution of retail loans to GDP stands merely at 6% in India vis--vis 15% in China and 24% in Thailand. All banks in our survey weigh Cost effective credit delivery mechanisms (100%) as most important to the promotion of financial inclusion. This was followed by factors such as identifying needs and developing relevant financial products (75%), demographic knowledge and strong local relations (62.5%) and ensuring productive use and adequate returns on credit employed
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(43.75%) in decreasing levels of importance. In fact, India has an expanding middle class of 250 to 300 million people in need of varied Banking services. While 60% of our population has access to banks, only 15% of them have Loan accounts and an overwhelming 70% of farmers have no access to formal sources of Credit, reflective of immense potential for the banking system. This is mirrored in the fact that while our survey finds no discernible shift in the lending Pattern of banks across Tier 1, Tier 2 and Tier 3 cities over the last two years, 93% of Indian Banking System: The Current State & Road Ahead Participants still find rural markets to be to be a profitable avenue, with 53% of respondents Finding it lucrative in spite of it being a difficult market. Cost of accessing markets has been the only sour note in the overall experience of our respondents in rural markets At the same time, more than 81.25% of our respondents have a strategy in place to tap rural Markets, with the remainder as yet undecided on their plan of action. Tie ups with Micro Finance institutions (MFIs)/SHG and introduction of innovative and customized products are considered most important to approaching rural markets according to respondents, more so as compared to internet kiosks, post offices and supply chain management techniques.

About Companies:
State Bank of India, the countrys largest commercial Bank in terms of profits, assets, deposits, branches and employees, welcomes you to its Investors Relations Section. SBI, with its heritage dating back to the year 1806, strives to continuously provide latest and upto date information on its financial performance. It is our endeavor to walk on the path of transparency and allow complete access to all the stakeholders enabling total awareness about the Bank. The Bank communicates with the stakeholders through a variety of channels, such as through e-mail, website, conference call, one-on-one meeting, analysts meet and attendance at Investor Conference throughout the world Please find below Banks financial results, analysis of performance and other highlights which will be of interest to Investors, Fund Managers and Analysts. SBI has always been fundamentally strong in its core business which is mirrored in its results year after year. Punjab National Bank (PNB) is the third largest PSU bank of India. It is engaged in the business of insurance, mutual funds and retail banking. The bank offers credit card, debit card and asset management services. In addition the bank offers corporate and personal banking,
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industrial finance, agricultural finance, financing of trade and international banking. The bank operates through a network of 4668 offices and two subsidiaries namely PNB Gilts Ltd and PNB Housing Finance Ltd. The bank offers its services to 38 million customers. PNB has strong correspondent banking relationships with more than 217 International banks of the world. Global Markets Directs Punjab National Bank - Financial Analysis Review is an in-depth business, financial analysis of Punjab National Bank. The report provides a comprehensive insight into the company, including business structure and operations, executive biographies and key competitors. The hallmark of the report is the detailed financial ratios of the company. HDFC Bank Limited (HDFC Bank) is a leading private bank in India. It offers a range of financial and banking products and services to individuals, retail customers and corporate clients. The bank is engaged in trading operations on the proprietary account, foreign exchange operations and derivatives trading both on the proprietary account and customer flows. The bank offers products and services through an extensive network of 1,506 branches and 3,573 ATMs, in 635 cities across India, and all branches of the bank are linked on an online real-time basis. The bank operates as part of the HDFC group of companies, which was formed by its principal shareholder, Housing Development Finance Corporation Limited (HDFC Limited), a public limited company established under the laws of India. As of March 31, 2009, HDFC Limited and its subsidiaries held about 19.4% of outstanding equity shares of the bank. HDFC Bank is headquartered at Mumbai, India. ICICI Bank Limited (ICICI Bank) is a diversified financial services company which together with its subsidiaries, joint ventures and associates, provides a wide range of banking and financial services to customers primarily in India. The product and services of the bank includes retail banking, insurance, project and corporate finance, private equity, venture capital, treasury products and services and brokerage services. Apart from India, ICICI Bank also has banking branches in the UK, Canada and Russia. Global Markets Direct, the leading business information provider, presents an in-depth business, strategic and financial analysis of ICICI Bank Limited. The report provides a comprehensive insight into the company, including business structure and operations, executive biographies and key competitors. The hallmark of the report is the detailed strategic analysis and Global Markets Directors views on the company. All these companies has taken based on the financial performance of the companies. NII
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CASA GROWTH of these companies.

Net Interest Income:

The difference between the revenue that is generated from a bank's assets and the expenses associated with paying out its liabilities. A typical bank's assets consist of all forms of personal and commercial loans, mortgages and securities. The liabilities are, of course, the customer deposits. The excess revenue that is generated from the spread between interest paid out on deposits and interest earned on assets is the net interest income.

SCRIP ICICI HDFC SBI PNB

200 200 200 201 7 8 9 0 2% 2% 2% 2% 4% 4% 4% 4% 3% 3% 3% 3% 3% 3% 3% 3%

Current accounts and Savings ratio(CASA):

CASA stands for Current and Savings account. Different kinds of deposits - current account, savings account and term deposits - form the major source of funds for banks. The CASA ratio shows how much deposit a bank has in the form of current and saving account deposits in the total deposit
scrip SBI 2008 37 2009 29 2010 34

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HDFC ICICI PNB

26 17 31

25 20 30

30 28 32

CHAPTER 3 THEORETICAL REVIEW

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Of Equity Analysis

EQUITY ANALYSIS: Equity represents an ownership position in a corporation. It is

residual claim in the sense that creditors and preference shareholders must be paid as scheduled before equity shareholders can receive payment. In bankruptcy equity holders are principle entitled only to assets remaining after all prior claimants has been satisfied. Thus risk is highest with equity shares and so must be its expected return. When investors buy equity shares, they receive certificates of ownership as proof of their being part owners of the company. The certificate states the number of shares purchased and their par value. The attitude towards equity shares varied from extreme pessimism to optimism from time to time. The main advantages of equity shares are listed below:

Potential for profit: The potential for profit is greater in equity shares than in any other investment security. Current dividends yield may be low but potential of capital gains is great. The total yield or yields to maturity may be substantial over a period of time.

Limited Liability: In corporate form of organization, its owners have, generally, limited liability. An equity share is usually fully paid. Shareholders may lose their investments, but no more. They are not further liable for any failure in the part of corporation of meet its obligation.

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Hedge against Inflation: The equity share is good hedge against inflation though it does not fully compensate for the declining purchasing power as it is subject to money-rate risk. But when interest rates are high, shares tend to be less attractive, and prices tend to be depressed.

Share in Growth: The major advantage of investment in equity shares is its ability to increase in value by sharing in the growth of company profits over the long run.

Tax Advantage: Equity shares also offers tax advantage to the investors. The larger yield on equity shares results from an increase in principal of capital gains, which are taxed at lower rate than other incomes in most of the countries.

Equity Capital Terminology:

The important terms used in equity capital are listed below:

Authorized Capital: The authorized capital is the maximum number of shares of each type that may be issued by the company. To change this number, or provision of any class of shares, the company requires the formal approval of shareholders.

Issued Capital: Issued capital is the part of the authorized capital that has been issued for cash, property, or service.

Paid up Capital: Fully paid shares are those shares for which the corporation has received full payment up to the par-value, or up to the amount established as the selling price of no-par-shares. Partly paid shares are those shares that have been issued for less than parvalue or the agreed subscription.

The analysis of movement of share prices is known as equity analysis. This Equity analysis basically has two approaches, which are used in the analysis of share. Fundamental analysis. Technical analysis.

