CHAPTER i1

i INTRODUCTIO
N
 1.1 iINTRODUCTION:
India iis ia ideveloping icountry. iNow ia idays imay ipeople iare iinterested ito iinvest
in ifinancial imarkets iespecially ion iequities ito iget ihigh ireturns, iand ito isave itax iin ihonest

iway. iEquities iare iplaying ia imajor irole iin icontribution iof icapital ito ithe ibusiness ifrom ithe

ibeginning. iSince ithe iintroduction iof ishares iconcept, ilarge inumber iof iinvestors iare

ishowing iinterest ito iinvest iin istock imarket.

In ian iindustry iplagued iwith iskepticism iand ia istock imarket iincreasingly idifficult
ito ipredict iand icontend iwith, iif ione ilooks ihard ienough ithere imay istill ibe ia igenuine iaid

ifor ithe iday iTraders iand iShort-Term iInvestors.

The iprice iof ia isecurity irepresents ia iconsensus. iIt iis ithe iprice iat iwhich ione
iperson iagrees ito ibuy iand ianother iagrees ito isell. iThe iprice iat iwhich ian iinvestor iis iwilling

ito ibuy ior isell idepends iprimarily ion ihis iexpectations. iIf ihe iexpects ithe isecurity's iprice ito

irise, ihe iwill ibuy iit i; iif ithe iinvestor iexpects ithe iprice ito ifall i, ihe iwill isell iit i. iThese isimple

istatements iare ithe icause iof ia imajor ichallenge iin iforecasting isecurity iprices, ibecause

ithey irefer ito ihuman iexpectations. iAs iwe iall iknow ifirst-hand, ihumans’ iexpectations iare

ineither ieasily iquantifiable inor ipredictable. iIf iprices iare ibased ion iinvestor iexpectations,

ithen iknowing iwhat ia isecurity ishould isell ifor i(i.e., ifundamental ianalysis) ibecomes iless

iimportant ithan iknowing iwhat iother iinvestors iexpect iit ito isell ifor. iThat's inot ito isay ithat

iknowing iwhat ia isecurity ishould isell ifor iisn't iimportant i-- iit iis. iBut ithere iis iusually ia

istrong iconsensus iof ia istock's ifuture iearnings ithat ithe iaverage iinvestor icannot idisprove

Fundamental ianalysis iand itechnical ianalysis ican ico i- iexist iin ipeace iand
icomplement ieach iother. iSince iall ithe iinvestors iin ithe istock imarket iwant ito imake ithe

imaximum iprofits ipossible, ithey ijust icannot iafford ito iignore ieither ifundamental ior

itechnical ianalysis.
OBJECTIVES iOF iTHE iSTUDY

The iobjective iof ithis iproject iis ito ideeply ianalyse iour iBanking iSector ifor
iinvestment ipurpose iby imonitoring ithe igrowth irate iand iperformance ion ithe ibasis iof

ihistorical idata.

The iother iobjectives iare:

 To iassess iequity ianalysis iin iICICI iBank, iHDFC iBank iand iAxis iBank.

 To iknow ithe iprofit iperformance iof iICICI, iHDFC iand iAxis iBank.

 To iasses imarket ishares iperformance iof iICICI, iHDFC iand iAxis ibank.

 To iidentify iwhich ibank ishare iis iof imore ireturn iwith ilow irisk.
SCOPE iOF iTHE iSTUDY

The iscope iof ithe istudy iis iidentified iafter iand iduring ithe istudy iis iconducted. iThe
iproject iis ibased ion itools ilike ifundamental ianalysis iand iratio ianalysis. iFurther, ithe istudy

iis ibased ion iinformation iof ilast ifive iyears.

The ianalysis iis imade iby itaking iinto iconsideration ithree ibanks ii.e., iICICI iBank,
iHDFC iBank iand iAXIS iBanks. iThe iequity ianalysis iof ibanking istocks istudy iis icarried iout iin

iChaitanyapuri ioffice iof iIIFL iin iHyderabad. iThe iscope iof ithe istudy iis ilimited ifor ia iperiod

iof ifive iyears. iThe iscope iis ilimited ito ionly ithe ifundamental ianalysis iof ithe ichosen istocks.
IMPORTANCE iOF iTHE iSTUDY

Decisions ilike iwhether iyou ishould ibuy ior isell iwhen itrading iin ithe ishare
imarket iis ia idifficult itask ito ido. iIt irequires isplit i - ihair ianalysis iof ithe imarket. iTo ido iso

ione ialso ineeds ito ihave iexcellent iunderstanding iof ithe imarket. iEquity ianalysis iforms ian

iintegral ipart iof ithe ishare itrading iexperience. iEquity ianalysis idecides ithe istance ione

iwould itake iin ithe ishare itrading iindustry. iFinding iout ithe ihighs iand ilows iin ithe imarket

iand ianalysing ithe iequity iis iof iutmost iimportance ibefore imaking iany isort iof iinvestment.

iTechnical ianalysis iand ifundamental ianalysis iform ipart iof ithe iequity ianalysis.
METHODOLOGY iOF iTHE iSTUDY

Research idesign ior iresearch imethodology iis ithe iprocedure iof icollecting,
ianalysing iand iinterpreting ithe idata ito idiagnose ithe iproblem iand ireact ito ithe

iopportunity iin isuch ia iway iwhere ithe icosts ican ibe iminimized, iand ithe idesired ilevel iof

iaccuracy ican ibe iachieved ito iarrive iat ia iparticular iconclusion.

