Fundamental Analysis of Banking Stocks

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EXECUTIVE SUMMARY
This project report revolves around the Fundamental Analysis of Banking Stocks. This
project was undergone for a period of ten weeks at Federal Capital Markets Ltd., Bangalore.
The Fundamental Analysis was undertaken with the objectives of analysing economic factors
influencing the banking stocks, analysing banking industry for assessing its potential and
finally to measure the profitability of the selected banking companies by calculating the
intrinsic value of each banking stock. The result of this analysis helps an investor to have a
ready reference for investment decisions.
The aspects taken into consideration for the 3 framework are: Economic Analysis, Industry
Analysis and Company Analysis. From the analysis, it was found that all the five Banking
Companies chosen for this study were good for investment because that the stock value in the
market is for each of these securities were undervalued.

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1.1 INTRODUCTION ABOUT THE INTERNSHIP
Internship is an integral part of the academic curriculum of MBA programme of VTU. It is a way
for bridging the gap between knowledge gained from theoretical studies and its application
through a practical exposure that will enable the students to gain an insight about any certain
industry.
An internship is a learning situation where the students has an opportunity to apply theoretical
concepts in real life situation at work place. When placed in an internship, students can
understand the working of the organisation / company / industry. They also enhance their
conceptual knowledge of various organisational structure and different working relationship
within their work place.
The internship report is prepared based on an in-depth study undertaken on an issue / problem in
the company chosen for the study by the student.
1.2 TOPIC CHOSEN FOR THE STUDY
“A Study on Fundamental Analysis of Banking Stocks at Federal Capital Markets Ltd.,
Bangalore”
1.3 NEED FOR THE STUDY
Stock market is highly volatile in nature. It is a great challenge for investors to predict the most
profitable equity. Selecting the right industry and the right company for investment plays a vital
role in stock markets. While identifying the opportunities, investors many a times face difficulties.
Having a sound knowledge of the fundamental analysis can give an investor a better foundation
for investment decisions.

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The Fundamental Analysis, in the real sense, is predominantly about obtaining a proper
understanding of a certain company, the growth prospects of its businesses and its future potential
growth. It involves a thorough analysis and interpretation of the financial statements and the
annual reports of the company in order to obtain an understanding of the comparative advantage
over its rivals, the performance of its competitors and the environment in which the market
operate. Therefore this Fundamental analysis aids an investor to determine if a company is a good
or poor choice of investment.
The study uses Fundamental Analysis and analyses the Indian economy, the banking industry and
the major companies in the Indian banking industry based on various parameters and indicators
and thereby provides a result which indicates the most favourable and profitable investment in the
banking sector.
1.4 OBJECTIVES OF THE STUDY
 To analyse economic factors influencing the banking stocks by using some
economic indicators like GDP, inflation rate, Foreign Direct Investments (FDI)
and Foreign Exchange Reserves
 To analyse banking industry for assessing the strength and find out best
performing companies.
 To measure the profitability of the selected banking companies
 To determine the intrinsic value of the selected banking stocks
 To measure under- pricing or over – pricing of banking stocks
1.5 SCOPE OF THE STUDY
This study covers the stock price of 5 banking stocks for a period of 5 years ranging from
2011 to 2015. Five years’ monthly closing prices of banking stocks have been taken for
testing the relevance of fundamental analysis. Five banking stocks with highest market
capitalization are chosen. The banking companies chosen for the study are:

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 SBI (State Bank of India)
 Bank of Baroda
 PNB (Punjab National Bank)
 IDBI
 Canara bank
1.6 RESEARCH METHODOLOGY
The Fundamental Analysis is done on the historical data. The companies in the banking
industry have been selected for this study. During the study, the historical data of the selected
companies, the banking industry and the economy was collected for certain period, based on
the different parameters of fundamental analysis to study the profitability of various stocks.
Because of the fact that the study is predominantly done on the basis of the historical data, the
descriptive research is ideal for the study where the data of the recent past were observed and
examined and their patterns were analysed from which an inference is drawn making use of
the Fundamental Analysis.
Source of data
Primary data: It was collected through an informal interaction with the personnel of Federal
Capital Markets Ltd.
Secondary data: The majority of the data collected for this study is the secondary data. It
was gathered from various web sources and reference books.
The Balance Sheets of various banking companies, ratio analysis and market capitalisation of
the banks were all collected from the websites www.moneycontrol.com and
www.equitymaster.com whereas the theoretical background of the study was obtained from a

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book called “Investment Analysis – Security Analysis and Portfolio Management” written by
V. K. Bhalla.
Framework of the analysis
This study on Fundamental Analysis consists of the following framework:
 Economic Analysis
 Industry Analysis
 Company Analysis
The aspects taken into consideration for the 3 framework are as follows:
 Economic Analysis – Variables such as GDP, Inflation rate, FDI, FE Reserve
 Industry Analysis – Growth rate of the market, developments in the industry,
Bank Index, Non –Performing Assets (NPA), etc.
 Company Analysis – Dividend per share (DPS), Earnings per share (EPS),
Dividend Pay-out ratio (DP ratio), Dividend Yield, Income per share,
Price/Income Ratio Price earnings ratio, Price / Earnings Ratio and Intrinsic value.
1.7 LITERATURE REVIEW
The origin of the concept of Fundamental Analysis of the share prices and its valuation dates
back to Yu-Hon Lui & David Abraham Mole (1997). There has been evidences showing
the use of Fundamentals Analysis as well as Technical Analysis by the dealers in the foreign
exchange in Hong Kong for the purpose of forecasting the exchange rate movements.
Mark R. Baumann (1995) conducted a study called, “A Report on the Fundamental
Analysis Research in Accounting”. His study has emphasised on the development of various

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accounting valuation models and reviewed related empirical work. His study identified 3
major issues associated with practical implementation of his model; the prediction of future
profitability, the determination of the appropriate discount rate and the length of appropriate
forecast horizon.
Pramod Gupta, in his work titled, “Indian banks going Innovative”, published in October
2003 by ‘Professional Bankers’ exclaimed that huge sums of money were spent on
technology by private banks as well as public banks, so as to offer innovative products and
services to its consumers, facilitating a greater level of satisfaction and convenience to them.
The cost of transaction can be reduced by the use of superior technology which thereby helps
to enhance the customer base and enable wider geographic reach.
Dr. Umesh Charan Patnaik published “Profitability in Public Sector Banks” through the
publisher ‘Sonali Publications’ in 2005. This book was designed exclusively for the masses
of people who had greater interest in evaluating the performance of banks. He used
Fundamental Analysis in his study and published his findings. His book laid emphasis on the
analysis of profitability of public sector banks in general and SBI in particular.
Prakash Tiwari & Hemraj Verma (2009) made a study on “Fundamental Analysis of
Public sector Banks in India”. His study explained the favourable and profitable position of
the banks with reference to various ratios. The stocks that he chose outperformed the market
and provided consistent gains to the investors.
K. Srinivas Rao, in his publication “Private Sector Banks in India and the Productivity
Question”, studied the productivity of the banking industry as a whole in the Indian economy.
This work was on profitability. Mr. Srinivas Rao concluded that social banking had become
an essential factor for productivity alongside conventional banking.

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J. Oza, in his article made a comparison between productivity and profitability of public
banks in India. By analysing the productivity of banks in the public sector, he inferred that
there had been remarkable growth in productivity per employee.
B. Satyamurty in wrote an article titled, “Bank costs and Profitability Concepts - Evaluation,
Technique & Strategies for Improvement” which was published in the journal of the Indian
Institute of Bankers dated July – Sept 1990. For his study, 24 ratios were categorized into 6
different groups of performance. The interrelationship among the variables was observed and
was interpreted for systematically and the evaluation of productivity and profitability of
banks were made.
1.8 LIMITATIONS OF THE STUDY
 In this study, only limited number of economic indicators like GDP, inflation rate,
FDI and Foreign Exchange Reserves are used to examine the economy of the country.
 The study is limited only to one industry, i:e, banking industry, from which only 5
companies are examined for the purpose of the analysis.
 Only quantitative factors are considered for the study. This study ignores factors such
as ‘Political factors’.
 The Fundamental Analysis is quite a time consuming study. The accuracy of the study
is fully dependent upon the time available. Since this study was carried out in a
limited frame of time, the historical data of only the past 5 years is considered for this
study.

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CHAPTER-2
INDUSTRY AND
COMPANY PROFILE

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2.1 INDUSTRY PROFILE
“Stock Broking Industry”
2.1.1 INTRODUCTION TO THE CAPITAL MARKET
Capital markets plays a significant role in a country by providing finance to companies for
operating their businesses. The Capital markets also offer liquidity option to the shareholders
to sell their shares and make money by trading in the market. An investor willing to make
investments in the stock market would do so only if he has the option to liquidate his
investment and this facility is provided by capital markets.
Capital Market is a long-term market which is meant for the purpose of trading stocks and
bonds and therefore, the stock markets and bond markets are together considered to be the
capital market. This capital market is comprising of the primary markets, in which new issues
are allocated to investors, and also the secondary markets, in which the existing securities are
traded.
The Capital Market, in simple terms means the market for securities, in which long-term
funds can be raised by companies and Governments. It provides finance to people who have a
shortage or need of funds from the people who have excess of funds which they can set apart
for investments. It meets the denomination, maturity, liquidity, risk (with respect to credit,
interest rate and market), and other features desired by an investor.
2.1.2 INTERNATIONAL CAPITAL MARKETS
The Dutch East India Company, in the year 1602, was the first company to offer shares for
public investors to buy over the Amsterdam stock exchange and this was the beginning of the
stock market. This was done with the joint stock company model. The companies that existed
during the European colonialism had raised a large part of their capital by selling shares. It
was also a safe way as it allowed diversification of their funds. So the money was not

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invested in a single risky voyage. Their shareholders then either earned dividends for
successful trade, but also shared in the losses when they occurred.
2.1.3 INSTRUMENTS OF THE CAPITAL MARKETS
The instruments of the Capital Markets can be classified as follows.
2.1.4 PLAYERS IN CAPITAL MARKET
The Capital Market does not work having a system in which the actual or the physical
meeting between the users and suppliers of funds takes place for the purpose of exchanging
money for company securities. Accomplishing such a ‘double coincidence of wants’ is quite
difficult. The actual sum of money supplied by the supplier need not necessarily match the
total sum of money required by the user. In the similar manner, the maturity, risk and
liquidity features of the securities issued by the issuer need not necessarily match the
expectations that the supplier has. In all such cases, very high amount of search cost would be
incurred to find each other. This search cost, however, can be reduced by the intermediaries
who play the role of matching and bringing together the users of funds and the suppliers of
funds.