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CHAPTER 4 Data Analysis and Interpretation 4.1Fundamental Analysis

Fundamental Analysis involves examining the economic, financial and other qualitative and quantitative factors related to a security in order to determine its intrinsic value. It attempts to study everything that can affect the security's value, including macroeconomic factors (like the overall economy and industry conditions) and individually specific factors (like the financial condition and management of companies). Fundamental analysis, which is also known as quantitative analysis, involves delving into a companys financial statements (such as profit and loss account and balance sheet) in order to study various financial indicators (such as revenues, earnings, liabilities, expenses and assets). Such analysis is usually carried out by analysts, brokers and savvy investors. Many analysts and investors focus on a single number--net income (or earnings)--to evaluate performance. When investors attempt to forecast the market value of a firm, they frequently rely on earnings. Many institutional investors, analysts and regulators believe earnings are not as relevant as they once were. Due to nonrecurring events, disparities in measuring risk and management's ability to disguise fundamental earnings problems, other measures beyond net income can assist in predicting future firm earnings. Two Approaches of fundamental analysis While carrying out fundamental analysis, investors can use either of the following approaches
1. Top-down approach: In this approach, an analyst investigates both international and

national economic indicators, such as GDP growth rates, energy prices, inflation and interest rates. The search for the best security then trickles down to the analysis of total sales, price levels and foreign competition in a sector in order to identify the best business in the sector.
2. Bottom-up approach: In this approach, an analyst starts the search with specific

businesses, irrespective of their industry/region. How does fundamental analysis works?

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Fundamental analysis is carried out with the aim of predicting the future performance of a company. It is based on the theory that the market price of a security tends to move towards its 'real value' or 'intrinsic value.' Thus, the intrinsic value of a security being higher than the securitys market value represents a time to buy. If the value of the security is lower than its market price, investors should sell it. The steps involved in fundamental analysis are: 1. Macroeconomic analysis, which involves considering currencies, commodities and indices. 2. Industry sector analysis, which involves the analysis of companies that are a part of the sector. 3. Situational analysis of a company. 4. Financial analysis of the company. 5. Valuation The valuation of any security is done through the discounted cash flow (DCF) model, which takes into consideration: 1. Dividends received by investors 2. Earnings or cash flows of a company 3. Debt, which is calculated by using the debt to equity ratio and the current ratio (current assets/current liabilities) Benefits of fundamental analysis Fundamental analysis helps in: 1. Identifying the intrinsic value of a security. 2. Identifying long-term investment opportunities 2. since it involves real-time data. . Identifying long-term investment opportunities since it involves real-time data. Drawbacks of fundamental analysis

The drawbacks of fundamental analysis are:

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Too many Economic indicators and extensive macroeconomic data can confuse novice investors. The same set of information on macroeconomic indicators can have varied effects on the same currencies at different times. It is beneficial only for long-term investments.

Fundamental Analysis Tools These are the most popular tools of fundamental analysis. Earnings per Share EPS Price to Earnings Ratio P/E Projected Earnings Growth PEG Price to Sales P/S Price to Book P/B Dividend Payout Ratio Dividend Yield Book Value Return on Equity

To know the performance we have chosen EPS, P/E, DIVIDEND PAYOUT RATIO AND RETURN ON EQUITY.

Earnings per share

The portion of a company's profit allocated to each outstanding share of common stock. Earnings per share serve as an indicator of a company's profitability. Calculated as:

When calculating, it is more accurate to use a weighted average number of shares outstanding over the reporting term, because the number of shares outstanding can change over time.
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However, data sources sometimes simplify the calculation by using the number of shares outstanding at the end of the period. Diluted EPS expands on basic EPS by including the shares of convertibles or warrants outstanding in the outstanding shares number. Earnings per share is generally considered to be the single most important variable in determining a share's price. It is also a major component used to calculate the price-to-earnings valuation ratio. An important aspect of EPS that's often ignored is the capital that is required to generate the earnings (net income) in the calculation. Two companies could generate the same EPS number, but one could do so with less equity (investment) - that company would be more efficient at using its capital to generate income and, all other things being equal, would be a "better" company. Investors also need to be aware of earnings manipulation that will affect the quality of the earnings number. It is important not to rely on any one financial measure, but to use it in conjunction with statement analysis and other measures Table of EPS:
2007 Pnb Sbi Hdfc Icici 48.84 86.29 43.29 28.55 2008 64.98 106.5 6 44.87 34.59 2009 98.03 143.6 7 52.77 37.37 2010 123.8 6 144.3 7 64.42 33.76 2011 139.9 4 116.0 7 84.4 36.1

According to the given table there is significant growth of HDFC and PNB is increasing and it symbolizes the organizations earnings on share is very good comparing to the other companies SBI and ICICI respectively. Event thought in the crisis situations the banks has performed well.

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DISPLAY CHART

Here the graph show SBI has growth from 2007 to 2010 and in the year of 2011 it has less EPS due to the bank has more NPAs and their Q4 results are not effective in 2010 2011.ICICI has also more NPAs it is totally based on fee based products.

Dividend payout ratio:

The payout ratio provides an idea of how well earnings support the dividend payments. More mature companies tend to have a higher payout ratio. The amount of earnings paid out in dividends to shareholders. Investors can use the payout ratio to determine what companies are doing with their earnings.
dividend payout ratio=yearly dividend per shareearnings per share

For example, a very low payout ratio indicates that a company is primarily focused on retaining its earnings rather than paying out dividends. The payout ratio also indicates how well earnings support the dividend payments: the lower the ratio, the more secure the dividend because smaller dividends are easier to pay out than larger dividends.

Table:

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Mar '07

Mar '08 28.84 18.93 21.61 20.56

Mar '09 29.08 19.1 22.47 21.13

Mar '10 31 19.15 19.62 21.2

Mar '11 32.33 20.16 17.27 23.24

ICICI
HDFC PNB SBI

27.36 16.32 27.26 16.75

Interpretation:
Here ICICI and SBI have more dividend payout ratio they are offering comparatively with HDFC and PNB. It indicates HDFC and PNB are better than the other because smaller dividends are easier to pay out than larger dividends. It indicates the company is ready for the further expansion of their business recently HDFC has acquired Centurion bank. It gives potential to the organization for their further expansion of business.

DISPLAY CHART

The Punjab national bank has good profits in the year of 2010 2011 and they are trying to expansion of their business to the other states , SBI have a plan to merge with their subsidiary banks like SBH and State bank of Travancore all the subsidiaries coming to merge with the SBI. May be it is also has some interruption in this case to high Dividends to the customers.

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Net profit margin:

A ratio of profitability calculated as net income divided by revenues, or net profits divided by sales. It measures how much out of every dollar of sales a company actually keeps in earnings. Looking at the earnings of a company often doesn't tell the entire story. Increased earnings are good, but an increase does not mean that the profit margin of a company is improving. For instance, if a company has costs that have increased at a greater rate than sales, it leads to a lower profit margin. This is an indication that costs need to be under better control.Net profit margin: A ratio of profitability calculated as net income divided by revenues, or net profits divided by sales. It measures how much out of every dollar of sales a company actually keeps in earnings. Looking at the earnings of a company often doesn't tell the entire story. Increased earnings are good, but an increase does not mean that the profit margin of a company is improving. For instance, if a company has costs that have increased at a greater rate than sales, it leads to a lower profit margin. This is an indication that costs need to be under better control.
Netprofit margin=Net IncomeRevenue by Sales

Table:
Mar '07 HDFC ICICI SBI PNB 13.57 14.12 10.12 12.53 Mar '08 12.82 10.81 11.65 12.68 Mar '09 11.35 10.51 12.03 13.76 Mar '10 14.76 9.74 10.54 15.64 Mar '11 16.09 12.17 8.55 14.56

Display chart:

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Interpretation:
SBI has less NPM their fourth quarter results are not satisfied in this year , even though ICICI sales are good their expenditure levels are very high in the year of 2010 to 2011.most of the NPAs and their subsidiaries of investments became high. It indicates companies business performance is good but it effects on their profit margin.

P/E ratio: A valuation ratio of a company's current share price compared to its per-share
earnings.
pe=market value per shareearnings per share

In general, a high P/E suggests that investors are expecting higher earnings growth in the future compared to companies with a lower P/E. However, the P/E ratio doesn't tell us the whole story by itself. It's usually more useful to compare the P/E ratios of one company to other companies in the same industry, to the market in general or against the company's own historical P/E. It would not be useful for investors using the P/E ratio as a basis for their investment to compare the P/E of a technology company (high P/E) to a utility company (low P/E) as each industry has much different growth prospects. It is important that investors note an important problem that arises with the P/E measure, and to avoid basing a decision on this measure alone. The denominator (earnings) is based on an accounting measure of earnings that is susceptible to forms of manipulation, making the quality of the P/E only as good as the quality of the underlying earnings number.