The imethodology iused iin ithe istudy ifor ithe icompletion iof ithe iproject iand ithe
ifulfilment iof ithe iproject iobjectives.

The isample iof ithe istocks ifor ithe ipurpose iof icollecting isecondary idata ihas
ibeen iselected ion ithe ibasis iof iRandom iSampling. iThe istocks iare ichosen iin ian iunbiased

imanner iand ieach istock iis ichosen iindependent iof ithe iother istocks ichosen. iThe istocks

iare ichosen ifrom ithe ibanking isector.

The isample isize ifor ithe inumber iof istocks iis itaken ias ithree ifor ifundamental
ianalysis iof istocks ias ifundamental ianalysis iis ivery iexhaustive iand irequires idetailed istudy.

Research iFindings

Considerable iamount iof itime iwas ispent ito icollate ithe ifindings iof ithe iresearch.
The ifindings ihad ito ibe istated.

Interpretation:
Interpretation irefers ito ithe itask iof idrawing iinference ifrom ithe icollected
ifacts iafter ian ianalytical istudy, iin ifact iit iis ia isearch ifor ibroader imeaning i of iresearch

ifindings

it iis ithrough iinterpretation ithat ithe iresearcher ican iwell iunderstand ithe iabstract
iprinciple ithat irespondents ibeneath ihis ifindings. iThe isimple istatistical itool iwill ibe

iused ito ianalyse ithe idata icollection, iand ibar igraphs iand ipie icharts ihave ibeen

iused ito iillustrate ithe ifindings idiagrammatically,

LIMITATIONS
Every istudy ihas iits iown ilimitations iin iterms iof imethodology iand iavailable
iresources ifor iits iconduct. iThis istudy iwas inot ian iexception iand iwas icarried iout iunder ithe

ifollowing ilimitations:

 The istudy iis irestricted ito ithree icompanies, ii.e. iICICI, iHDFC iand iAxis
ibank, ibased ion iFundamental ianalysis.

 The istudy iis ilimited ito ithe icompanies ihaving iequities.

 Detailed istudy iof ithe itopic iwas inot ipossible idue ito ilimited isize iof ithe iproject.

 Suggestions iand iconclusions iare ibased ion ithe ilimited idata iof ifive iyears.
CHAPTER i2
i INDUSTRY
PROFILE
i
 2.1. iFINANCIAL iMARKETS

Finance iis ithe ipre-requisite ifor imodern ibusiness iand ifinancial iinstitutions iplay ia
ivital irole iin ithe ieconomic isystem. iIt iis ithrough ifinancial imarkets iand iinstitutions

ithat ithe ifinancial isystem iof ian ieconomy iworks. iFinancial imarkets irefer ito ithe

iinstitutional iarrangements ifor idealing iin ifinancial iassets iand icredit iinstruments iof

idifferent itypes isuch ias icurrency, icheques, ibank ideposits, ibills, ibonds, iequities, ietc.

Financial imarket iis ia ibroad iterm idescribing iany imarketplace iwhere ibuyers iand
isellers iparticipate iin ithe itrade iof iassets isuch ias iequities, ibonds, icurrencies iand

iderivatives. iThey iare itypically idefined iby ihaving itransparent ipricing, ibasic

iregulations ion itrading icosts iand ifees iand imarket iforces idetermining ithe iprices iof

isecurities ithat itrade.

Generally, ithere iis ino ispecific iplace ior ilocation ito iindicate ia ifinancial imarket.
iWherever ia ifinancial itransaction itakes iplace, iit iis ideemed ito ihave itaken iplace iin

ithe ifinancial imarket. iHence ifinancial imarkets iare ipervasive iin inature isince

ifinancial itransactions iare ithemselves ivery ipervasive ithroughout ithe ieconomic

isystem. iFor iinstance, iissue iof iequity ishares, igranting iof iloan iby iterm ilending

iinstitutions, ideposit iof imoney i into ia ibank, ipurchase iof idebentures, isale iof ishares

iand iso ion.

In ia inutshell, ifinancial imarkets iare ithe icredit imarkets icatering ito ithe ivarious ineeds iof
the iindividuals, ifirms iand iinstitutions iby ifacilitating ibuying iand iselling iof ifinancial iassets, iclaims
iand iservices.
Classification iof ifinancial imarkets:-
Capital iMarket
i

The icapital imarket iis ia imarket ifor ifinancial iassets iwhich ihave ia ilong ior iindefinite
imaturity. iGenerally, iit ideals iwith ilong iterm isecurities iwhich ihave ia iperiod iof

iabove ione iyear. iIn ithe iwidest isense, iit iconsists iof ia iseries iof ichannels ithrough

iwhich ithe isavings iof ithe icommunity iare imade iavailable ifor iindustrial iand

icommercial ienterprises iand ipublic iauthorities. iAs ia iwhole iCapital imarket

ifacilitates iraising iof icapital.