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An intermediary acts as an agent who matches the demand of the users of funds with the
suppliers of funds for a percentage of commission on the funds traded. He helps users as well
as the suppliers in the creation and sale of securities for a fixed fee or buys the securities
allotted by users and in turn, sells their own securities to the suppliers to earn profits. The
Capital market doesn’t work in a void space, but requires the services of different players like
brokers, banks, arbitrageurs, financial institutions, speculators, jobbers, etc.
2.1.5 CAPTIPAL MARKET INTERMEDIARIES
The intermediaries in the Capital Market refer to the various institutions that enable the
smooth functioning of the securities market. They facilitate the issuers of securities to have
interactions with the investors in the primary as well as the secondary arena.
The following are the intermediaries in the Capital Market.
 Stock brokers
 Merchant bankers
 R & T Agents –registrars to issue
 Credit rating agencies
 Custodian
 Depositories
 Depository participants
 Mutual funds
2.1.6 INTRODUCTION TO THE INDIAN STOCK MARKET
Stock exchanges are places that facilities the company stocks and other securities to be traded
by the stock brokers. A stock that is listed in a stock exchange can be bought or sold. Thus an
exchange is a meeting place for sellers and buyers of stock. India’s premier stock exchanges
are the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

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The functioning of the stock exchange in India started in the year 1875. The BSE (Bombay
Stock Exchange) is the earliest stock market in the country. The Indian stock trading has a
deep routed history, which was stared when the membership was taken by 318 people in a
native share brokers’ association, which is currently known as the Bombay Stock Exchange.
The BSC and NSE represents themselves as synonyms of the Indian stock markets. The
origin of the BSE is almost the same as the history of the Indian stock market.
Presently, Capital Markets contribute 6% of India’s GDP. The BSE and NSE has reported to
have a market capitalisation of US$1.72 trillion and US$1.69 trillion respectively as of
February 2015. BSE is ranked as 11th largest stock exchange in the world and NSE is
ranked as 12th largest stock exchange in the world, as per the ranking of the World’s
Federation of Exchanges.
2.1.7 IMPORTANCE OF STOCK MARKETS
The stock market plays a key role in an economy by being the most significant source of
funds for companies. The corporates being publicly traded, or raising of additional capital for
the purpose of diversification or expansion by corporates by means of the sale ownership
stakes of the company in a public platform can all happen due to the existence of the Stock
Markets. The investors have the ability to sell their securities with ease and with no delay in
time because of the liquidity option which a stock exchange provides.
Collection and delivery of shares, payment guarantee to the sellers of securities, etc. are done
by the Stock Exchange. Therefore the Stock Exchange acts as the clearinghouse for each
transaction. As a result of this, the risk associated to individual buyers or sellers that the
counterparty can default on the transaction is eliminated. The accomplishment of economic
growth, lower enterprise risks and lower costs of manufacture can boost the production of
goods and services in an economy as well as generate employment opportunities if aided with
the smooth functioning of all said activities of the Stock Exchange.

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Therefore, it can be concluded that the stock markets greatly contributes to the economic
development in a county.
2.1.8 ORIGIN OF STOCK BROKING FIRMS-IN INDIA
The Brokerage Industry that exists in India is one among the earliest brokerage industries in
the continent of Asia. For more than 150 years, India had a very active stock market which
played an important role in the development of the risk markets and also in the promotion of
businesses and aiding in the development of various industries.
In India, the roots of stock market can be found during the American civil work during the
1860s which led to the sudden rise in the demand in the country for products such as cotton,
which eventually resulted in the establishment up of many joint stock companies which
issued securities to finance their businesses. This sudden drift was similar or parallel to the
growth of securities market that happened in a fast pace in European countries and the
countries of North America due to the expansion of railways, land development and
exploitation of natural resources.
According to some ancient records, as early as in the year 1864, more than 1000 brokers
functioned in stock markets from 3 places in Bombay; from 9am to 7pm at the junction of
Meadows Street, from 9am to 7pm at Rampart Row and from 9pm to the early hours of the
next morning at Bazaargate. According to another report on stock markets, it was found that
during the year 1864, an ordinary broker would earn about 200 rupees each day, which was a
huge sum of money those days. But unfortunately, in the year 1865, the boom trend came to a
sudden and an unexpected end.
During the period of the aftereffects of the crunch, the banking institutions on whose building
steps, the gathering of the share brokers used to take place for the purpose of seeking stock
tips and news about shares, ceased to allow them to gather at the banking premises.
Therefore, this compelled the brokers to find a separate place for themselves. This place they
later used eventually turned into the very famous Dalal Street. The stock exchange was

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formed by a group of about 300 brokers in July 1875, leading to the establishment of a trust
in 1887 which was called the “The Association for Native Share and Stock Brokers”.
One of the exclusive features of the development of the Stock Market in India was that there
were local enterprises that were fully driving the development of the Stock Market, and this
trend was different from that of the development of the banking industry, because the banks
were actually owned and managed by the British before the Indian independence. After the
1st
stock exchange was established in Bombay, there were many other Stock Exchanges that
followed suit in the various major cities of the country, namely at Ahmadabad in the year
1894, at Calcutta in the year 1908, at Madras in the year 1937, at Uttar Pradesh and Nagpur
in the year 1940 and at Hyderabad in the year 1944. In many industries such as jute, tea, coal,
etc., the stock markets gained from surge and boom at various points of time.
2.1.9 REGULATORY FRAMEWORK
There are five main legislations or Acts governing the capital market. They are as follows:
 The Securities Contracts (Regulation) Act, 1956
 Companies Act, 1956
 Security Exchange Board of India Act, 1992
 Depositories Act, 1996
 Prevention of Money Laundering Act, 2002
2.1.10 RECENT DEVELOPMENTS IN THE INDUSTRY AND THE FUTURE
GROWTH
Indian capital market has undergone a rapid transformation. The introduction of rolling
settlement and internet trading, the abolition of par value system and the entry of IT
companies has greatly helped in the expansion of security market. There have been reforms

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introduced by the SEBI which encompasses a wide range of issues in the security market.
Now there is a greater need for a continuous effort to bring about further transformation and
development in market infrastructure and microstructure so that the market become a safer,
efficient, fair, competitive and attractive for individual investors as well as institutional
investors.
The growth in capital market capitalization, according to historical trends, is predominantly
driven by the corporate earnings and economic growth in the long-run. According to a
forecast with a set of assumptions, and based on the real GDP growth of 6.6% and also a
historical average market capitalization GDP ratio of 139%, the size of capitalization in the
capital market would double from 2 trillion to 4 trillion by the year 2020.
The Indian Capital Market is well-functioning and is conducive to sustained growth. Many
studies have been conducted by many organisations, ranging from different scholars to IMF
and the World Bank. These studies have portrayed a two-way healthy between the growth in
the economy and the development in the capital market. Improved allocation of investible
funds increases the quantities of real savings and capital formation and decreases the cost of
capital from any given amount of investment.
In India, the past ten years has been extremely productive for the stock markets. Due to the
broad range of change in the regulations and the change in the practices in the markets along
with the increasing FII participation, the stock markets of India have now become strongly
technology oriented and process driven, and now it hardly gives any scope for intervention by
people that was the prime source of markets abuse earlier.
Electronic trading, straight through processing, digital certificates, online broking and
electronic contract notes are the major outcomes of the use of technology in this industry.
Risk management have strongly been aiding at diminishing the possibility of the defaults in
payments. The expansion of Products have taken place swiftly. Now the Indian equity
markets facilitate opportunities in buying and selling of derivatives in future and option in
index and stock in addition to the existing trading activities in equities segment.

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2.2 COMPANY PROFILE
“Federal Capital Markets Ltd.”
2.2.1 INTRODUCTION TO FEDERAL CAPITAL MARKETS LTD.
Federal Capital Markets Ltd. is a Public Limited Company incorporated on the 11th
of July, in
2011. The company is categorised as an Indian Non-Government Company. It was registered
at the Registrar of Companies at Bangalore with the company’s authorized share capital
being rupees 2,00,00,000 and its paid up capital is rupees 12,000,000.
Federal Capital Markets Ltd. is a stock broking company, which offers a complete range of
products such as pre-trade, trade and post trade services on the BSE and the NSE.
Federal Capital Markets Ltd is a firm that renders services mainly in the area dealing with
investments and consultancy needs by means of providing various ranges of products.
Its recent development is the facility for online trading. Federal Capital Markets Ltd online, is
a complete solution for online trading. It’s a kind of platform which is offering the facility of
trading across all its products. Equity, Insurance, Derivatives, Mutual Funds, IPOs,
Commodity trading, and many more facilities are also available for NRI customers. Federal
Capital online facilitates an investor the power and convenience to trade anytime and
anywhere.