Table:
2007 2008 2009 2010 2011

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Hdfc icici sbi pnb

20.83 28.18 10.78 8.75

29.42 22.26 15.00 7.82

18.34 8.90 7.42 4.19

30.00 28.22 14.40 8.18

27.76 30.82 23.85 8.72

Display chart:
Interpretation:
Generally P/E indicates the companies price earning capacity, we cannot take decision on one scrip is maintaining is high P/E and low P/E. We have compare with the same level of company in the same industry then only we can measure the scrips performance is undervalued or overvalued. If the scrip value of p/e is very low the investors ready to invest there to earn more profits until it reaches the over value of p/e. here the p/e of Punjab national banks p/e is very low comparing to other peer organizations. And SBI has less p/e it is in the second position .p/e always says if we have to earn one rupee profit how much amount we have to invest on the scrips so PNB has less p/e it indicates your investment is very less and earnings can be high.

PEG ratio:
A ratio used to determine a stock's value while taking into account earnings growth. The calculation is as follows:
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PEG is a widely used indicator of a stock's potential value. It is favored by many over the price/earnings ratio because it also accounts for growth. Similar to the P/E ratio, a lower PEG means that the stock is more undervalued. Keep in mind that the numbers used are projected and, therefore, can be less accurate. Also, there are many variations using earnings from different time periods (i.e. one year v/s five year). Be sure to know the exact definition your source is using.

2008 Hdfc icici sbi pnb 41% -21% 39% -11%

2009 -38% -60% -51% -46%

2010 64% 217% 94% 95%

2011 -7% 9% 66% 7%

Display chart:

Interpretation:
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The peg ratio of PNB has undervalued and HDFC also has less PE growth comparatively other peer companies it indicates company has an opportunity to grow their performance and their market prices are in reasonable position to buy and supportive to get more profits in the long term perspective.

Return on equity:
The amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.
Return on equity=(Net income)/(Shareholder'sequity) Net income is for the full fiscal year (before dividends paid to common stock holders but after dividends to preferred stock). Shareholder's equity does not include preferred shares. Also known as "return on net worth" (RONW) .

The ROE is useful for comparing the profitability of a company to that of other firms in the same industry. There are several variations on the formula that investors may use: 1. Investors wishing to see the return on common equity may modify the formula above by subtracting preferred dividends from net income and subtracting preferred equity from shareholders' equity, giving the following: return on common equity (ROCE) =
ROCE=net income-preffered dividendscommon equity

2. Return on equity may also be calculated by dividing net income by average shareholders' equity. Average shareholders' equity is calculated by adding the shareholders' equity at the beginning of a period to the shareholders' equity at period's end and dividing the result by two. 3. Investors may also calculate the change in ROE for a period by first using the shareholders' equity figure from the beginning of a period as a denominator to determine the beginning ROE. Then, the end-of-period shareholders' equity can be used as the denominator to determine the ending ROE. Calculating both beginning and ending ROEs allows an investor to determine the change in profitability over the period.
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This is also known as DU-Pont analysis DuPont analysis tells us that ROE is affected by three things: - Operating efficiency, which is measured by profit margin - Asset use efficiency, which is measured by total asset turnover - Financial leverage, which is measured by the equity multiplier ROE = Profit Margin (Profit/Sales) * Total Asset Turnover (Sales/Assets) * Equity Multiplier (Assets/Equity)

It is believed that measuring assets at gross book value removes the incentive to avoid investing in new assets. New asset avoidance can occur as financial accounting depreciation methods artificially produce lower ROEs in the initial years that an asset is placed into service. If ROE is unsatisfactory, the DuPont analysis helps locate the part of the business that is underperforming.

Table:
2008 HDFC bank ICICI bank SBI PNB 13.83 13.17 13.72 19 2009 15.32 8.94 15.74 23.52 2010 13.7 7.58 13.89 24.06 2011 15.47 7.79 12.71 22.12

Return on equity is comparing with the specific peer companies and it high ROE is the better means when we have high return on equity it indicates we can get more returns on the particular equity value. Here PNB and HDFC have high ROE than other companies. There is an opportunity to invest in these companies to get more profits.

28

Display chart:
Interpretation: If you observe PNB has good ROE when the economy and companies are in
crisis also it has good return than the other and ICICI performance is very poor in the past 2 years .SBI has constant and their 2010 results has tepid growth. Thats a major problem of that company.

2. Technical analysis:
Technical analysis is a method of evaluating securities by analyzing the statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a security's intrinsic value, but instead use charts and other tools to identify patterns that can suggest future activity. Just as there are many investment styles on the fundamental side, there are also many different types of technical traders. Some rely on chart patterns; others use technical indicators and oscillators, and most use some combination of the two. In any case, technical analysts' exclusive use of historical price and volume data is what separates them from their fundamental counterparts. Unlike fundamental analysts, technical analysts don't care whether a stock is undervalued - the only thing that matters is a security's past trading data and what information this data can provide about where the security might move in the future. The field of technical analysis is based on three assumptions:
29

1. The market discounts everything. 2. Price moves in trends. 3. History tends to repeat itself.

1. The Market Discounts Everything A major criticism of technical analysis is that it only considers price movement, ignoring the fundamental factors of the company. However, technical analysis assumes that, at any given time, a stock's price reflects everything that has or could affect the company - including fundamental factors. Technical analysts believe that the company's fundamentals, along with broader economic factors and market psychology, are all priced into the stock, removing the need to actually consider these factors separately. This only leaves the analysis of price movement, which technical theory views as a product of the supply and demand for a particular stock in the market. 2. Price Moves in Trends In technical analysis, price movements are believed to follow trends. This means that after a trend has been established, the future price movement is more likely to be in the same direction as the trend than to be against it. Most technical trading strategies are based on this assumption.

3. History Tends To Repeat Itself Another important idea in technical analysis is that history tends to repeat itself, mainly in terms of price movement. The repetitive nature of price movements is attributed to market psychology; in other words, market participants tend to provide a consistent reaction to similar market stimuli over time. Technical analysis uses chart patterns to analyze market movements and understand trends. Although many of these charts have been used for more than 100 years, they are still believed to be relevant because they illustrate patterns in price movements that often repeat themselves.

Fundamental V/s. Technical Analysis

Technical analysis and fundamental analysis are the two main schools of thought in the financial markets. As we've mentioned, technical analysis looks at the price movement of a security and uses this data to predict its future price movements. Fundamental analysis, on the other hand, looks at economic factors, known as fundamentals. Let's get into the details of how these two approaches

30

differ, the criticisms against technical analysis and how technical and fundamental analysis can be used together to analyze securities.

The Use Of Trend

One of the most important concepts in technical analysis is that of trend. The meaning in finance isn't all that different from the general definition of the term - a trend is really nothing more than the general direction in which a security or market is headed

Types of Trend There are three types of trend: Uptrends Downtrends Sideways/Horizontal Trends As the names imply, when each successive peak and trough is higher, it's referred to as an upward trend. If the peaks and troughs are getting lower, it's a downtrend. When there is little movement up or down in the peaks and troughs, it's a sideways or horizontal trend. If you want to get really technical, you might even say that a sideways trend is actually not a trend on its own, but a lack of a well-defined trend in either direction. In any case, the market can really only trend in these three ways: up, down or nowhere. (For more insight, see Peak-And-Trough Analysis.) Trend Lengths Along with these three trend directions, there are three trend classifications. A trend of any direction can be classified as a long-term trend, intermediate trend or a short-term trend. In terms of the stock market, a major trend is generally categorized as one lasting longer than a year. An intermediate trend is considered to last between one and three months and a near-term trend is anything less than a month. A long-term trend is composed of several intermediate trends, which often move against the direction of the major trend. If the major trend is upward and there is a downward correction in price movement followed by a continuation of the uptrend, the correction is considered to be an intermediate trend. The shortterm trends are components of both major and intermediate trends. Take a look a Figure 4 to get a sense of how these three trend lengths might look. When analyzing trends, it is important that the chart is constructed to best reflect the type of trend being analyzed. To help identify longterm trends, weekly charts or daily charts spanning a five-year period are used by chartists to get a better idea of the long-term trend. Daily data charts are best used when analyzing both
31

intermediate and short-term trends. It is also important to remember that the longer the trend, the more important it is; for example, a one-month trend is not as significant as a five-year trend. The Importance of Trend It is important to be able to understand and identify trends so that you can trade with rather than against them. Two important sayings in technical analysis are "the trend is your friend" and "don't buck the trend," illustrating how important trend analysis is for technical traders. This technical analysis has done by 2 components. Moving average method. Relative strength index.