The imajor ifunctions iperformed iby ia icapital imarket iare:

1. Mobilization iof ifinancial iresources ion ia ination-wide iscale.
2. Securing ithe iforeign icapital iand iknow-how ito ifill iup ideficit iin ithe
irequired iresources ifor ieconomic igrowth iat ia ifaster irate.

3. Effective iallocation iof ithe imobilized ifinancial iresources, iby idirecting ithe
isame ito iprojects iyielding ihighest iyield ior ito ithe iprojects ineeded ito

ipromote ibalanced ieconomic idevelopment.

Capital imarket iconsists iof iprimary imarket iand isecondary imarket.

Primary imarket: iPrimary imarket iis ia imarket ifor inew iissues ior inew ifinancial
iclaims. iHence iit iis ialso icalled ias iNew iIssue iMarket. iIt ibasically ideals iwith ithose

isecurities iwhich iare iissued ito ithe ipublic ifor ithe ifirst itime. iThe imarket,

itherefore, imakes iavailable ia inew iblock iof isecurities ifor ipublic isubscription. iIn

iother iwords, iit ideals iwith iraising iof ifresh icapital iby icompanies ieither ifor icash

ior ifor iconsideration iother ithan icash. iThe ibest iexample icould ibe iInitial iPublic

iOffering i(IPO) iwhere ia ifirm ioffers ishares ito ithe ipublic ifor ithe ifirst itime.

Secondary imarket: iSecondary imarket iis ia imarket iwhere iexisting isecurity iare
itraded. iIn iother iwords, isecurities iwhich ihave ialready ipassed ithrough inew

market iare itraded iin ithis imarket. iGenerally, isuch isecurities iare iquoted iin ithe istock
iexchange iand iit iprovides ia icontinuous iand iregular imarket ifor ibuying iand iselling

isecurities. iThis imarket iconsists iof iall istock iexchanges irecognized iby ithe igovernment

iof iIndia.
Money iMarket
Money imarkets iare ithe imarkets ifor ishort-term, ihighly iliquid idebt isecurities.
iMoney imarket isecurities iare igenerally ivery isafe iinvestments iwhich ireturn

irelatively ilow iinterest irate ithat iis imost iappropriate ifor itemporary icash istorage ior

ishort-term itime ineeds. iIt iconsists iof iseveral isub-markets iwhich icollectively

iconstitute ithe imoney imarket inamely icall imoney imarket, icommercial ibills imarket,

iacceptance imarket, iand iTreasury ibill imarket.

Derivatives iMarket

The iderivatives imarket iis ithe ifinancial imarket ifor iderivatives, ifinancial
iinstruments ilike ifutures icontracts ior ioptions, iwhich iare iderived ifrom iother

iforms iof iassets. iA iderivative iis ia isecurity iwhose iprice iis idependent iupon ior

iderived ifrom ione ior imore iunderlying iassets. iThe iderivative iitself iis imerely ia

icontract ibetween itwo ior imore iparties. iIts ivalue iis idetermined iby ifluctuations iin

ithe iunderlying iasset. iThe imost icommon iunderlying iassets iinclude istocks, ibonds,

icommodities, icurrencies, iinterest irates iand imarket iindexes. iThe iimportant

ifinancial iderivatives iare ithe ifollowing:

 Forwards: iForwards iare ithe ioldest iof iall ithe iderivatives. iA iforward
icontract irefers ito ian iagreement ibetween itwo iparties ito iexchange ian iagreed

iquantity iof

an iasset ifor icash iat ia icertain idate iin ifuture iat ia ipredetermined iprice
ispecified iin ithat iagreement. iThe ipromised iasset imay ibe icurrency,

icommodity, iinstrument ietc.

 Futures: iFuture icontract iis ivery isimilar ito ia iforward icontract iin iall
irespects iaccepting ithe ifact ithat iit iis icompletely ia istandardized ione. iIt iis

inothing ibut ia istandardized iforward icontract iwhich iis ilegally ienforceable iand

ialways itraded

on ian iorganized iexchange.

  Options: iA ifinancial iderivative ithat irepresents ia icontract isold iby ione
iparty i(Option i writer) ito ianother i party i (option i holder). i The i contract i offers i the

i buyer ithe iright, ibut inot ithe iobligation, ito ibuy i(call) ior isell i(put) ia isecurity ior

iother ifinancial iasset iat ian iagreed-upon iprice i(the istrike iprice) iduring ia icertain

period ior ion ia ispecific idate i(exercise idate). iCall ioptions igive ithe

option ito ibuy iat icertain iprice, iso ithe ibuyer iwould iwant ithe istock ito igo iup.
iPut ioptions igive ithe ioption ito isell iat ia icertain iprice, iso ithe ibuyer iwould

iwant ithe istock ito igo idown.

 Swaps: iIt iis iyet ianother iexciting itrading iinstrument. iit iis ithe
icombination iof iforwards iby itwo icounterparties. iIt iis iarranged ito ireap ithe

ibenefits iarising ifrom ithe ifluctuations iin ithe imarket i- ieither icurrency imarket

ior iinterest irate imarket ior iany iother imarket ifor ithat i matter.