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OWNERSHIP PATTERN:
CATEGORY NO.OF
SHARE (min)
PERCENTAGE
OF
SHAREHOLDING
Total promoters holding 17.44 69
NRI holding 3.48 15.3
Non promoters corporate 2.18 3.2
Others 3.14 12.5
Total 26.24 100
This data is as per 31-03-2014
OWNERSHIP PATTERN OF FEDERAL CAPITAL
TOTAL PROMOTERS HOLDINGS
(69%)
NRI Holding (15.3%0
non promoters corprate holding
(3.2%)
others (12.5%)

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Federal capital is a public limited company, where it consist of 26.24 number of shares, in
that total promoters holdings 17.44 of shares 69% are the major capital holders, NRI holdings
3.48 consist of 15.3%. Non promoter’s corporate holdings 2.18 consists of 3.2% and others
holding are 3.14 with 12.5%.
ACHIVEMENTS AND AWARDS:
 Corporate Excellence Award in 2012 from BSE
 Commodity Broking Award for the improving broking house in 2013 from BSE
 Best Entrepreneurship Award in 2014 from NSE
Organisation Chart of Federal Capital Markets Ltd

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2.2.2 PROMOTERS
The promoters of the company are
 Sherry Zacharias
 Pulinilkunathil Abraham
 Pavithra Pachipala
 Joseph John
 Rajan Karim Kuttical Samuel
 Pradeep Shanthakumari Ramappa
2.2.3 VISION AND PURPOSE
2.2.4 QUALITY POLICY
 Federal Capital Markets Ltd. has a quality policy that aims at the fullness in
satisfaction of its customers, by the combination of its technological and human
recourses, for the purpose of providing financial services of superior quality, in order
to achieve and retain leadership.

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 Federal Capital Markets Ltd, in this process, will strive to exceed customers’
expectation and its objectives. As per this Quality Policy, Federal Capital Markets
Ltd will emphasize on :
 Integrity
 Client commitment
 Excellence
 Strive for profitability
 Updated technology
 Fundamental Analysis
 Technical analysis
 Innovation
 Systematic Investment plans (SIPs)
2.2.5 PRODUCTS /SERVICES PROFILE
The following are the categories of services provided by Federal Capital Markets Ltd.
 Equity
 Derivatives
 Insurance
 Mutual funds
 Commodity trading
 IPO
 Opening of DEMAT accounts
2.2.6 AREA OF OPERATION
Federal Capital Markets Ltd conducts its operation with a network ranging from North to
South India, therefore covering areas throughout India. They have over 25 & more unique
Investments outlets spread across 20 cities in India. Bangalore, Hassan, Dharwad, Mangalore,
Chennai, Puducherry, Thiruvanathapurnam, Cochin, Guruvayur, Hyderabad, Thirupathi,

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Vijayawada, Vishakapatnam, Mumbai, Panaji, Buvaneshwar, Delhi, Patna, Kolkata, Luknow,
Jaipur, with over 5 years expertise in financial services industry. They have 140 more wealth
managers on board advising 1500 more clients’ relationship. Their network is further
strengthened by over 50 and more channel partners for the trading and investments products.
2.2.7 COMPETITIOR’S INFORMATION
SLNO Company names Market share (approx.)
1 Share Khan broking Limited 16%
2 Karvy Stock Broking Limited 15%
3 Motilal Oswal Securities Stock
Broking
15%
4 Geojit Stock Broking Limited 12%
5 Blossom Stock Limited 9%
2.2.8 SWOT ANALYSIS
SWOT analysis means analysis of the internal factors (that a company has a control on, that
is strengths and weakness of the company) and also analysis of external factors (that a
company has no control on, that is opportunities and threats of the company).
Strengths:
1. Federal Capital has a highly advanced and sophisticated research team making it
possible for its clients to earn good returns.
2. Federal Capital has a very conductive infrastructure for the activities of the capital
markets.
3. Federal Capital possesses of committed employees
4. The individuals has an ability to visualise the implication of present policies and
actions for the future in practical terms, and fair for figures.

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Weakness:
1. Insufficient of funds for advertisements
2. Insufficient of access to the rural markets.
Opportunities:
1. Federal Capital Markets Ltd has a good CRM strategy. Therefore there is a good
opportunity to create goodwill and enhance its market share.
2. The growth of IPO markets creates an opportunity to take over the new markets
3. Since most of investors have a greater knowledge about financial instruments and
working strategy of stock brokers, there is a positive outlook of people towards
financial products.
4. Media which creates new opportunity at Federal Capital Ltd for attracting new
investors to financial markets.
Threats:
1. Entry of new players to the markets has increased competition in the market
2. Customers who opt for disinvestments
3. Slowdown in the Global economy
4. The commission policy of the competitors
2.2.9 FUTURE GROWTH AND PROSPECTS
Since the time the company was established, Federal Capital Markets Ltd has always been
growing and improving its services. Federal Capital aspires to enhance its market share
substantially and it would emphasize be more on new product lines like Investment banking,
‘Mergers & Acquisitions’- advisory, Merchant banking and PE advisory. The company
would be focusing more on currencies (both retail and corporate) as well as commodity
segment.
Federal Capital Markets Ltd. will be hoping to increase its market share in Equity segment.
An NRI desk would be set up in a strategic foreign location. An important part in the future
plans would be real Estate Broking. Development of latest technology would be done to give
a better and a faster service to its clients. The company expects a growth rate of 5% to 7% in
the next 5 years and present De-mat accounts 2% of the population.

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2.2.10 FINANCIAL STATEMENTS ANALYSIS
Balance sheet of Federal Capital Markets Ltd.
Sources of Funds Mar ' 15 Mar ' 14 Mar ' 13
Ownership Funds
Equity share Capital 23.29 23.29 23.28
Preference share capital - - -
Reserves & surplus 49.54 58.61 63.3
Loan funds
Secured loans 5.6 - -
Unsecured loans 6.39 - -
Total 84.81 81.89 86.58
Uses of funds
Fixed assets
Gross block 31.38 31.53 32.95
Less : revaluation reserve - - -
Less : accumulated depreciation 23.57 18.24 15.11
Net block 7.81 13.29 17.84
Work-in-progress 0.03 0.07 0.37
Investments 36.69 37.19 42.2
Net current assets
Current assets, loans & advances 55.25 61.9 67.76
Less : current liabilities & provisions 14.97 30.55 41.6
Total net current assets 40.27 31.34 26.16
Miscellaneous expenses not written - - -
Total 84.81 81.89 86.58
Notes:
Book value of unquoted investments 36.69 37.28 42.29
Market value of quoted investments - - -
Contingent liabilities 15.52 14.11 9.84
Number of equity shares outstanding (Laces) 233.53 233.53 233.06

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RATIO ANALYSIS
RATIO 2012-13 2013-14 2014-15
Current ratio 1.62 2.02 3.69
Debt equity ratio 0 0 0.16
Proprietary ratio 1 1 0.85
EPS 0.01 -0.024 -0.034
DPS 0 0 0
Current ratio:
The ratio has increased in the year 2014-2015 and thus, greater the current ratio, greater the
capacity the company has in paying off its obligations. The standard ratio is 1:1.
Current assets are the assets that are convertible into cash within a period of a year. Current
liabilities are the liabilities that are payable in a year.
Current Ratio =
Debt equity ratio:
The ratio for the year 2012-13 and 2013-14 is zero because the company is fully dependent
on internal source. This indicates that the company depends more on internal sources than on
external sources. It means that the company depends upon the shareholders’ fund. But in
2014-15, it has also used outside fund i.e loan. Therefore in 2014-15 its ratio is 0.16
Proprietary ratio
The ratio is 1.00 in 2012-13 and 2013-14. But in the year 2014-15, the ratio has decreased to
0.85, which is quite normal and hence it is negligible. It indicates that the company’s
dependence on shareholders’ fund is increasing year by year. It shows that the financial
position of the company is quite good.
Current Assets
Current Liabilities

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EPS
The earnings per share of the company is very less. In 2012-13 EPS is 0.01 but in 2013-14
and 2014-15 it was negative and has decreased from -0.024 to -0.034 in these two years. This
is because the company is suffering from losses and having negative PAT.
DPS
From the year 2012-13, till 2014-15, the dividend is not declared by the company because the
EPS is negative. This indicates that the company is not in good condition.