Moving Averages : Most chart patterns show a lot of variation in price movement. This can make it difficult for traders to get an idea of a security's overall trend. One simple method traders use to combat this is to apply moving averages. A moving average is the average price of a security over a set amount of time. By plotting a security's average price, the price movement is smoothed out. Once the day-to-day fluctuations are removed, traders are better able to identify the true trend and increase the probability that it will work in their favor.
Types of Moving Averages There are a number of different types of moving averages that vary in the way they are calculated, but how each average is interpreted remains the same. The calculations only differ in regards to the weighting that they place on the price data, shifting from equal weighting of each price point to more weight being placed on recent data. The three most common types of moving averages are Simple, Linear and Exponential.

Simple Moving Average (SMA) This is the most common method used to calculate the moving average of prices. It simply takes the sum of all of the past closing prices over the time period and divides the result by the number of prices used in the calculation. For example, in a 10-day moving average, the last 10 closing prices are added together and then divided by 10. As you can see in Figure 1, a trader is able to make the average less responsive to changing prices
32

by increasing the number of periods used in the calculation. Increasing the number of time periods in the calculation is one of the best ways to gauge the strength of the long-term trend and the likelihood that it will reverse. Many individuals argue that the usefulness of this type of average is limited because each point in the data series has the same impact on the result regardless of where it occurs in the sequence. The critics argue that the most recent data is more important and, therefore, it should also have a higher weighting. This type of criticism has been one of the main factors leading to the invention of other forms of moving averages. Linear Weighted Average This moving average indicator is the least common out of the three and is used to address the problem of the equal weighting. The linear weighted moving average is calculated by taking the sum of all the closing prices over a certain time period and multiplying them by the position of the data point and then dividing by the sum of the number of periods. For example, in a five-day linear weighted average, today's closing price is multiplied by five, yesterday's by four and so on until the first day in the period range is reached. These numbers are then added together and divided by the sum of the multipliers. Exponential Moving Average (EMA) This moving average calculation uses a smoothing factor to place a higher weight on recent data points and is regarded as much more efficient than the linear weighted average. Having an understanding of the calculation is not generally required for most traders because most charting packages do the calculation for you. The most important thing to remember about the exponential moving average is that it is more responsive to new information relative to the simple moving average. This responsiveness is one of the key factors of why this is the moving average of choice among many technical traders. 15-period EMA rises and falls faster than a 15-period SMA. This slight difference doesnt seem like much, but it is an important factor to be aware of since it can affect returns. Moving Average Convergence
The moving average convergence

divergence (MACD) is one of the most well known and used indicators in technical analysis. This indicator is comprised of two exponential moving averages, which help to measure momentum in the security. The MACD is simply the difference between these two moving averages plotted against a centerline. The centerline is the point at which the two moving averages are equal. Along with the MACD and the centerline, an exponential moving average of the MACD itself is plotted on the chart. The idea behind this momentum
33

indicator is to measure short-term momentum compared to longer term momentum to help signal the current direction of momentum.
MACD=(short term moving average-long term moving average)

When the MACD is positive, it signals that the shorter term moving average is above the longer term moving average and suggests upward momentum. The opposite holds true when the MACD is negative - this signals that the shorter term is below the longer and suggest downward momentum. When the MACD line crosses over the centerline, it signals a crossing in the moving averages. The most common moving average values used in the calculation are the 26day and 12-day exponential moving averages. The signal line is commonly created by using a nine-day exponential moving average of the MACD values. These values can be adjusted to meet the needs of the technician and the security. For more volatile securities, shorter term averages are used while less volatile securities should have longer averages. Another aspect to the MACD indicator that is often found on charts is the MACD histogram. The histogram is plotted on the centerline and represented by bars. Each bar is the difference between the MACD and the signal line or, in most cases, the nine-day exponential moving average. The higher the bars are in either direction, the more momentum behind the direction in which the bars point. The dates which is from 2nd april 2009 to 2011

SBI
DATE 1-Apr-09 2-Apr-09 6-Apr-09 8-Apr-09 9-Apr-09 13-Apr-09 CNX SBI NIFTY 1073. 95 3060.35 1145. 35 3211.05 1128. 95 3256.6 1123. 9 3342.95 1140. 4 3342.05 1217. 9 3382.6 M.A.3 M.A.7 MACD

1116.08 33 1132.73 33 1131.08 33 1160.73 33 34

15-Apr-09 16-Apr-09 17-Apr-09 20-Apr-09 21-Apr-09 22-Apr-09 23-Apr-09 24-Apr-09 27-Apr-09 28-Apr-09 29-Apr-09 4-May-09 5-May-09 6-May-09 7-May-09 8-May-09 11-May09 12-May09 13-May09 14-May09 15-May09

1295. 6 1261. 7 1306. 35 1295. 95 1255. 35 1232. 6 1265. 7 1307. 8 1282. 15 1240 1277. 7 1366. 2 1343. 65 1323. 7 1366. 95 1325. 15 1260. 7 1295. 45 1262. 15 1267. 85 1312. 25

3484.15 3369.5 3384.4 3377.1 3365.3 3330.3 3423.7 3480.75 3470 3362.35 3473.95 3654 3661.9 3625.05 3683.9 3620.7 3554.6 3681.1 3635.25 3593.45 3671.65

1217.96 67 1258.4 1287.88 33 1288 1285.88 33 1261.3 1251.21 67 1268.7 1285.21 67 1276.65 1266.61 67 1294.63 33 1329.18 33 1344.51 67 1344.76 67 1338.6 1317.6 1293.76 67 1272.76 67 1275.15 1280.75

1160.864 286 1187.685 714 1210.685 714 1234.542 857 1253.321 429 1266.492 857 1273.321 429 1275.064 286 1277.985 714 1268.507 143 1265.9 1281.735 714 1297.6 1305.885 714 1314.335 714 1320.478 571 1323.435 714 1325.971 429 1311.107 143 1300.278 571 1298.642 857

57.102380 95 70.714285 71 77.197619 05 53.457142 86 32.561904 76 5.1928571 43 22.104761 9 6.3642857 14 7.2309523 81 8.1428571 43 0.7166666 67 12.897619 05 31.583333 33 38.630952 38 30.430952 38 18.121428 57 5.8357142 86 32.204761 9 38.340476 19 25.128571 43 17.892857

35

18-May09 19-May09 20-May09 21-May09 22-May09 25-May09 26-May09 27-May09 28-May09 29-May09 1-Jun-09 2-Jun-09 3-Jun-09 4-Jun-09 5-Jun-09 8-Jun-09 9-Jun-09 10-Jun-09 11-Jun-09 12-Jun-09 15-Jun-09

1577. 95 1754. 45 1780. 2 1714. 3 1731. 7 1719. 85 1687. 95 1790. 55 1828. 9 1869. 1 1879. 8 1909. 5 1873. 2 1875. 9 1817. 9 1695. 1 1763. 3 1756. 75 1696. 25 1637 1642

4323.15 4318.45 4270.3 4210.9 4238.5 4237.55 4116.7 4276.05 4337.1 4448.95 4529.9 4525.25 4530.7 4572.65 4586.9 4429.9 4550.95 4655.25 4637.7 4583.4 4484

1386.01 67 1548.21 67 1704.2 1749.65 1742.06 67 1721.95 1713.16 67 1732.78 33 1769.13 33 1829.51 67 1859.26 67 1886.13 33 1887.5 1886.2 1855.66 67 1796.3 1758.76 67 1738.38 33 1738.76 67 1696.66 67 1658.41 36