Foreign iExchange iMarket

It iis ia imarket iin iwhich iparticipants ican ibuy, isell, iexchange iand ispeculate ion
icurrencies. iForeign iexchange imarkets iare imade iup iof ibanks, icommercial

icompanies, icentral ibanks, iinvestment imanagement ifirms, ihedge ifunds, iand iretail

iforex ibrokers iand iinvestors. iThe iforex imarket iis ithe ilargest ifinancial imarket iin ithe

world. iIt iis ia iworldwide idecentralized iover-the-counter ifinancial imarket ifor ithe
itrading iof icurrencies. iBecause ithe icurrency imarkets iare ilarge iand iliquid, ithey iare

ibelieved ito ibe ithe imost iefficient ifinancial imarkets. iIt iis iimportant ito irealize ithat

ithe iforeign iexchange imarket iis inot ia isingle iexchange, ibut iis iconstructed iof ia

iglobal inetwork iof icomputers ithat iconnects iparticipants ifrom iall iparts iof ithe

iworld.
Commodities iMarket

It iis ia iphysical ior ivirtual imarketplace ifor ibuying, iselling iand itrading iraw ior iprimary
iproducts. iFor iinvestors' ipurposes ithere iare icurrently iabout i50 imajor icommodities

imarkets iworldwide ithat ifacilitate iinvestment itrade iin inearly i100 iprimaries

icommodities. iCommodities iare isplit iinto itwo itypes: ihard iand isoft icommodities.

iHard icommodities iare itypically inatural iresources ithat imust ibe imined ior iextracted

i(gold, irubber, ioil, ietc.), iwhereas isoft icommodities iare iagricultural iproducts ior

ilivestock i(corn, iwheat, icoffee, isugar, isoybeans, ipork, ietc.)

INDIAN iFINANCIAL iMARKETS

India iFinancial imarket iis ione iof ithe ioldest iin ithe iworld iand iis ithe

fastest igrowing iand ibest iamong iall ithe imarkets iof ithe iemerging ieconomies. iThe
ihistory iof iIndian icapital imarkets idates iback i200 iyears itoward ithe iend iof ithe i18th

icentury iwhen iIndia iwas iunder ithe irule iof ithe iEast iIndia iCompany. iThe

idevelopment iof ithe icapital imarket iin iIndia iconcentrated iaround iMumbai iwhere ino

iless ithan i200 ito i250 isecurities ibrokers iwere iactive iduring ithe isecond ihalf iof ithe

i19th icentury. iThe ifinancial imarket iin iIndia itoday iis imore ideveloped ithan imany

iother isectors ibecause iit iwas iorganized ilong ibefore iwith ithe isecurities iexchanges

iof iMumbai, iAhmadabad iand iKolkata iwas iestablished ias iearly ias ithe i19th icentury.

iBy ithe iearly i1960s ithe itotal inumber iof isecurities iexchanges iin iIndia irose ito ieight,

iincluding iMumbai, iAhmadabad iand iKolkata iapart ifrom iMadras, iKanpur, iDelhi,

iBangalore iand iPune. iToday ithere iare i21 iregional isecurities iexchanges iin iIndia iin

iaddition ito ithe icentralized iNSE i(National iStock iExchange) iand iOTCEI i(Over ithe

iCounter iExchange iof iIndia).

However, ithe istock imarkets iin iIndia iremained istagnant idue ito istringent icontrols ion
ithe imarket ieconomy ithat iallowed ionly ia ihandful iof imonopolies ito idominate ithem

irespective isectors. iThe icorporate isector iwasn't iallowed iinto imany iindustry

isegments, iwhich iwere idominated iby ithe istate icontrolled ipublic isector iresulting iin

istagnation iof ithe ieconomy iright iup ito ithe iearly i1990s. iThereafter iwhen ithe iIndian

ieconomy ibegan iliberalizing iand ithe icontrols ibegan ito ibe idismantled ior ieased iout,

ithe isecurities imarkets iwitnessed ia iflurry iof iIPO's ithat iwere ilaunched. iThis iresulted

iin imany inew icompanies iacross idifferent iindustry isegments ito icome iup iwith inewer

iproducts iand iservices.

A iremarkable ifeature iof ithe igrowth iof ithe iIndian ieconomy iin irecent iyears ihas
ibeen ithe irole iplayed iby iits isecurities imarkets iin iassisting iand ifuelling ithat

igrowth iwith imoney irose iwithin ithe ieconomy. iThis iwas iin imarked icontrast ito ithe

iinitial iphase iof igrowth iin imany iof ithe ifast-growing ieconomies iof iEast iAsia ithat

iwe iwitnessed ihuge

doses iof iFDI i(Foreign iDirect iInvestment) ispurring igrowth iin itheir iinitial idays iof
imarket idecontrol. iDuring ithis iphase iin iIndia imuch iof ithe iorganized isector ihas

ibeen iaffected iby ihigh igrowth ias ithe ifinancial imarkets iplayed ian iall-inclusive irole

iin isustaining ifinancial iresource imobilization. iMany iPSUs i(Public iSector

iUndertakings) ithat idecided ito ioffload ipart iof itheir iequity iwere ialso ihelped iby ithe

iwell-organized isecurities imarket iin iIndia.