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CHAPTER-3
THEORITICAL
BACKGROUND OF THE
STUDY

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INTRODUCTION TO FUNDAMENTAL ANALYSIS
Fundamental security analysis is done with an objective of appraising a security’s intrinsic
value. This intrinsic value can be considered as a financial asset’s real economic growth.
According to a fundamentalist, the present value of future dividends from a share which is
discounted at an appropriate rate of interest linked to its risk must essentially be equal to the
intrinsic value of that share at any given point of time. Therefore, it can be considered that the
actual price of each security is the function of a given set of expected or predicted rate of
capitalisation. As and when this expected or predicted rate changes as a result of new
information, the price of the security also will change. However, the fundamentalists further
make an argument that the actual price of a stock would generally be not equal to its intrinsic
value in the event of incomplete information. Therefore, it is believed by them that many a
times the market can be incorrect in appraising a company’s share value. Because of this
factor, the duty of a Fundamental Analyst of securities is sorting out the temporary instability
from the real changes in the economy of the country and taking into account the tricks from
the real changes in the income of a firm for the purpose of arriving at an appraisal of the
intrinsic value that is unbiased.
It is on the basis of this this reasoning that these fundamentalists make an attempt to ascertain
the true growth for a given security, after giving due consideration to the potential to which a
firm can earn and this in turn depends upon the factors of the investment environment like the
growth and situation of the economy of the country, RBI’s monetary policy, political and
social environment, corporate laws and the key factors relating to each industries like the
product’s stage in the PLC (Product Life Cycle) and industry’s growth potential. This would
also, to a greater extent, be dependent upon the competitiveness of the firm, operational
efficiency, the firm’s management quantity, the capital-structure and dividend policy and
finally the profitability.
The stock market or even a firm cannot be studied in vacuum. The survival of all the
companies within an economic environment, would predominantly be dependent upon the
performance of the economy as a whole. For example, the demand for a company’s goods

29
and services is expected to result in the increase in the sales and thereby increase the profits
during a period of economic prosperity. The stock markets are in a favourable condition
when the economy is expected to grow.
For the purpose of obtaining the perspective of investment, the factors effecting the economic
environment in which investments are made must be determined. The present economic
condition and the direction to which the economy is moving to, and the implications of the
decisions for investment must most essentially be determined. This kind of an analysis
permits an investor to opt for the specific industry in an economy which appears to offer
opportunities of profitability. Such an analysis would certainly aid in the finding out of the
type of investment that must be made among the riskless investment, real assets, common
stocks or short-term or long-term bonds.
APPROACHES OF FUNDAMENTAL ANALYSIS
There are two approaches of Fundamental Analysis. They are as follows:
1. Top – Down Approach
This approach is also known as Macro Fundamental analysis. The fundamental
analysts, as per this approach, initially makes an investigation of both the national
economic indicators as well as the international economic indicators including the
growth rate of the GDP, inflation and the interest rates. Then after this economic
analysis, a detailed analysis is done on various industries and finally the best company
is chosen from the industry selected based on the industrial analysis. The Company
analysis is done using variables such as Dividend per Share, Earnings per Share, Price
Earnings Ratio, etc. The investment decision is made in stocks of companies based on
the results of the analysis hence obtained.
2. Bottom – Up Approach
This approach is also known as Micro Fundamental analysis. The fundamental
analyst, according to this approach, begins the study using specific companies that he

30
has selected, irrespective of the industry and economy and studies the feasibility of
investments in these companies. Later, an analysis is made on the Industry and the
economy in which these selected companies operate. The investment decision is made
in stocks of companies based on the results of the analysis hence obtained.
AN ANALYSIS FOR THE ECONOMY
Investments made in ownership securities and fixed income are very closely associated with a
country’s economic activity. An investment made in the equity capital of a company is
expected to yield greater profits when the company is operating in a strong, stable and
prosperous economy. Therefore the stock markets are in a favourable condition when the
economy is expected to grow. By the same token, strength in an industry that has evidenced
rapid growth in the past suggests that companies within that industry and on the periphery of
it will benefit from this growth and that, in the end, they will provide substantial rewards.
Not all industries grow at the same rate, nor do all companies. The growth of a company or
an industry depends upon basically on its ability to satisfy human wants through production
of goods or performance of a service. How people earn their living and where they spend
their money will, in the last analysis, determine which company and industry will grow and
will prosper and which will decline.
In contrast, if there is a strong expectation that the country’s economy would decline, if there
is a seriousness in the implications and hints in the investment in debt or equity instruments,
if it could be certain that the next three years could bring a recession, this fact would be
reflected in our investment position. Generally it would suggest a greater attention to fixed
income obligations, because these would offer considerably more safety than equity. It is
important, therefore to analyse the national economy, attempts to determine its course over
the next twelve months to three years to obtain some investment perspective determine what
the longer-term possibilities are.

31
Once this has been accomplished, the growth of the national economy can be used to forecast
the growth of an industry or company and thus to determine those areas offering those
opportunities. This process will also help to point out industries and companies that should be
avoided because they appear to offer less attractive opportunities as a principal strong and
stable economy with real growth is favourable for investments.
THE SIGNIFICANCE AND INPRETATION OF THE ECONOMIC
INDICATORS
An analysis of the economy is made by the investors mainly for the purpose of determining
the strategy for investment. Economic forecasts need not be made by the investor on their
own. However, his basic responsibility is to learn the economic trends and make adjustments
to the position of the investment accordingly. Many of the published forecasts are excellent
and provide the necessary perspective.
The variables taken into consideration for the purpose of this analysis has their own
significance. One of the most useful indicators is the GNP in nominal terms and GNP in real
terms. Increase in price or inflation is negative to the equity price. Therefore a favourable and
desirable variable would be the real growth of GNP without inflation. Higher rates are
unfavourable for investment in both bonds and most equities; if inflation is expected to be
very high next year, this fact will have an unfavourable effects on the stock markets now.
Business investment is an important economic variable to watch. The expectation of an
increase in business investment is an optimistic condition for the economy and the stock
markets.
A leading indicators is very useful. These rising indicators are bullish for the stock market
and the economy as a whole. Federal Reserve Bank of Dallas economist, Wallace H. Duncan,
has developed what he considers to be a better leading indicator. He divides quarterly GNP

32
minus business investors into customer durables plus residential and business fixed
investment. As the ratio rises, this is a sign that the economy will strengthen and that the
stock market should turn up. A high level of housing starts is a good indicator of business
condition. A high level of auto production and the expectation growth are favourable
indicators. The figure must be interpreted realistically. However, in inflationary conditions, a
decline in housing starts and Auto production would be a welcome sign, for it would signal
reduced pressure on prices. An increase in business investors is good for the economy under
conditions of inflation. But under the stable conditions, it signifies the economy is slowing
down, which would be unfavourable. Increase in employment and decrease in unemployment
are favourable for economy; the opposite situation is unfavourable. An increase in personal
income couples with substantial consumers’ confidence is favourable economic indicator. An
increase in savings is a negative indicator in depressed times, but positive under inflationary
conditions. A deficit is positive for a depressed economy, nut negative for an inflationary
economy.
Another indicator to be examined is the balance of trade and the price of the currency in
foreign exchange market. Deficits in trade and balance of payment position depreciate the
currency in foreign exchange market and it has a negative influence on the economy and the
securities market. Further high long-term interest rate and short-term interest rate are
unfavourable for the economy under normal conditions. They are quite unfavourable for
equity prices. High interest rate, then would be negative influence on stock market.
A high level of corporate profit and the expectations for the increased corporate profit are
favourable for the economy and the stock market. Generally, GNP in real terms is low when
the corporate profits are low and vice versa.
Stock markets that are rising suggest that there would be growth for the next nine months or a
year in the economy. Whereas stock markets that are declining suggest that there wouldn’t be
any substantial growth for the next one year in the economy.

33
An investor avails a convenient reference for the purpose of interpreting the direction to
which the economy and the stock market is moving, if he analyses these variables. This
reference along with some professional opinion about the economy will lead an investor to
establish a sound policy for investment.
THE CONCEPT OF INDUSTRY
In a broad sense, an industry can be considered as a community of interests. This concept may
reflect the idea of a group of persons who come together as they perform a specific kind of
work or manufacture a similar kind of a product. Such a kind of group includes
manufacturing, agriculture, merchandising and also mining. In the economic perspective,
these groups are classified into distinct industries as they perform distinct products and with
distinct processes. We tend to think of an industry as a product- or process-oriented unit. The
automobile industry, for example, reflex both the concept of the end product- the automobile-
and the method of production- the manufacturing process. The banking industry also shows
the concept of an industry. Basically, the banking industry consists of predominantly
commercial banks that make business and advance loans to consumers. In this industry, the
product served is money and the process refers to the process of lending.
The classes of industries are unlimited. If we classify industries by the process of
manufacture, then we can divide them according to the nature of their function; for example,
the manufacturing industries, the transportation industries and the public industries.
The classification of an industry is important when we analyse its growth. Each industry
takes its share of GNP and competes with every other industry. Thus the manufacturing
industry competes with agriculture, transportation and public utilities. This inter-industries
competition is important. And within each major industry classification, the product or
service oriented segment competes for a share of the GNP. We are mainly interested in the
service and product oriented industries. An industry can then be defined as, a limited set of
productive function or activities measured by the output of an end product or services.