1328.785 714 1390.114 286 1464.328 571 1524.164 286 1591.242 857 1655.814 286 1709.485 714 1739.857 143 1750.492 857 1763.192 857 1786.835 714 1812.235 714 1834.142 857 1860.992 857 1864.9 1845.785 714 1830.671 429 1813.092 857 1782.628 571 1748.885 714 1715.471

14 57.230952 38 158.10238 1 239.87142 86 225.48571 43 150.82380 95 66.135714 29 3.6809523 81 7.0738095 24 18.640476 19 66.323809 52 72.430952 38 73.897619 05 53.357142 86 25.207142 86 9.2333333 33 49.485714 29 71.904761 9 74.709523 81 43.861904 76 52.219047 62 -

67 16-Jun-09 17-Jun-09 18-Jun-09 19-Jun-09 22-Jun-09 23-Jun-09 24-Jun-09 25-Jun-09 26-Jun-09 29-Jun-09 30-Jun-09 1-Jul-09 2-Jul-09 3-Jul-09 6-Jul-09 7-Jul-09 8-Jul-09 9-Jul-09 10-Jul-09 13-Jul-09 1714. 1 1663. 4 1702. 2 1724. 35 1694. 75 1708. 35 1716. 5 1704. 3 1748. 95 1765. 1 1742. 05 1779. 8 1758. 9 1810. 65 1655 1636. 35 1587 1601. 95 1543. 6 1546. 1 4517.8 4356.15 4251.4 4313.6 4235.25 4247 4292.95 4241.85 4375.5 4390.95 4291.1 4340.9 4348.85 4424.25 4165.7 4202.15 4078.9 4080.95 4003.9 3974.05 1664.36 67 1673.16 67 1693.23 33 1696.65 1707.1 1709.15 1706.53 33 1709.71 67 1723.25 1739.45 1752.03 33 1762.31 67 1760.25 1783.11 67 1741.51 67 1700.66 67 1626.11 67 1608.43 33 1577.51 67 1563.88 33 37

429 1700.642 857 1696.114 286 1687.385 714 1682.757 143 1682.542 857 1692.735 714 1703.378 571 1701.978 571 1714.2 1723.185 714 1725.714 286 1737.864 286 1745.085 714 1758.535 714 1751.492 857 1735.407 143 1709.964 286 1689.95 1656.207 143 1625.807 143

57.054761 9 36.276190 48 22.947619 05 5.8476190 48 13.892857 14 24.557142 86 16.414285 71 3.1547619 05 7.7380952 38 9.05 16.264285 71 26.319047 62 24.452380 95 15.164285 71 24.580952 38 9.9761904 76 34.740476 19 83.847619 05 81.516666 67 78.690476 19 61.923809

14-Jul-09 15-Jul-09 16-Jul-09 17-Jul-09 20-Jul-09 21-Jul-09 22-Jul-09 23-Jul-09 24-Jul-09 27-Jul-09 28-Jul-09 29-Jul-09 30-Jul-09 31-Jul-09

1582. 6 1633. 9 1607. 35 1674. 65 1721. 15 1708. 4 1693. 55 1725. 9 1698. 5 1709. 55 1680. 5 1656. 45 1722. 8 1814

4111.4 4233.5 4231.4 4374.95 4502.25 4469.1 4398.9 4523.75 4568.55 4572.3 4564.1 4513.5 4571.45 4636.45

1557.43 33 1587.53 33 1607.95 1638.63 33 1667.71 67 1701.4 1707.7 1709.28 33 1705.98 33 1711.31 67 1696.18 33 1682.16 67 1686.58 33 1731.08 33

1593.228 571 1590.214 286 1586.071 429 1598.592 857 1615.621 429 1639.164 286 1660.228 571 1680.7 1689.928 571 1704.528 571 1705.364 286 1696.121 429 1698.178 571 1715.385 714

52 35.795238 1 2.6809523 81 21.878571 43 40.040476 19 52.095238 1 62.235714 29 47.471428 57 28.583333 33 16.054761 9 6.7880952 38 9.1809523 81 13.954761 9 11.595238 1 15.697619 05

Column1 3-Jan-11 4-Jan-11 5-Jan-11 6-Jan-11 7-Jan-11

Colum n2 2820.85 2733.6 2697.3 2625.2 2599.85

Column 3 6157.6 6146.35 6079.8 6048.25 5904.6

Column 4

Column5 Column6 2766.857 26.942857 2793.8 143 14 2763.814 24.685714 2788.5 286 29 2750.58 2756.021 5.4380952 333 429 38 2685.36 2741.471 56.104761 667 429 9 2640.78 2719.621 38

333 10-Jan-11 11-Jan-11 12-Jan-11 13-Jan-11 14-Jan-11 17-Jan-11 18-Jan-11 19-Jan-11 20-Jan-11 21-Jan-11 24-Jan-11 25-Jan-11 27-Jan-11 28-Jan-11 31-Jan-11 1-Feb-11 2-Feb-11 3-Feb-11 4-Feb-11 2547.8 2611.8 2664.75 2560.65 2502.25 2516.45 2556.35 2508.7 2534.85 2597.95 2693.1 2679.25 2653.65 2618.55 2641.05 2595.75 2573.35 2652.55 2646.7 5762.85 5754.1 5863.25 5751.9 5654.55 5654.75 5724.05 5691.05 5711.6 5696.5 5743.25 5687.4 5604.3 5512.15 5505.9 5417.2 5432 5526.75 5395.75 2590.95 2586.48 333 2608.11 667 2612.4 2575.88 333 2526.45 2525.01 667 2527.16 667 2533.3 2547.16 667 2608.63 333 2656.76 667 2675.33 333 2650.48 333 2637.75 2618.45 2603.38 333 2607.21 667 2624.2

429 2690.807 143 2662.342 857 2640.042 857 2615.335 714 2587.471 429 2571.935 714 2565.721 429 2560.135 714 2549.142 857 2539.6 2558.521 429 2583.807 143 2603.407 143 2612.292 857 2631.2 2639.9 2636.385 714 2630.592 857 2625.942 857

78.838095 24 99.857142 86 75.859523 81 31.926190 48 2.9357142 86 11.588095 24 45.485714 29 40.704761 9 32.969047 62 15.842857 14 7.5666666 67 50.111904 76 72.959523 81 71.926190 48 38.190476 19 6.55 -21.45 33.002380 95 23.376190 48 1.7428571

39

7-Feb-11 8-Feb-11 9-Feb-11 10-Feb-11 11-Feb-11 14-Feb-11 15-Feb-11 16-Feb-11 17-Feb-11 18-Feb-11 21-Feb-11 22-Feb-11 23-Feb-11 24-Feb-11 25-Feb-11 28-Feb-11 1-Mar-11 3-Mar-11 4-Mar-11 7-Mar-11

2662.7 2638.7 2590.9 2496.65 2584.65 2691.2 2728.4 2752.95 2779.35 2755.3 2791.5 2727.05 2622.3 2530.95 2583.9 2632 2706.9 2690 2700.2 2622.8

5396 5312.55 5253.55 5225.8 5310 5456 5481 5481.7 5546.45 5458.95 5518.6 5469.2 5437.35 5262.7 5303.55 5333.25 5522.3 5536.2 5538.75 5463.15

2653.98 333 2649.36 667 2630.76 667 2575.41 667 2557.4 2590.83 333 2668.08 333 2724.18 333 2753.56 667 2762.53 333 2775.38 333 2757.95 2713.61 667 2626.76 667 2579.05 2582.28 333 2640.93 333 2676.3 2699.03 333 2671 40

2627.235 714 2630.114 286 2622.95 2608.792 857 2610.407 143 2615.928 571 2627.6 2640.492 857 2660.585 714 2684.071 429 2726.192 857 2746.535 714 2736.692 857 2708.485 714 2684.335 714 2663.285 714 2656.371 429 2641.871 429 2638.035 714 2638.107 143

43 26.747619 05 19.252380 95 7.8166666 67 33.376190 48 53.007142 86 25.095238 1 40.483333 33 83.690476 19 92.980952 38 78.461904 76 49.190476 19 11.414285 71 23.076190 48 81.719047 62 105.28571 43 81.002380 95 15.438095 24 34.428571 43 60.997619 05 32.892857 14