The ilaunch iof ithe iNSE i(National iStock iExchange) iand ithe iOTCEI i(Over ithe iCounter
iExchange iof iIndia) iduring ithe imid-1990s iby ithe igovernment iof iIndia iwas imeant ito iusher

iin ian ieasier iand imore itransparent iform iof itrading iin isecurities. iThe iNSE iwas iconceived ias

ithe imarket ifor itrading iin ithe isecurities iof icompanies ifrom ithe ilarge-scale isector iand ithe

iOTCEI ifor ithose ifrom ithe ismall-scale isector. iWhile ithe iNSE ihas inot ijust idone iwell ito

igrow iand ievolve iinto ithe ivirtual ibackbone iof icapital imarkets iin iIndia ithe iOTCEI istruggled

iand i is iyet ito ishow

any isign iof igrowth iand idevelopment. iThe iintegration iof iIT iinto ithe icapital imarket
iinfrastructure ihas ibeen iparticularly ismooth iin iIndia idue ito ithe icountry's iworld

iclass iIT iindustry. iThis ihas ipushed iup ithe ioperational iefficiency iof ithe iIndian istock

imarket ito iglobal istandards iand ias ia iresult ithe icountry ihas ibeen iable ito icapitalize

ion iits ihigh igrowth iand iattract iforeign icapital ilike inever ibefore.

The iregulating iauthority ifor icapital imarkets iin iIndia iis ithe iSEBI i(Securities iand iExchange
iBoard iof iIndia). iSEBI icame iinto iprominence iin ithe i1990s iafter ithe icapital imarkets

iexperienced isome iturbulence. iIt ihad ito itake idrastic imeasures ito iplug imany iloopholes

ithat iwere iexploited iby icertain imarket iforces ito iadvance itheir ivested iinterests. iAfter

ithis iinitial iphase iof istruggle iSEBI ihas igrown iin istrength ias ithe iregulator iof iIndia's

icapital imarkets iand ias ione iof ithe icountries' is imost iimportant i institutions.
CHAPTER i3
i COMPANY
PROFILE
i
 3. iIIFL iLtd
The iIIFL i(India iInfoline) igroup, icomprising ithe iholding icompany, iIndia iInfoline iLtd iand iits
isubsidiaries, iis ione iof ithe ileading iplayers iin ithe iIndian ifinancial iservices ispace. iIIFL ioffers

iadvice iand iexecution iplatform ifor ithe ientire irange iof ifinancial iservices icovering iproducts

iranging ifrom iEquities iand iderivatives, iCommodities, iWealth imanagement, iAsset

imanagement, iInsurance, iFixed ideposits, iLoans, iInvestment iBanking, iGold ibonds iand

iother ismall isavings iinstruments. iIIFL irecently ireceived ian iin-principal iapproval ifor

iSecurities iTrading iand iClearing imemberships ifrom iSingapore iExchange i(SGX) ipaving ithe

iway ifor iIIFL ito ibecome ithe ifirst iIndian ibrokerage ito iget ia imembership iof ithe iSGX. iIIFL

ialso ireceived imembership iof ithe iColombo iStock iExchange ibecoming ithe ifirst iforeign

ibroker ito ienter iSri iLanka. iInflows iand imanages ithe iwebsite, iwww.indiainfoline.com,

iwhich iis ione iof iIndia’s ileading ionline idestinations ifor ipersonal ifinance, istock imarkets,

ieconomy i and ibusiness.

IIFL ihas ibeen iawarded ithe i'Best iBroker, iIndia' iby iFinance iAsia iand ithe iMost
iimproved ibrokerage, iIndia' iin ithe iAsia iMoney ipolls. iIndia iInfoline iwas ialso

iadjudged ias i'Fastest iGrowing iEquity iBroking iHouse i- iLarge ifirms' iby iDun i&

iBradstreet. iA iforerunner iin ithe ifield iof iequity iresearch, iIIFL's iresearch iis

iacknowledged iby inone iother ithan iForbes ias iBest iof ithe iWeb' iand... ia imust iread

ifor iinvestors iin iAsia'

The icompany's iresearch iis iavailable inot ijust iover ithe iInternet ibut ialso
ion iinternational iwire iservices ilike iBloomberg, iThomson iFirst iCall iand

iInternet iSecurities iwhere iit iis iamongst ione iof ithe imost iread iIndian

ibrokers.

A inetwork iof iover i2,500 ibusiness ilocations ispread iover imore ithan i500 icities iand
itowns iacross iIndia ifacilitates ithe ismooth iacquisition iand iservicing iof ia ilarge

icustomer ibase. iAll iour ioffices iare iconnected iwith ithe icorporate ioffice iin iMumbai

iwith icutting iedge inetworking itechnology. iThe igroup icaters ito ia icustomer ibase iof

iabout ia imillion icustomers, iover ia ivariety iof imediums iviz. ionline, iover ithe iphone

iand iat iour ibranches.