34
Changes can be observed much more easily than if a broader classification is used. These
changes and expectations of change should cause an investor to react favourable or
unfavourable towards an industry for investment.
INDUSTRY ANALYSIS
Different industries in an economy exhibit variations in the rate of growth and in their overall
contribution to the economy. Some of these which contribute to the output of various sectors
have exhibited more growth than the growth in the GNP and also portrays a trend which
makes it able for a continued growth. On the other hand, there are other industries that have
sustained a rate of growth parallel to that of the rate of growth in the GNP. There are yet
other industries that doesn’t have the ability for making expansions and these industries have
a reduced significance in the economy.
For being a successful investor, one needs to make an analysis on the industry’s significance
in the economy and make investments only in the industries which yield a continued success
and this can be ascertained by measuring the ability of the industry to compete for a share in
the GDP that is good enough to do so. Therefore a logical position to start investments would
be to search for the industries which are anticipated to grow at a rate higher than that of the
real rate of GNP in the future.
THE INDUSTRY GROWTH CYCLE
According to the Industry Growth Cycle, an industry’s growth is divided into 3 stages.
Grodinsky, in his book on investment, divided the growth cycle into the stages which was
quite similar to the Kuznet’s concept. It is as follows:
 The pioneering stage
 The expansion stage
 The stagnation stage

35
1. The Pioneering stage
This stage can be comparable to Kuznet’s discovery stage, the stage when the
technological development takes place. Its primary characteristics are a rapid
expansion in the demand for products and sudden increase in the population.
2. The Expansion stage
This stage in the growth cycle is characterised by an expansion in the demand for
products, but the rate at which this expansion in demand takes place is less than that
in the Pioneering stage. In this stage, a greater stability of production and prices of
products can be observed. Since a small number of large firms dominate the industry,
it can be understood that the level of competition is intense. These firms are financed
well. These firms have a financial structure that is quite strong and their current
financial position is excellent. They have an established dividend policy and are able
to expand from internally generated funds, making them independent of the long term
capital markets except for major capital expenditure programme.
3. The Stagnation stage
In the Stagnation stage, it can be observed that the rate at which the industry grows
reduces. There is no growth at all in certain industries, and in this phase, the output
actually reduces. The industry simply loses its power to expand. When the national
economy shows economic strength, the growth of an industry in the stagnation stage
does not keep pace and its output falls faster than the economic increase. It can be
learnt that if the investors doesn’t understand the change taking place in the industry,
they will be taken by a surprise because the shift from the expansion stage to the
stagnation stage happens very gradually.

36
COMPANY ANALYSIS
The performance of a company may be enhanced by specific market and economic
environment, for a given period of time. It is ultimately a firm’s own capabilities that will
judge its performance over in the long run. For this reason, firms in the same industry are
compared to one another to ascertain which one is the best performer, i:e, which firm earns
the most frequently used tools. Ratios are popular because they are easily understood and can
be computed with ease. Ratios may be computed and interpreted from two positions. They
may compiled over a number of years to perceive trend. This is called time series analysis.
An alternative is to compute ratios at a given time for several firms within an industry is
called as gross section analysis. The time series and gross section series may be used
together, but rarely will all the ratios indicate the same general tendency. When they are
taken as group, the ratios give the investor an indication of the direction in which the firm is
moving and its financial position is compared with the other firm since a large number of
ratios may be calculated, the individual should select those that are best suited to his or her
specific purpose. This selection will depend on the type of industry and the objective interest
of the investigator in the firm.

37
A. Marketing:
The first variable that influence future earnings in terms of both quality and quantity
is the marketing results of the firm in comparison to industry . This in turn is
determined by the share of the company in the industry, growth of its sales and
stability of sales. A company in a strong competitive position will provide greater
earnings with more certainty than a company in a poor competitive position. The
company with diversified activity should be competitive in all areas of its production
activity.
1. Sales:
The rupees amount of annual sales and its share of market aids in the determination of
the relative competitive position of a company within the industry and how successful
it has been in meeting competition.
2. Growth in Sales:
The annual growth in sales is equally if not more important than the amount of sales
in determining the competitive position of the company. Expanding annual sales and
adequate financing firm will be in a better position to earn money.
3. Stability to sales:
Stability of sales will provide stable earning for a firm, other things being equal. A
stability in sales will allow for better financial planning and plant utilisation of plant.
Aggregate sales of various industries vary in their degree of stability and company’s
sale should have same pattern as that of the industry.
B. Accounting polices:
The risk of faulty interpretation of corporate earnings and consequent bad judgement
in purchasing, keeping or selling stock. The accounting variations in reporting cost,
expanses and extraordinary items could change earning to a great extent, some of the
accounting variation or policies are:

38
1. Inventory pricing:
Due to change in the prices, the value of the inventory may change greatly during an
operating period. Methods of inventory pricing such as, cost or markets value
methods in which case the inventory would be priced at lower of the market price or
the average cost of inventory.
* FIFO (first in first out)
* LIFO (last in first out)
The inventory pricing methods affects profitability and inventory costs, i.e. assets of
the company as reported in balance sheet. In an inflationary situation FIFO will reflect
higher profits because of increase in carrying inventory cost LIFO method will make
the inventory costs only historical cost and thus will under-evaluate the assets of the
company and will reflect lesser profits.
2. Depreciation methods:
The depreciation for the wear and tear of the machinery and so reduction in value of
assets is provided as fixed expenses. The change in providing provision for
depreciation will thus affect net income and also affect the valuation of the assets.
Higher depreciation will thus affect net income and also affect the valuation of the
assets. Higher the depreciation will reduce income and undervalue the fixed assets of
the firm. The following 3 methods used for depreciation:
a. Straight line method
b. Non- operating income
c. Double declining balance
d. Sum of the years’ digit
e. Tax carryon
C. Profitability:
When a security is purchased, the right on its future earnings associated with it is also
purchased. An investor would be concerned about the stability of the income amount

39
and the growth of these earnings, especially the amount of income when it is received.
Therefore, a rational investor normally opts for the companies which has stability and
growth in terms of its sales because it is presumed that earnings would grow as the
sales grow.
The trends that show the ratios of profitability are as follows:
 Return on Equity
 Gross Profit margin
 Net Profit margin
 Earnings power
 Earnings per share
 Cash Earnings per share
D. Dividend policy:
In the most cases it is observed that the management tries to have a stable dividend
policy and increases the dividend only when they expect they will be able to maintain
the higher rate of dividends in future.
E. Capital structure
By using the financial leverage, i.e. using debt financing instead of equity financing,
the return on the equity holder’s investments can be optimised. Such a use of financial
leverage can be assessed with the help of capitalisation ratios which indicates the
extent to which the firm finance its assets by the uses of debt or preference share.
These ratio are also referred as debt ratio.
1. Preference shares
2. Debt (Earning limit of debt & assets limit of Debt)

40
F. Financial analysis:
For the purpose of financial analysis, an investigation is done on the company’s
solvency position and the liquidity position. Unless a company has a strong financial
position in the present, it cannot be considered profitable for investments. For the
purpose of assessment of current financial position, an analysis is done on the current
assets and its composition, the relationship between the current assets and current
liabilities, as well as the cash flow analysis must be conducted.
The ratios used are as follows.
1. Current Ratio
2. Inventory period
3. Collection period
4. Quick Ratio or Acid test ratio
5. Working capital turnover
G. Operating efficiency:
A company that is constantly expanding its physical facilities and continues to operate
at full capacity is more to produce profits in the future. A company that is expanding
and maintaining a high operating rate with a low breakeven point will be a profitable
company. A company with the stable operating rate will have more stable revenue,
income from sale is the results of optimum use of the capital assets combined with the
labour, raw materials and management. For the growth of sales the capital assets base
should expand preferably from funds generated internally through company’s
reputation.
H. Management:
The duty of the management is to attain the goal of the organisation in a manner that
is effective and efficient through planning, leading, organising and controlling the
recourses of the organisation. This general definition Management conveys two
important ideas:

41
1. Managers are responsible for the attainment of various organisational objectives
both effectively and efficiently.
2. Management includes four basic function, such as
* Planning
* Organising
* Leading
* Controlling
AN APPRAISAL FOR FUNDAMENTAL SECURITYANALYSIS
Ratios for Investors to Analyse Stocks of Companies
1. Liquidity Ratio
a. Current Ratio =
b. Quick Ratio =
c. Interest Earned =
d. Average Collection Period =
Current Assets
Current Liabilities
Current Assets - Inventories
Current Liabilities
Earnings Before Tax + Interest Charges
Interest Charges
Earnings Before Tax + Sales
Interest Charges

42
2. Profitable Ratio
a. Profit on sales =
b. Return on Total =
3. Leverage Ratio
a. Debt to Total Assets =
b. Fixed Charges Coverage =
c. Inventory Turnover =
4. Activity Ratio
a. Fixed Assets Turnover =
b. Total Assets Turnover =
5. Equity per Share
EPS =
Net Profit
Sales
Net Profit
Total Assets
Total Debt
Total Assets
Income Available for Fixed Charges
Fixed Charges
Sales
Inventory
Sales
Fixed Assets
Sales
Fixed Charges
Profit After Tax - Preference Dividend
Number of Equity Shares

43
6. Price Earning (P/E) Ratio
P/E Ratio =
7. Dividend Yield
Dividend Yield =
8. Cover for Equity Dividend
Cover for Equity Dividend=
9. Pay-out Ratio
Pay-out Ratio =
- or -
Pay-out Ratio =
Market Price per Equity Share
Earnings per Share
Dividend per share X 100
Market Price per share
Earnings after Tax-Preference Divined
Total number of Equity Dividend
Equity Share Capital + Reserves
Total Number of Equity Shares
Net Worth - Preference Share Capital
Total Number of Equity Shares

44
CHAPTER-4
ANALYSIS AND
INTERPRETATION

45
4.1 Economic Analysis
The Economy of India in the era post-independence, i:e from the year 1947 to till 1991 was based
on the model of a mixed economy that combined the characteristics of the capitalism model of
economy and the socialism model of economy.
In 1991, India adopted the LPG policy and thus the policies of liberalisation. With the direction of
the then Minister of Finance Dr. Manmohan Singh and under the Prime Ministry of Late. P.V.
Narasimha Rao, the economy was set free and was open for international trade. The system that
prevailed since the British rule, namely the Licence Raj system, by which the government had
strict controls over the setting up of new industries was removed during this period. Many other
fundamental reforms took place after the year 1991. As a result of all these policies, India moved
towards a free market economy.
The economy of India is the world’s ninth largest economy in terms of the nominal GDP and also
is the world’s third largest economy in terms of Purchasing Power Parity (PPP). India is one of the
members of BRICS and is one of the economies in the G-20 major economies. India stands at
141st
rank, according to the basis of per-capita-income, on grounds of nominal GDP.
4.1(a) Gross Domestic Product (GDP)
One of the basic indicators that can be used in order to assess the health of the economy of a
country is the Gross Domestic Product (GDP). GDP or Gross Domestic Product is the
total monetary value of all the finished goods and services that is produced in a specific time
period, usually a year, within a country's borders. Even though the GDP is normally ascertained on
a yearly basis, ascertainment of GDP on a quarterly basis can also be done. GDP is inclusive of all
public consumptions and private consumption, expenditure of the Government, balance of
payments as well as investments that happen within an economy. In simple words, it can be said
that GDP is a broad measurement of the total of all economic activities of a nation.