8-Mar-11 9-Mar-11 10-Mar11 11-Mar11 14-Mar11 15-Mar11 16-Mar11 17-Mar11 18-Mar11 21-Mar11 22-Mar11 23-Mar11 24-Mar11 25-Mar11 28-Mar11 29-Mar11 30-Mar11 31-Mar11

2644.55 2632.55 2589.7 2571.55 2600.1 2563.45 2642.85 2618.1 2590.65 2582.7 2620.95 2646.7 2651.7 2709.45 2747.3 2768.65 2859.25 2767.9

5520.8 5531 5494.4 5445.45 5531.5 5449.65 5511.15 5446.65 5373.7 5364.75 5413.85 5480.25 5522.4 5654.25 5687.25 5736.35 5787.65 5833.75

2655.85 2633.3 2622.26 667 2597.93 333 2587.11 667 2578.36 667 2602.13 333 2608.13 333 2617.2 2597.15 2598.1 2616.78 333 2639.78 333 2669.28 333 2702.81 667 2741.8 2791.73 333 2798.6

2654.335 714 2661.285 714 2655.242 857 2635.907 143 2623.064 286 2603.528 571 2606.392 857 2602.614 286 2596.628 571 2595.628 571 2602.685 714 2609.342 857 2621.95 2631.464 286 2649.921 429 2675.35 2714.857 143 2735.85

1.5142857 14 27.985714 29 32.976190 48 37.973809 52 35.947619 05 25.161904 76 4.2595238 1 5.5190476 19 20.571428 57 1.5214285 71 4.5857142 86 7.4404761 9 17.833333 33 37.819047 62 52.895238 1 66.45 76.876190 48 62.75

Display trend line chart for SBI:

41

Interpretation: The trend line indicates for the short term perspective it has problems to invest it is fluctuating but if u think in the long term perspective it has bullish sign to Invest. stock price line rises through the moving average line constantly and the price line falls below the moving average average line which is rising .

HDFC:
Date 1-Apr-09 2-Apr-09 6-Apr-09 8-Apr-09 9-Apr-09 13-Apr-09 15-Apr-09 16-Apr-09 17-Apr-09 20-Apr-09 21-Apr-09 22-Apr-09 23-Apr-09 24-Apr-09 27-Apr-09 28-Apr-09 29-Apr-09 NIFT HDFC Y M.A.3 M.A.7 997.1 3060. 5 35 1034. 3211. 75 05 1062. 3256. 1031.6 95 6 17 1045. 3342. 1047.8 85 95 5 1046. 3342. 1051.6 05 05 17 1096. 3382. 1062.8 7 6 67 1083. 3484. 1075.5 1052.4 9 15 5 79 1064. 3369. 1081.6 1062.0 4 5 67 86 1068. 3384. 1072.1 1066.8 2 4 67 64 1066. 9 1086. 5 1089. 2 1092. 5 1110 1115. 5 1070. 75 1100. 7 3377. 1 3365. 3 3330. 3 3423. 7 3480. 75 3470 3362. 35 3473. 95 1066.5 1073.8 67 1080.8 67 1089.4 1097.2 33 1106 1098.7 5 1095.6 5 1067.4 29 1073.2 36 1079.4 1078.8 1082.5 29 1089.8 29 1090.1 93 1095.0 21 42 MACD

23.0714 286 19.5809 524 5.30238 095 0.92857 143 0.63095 238 1.46666 667 10.6 14.7047 619 16.1714 286 8.55714 286 0.62857 143

4-May-09 5-May-09 6-May-09 7-May-09 8-May-09 11-May-09 12-May-09 13-May-09 14-May-09 15-May-09 18-May-09 19-May-09 20-May-09 21-May-09 22-May-09 25-May-09 26-May-09 27-May-09 28-May-09 29-May-09

1194. 7 1189. 1 1172. 1 1176. 75 1143. 5 1144. 8 1189. 7 1163. 3 1164. 85 1184. 75 1378. 95 1407. 6 1374. 35 1367. 3 1369. 05 1358. 25 1338. 8 1408. 1 1436. 2 1442. 35

3654 3661. 9 3625. 05 3683. 9 3620. 7 3554. 6 3681. 1 3635. 25 3593. 45 3671. 65 4323. 15 4318. 45 4270. 3 4210. 9 4238. 5 4237. 55 4116. 7 4276. 05 4337. 1 4448. 95

1122.0 5 1161.5 1185.3 1179.3 17 1164.1 17 1155.0 17 1159.3 33 1165.9 33 1172.6 17 1170.9 67 1242.8 5 1323.7 67 1386.9 67 1383.0 83 1370.2 33 1364.8 67 1355.3 67 1368.3 83 1394.3 67 1428.8 83

1110.4 79 1124.7 5 1136.1 21 1145.6 57 1149.6 57 1160.2 36 1172.9 5 1168.4 64 1165 1166.8 07 1195.6 93 1233.4 21 1266.2 14 1291.5 86 1320.9 79 1348.6 07 1370.6 14 1374.7 79 1378.8 64 1388.5 79

11.5714 286 36.75 49.1785 714 33.6595 238 14.4595 238 5.21904 762 13.6166 667 2.53095 238 7.61666 667 4.15952 381 47.1571 429 90.3452 381 120.752 381 91.4976 19 49.2547 619 16.2595 238 15.2476 19 6.39523 81 15.5023 81 40.3047 619

Column1

Colum n2

Colum n3

Column 4 43

Column 5

Column 6

10-Feb-11 11-Feb-11 14-Feb-11 15-Feb-11 16-Feb-11 17-Feb-11

2019.3 2060.8 2107.7 2111.3 2096.8

5225.8 5310 5456 5481 5481.7

2015.1 2034 2062.6 2093.26 667 2105.26 667 2130.63 333 2151.08 333 2185.71 667 2172.31 667 2152.91 667 2108.93 333 2076.51 667 2054.93 333 2077.45 2126.35 2182.6 2196.28 333 2200.61 667 2196.33 333 2204.6 2196.5 2198.88 333 2193.4 44

2183.8 5546.45

18-Feb-11 2172.65 5458.95 21-Feb-11 22-Feb-11 2200.7 2143.6 5518.6 5469.2

23-Feb-11 2114.45 5437.35 24-Feb-11 2068.75 5262.7

2026.1 2032.20 714 2038.89 286 2052.02 857 2060.27 143 2085.94 286 2107.47 857 2133.39 286 2145.22 143 2146.18 571 2140.10 714 2132.9 2113.74 286 2108.55 2107.45 714 2118.15 2127.13 571 2146.75 2169.5 2191.27 857 2197.77 143 2200.58 571 2195.90 714

25-Feb-11 2046.35 5303.55 28-Feb-11 1-Mar-11 2049.7 5333.25 2136.3 5522.3

3-Mar-11 2193.05 5536.2 4-Mar-11 2218.45 5538.75 7-Mar-11 2177.35 5463.15 8-Mar-11 2206.05 9-Mar-11 2205.6 5520.8 5531 5494.4

10-Mar-11 2202.15

11-Mar-11 2181.75 5445.45 14-Mar-11 2212.75 15-Mar-11 5531.5

2185.7 5449.65

-11 1.79285 714 23.7071 429 41.2380 952 44.9952 381 44.6904 762 43.6047 619 52.3238 095 27.0952 381 6.73095 238 31.1738 095 56.3833 333 58.8095 238 -31.1 18.8928 571 64.45 69.1476 19 53.8666 667 26.8333 333 13.3214 286 1.27142 857 1.70238 095 2.50714 286

16-Mar-11 2184.85 5511.15 17-Mar-11 2187.65 5446.65 18-Mar-11 2153.2 5373.7

2194.43 333 2186.06 667 2175.23 333 2165.06 667 2153.03 333 2156.76 667 2169.15 2205.9 2248.2 2286.58 333 2311.93 333 2329.15

2196.97 857 2194.35 2186.86 429 2180.03 571 2175.72 143 2168.81 429 2169.64 286 2180.63 571 2195.44 286 2217.36 429 2243.57 857 2270.92 143

21-Mar-11 2154.35 5364.75 22-Mar-11 2151.55 5413.85 23-Mar-11 24-Mar-11 25-Mar-11 28-Mar-11 2164.4 5480.25 2191.5 5522.4

2261.8 5654.25 2291.3 5687.25

29-Mar-11 2306.65 5736.35 30-Mar-11 2337.85 5787.65 31-Mar-11 2342.95 5833.75

2.54523 81 8.28333 333 11.6309 524 14.9690 476 22.6880 952 12.0476 19 0.49285 714 25.2642 857 52.7571 429 69.2190 476 68.3547 619 58.2285 714

Trend analysis display chart:

The trend line indicates for the short term perspective it has problems to invest it is fluctuating but if u think in the long term perspective it has bullish sign to Invest. stock price line rises through the moving average line constantly and the price line falls below the moving average average line which is rising .