VISION
The icompany's ivision iis ito ibe ithe imost irespected icompany iin ithe ifinancial iservices ispace.
 COMPANY iSTRUCTURE

India iInfoline iLimited

India iInfoline iLimited iis ilisted ion iboth ithe ileading istock iexchanges iin iIndia, iviz.
ithe iStock iExchange, iMumbai i(BSE) iand ithe iNational iStock iExchange i(NSE) iand iis

ialso

a imember iof iboth ithe iexchanges. iIt iis iengaged iin ithe ibusinesses iof iEquities
ibroking, iWealth iAdvisory iServices iand iPortfolio iManagement iServices. iIt ioffers

ibroking iservices iin ithe iCash iand iDerivatives isegments iof ithe iNSE ias iwell ias ithe

iCash isegment iof ithe iBSE. iIt iis iregistered iwith iNSDL ias iwell ias iCDSL ias ia

idepository iparticipant, iproviding ia ione-stop isolution ifor iclients itrading iin ithe

iequities imarket. iIt ihas irecently ilaunched iits iInterparticipant, iproviding ia ione-stop
isolution ifor iclients
trading iin ithe iequities imarket. iIt ihas irecently ilaunched iits iinvestment ibanking
iand iInstitutional iBroking ibusiness.

A iSEBI iauthorized iPortfolio iManager; iit ioffers iPortfolio iManagement iServices ito
iclients. iThese iservices iare ioffered ito iclients ias idifferent ischemes, iwhich iare ibased

ion idiffering iinvestment istrategies imade ito ireflect ithe ivaried irisk-return ipreferences

iof iclients.

India iInfoline iMedia iand iResearch iServices iLimited

The iservices irepresent ia istrong isupport ithat idrives ithe ibroking, icommodities,
imutual ifund iand iportfolio imanagement iservices ibusinesses. iIt iundertakes iequities

iresearch iwhich iis iacknowledged iby inone iother ithan iForbes ias i'Best iof ithe iWeb'

iand'...a imust iread ifor iinvestors iin iAsia'. iIndia iInfoline's iresearch iis iavailable inot

ijust iover ithe iinternet ibut ialso ion iinternational iwire iservices ilike iBloomberg i(Code:

iIILL),

Thomson iFirst iCall iand iInternet iSecurities iwhere iIndia iInfoline iis iamongst ithe
imost iread iIndian ibrokers.

India iInfoline iCommodities iLimited.

India iInfoline iCommodities iPvt iLimited iis iengaged iin ithe ibusiness iof icommodities
ibroking. iTheir iexperience iin isecurities ibroking iempowered ithem iwith ithe irequisite

iskills iand itechnologies ito iallow ithem ito ioffer icommodities ibroking ias ia icontra-

icyclical ialternative ito iequities ibroking. iIt ienjoys imemberships iwith ithe iMCX iand

iNCDEX iNCDEX, itwo ileading iIndian icommodities iexchanges, iand irecently iacquired

iMPAL imembership iof iDGCX. iIt ihas ia imulti-channel idelivery imodel, imaking iit iamong

ithe iselect ifew ito ioffer ionline ias iwell ias ioffline itrading ifacilities.
India iInfoline iMarketing i& iService’s

India iInfoline iMarketing iand iServices iLimited iis ithe iholding icompany iof iIndia
iInfoline iInsurance iServices iLimited iand iIndia iInfoline iInsurance iBrokers iLimited.

 India iInfoline iInsurance iServices iLimited iis ia iregistered iCorporate iAgent

iwith ithe iInsurance iRegulatory iand iDevelopment iAuthority i(IRDA). iIt iis ithe

ilargest iCorporate iAgent ifor iICICI i Prudential iLife iInsurance iCo i Limited,

iwhich i is iIndia's ilargest iprivate iLife iInsurance iCompany. iIndia iInfoline iwas

ithe ifirst icorporate iagent ito iget ilicensed iby iIRDA iin iearly i2001.

 India iInfoline iInsurance iBrokers iLimited iIndia iInfoline iInsurance

iBrokers iLimited iis ia inewly iformed isubsidiary iwhich iwill icarry iout ithe

ibusiness iof iInsurance ibroking.

India iInfoline iInvestment iServices iLimited

Consolidated ishareholdings iof iall ithe isubsidiary icompanies iengaged iin iloans iand
ifinancing iactivities iunder ione isubsidiary. iRecently, iOrient iGlobal, ia iSingapore-

based iinvestment iinstitution iinvested iUSD i76.7 imillion ifor ia i22.5% istake iin iIndia
iInfoline iInvestment iServices. iThis iwill ihelp ifocused iexpansion iand icapital iraising iin

ithe isaid isubsidiaries ifor ivarious ilending ibusinesses ilike iloans iagainst isecurities,

iSME ifinancing, idistribution iof iretail iloan iproducts, iconsumer ifinance ibusiness iand

ihousing

finance ibusiness. iIndia iInfoline iInvestment iServices iPrivate iLimited iconsists iof ithe
ifollowing istep-down isubsidiaries.