46
GDP at Factor Cost at Constant Prize
The following data shows the GDP of the economy.
Year GDP (Rupees in billion)
2010-11 4937006
2011-12 5247530
2012-13 5482111
2013-14 9921106
2014-15 10656925
Sector-wise contribution to India’s GDP
There are three sectors into which the economy of India is categorised — the Primary Sectoor or
the Agricultural sector, the Secondary Sector or the Industrial sector and the Services sector.
GDP (Rupees in billion)
0
2000000
4000000
6000000
8000000
10000000
12000000
2010-11 2011-12 2012-13 2013-14 2014-15
GDP at Factor Cost at Constant Prize

47
The Agriculture sector comprises of Agriculture (including livestock) as well as the activities that
are allied to it such as Forestry, Fishing, & Logging, and some associated activities. The Industrial
sector comprises of registered & unregistered Manufacturing, supply of water, gas, electricity as
well as construction, and other such activities. Whereas the Services sector includes restaurants
and hotels, repair, Transportation, Banking, Insurance, communication and services related to
broadcasting, Storage services, real estate and professional services such as financial advice, legal
advice and such other advisory services.
The sector-wise GDP of India for the year 2014-15 according to the CIA’s composition is as
follows: Primary Sector (17.90%), Secondary Sector (24.20%) and Services Sector (57.90%).
India is 2nd
largest producer of agricultural produce in the world. India accounts for 7.65% of total
agricultural output of the world. The GDP contributed by the Industrial sector accounts up to
$494.34 billion and therefore is ranked is 12th
in the world. The Indian Services Sector is ranked
11th
in the world as the contribution of this sector to the GDP is $1184.34 billion. The contribution
of the Agricultural sector of India is much higher than that of the average contribution of the world
by this sector (6.2%). Whereas the contribution of Secondary Sector and the Services sector is
much lower than that of the average contribution of the world by this sectors (30.4% by the
Secondary Sector and 63.4% for the Services sector).
The following is the contribution of each sector as for the year 2014-15.
Sector of the Economy Contribution to the GDP
Agriculture 17.90%
Industry 24.20%
Service 57.90%

48
GDP Ranking 2015
This ranking of GDP is based on the projection given by IMF in April 2015. The top 10
economies of the world in nominal terms in 2015 were: USA, China, Japan, Germany, UK,
France, India, Italy, Brazil and Canada. Whereas, the top ten countries on the basis of PPP were:
China, United States of America, India, Japan, Germany, Brazil, Russia, Indonesia, France and
UK. Among the top 10 countries, 8 countries are common by both the methods. Italy and Canada
are the others 2 countries that are in the top 10 on nominal basis, whereas Russia and Indonesia are
in the top 10 on PPP basis. 66.34% & 61% of the total global wealth in terms of nominal and PPP,
respectively is shared by the top 10 countries.
Service
57.90%
Industry
24.20%
Agriculture
17.90%
Sectorwise Contribution to the GDP

49
The following are the statistics of the top 10 economies based on their GDP in 2015.
Rank Country
GDP (Nominal)
($ in billion)
1 USA 17968
2 China 11385
3 Japan 4116
4 Germany 3371
5 UK 2865
6 France 2423
7 India 2183
8 Italy 1819
9 Brazil 1800
10 Canada 1573
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
USA
China
Japan
Germany
UK
France
India
Italy
Brazil
Cannada
1 2 3 4 5 6 7 8 9 10
GDP Ranking 2015

50
GDP Growth Rate
The growth rate of the GDP of the Indian economy from the year 2000 till the previous rate is as
announced by the Ministry of Statistics and Program Implementation (MOSPI) is as follows:
Year
Percentage of Real
Growth
2000 5.61
2001 6.00
2002 4.32
2003 8.31
2004 6.21
2005 8.46
2006 9.24
2007 9.00
2008 7.41
2009 7.40
2010 7.10
2011 6.80
2012 6.51
2013 5.10
2014 6.90
2015 (estimate) 7.30
The above table shows that the present annual growth rate of Indian GDP in compared to the past
five years has increased, signalling the increase in the economic activities. This signal is conducive
for investments.

51
4.1(b) Indian Foreign Exchange Reserves (1998 to 2016)
The foreign assets that are controlled or held by the central bank of the country are called as
Foreign Exchange Reserves in India. These reserves comprises of gold or a certain currency.
These reserves can also be treasury bills, equities and corporate bonds, foreign currency loans as
well as Government bonds.
The Foreign Exchange Reserves in India as on February 26th
, 2016 was US$ 346734 Million. This
reserve, in India, averaged to US$ 193406.26 Million from the year 1998 until the year 2016, thus
reaching an all-time peak of US$ 383634 Million in December, 2009 and a record low of US$
29348 Million in June of 1998.
The Foreign Exchange Reserves in India, is reported by the RBI. The Indian economy has a
good amount of Foreign Exchange Reserves, making it safe for investments.
4.1(c) Foreign Direct Investments (FDI)
The Indian economy has risen to a greater extent on grounds of Foreign Direct Investment (FDI)
due to the development of the economy which was seen in India in the past two decades. In the
recent past, FDI has been the most non-debt financial factor influencing the growth of the Indian
economy. Special investment vantages like tax benefits on the invested amount and cheap cost
wages, and such other advantages has attracted foreign companies to make investments in India. A
wide range of industries have been benefited by the FDI in India and this has enhanced the foreign
investors’ trust and faith in the Indian economy.
The Indian Government has created an atmosphere conducive for trade and has formulated
effective business policy measures in place conducive for FDI for the purpose of ensuring a
smooth FDI inflow in the economy. This strategy can be noticed in the steps that the Government
has taken, such as reduction in the restrictions levied on sectors such as defence, stock exchanges,
telecommunications, power exchanges, oil refineries, PSU and such other industries.

52
The Indian Market for FDI
A remarkable increase in the inflow of FDI made in India was seen in the previous fiscal year
(2014-15). This was possible mainly due to the pro-growth business policies of India. A net
inflow of USD 14.10 million FDI in India was seen during the first 5 months of the fiscal
year 2014-15 and this amounted to a 33.50% increase in the FDI influx registered for the
corresponding period during the previous fiscal year. The neighbouring country Mauritius has
become the country with the largest Foreign Direct Investment (FDI) inflow into India with
an aggregate investment of USD 343,934 million between April 2000 and November 2014.
4.1(d) Inflation
Inflation can be measurable with the use of the Consumer Price Index (CPI). Inflation rate
depicts the yearly the percentage change in the cost, to an average consumer, of buying a
basket of goods and services that may be fixed or changed at specified intervals, such as
yearly.
The following data shows the Inflation rates for the past five years as recorded by the
Ministry of Statistics and Program Implementation (MOSOI).
Year Inflation Rate
2011 8.9
2012 9.3
2013 10.9
2014 6.4
2015 6.23

53
From the table and chart above, it can be inferred that the inflation rate is lowest when
compared to that of the other years in the past five years. This signals that the economy is
stable because the inflation rate is controlled. Therefore India is a favourable economy for
investments.
4.2 INDUSTRIAL ANALYSIS
The origin of the Banking industry in India dates back to the 18th century. Since then, the industry
experienced a varied evolution. In India, the early banks were basically traders’ banks which
involved in only in financing activities.
In the era prior to independence, the banking industry evolved when the British established
Presidency Banks, which were later amalgamated into Imperial Bank of India and subsequently
into the State Bank of India (SBI).
8.9
9.3
10.9
6.4 6.23
2011 2012 2013 2014 2015
Inflation Rate

54
During the early period of the industry, there were majorly private banks that had a highly unstable
work environment. In the years 1969 and 1980, a major step has been taken towards public
ownership and accountability with the Nationalisation of major banks in India. This transformed
the face of banking sector in India. Recently, after having recognised the importance of private
players and foreign players in a competitive scenario, India has moved towards greater
liberalisation.
CURRENT STATE AND FUTURE PROSPECTS OF INDAN BANKING INDUSTRY
4.2(a) Performance as per the Balance Sheet Analysis
Indian banks have relatively strong balance sheet and is doing well according to a study conducted
comparing different ratios of Indian banks with those of France, Chinese, Malaysian, Korean,
German, US and Turkey banks.
Following are a few ratios that show performance of banks
 Return on Equity-
Indian banks have 15.3 % Return on Equity, highest being Turkey with 19.5 % among the
above mentioned economies.
 Cost to income ratio-
Indian banks have 47.3 % Cost to Income Ratio, lowest being Singapore with 40.1%
 Price to Book ratio
Indian banks have 1.8 PBV, lowest being Germany with 0.3 %
 Bad debt to Asset ratio
Indian banks have 0.6 % bad debt to asset ratio, lowest being France with 0.2%
All Indian banks as a whole are performing well, tough there is scope for improvement.