45

ICICI BANK: Column1 15-Apr-09 16-Apr-09 17-Apr-09 20-Apr-09 21-Apr-09 22-Apr-09 23-Apr-09 24-Apr-09 27-Apr-09 28-Apr-09 29-Apr-09 4-May-09 5-May-09 6-May-09 7-May-09 8-May-09 11-May-09 12-May-09 Colum n2 Colum Column Column Column n3 4 5 6 3484.1 418.983 388.264 30.7190 443.7 5 333 286 476 399.257 29.2928 426.4 3369.5 428.55 143 571 437.183 410.857 26.3261 441.45 3384.4 333 143 905 431.466 418.271 13.1952 426.55 3377.1 667 429 381 422.266 0.81666 398.8 3365.3 667 421.45 667 408.516 421.807 13.2904 400.2 3330.3 667 143 76 407.533 422.957 15.4238 423.6 3423.7 333 143 1 3480.7 418.766 421.357 2.59047 432.5 5 667 143 62 427.292 14.0571 467.95 3470 441.35 857 429 3362.3 426.992 19.6071 439.35 5 446.6 857 429 3473.9 461.683 434.307 27.3761 477.75 5 333 143 905 452.914 29.1357 529.05 3654 482.05 286 143 525.416 477.092 48.3238 569.45 3661.9 667 857 095 3625.0 546.433 493.835 52.5976 540.8 5 333 714 19 553.116 510.492 42.6238 549.1 3683.9 667 857 095 536.833 518.014 18.8190 520.6 3620.7 333 286 476 530.028 1.02142 523.45 3554.6 531.05 571 857 534.233 541.585 7.35238 558.65 3681.1 333 714 1 46

13-May-09 14-May-09 15-May-09 18-May-09 19-May-09 20-May-09 21-May-09 22-May-09 25-May-09 26-May-09 27-May-09 28-May-09 29-May-09 1-Jun-09 2-Jun-09 3-Jun-09 4-Jun-09 5-Jun-09 8-Jun-09 9-Jun-09 10-Jun-09 11-Jun-09 12-Jun-09

549.65 536.7 574.45 706.65 758.6 708.8 672.3 702.8 703.55 666.6 710.55 729.5 740.7 723.2 732.45 719.7 734.25 751.15 724.25 735.55 747.8 750.3 740.45

3635.2 5 3593.4 5 3671.6 5 4323.1 5 4318.4 5 4270.3 4210.9 4238.5 4237.5 5 4116.7 4276.0 5 4337.1 4448.9 5 4529.9 4525.2 5 4530.7 4572.6 5 4586.9 4429.9 4550.9 5 4655.2 5 4637.7 4583.4

543.916 667 548.333 333 553.6 605.933 333 679.9 724.683 333 713.233 333 694.633 333 692.883 333 690.983 333 693.566 667 702.216 667 726.916 667 731.133 333 732.116 667 725.116 667 728.8 735.033 333 736.55 736.983 333 735.866 667 744.55 746.183 333 47

544.528 571 539.85 544.657 143 567.164 286 601.164 286 627.642 857 643.878 571 665.757 143 689.592 857 702.757 143 703.314 286 699.157 143 703.714 286 710.985 714 715.221 429 717.528 571 727.192 857 732.992 857 732.242 857 731.507 143 735.021 429 737.571 429 740.535 714

0.61190 48 8.48333 333 8.94285 714 38.7690 476 78.7357 143 97.0404 762 69.3547 619 28.8761 905 3.29047 619 11.7738 1 9.74761 9 3.05952 381 23.2023 81 20.1476 19 16.8952 381 7.58809 524 1.60714 286 2.04047 619 4.30714 286 5.47619 048 0.84523 81 6.97857 143 5.64761 905

15-Jun-09 16-Jun-09 17-Jun-09 18-Jun-09 19-Jun-09 22-Jun-09 23-Jun-09 24-Jun-09 25-Jun-09 26-Jun-09 29-Jun-09

733.5 733.35 722.5 703.85 713.75 726.9 697.45 689.35 698.7 754.35 748.7

4484 4517.8 4356.1 5 4251.4 4313.6 4235.2 5 4247 4292.9 5 4241.8 5 4375.5 4390.9 5

741.416 667 735.766 667 729.783 333 719.9 713.366 667 714.833 333 712.7 704.566 667 695.166 667 714.133 333 733.916 667

740.428 571 737.885 714 737.635 714 733.107 143 728.242 857 724.9 718.757 143 712.45 707.5 712.05 718.457 143

0.98809 524 2.11904 76 7.85238 1 13.2071 43 14.8761 9 10.0666 67 6.05714 29 7.88333 33 12.3333 33 2.08333 333 15.4595 238

The trend line indicates for the short term perspective it has problems to invest it is fluctuating but if u think in the long term perspective it has bullish sign to Invest. stock price line rises through the moving average line constantly and the price line falls below the moving average line which is rising .

PNB:
Column Colum Column Column Column Column 1 n2 3 4 5 6 15-Apr444.657 15.8428 09 475.4 3484.15 460.5 143 571 16-Apr485.65 3369.5 470.966 456.178 14.7880 48

09 17-Apr09 20-Apr09 21-Apr09 22-Apr09 23-Apr09 24-Apr09 27-Apr09 28-Apr09 29-Apr09 4-May-09 5-May-09 6-May-09 7-May-09 8-May-09 11-May09 12-May09 13-May09 14-May09 15-May09 18-May09 19-May09 20-May09

667 492.6 485.95 465.6 470.25 492.45 518.45 523.55 473.1 478.1 503.7 504.25 505.65 523.45 527.25 519.1 549.9 559.2 563.6 575.05 646.9 692.1 677.55 3384.4 3377.1 3365.3 3330.3 3423.7 3480.75 3470 3362.35 3473.95 3654 3661.9 3625.05 3683.9 3620.7 3554.6 3681.1 3635.25 3593.45 3671.65 4323.15 4318.45 4270.3 484.55 488.066 667 481.383 333 473.933 333 476.1 493.716 667 511.483 333 505.033 333 491.583 333 484.966 667 495.35 504.533 333 511.116 667 518.783 333 523.266 667 532.083 333 542.733 333 557.566 667 565.95 595.183 333 638.016 667 672.183 333 49

571 465.328 571 470.621 429 473.042 857 475.328 571 481.128 571 487.278 571 492.692 857 489.907 143 488.785 714 494.228 571 499.085 714 500.971 429 501.685 714 502.214 286 508.785 714 519.042 857 526.971 429 535.45 545.364 286 563 586.55 609.185 714

952 19.2214 286 17.4452 381 8.34047 619 1.39523 81 5.02857 14 6.43809 524 18.7904 762 15.1261 905 2.79761 905 9.26190 48 3.73571 43 3.56190 476 9.43095 238 16.5690 476 14.4809 524 13.0404 762 15.7619 048 22.1166 667 20.5857 143 32.1833 333 51.4666 667 62.9976 19

21-May09 22-May09 25-May09 26-May09 27-May09 28-May09 29-May09 1-Jun-09 2-Jun-09 3-Jun-09 4-Jun-09 5-Jun-09 8-Jun-09 9-Jun-09 10-Jun-09 11-Jun-09 12-Jun-09 15-Jun-09 16-Jun-09