 India iInfoline iDistribution iCompany iLimited i(distribution iof iretail iloan iproducts)
 Money iline iCredit iLimited i(consumer ifinance)
 India iInfoline iHousing iFinance iLimited i(housing ifinance)
IIFL i(Asia) iPrivate iLimited

IIFL i(Asia) iPrivate iLimited iis iwholly iowned isubsidiary iwhich ihas ibeen
iincorporated iin iSingapore ito ipursue ifinancial isector iactivities iin iother iAsian

imarkets. iFurther ito iobtaining ithe inecessary iregulatory iapprovals, ithe icompany

ihas ibeen iinitially icapitalized iat i1 imillion iSingapore idollars.

IIFL iMANAGEMENT

THE iMANAGEMENT iTEAM

Mr. iNirmal iJain, iChairman i& iManaging iDirector

Nirmal iJain, iMBA i(IIM, iAhmadabad) iand ia iChartered iand iCost iAccountant,
iFounded iIndia's ileading ifinancial iservices icompany iIndia iInfoline iLtd. iin i1995

iproviding iglobally iacclaimed ifinancial iservices iin iequities iand icommodities ibroking,

ilife iinsurance iand imutual ifunds idistribution, iamong i others.

Mr. iR iVenkataraman, iExecutive iDirector

R iVenkataraman, ico-promoter iand iExecutive iDirector iof iIndia iInfoline iLtd., iis ia iB.
iTech i(Electronics iand iElectrical iCommunications iEngineering, iIIT iKharagpur) iand ian

iMBA i(IIM iBangalore). iHe ijoined ithe iIndia iInfoline iboard iin iJuly i1999.

THE iBOARD iOF iDIRECTORS

Apart ifrom iNirmal iJain iand iR iVenkataraman, ithe iBoard iof iDirectors iof iIndia
iInfoline iLtd. icomprises:
Mr. iNilesh iVikamsey, iIndependent iDirector

Mr. iVikamsey, iBoard imember isince iFebruary i2005 ia ipracticing iChartered iAccountant iand
ipartner i(Khimji iKunverji i& iCo., iChartered iCo., iChartered iAccountants), ia imember ifirm iof

iHLB

International, iheaded ithe iaudit idepartment itill iT990 iand ithereafter ialso ihandles ifinancial
iservices, iconsultancy, iinvestigations, imergers iand iacquisitions, ivaluations ietc

Mr iKranti iSinha, iIndependent iDirector

Mr. iKranti iSinha i- iBoard imember isince iJanuary i2005 icompleted ihis imasters ifrom ithe iAgra
iUniversity iand istarted ihis icareer ias ia iClass iI iofficer i with iLife iInsurance iCorporation iof iIndia.

Mr iArun iK. iPurvar, iIndependent iDirector

Mr. iA.K. iPurvar iBoard imember isince iMarch i2008 icompleted ihis iMaster’s idegree iin
icommerce ifrom iAllahabad iUniversity iin i1966 iand ia idiploma iin iBusiness iAdministration iin

i1967.
PRODUCTS i& iSERVICE

Equities

India iInfoline iprovided ithe iprospect iof iresearched iinvesting ito iits iclients, iwhich iwas
ihitherto irestricted ionly ito ithe iinstitutions. iResearch ifor ithe iretail iinvestor idid inot iexist

iprior ito iIndia iInfoline. iIndia iInfoline ileveraged itechnology ito ibring ithe iconvenience

of itrading ito ithe iinvestor's ilocation iof ipreference i(residence ior ioffice) ithrough
icomputerized iaccess. iIndia iInfoline imade iit ipossible ifor iclients ito iview

itransaction icosts iand iledger iupdates iin ireal itime. iThe iCompany iis iamong ithe

ifew ifinancial iintermediaries iin iIndia ito ioffer ia iComplement iof ionline iand ioffline

ibroking. iThe iCompanies inetwork iof ibranches ialso iallows icustomers ito iplace

iorders ion iphone ior ivisit iour ibranches ifor itrading.

Commodities

India iInfoline's iextension iinto icommodities itrading ireconciles iits istrategic iintent ito
iemerge ias ia ione istop isolutions ifinancial iintermediary. iIts iexperience iin isecurities

ibroking ihas iempowered iit iwith irequisite iskills iand itechnologies. iThe iCompanies

icommodities ibusiness iprovides ia icontra-cyclical ialternative ito iequities ibroking.

iThe iCompany iwas iamong ithe ifirst ito ioffer ithe ifacility iof icommodities itrading iin

iIndia's

young icommodities imarket i(the iMCX icommenced ioperations iin i2003).

iAverage imonthly iturnover ion ithe icommodity iexchanges iincreased ifrom iRs

i0.34 ibn ito iRs

bn.
Insurance

An ientry iinto ithis isegment ihelped icomplete ithe iclient's iproduct ibasket;
iconcurrently, iit igraduated ithe iCompany iinto ia ione istop iretail ifinancial isolutions

iprovider. iTo iensure imaximum ireach ito icustomers iacross iIndia, iit ihas iemployed ia

imulti-pronged iapproach iand ireaches iout ito icustomers ivia iour iNetwork, iDirect iand

iAffiliate ichannels. iIndia iInfoline iwas ithe ifirst icorporate iin iIndia ito iget ithe iagency

ilicense iin iearly i2001.