55
4.2(b) Growth Rate of Indian Banking Industry
 Indian banking industry can be 3rd largest by 2025 having the current growth rate, with
China at 1st
rank and US at 2nd
rank (Considering total banking assets as the barometer).
 Around 1000-1500 saving banks accounts per branch for Large PSU banks, Foreign
banks, New generation private banks
 Around 500-1000 savings accounts per branch for Small PSU banks and old generation
private banks.
 As their major source of funds the number can be improved as banks have CASA (current
account saving account).
4.2(c) Diversifying in New Channels
 The major revenue for banks in early 2000’s was from services of cash and cheque.
 Currently, banks are diversifying in various aspects for generating revenue. Some of the
innovation in banking are ATM card, Mobile- POS (point of sale), Credit cards (POS),
online banking and mobile banking.
 The banks investing in new technologies will emerge as market leaders.
4.2(d) Operating model change
 There has been a revolution in the banking industry made due to the presence of foreign
banks and New Generation Private Banks which have been adapting to new technology
quickly and effectively. These banks offer services such as centralized inward clearing,
outward clearing, and account opening.
 Comparatively, the large and small PSU banks and old generation private banks are not
investing in technology as much as the foreign banks do. The old generation banks have a
scope for improvement in their operating model by adapting to change in technology and
services.

56
4.2(e) Bad debts
Gross NPA in priority sector lending can be decreased from the current levels. The following are
some figures of gross NPA as on 31st
March, 2011.
 4.96 % gross NPA for Unsecured and student loans.
 4.34 % gross NPA for MSME loans.
 4.01 % gross NPA for Auto loans.
 3.74 % gross NPA for Agriculture loans.
4.2(f) Bank Index
It represents the 12 most liquid and large capitalised stocks from the banking sector which
trade on the National Stock Exchange (NSE). It provides investors and market intermediaries
a benchmark that captures the capital market performance of Indian banking sector.
Year Index Points
2011 8027.4
2012 12485.15
2013 11385.75
2014 18535.35
2015 13914.9

57
Year
Index Points
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
1
2
3
4
5
NIFTY Bank Index 2011 - 2015
Year Index Points

58
4.3 Company Analysis
This study covers the stock price of 5 banking stocks for a period of 5 years ranging from
2011 to 2015. Five years’ monthly closing prices of banking stocks have been taken for
testing the relevance of fundamental analysis. Five banking stocks with highest market
capitalization are chosen. The banking companies chosen for the study are:
 SBI (State Bank of India)
 Bank of Baroda
 PNB (Punjab National Bank)
 IDBI
 Canara bank
4.3.1 State Bank of India
State Bank of India is a public sector bank. It is one of the largest multinational banking
companies in India.
SBI is a Government of India owned bank. It has its headquarters in Mumbai, Maharashtra. The
total assets of SBI was INR 20,48,080 crores as of 2014-15. SBI had 16,334 branches, including
191 foreign offices spread across 36 nations, that makes it the largest banking and financial
services company in India by assets. SBI has a market share of 20% in deposits and loans among
the Indian commercial banks.
Key People
 Arundhathi Battacharya – Chairman
 Parveen Kumar Gupta - Managing Director
Products & Services
 Corporate banking
 Consumer banking

59
 Mortgage loans
 Private equity
 Asset management
 Credit cards
 Finance and insurance
 Private banking
 Investment banking
 Savings
 Securities
 Wealth management
Market Capitalization
The holdings of the Government of India was about 58.6% of the equity shares in SBI as on 31st
March, 2014. The largest non-promoter shareholder in the company with 15% shareholding is LIC
of India.
Shareholders Shareholding
Promoters: Government of India 58.61%
Banks & Insurance Companies 16.80%
FIIs/GDRs/OCBs/NRIs 12.05%
Mutual Funds & UTI 03.79%
Private Corporate Bodies 02.88%
Others 5.96%

60
Ratio Analysis
Key Financial Ratios Mar-11 Mar-12 Mar-13 Mar-14 Mar-15
Earnings per Share 168.3 228.6 261.9 189.9 227.6
Dividend per Share 30 35 41.5 30 3.5
Income per share 1789.6 2193.6 2455.7 2532.4 2785.7
Average Dividend Yield (in
percentage) 1.1 1.5 1.9 1.5 1.3
Average Price / Income Ratio 1.5 1 0.9 0.8 0.1
Average Price / Earnings Ratio 16.4 9.9 8.3 10.3 1.2
Dividend Pay-out Ratio (in percentage) 17.8 15.3 15.8 15.8 1.5
Net Interest Margin (in percentage) 9.83 10.75 10.9 7.66 8.42
Operating Profit Margin (in
percentage) -20.26 -9.41 -8.48 -12.37 -15.28
Cost to income Ratio (in percentage) 46.38 40.55 37.6 40.8 41.42
Source of information: www.moneycontrol.com and www.equitymaster.com
Intrinsic Value and Investment Decision
Average Price / Earnings Ratio 9.22
Expected EPS 215.26
Intrinsic Value 1984.69
Current Market Price (18th
March, 2016) 191.5
Investment decision BUY
Market value of the stock is low when compared to the intrinsic value. This implies that the
stock value in the market is undervalued. So it is recommended to buy the securities.
When an investment is made in a company, the intrinsic value should be lesser than that of
the market value and when an investment is made in a market, the market value should be
lesser than that of the intrinsic value.

61
4.3.2 Bank of Baroda
Bank of Baroda is an Indian state-owned banking and financial services company. It has its
headquarters in Vadodara (Baroda) in Gujarat, India.
It is the 2nd
largest bank in India, next to SBI. Its headquarters is in Vadodara, it has a corporate
office in the Bandra Kurla Complex in Mumbai.
Based on the data of 2014, Bank of Baroda ranked 801st
in Forbes Global 2000 list. The bank has
a total assets in excess of INR 3.58 trillion, a network of 5304 branches in India and abroad, and
over 7000 ATMs.
Key People
 Mr. P. S. Jaykumar – Chairman
 Mr. Shiv Badan Yadav – Whole Time Director and Chief Financial Officer
Products & Services
Corporate banking, Consumer banking, Credit cards, investment banking, finance and insurance,
private banking, mortgage loans, wealth management, private equity, etc.
Bank of Baroda was established in the year 1911 as a Large Cap company, having a market
capitalisation of Rs. 32,831.49 crore.

62
Ratio Analysis
Earnings per Share 113.2 127.7 114 116.5 17.6
Dividend per Share 16.5 17 21.5 21.5 3.2
Income per share 575 741.6 865.1 942.3 201.9
Average Dividend Yield (in percentage) 2 2.1 2.9 3.6 1.7
Average Price / Income Ratio 1.4 1.1 0.9 0.6 0.9
Operating Profit Margin (in
percentage) 5.02 3.65 0.65 -1.45 -.359
Expected EPS 97.8
March, 2016) 144.3

63
4.3.3 Punjab National Bank
Punjab National Bank is an Indian multinational banking and financial services company. It is
a state-owned company based in New Delhi, India.
The bank was founded in 1894, and presently has over 6,200 branches and over
7,900 ATMs across 761 cities. The bank serves over 80 million customers.
Punjab National Bank was India’s first Swadeshi Bank which commenced its operations on 12th
April, 1895 from Lahore, with an authorised capital of INR 2 lacks and working capital of INR
20,000.
Key People
 Mr.K V Brahmaji Rao - Executive Director
 Mrs.Usha Ananthasubramanian - Managing Director & CEO
Products
corporate banking, consumer banking, finance and insurance, Credit cards, mortgage
loans, investment banking, private equity, wealth management, private banking.

64
Ratio Analysis
Dividend per Share 22 22 27 10 3.3
Income per share 869.6 1105.5 1218.7 1241.7 1313.3
Average Dividend Yield (in percentage) 2 2.2 3.4 1.6 1.8
Operating Profit Margin (in percentage) 3.12 1.96 1.45 -2.61 -5.81
Expected EPS 123.12
March, 2016) 84.5

65
4.3.4 IDBI
IDBI Bank is an Indian government-owned financial service company, it is commonly known
as Industrial Development Bank of India. The Headquartered is located in Mumbai, Which
was established in 1964 by an Act of Parliament this is to provide credit for the public and
different financial facilities for the growth of the fledgling Indian industry.
Key people
B K Batra - Deputy Managing Director
Kishore Piraji Kharat – MD and CEO
Products & Services
 Finance and insurance
 Corporate banking
 Consumer banking
 Mortgage loans
 Private equity
 Private banking
 Wealth management
 Agriculture Loan
 Investment banking
76.34% of the shares were held by the Government of India as on 31 March 2014 in IDBI
Bank. More than 4.5 lakh public shareholders owned 8.34% of the shares of the bank.
Insurance companies held approx. 12.43% of the shares while remaining 2.89% shares were
held by others.

