Project report on fundamental analysis of scrips under banking sector


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Project report on fundamental analysis of scrips under banking sector

  1. 1. Project Report on Fundamental Analysis of Scrips under Banking Sector<br />Presented By: AFTAB SHAIKH<br />
  2. 2. COMPANY PROFILE<br />SHCIL was incorporated under the Companies Act 1956 on 28th July 1986 at the initiative of the Government<br />Promoted by seven all Indian financial institution<br />Industrial Development Bank Of India<br />Unit Trust Of India<br />ICICI<br />Industrial Finance Corporation of India Ltd<br />Life Insurance Corporation Of India<br />General Insurance Corporation of India and its Subsidiaries.<br />Industrial Investment Bank of India.<br />
  3. 3. SUBSIDIARIES<br />SHCIL SERVICES LIMITED<br />HCIL PROJECTS LIMITED<br />SHCIL COMMODITIES AND DERIVATIVES TRADING LIMITED<br />UNITEC VALUE SOLUTIONS PTE. LIMITED, SINGAPORE<br />Corporate Philosophy:<br />People Organization<br />Owner Mindset<br />Equal Opportunities Employee<br />
  4. 4. SHCIL OFFERS THE FOLLOWING SERVICES TO THE CLIENTS<br />Custodial Services<br />Clearing & Settlement Services (Cash Segment)<br />Electronic & Physical Safekeeping Services<br />SHCIL offers clients<br />Premium Offerings<br />web-delivery<br />Vaults<br />Asset Servicing<br />Clearing Services (Futures and Options segment)<br />DEPOSITORY SERVICE: <br />
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  7. 7. Operating Charges Of SHCIL<br />Account Opening Fees:<br />Rs 7000/- onetime refundable AMC<br />Rs 662 Annual AMC<br />Brokrage charges are <br />Rs. 15 paise for intraday and <br />Rs. 55 paose for holding on account<br />
  8. 8. Management<br />
  9. 9. COMPETITORS ofSHCIL<br />Kotak Securities Limited <br />India Bulls<br /><br />Share Khan<br />MotilalOswal<br />Sbi capital<br />
  10. 10. INFRASTRUCTURE FACILITY:<br />They adopted local area network (LAN). <br />There is mainly one server that stores all the documents.<br />Highly sophisticated computer system.<br />High speed internet and telephone service.<br />Canteen facility.<br />Vehicles parking facility.<br />Well ventilated with air conditioned rooms.<br />Visual display (TV) on every corner.<br />Well maintained sanitarian.<br />Close circuit camera (CCTV) on each cabins.<br />Fire extinguishing systems.<br />
  11. 11. PART B<br />INTRODUCTION TO FUNDAMENTAL ANALYSIS <br />Fundamental Analysisinvolves examining the economic, financial and other qualitative and quantitative factors related to a security in order to determine its intrinsic value<br />Approaches of fundamental analysis<br />Bottom-up approach<br />Top-down approach<br />
  12. 12. Fundamental Analysis Tools <br />These are the most popular tools of fundamental analysis. <br />Earnings per Share – EPS <br />Price to Earnings Ratio – P/E <br />Projected Earnings Growth – PEG <br />Price to Sales – P/S <br />Price to Book – P/B <br />Dividend Payout Ratio <br />Dividend Yield <br />Book Value <br />Return on Equity <br />
  13. 13. Ratio analysis<br />Performance ratios<br />Working capital ratios<br />Liquidity ratios<br />Solvency ratios<br />Technical analysis is the practice of anticipating price changes of a financial instrument by analyzing prior price changes and looking for patterns and relationships in price history. <br />
  14. 14. STAEMENY OF THE PROBLEM<br />There is no significant relationship between return on equity, dividend payout ratio, book value, dividend yield, earning per share, and market price.<br />OBJECTIVE & SCOPE OF THE STUDY<br />To assess the performance of selected banking companies listed in NSE and BSE<br />To evaluate the financial strength of the selected banking companies listed in BSE and NSE<br />To evaluate intrinsic value of shares & compare it with present market price to decide whether a share is overvalued or undervalued<br />To evaluate managements efficiency & internal decisions taken by them to run the business<br />To calculate credit risk<br />
  15. 15. METHODOLOGY<br />Analysis of secondary data like <br />Economy analysis <br />Industry analysis<br />Company analysis<br />Limitation of the study<br />The study is restricted to five years only.<br />The sample is limited to two Public and Private sector banks for analysis.<br />This study uses only nine fundamental financial tools for analysis.<br />Only BSE listed (Group A) public and private limited banking companies were taken for the study<br />
  16. 16. Economy analysis <br />The growth in real GDP <br />Index of Industrial Production <br />
  17. 17. Core infrastructure-supportive sectors growth<br />Inflation in terms of Wholesale Price Index <br />
  18. 18. Policy Rates/Interest Rates (per cent per annum) <br />
  19. 19. INDUSTRY ANALYSIS<br />Post independence<br />In 1948, the Reserve Bank of India India's central banking authority was nationalized,<br />In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India." <br />Liberalization<br />liberalization and gave licenses to a small number of private banks<br />Global Trust Bank (the first of such new generation banks to be set up) which later amalgamated with Oriental Bank of Commerce, <br />UTI Bank (now re-named as Axis Bank), <br />ICICI Bank and<br />HDFC Bank.<br />
  20. 20. COMPANY ANALYSIS<br />
  21. 21. INDUSTRY ANALYSIS<br />
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  23. 23. Cont’d<br />
  24. 24. FINDINGS AND CONCLUSION<br />As per P/E ratio SBI can be considered at a fair value, PNB is undervalued and ICICI bank is growth stock with earnings expected to increase substantially in future and HDFCBANK have high expected future growth in earnings.<br />All selected bank has maintained the CAR% as per Basel norm.<br />SBI has the highest Book value of 1038.76.<br />The net interest spread of HDFC BANK is highest at 6.98% which means there is large disparity between the rate of lending and deposit.<br />Except for SBI and ICICI Bank the recommendation of all selected banks are of BUY.<br />
  25. 25. TANK U<br />