668.7 663.25 644.05 639.1 658.5 664.65 670.7 663.95 647 656.4 658.6 652.7 606.1 610.75 632.7 613.25 594.95 610.3 631.1

4210.9 4238.5 4237.55 4116.7 4276.05 4337.1 4448.95 4529.9 4525.25 4530.7 4572.65 4586.9 4429.9 4550.95 4655.25 4637.7 4583.4 4484 4517.8

679.45 669.833 333 658.666 667 648.8 647.216 667 654.083 333 664.616 667 666.433 333 660.55 655.783 333 654 655.9 639.133 333 623.183 333 616.516 667 618.9 613.633 333 606.166 667 612.116 50

626.157 143 641.021 429 652.514 286 661.664 286 663.321 429 659.4 658.421 429 657.742 857 655.421 429 657.185 714 659.971 429 659.142 857 650.778 571 642.214 286 637.75 632.928 571 624.15 617.25 614.164

53.2928 571 28.8119 048 6.15238 095 12.8642 86 16.1047 62 5.31666 67 6.19523 81 8.69047 619 5.12857 143 1.40238 1 5.97142 86 3.24285 71 11.6452 38 19.0309 52 21.2333 33 14.0285 71 10.5166 67 11.0833 33 -

17-Jun-09 18-Jun-09 19-Jun-09 22-Jun-09 23-Jun-09 24-Jun-09

614.45 620.7 641.75 648.55 626.2 624.15

4356.15 4251.4 4313.6 4235.25 4247 4292.95

667 618.616 667 622.083 333 625.633 333 637 638.833 333 632.966 667

286 615.357 143 616.778 571 618.071 429 623.114 286 627.578 571 629.557 143

2.04761 9 3.25952 381 5.30476 19 7.56190 476 13.8857 143 11.2547 619 3.40952 381

Display chart:

The trend line indicates for the short term perspective it has problems to invest it is fluctuating but if u think in the long term perspective it has bullish sign to Invest. stock price line rises through the moving average line constantly and the price line falls below the moving average line which is rising .

The Relative Strength Index (RSI): It is another one of the most used and well-known
momentum indicators in technical analysis. RSI helps to signal overbought and oversold conditions in a security. The indicator is plotted in a range between zero and 100. A reading above 70 is used to suggest that a security is overbought, while a reading below 30 is used to suggest that it is oversold. This indicator helps traders to identify whether a securitys price has been unreasonably pushed to current levels and whether a reversal may be on the way. The standard calculation for RSI uses 14 trading days as the basis, which can be adjusted to meet the needs of the user. If the trading period is adjusted to use fewer days, the RSI will be more volatile and will be used for shorter term trades.

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A technical momentum indicator that compares the magnitude of recent gains to recent losses in an attempt to determine overbought and oversold conditions of an asset. It is calculated using the following formula: RSI = 100 - 100/(1 + RS*) *Where RS = Average of x days' up closes / Average of x days' down closes. A trader using RSI should be aware that large surges and drops in the price of an asset will affect the RSI by creating false buy or sell signals. The RSI is best used as a valuable complement to other stock-picking tools.

RSI of HDFC Bank:

RSI indicates the movement in between 20 - high level is at 80 and the low level point is at 20. most probably the scrip moment is in between 80-20. The values are in between one level of price moment like if the scrip value is crossed highr level of 52

value 60 it signs the movement is bullish for the scrip. And if it crosses the moment of scrip is coming down to 40 below it comes more up to 20 levels. It indicates the v=bearish sign of the market. So the scrip is more volatile in between 20 to 80 levels.

RSI of SBI

RSI of ICICI:

Interpretation
RSI indicates the movement in between 20 - high level is at 80 and the low level point is at 20. Most probably the scrip moment is in between 80-20. The values are in between one level of price moment like if the scrip value is crossed highr level of value 60 it signs the movement is bullish for the scrip. And if it crosses the moment of scrip is coming down to 40 below it comes more up to 20 levels. It indicates the v=bearish sign of the market. So the scrip is more volatile in between 20 to 80 levels . now it crosses the 100 levels of movement the scrip moment reaches the high level price moment so the scrip value may come down.

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RSI OF SBI

Interpretation
RSI indicates the movement in between 20 - high level is at 80 and the low level point is at 20. most probably the scrip moment is in between 80-20. The values are in between one level of price moment like if the scrip value is crossed highr level of value 60 it signs the movement is bullish for the scrip. And if it crosses the moment of scrip is coming down to 40 below it comes more up to 20 levels. It indicates the v=bearish sign of the market. So the scrip is more volatile in between 20 to 80 levels. The scrip movement is from bottom to top approach it will come down according to the trend level of the scrip. It depends upon the market conditions and fundamental performance of the bank performance.

RSI Of PNB:

RSI indicates the movement in between 20 - high level is at 80 and the low level point is at 20. most probably the scrip moment is in between 80-20. The values are in between one level of price moment like if the scrip value is crossed highr level of value 60 it signs the movement is bullish for the scrip. And if it crosses the moment of scrip is coming down to 40 below it comes
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more up to 20 levels. It indicates the v=bearish sign of the market. So the scrip is more volatile in between 20 to 80 levels. The level of multiples are very good sign to buy this scrip it is in low value and good to buy this scrip will give the returns in the long term perspective.

FINDINGS, RECOMMENDATIONS AND CONCLUSIONS

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Findings:
SBI:
Banks are mainly concentrating on CASA and NIM of banks because banks are accepting the deposits for the purpose of lending and repayable on the demand of the customer. The CASA Ratio of SBI is very good when compared with the other banks. That too savings accounts ratio is good as most of the deposits of their depositors are savings deposits. These are more than the current account deposits. NII is very good and NIM is also maintaining good growth of SBI. It has high worth of scrip in the public sector banking industry. PNB: Punjab national bank has high reserves comparing to the SBI. It has good growth and NPAs are
very less. PNB s CASA is also more dependent on the savings deposits only, their lending rate is effective and the profits of the PNB is growing constantly. NII and NIM are executed effectively. ICICI: ICICI is a leading private sector banking and the bank is depending on credit cards and lending. It has more profitability and much of NPAs too. This is the first new generation bank in India. Casa has Growth and NIM is effective HDFC: 56

HDFC has 30% growth every quarter in terms of assets and the company has acquired the centurion bank recently. It supported the bank to grow more drastically in terms of branches and CASA deposits.

Recommendations:

ICICI operating levels are good and at the same time their expenditure levels are very high. It could be a problem to raise funds to the organization, so the company need to control the expenses.

SBIs annual profits are very low because of their NPAs. SBI have to reduce NPAs by controlling the bad debts.

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Conclusion:
In my project, I have taken four major banks in banking industry from public and private sector i.e. SBI and PNB from PSBs , HDFC and ICICI from private sector, being the most preferred sector among the investors, I have compared every bank with other banks in regard of Price Earning Multiple, Earning Per share Dividend Per share, Dividend Payout Ratio, price earning, PEG and return on equity(DU-PONT analysis). From the technical point of view Moving average, moving average convergence and divergence(MAC), and the final one is Relative Strength Index(RSI), by observing all these parameters I can conclude that PNB and HDFC are better option for the investors to invest i.e. to give it a first preference than the other banking firms. Hence, from this Project i.e. A STUDY ON EQUITY ANALYSIS I am able to understand as an analyst from the view of an investor for the purpose of making Investment. Analysis, and Interpretation of Financial data explains the purpose of Investment decision making in capital markets by investing the shares in PNB. Hence overall position of the company is satisfactory.

BIBLIOGRAPHY
Books : Investment and Portfolio Analysis by PRASANNA CHANDRA.
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Punithavathy Pandian, Security Analysis and Portfolio Management. Study of stock price responses to earnings announcements of selected companies listed on BSE which is done by IQBAL from finance India September 2010.the stock performance and reaction with the market conditions.

Operational efficiency of selected private banks of India. (P.S.Vohra) from Finance India march 2011. Which is shown in terms of the growth of the private banks in India and their performance.

Web references:

http://www.nseindia.com http://www.bseindia.com http://www.investopedia.com

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