66
Ratio Analysis
Dividend per Share 3.5 3.5 3.5 1 0.75
Income per share 189.1 183 188.1 165.9 175.6
Average Dividend Yield (in percentage) 2.3 3 3.6 1.4 0.9
Average Price / Earnings Ratio 9.7 7.4 6.9 10 14.7
Dividend Pay-out Ratio (in percentage) 22 22.3 24.7 13.9 12.8
Operating Profit Margin (in percentage) -3.5 -0.78 0.58 0.35 0.26
Expected EPS 11.78
March, 2016) 67.2

67
4.3.5 Canara Bank
In the year 1906, Canara Bank was established in Mangalore. Canara Bank is an Indian state-
owned bank and its headquarters is located in Bangalore, Karnataka. The bank is one of the oldest
banks in India. In the year 1969, the Government nationalized the bank. In November 2015, the
bank had a network of 5734 branches and more than 9143 ATMs spread across the country. The
bank also has offices in London, Moscow, Hong Kong, Shanghai, Dubai, Doha, and New York.
Key People
Rakesh Sharma - MD & CEO
Products & Services
 Commercial Banking
 Consumer Banking
 Investment Banking
 Private Banking
 Retail Banking
 Pensions
 Asset Management
 Credit Cards
 Mortgages
The current market capitalisation stands at Rs 10,151.22 crore.

68
Ratio Analysis
Earnings per Share 91.9 75.4 67 57 60.3
Dividend per Share 11 11 13 11 10.5
Income per share 519.2 695.6 769.1 857.9 922
Average Dividend Yield (in percentage) 1.9 2.2 3 3.4 2.8
Operating Profit Margin (in percentage) 4.53 0.46 -1.04 -3.92 -4.28
Cost to income Ratio (in percentage) 26 22.15 22.01 24.06 23.80
Expected EPS 70.34
March, 2016) 190.75

69
CHAPTER-5
FINDINGS,
SUGGESTION AND
CONCLUSION

70
5.1 FINDINGS
5.1.1 Economic Analysis
 India stands third largest by Purchasing Power Parity (PPP) and the Indian economy is the
ninth largest economy in the world by nominal GDP.
 Sector wise Indian GDP contribution are 17.9% Agriculture 24.2% in Industry and 57.9%
in the Service sector.
 In agricultural products, India is the second largest producer
 Year on year, in the last 3 months of 2015, the Indian economy expanded for 7.3%
 Foreign Exchange Reserves in India as reported by the Reserve Bank of India, makes it
safe for investment because India has a good amount of Foreign Exchange Reserve.
 FDI has played an important non debt financial force for the economic upsurge in India
 The consumers save 5% to 10% on their expenses with good quality and less rates which
are the advantages of increasing FDI
 In the year 2011, the inflation rate was 8.9% and in the year 2015, it was 6.23%
 Over the past five years, the inflation rate has been decreased.
 The economic cycle is quite sensitive to the banking sector. Hence it is susceptible to
extremes in prices and valuation that attracts the value investors.
 The Indian economy grew up to 8% and the banking industry is benefited with demand for
credit and market conditions are more expectable for growth of loan books
5.1.2 Industry Analysis
 Balance Sheet and better execution are relatively strong by Indian Banks.
 The Return on Equity is 15.3% by Indian banks.
 Cost of income ratio is 47.3% by Indian banks.
 Bad debts to asset ratio is 0.6.
 Better performance execution is expected from Indian banks. it is expected to be the third
largest by 2025 with the current growth rate in the banking industry, though it is lagging
with Savings Accounts per bank.
 A major source of funds can be from current accounts (CA) and savings accounts (SA).
 Bank with new technologies is adopted by foreign banks and new generation private banks
with more efficiency.

71
5.1.3 Company Analysis
SBI
 According to the market capitalization, SBI is the largest bank in the Public Sector in
India. It has 180 overseas offices spread over 34 countries. In the past few years
compared, employed labours are quite productive and there is no scarcity of labour as
of now.
 EPS has increased. In the year 2013-14, it is 189.9 and in the year 2014-15, it rose to
227.6. This indicates that the profitability of the company has increased.
 Dividend per Share (DPS) has decreased. In the year 2013-14, it is 30 and in 2014-15
it fell to 3.5. This indicates that the company’s declared dividends per share has
decreased.
 Average Dividend Yield has decreased. In the year 2013-14, it is 1.5 and in 2014-15 it
fell to 1.3. This shows that the company’s share price has decreased.
 Net Interest Margin has increased in the year 2014-15 to 8.42, which indicated that
the company has taken a successful decision in investment, compared to it bad debts
situation.
 Operating Profit margin has decreased in the year 2014-15, which indicates “no profit
after payment of Variable costs, associated with business operations”.
 Cost to Income for the year 2014-15 is 41.42. This indicates the increase of the cost
changing, compared to the income of banks.
 The Market Value of the stock is low compared to the intrinsic value. This implies
that the stock value in the market is undervalued. So it is recommended to purchase
the securities.

72
Bank of Baroda
 EPS has decreased in the year 2014-15 to 17.6 which indicates that its profitability
has decreased.
 DPS has decreased in the year 2014-15 to 3.2 which indicates that the distribution of
dividends per share has decreased.
 Average Dividend Yield has decreased in the year 2014-15 to 1.7. This shows that the
company’s pay-out for its dividend for its share price has decreased.
 PE Ratio has been improved in the year 2014-15 and is at 10.8. This indicates that the
company’s earnings per share will increase in the future.
 Net Interest Margin is constant till the year 2014-15 at 0.02, which indicates that the
company’s decisions are constant in investment, compared to it bad debts situation.
 Operating Profit margin has decreased in the year 2014-15 to (-3.59), which indicates
“no profit after payment of Variable costs, associated with business operations”.
 Cost to Income for the year 2014-15 is 31.37. This indicates the increase of the cost
changing, compared to the income of banks.
that the stock value in the market is undervalued. So it is recommended to buy the
securities.

73
Punjab National Bank
 On the basis of market capitalization, this is the third largest public sector bank.
Number of employees and productive capacity of employees are rising. It has 5
overseas branches.
 EPS has decreased in the year 2014-15 to 88.5 which indicates that its profitability
has decreased.
 Average Dividend Yield has increased in the year 2014-15 to 1.8. This shows that the
company’s pay-out for its dividend for its share price has increased.
 PE Ratio has been decreased in the year 2014-15 to 2.1. This indicates that the
company’s earnings per share may not increase in the future.
 Operating Profit Margin has decreased in the year 2014-15 to (-5.81), which indicates
 Cost to Income for the year 2014-15 has increased to 36.8. This indicates the increase
of the cost changing, compared to the income of banks.
securities.

74
Canara Bank
 EPS has increased in the year 2014-15 to 60.3 which indicates that its profitability has
increased.
 PE Ratio has been increased in the year 2014-15 to 6.2. This indicates that the
 Operating Profit Margin has decreased in the year 2014-15 to (-4.28), which indicates
 Cost to Income for the year 2014-15 has decreased to 23.8. This indicates the decrease
of the cost changing, compared to the income of banks.
securities.

75
IDBI
 EPS has decreased in the year 2014-15 to 5.9 which indicates that its profitability has
decreased.
 PE Ratio has been increased in the year 2014-15 to 14.7. This indicates that the
 Operating Profit Margin has decreased in the year 2014-15 to 0.26, which indicates
 Cost to Income for the year 2014-15 has increased to 27.84. This indicates the
increase of the cost changing, compared to the income of banks.
securities.

76
5.2 SUGGESTIONS
 Fundamental Analysis criteria is first rated for long term investments for long term trends.
 Banking sector and investors are more focused on long term value investing
 The investments in stocks which have more market price will not fully reflect the business
future cash flow.
 Analyse the fundamental estimation or valuation of a company stock for investments.
 Realise the intrinsic value to analyse the company’s fundamental ratios.
 Then forecast the economic condition for general economic realisation. The top –down
approach would be the preferred option.
 For a better determination of an investment opportunity, the market value should match
the true value of the company
 Earnings help to identifying the future growth and potential growth opportunities which
are determinants of the stock price.
 Profit margin helps to determine the company that keeps the earnings out of every rupee of
revenue.
 The Return on Equity helps in measuring how efficient a company is in creating its profit,
because it contains the information about the factors like leverage, returning value on
share, margins, profits and revenue.
 It is very important in a long run stock price that it should reflect its fundamental true
value.
 Through Fundamental Analysis of a company, we can identify a company that represent a
good value.

77
5.3 CONCLUSION
The research of fundamental analysis in banking sector is made with the relevant and detailed
information. The decision on the investments can be made more effective with analysis of
 Economic analysis
 Industry analysis
 Company analysis
This helps in long term investment decision.
The study of the fundamental analysis in banking sector, which shows the economic analysis
which represents an increasing trend for the upcoming years in GDP.
The positive economic sign such as increase in FDI inflow, good level of foreign exchange results
and controlled inflation rate is conducive for investments.
In the study of industrial analysis, we can see a higher growth rate with respect to performance of
balance sheet of Indian banking industry, which indicates higher scope of improvement in all over
Indian banks, allowing with higher speed in growth rate and diversifying in new innovative
channels and introducing new operating model changes in banking sector.
In the company analysis, all the five banks are closely studied for five years with the help of ratios
like price earnings ratio, earnings per ratio, dividend per ratio, intrinsic value and current market
price. Through this we can make proper investment decisions whether to buy/sell the securities.
The market value of the stocks of all the selected five banks were low when compared to that of
intrinsic value, which means the stock value in the market for all the five banks were under value.

78
BIBLIOGRAPHY
Book referred
“Investment Analysis – Security Analysis and Portfolio Management” written by V. K.
Bhalla.
Websites referred
www.moneycontrol.com
www.equitymaster.com
http://www.federalcapital.in/
https://www.zaubacorp.com/company/FEDERAL-CAPITAL-MARKETS
https://en.wikipedia.org/wiki/Economy_of_India
http://statisticstimes.com/economy/sectorwise-gdp-contribution-of-india.php

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