Invest iOnline

India iInfoline ihas imade iinvesting iin iMutual ifunds iand iprimary imarket iso ieffortless.
iOnly iregistration iis ineeded. iNo ipaperwork ino iqueues iand iNo iregistration icharges.

iIndia iInfoline ioffers ia ihost iof imutual ifund ichoices iunder ione iroof, ibacked iby iin-

depth iresearch iand iadvice ifrom iresearch ihouse iand itools iconfigured ias iinvestor
ifriendly.

Wealth iManagement

The ikey ito iachieving ia isuccessful iInvestment iPortfolio iis ito ihave ia icarefully iplanned
ifinancial istrategy ibased ion ia ithorough iunderstanding iof ithe iclient's iinvestment

ineeds iand irisk iappetite. iThe iIIFL iPrivate iWealth iManagement iTeam iof ifinancial

iexperts

will irecommend ian iappropriate ifinancial istrategy ito ieffectively imeet icustomer's
iinvestment irequirements.

Asset iManagement

India iInfoline iis ia ileading ipan-India imutual ifund idistribution ihouse iassociated iwith
ileading iasset imanagement icompanies. iIt ioperates iprimarily iin ithe iretail isegment

ileveraging iits iexisting idistribution inetwork ito ireach iprospective iclients. iIt ihas

ireceived ithe iin-principal iapproval ito iset iup ia imutual ifund.

Portfolio iManagement

IIFL iPortfolio iManagement iService iis ia iproduct iwherein ian iequity iinvestment
iportfolio iis icreated ito isuit ithe iinvestment iobjectives iof ia iclient. iIndia iInfoline

iinvests ithe iclient's iresources iinto istocks ifrom idifferent isectors, idepending ion

iclient's irisk- ireturn iprofile. iThis iservice iis iparticularly iadvisable ifor iinvestors iwho

icannot iafford ito igive itime ior idon't ihave ithat iexpertise ifor iday-to-day

imanagement iof itheir iequity iportfolio.

Newsletters

As ia isubscriber ito ithe iDaily iMarket iStrategy, iclient's iget iresearch ireports iof iIndia
iInfoline iresearch iteam ion ia ipriority ibasis. iThe iIndia iInfoline iWeekly iNewsletter iis

ithe iflashback ifor ithe iweek igone iby, iA iweekly ioutlook icoupled iwith ithe ibest iof

ithe iweb istories ifrom iIndia iInfoline iand ilinks ito iimportant iinvestment iideas,

iLeader iSpeak iand ifeatures iis idelivered iin ithe iclient's i inbox ievery iFriday ievening.
 CHAPTER i4
THEORETICAL iFRAME iWORK iOF iTHE iSTUDY
SECURITY iANALYSIS:

Investment isuccess iis ipretty imuch ia imatter iof icareful iselection iand itiming iof

stock ipurchases icoupled iwith iperfect imatching ito ian iindividual’s irisk itolerance. iIn
iorder ito icarry iout iselection, itiming iand imatching iactions ian iinvestor imust iconduct

ideep isecurity ianalysis.

Investors ipurchase iequity ishares iwith itwo ibasic iobjectives:

1. To imake icapital iprofits iby iselling ishares iat ihigher iprices.

2. To iearn idividend iincome.

These itwo ifactors iare iaffected iby ia ihost iof ifactors. iAn iinvestor ihas ito
carefully iunderstand iand ianalyse iall ithese ifactors. iThere iare ibasically itwo iapproaches
ito istudy isecurity iprices iand ivaluation ii.e., ifundamental ianalysis iand itechnical ianalysis

The ivalue i of icommon istock i 1s idetermined iin ilarge i measure iby ithe
iperformance iof ithe ifirm ithat iissued ithe istock. iIf ithe icompany iis ihealthy iand

ican

demonstrate istrength iand igrowth, ithe ivalue iof ithe istock iwill iincrease. iWhen ivalues
iincrease ithen iprices ifollow iand ireturns ion ian iinvestment iwill iincrease. iHowever, ijust

ito ikeep ithe isavvy iinvestor ion itheir itoes, ithe imix iis icomplicated iby ithe irisk ifactors

iinvolved. iFundamental ianalysis iexamines iall ithe idimensions iof irisk iexposure iand ithe

iprobabilities iOI ireturn, iand imerges ithem iwith ibroader ieconomic ianalysis iand igreater

iindustry ianalysis ito iformulate ithe ivaluation iof ia istock.

FUNDAMENTAL iANALYSIS

Fundamental ianalysis iis ia imethod iof iforecasting ithe ifuture iprice imovements

Ca ifinancial iinstrument ibased ion ieconomic, ipolitical, ienvironmental iand iother irelevant
ifactors iand istatistics ithat iwill iaffect ithe ibasic isupply iand idemand iof iwhatever

iunderlies ithe ifinancial iinstrument. iIt i1s ithe istudy iof ieconomic, iindustry iand icompany

iconditions iin ieffort ito idetermine ithe ivalue iof ia icompany' is istock. iFundamental

ianalysis itypically

an ifocuses ion ikey istatistics iin icompany's ifinancial istatements ito idetermine iif ithe istock
iprice iis icorrectly ivalued. iThe iterm isimply irefers ito ithe ianalysis iof ithe ieconomic iwell-

being iof ia ifinancial ientity ias iopposed ito ionly iits iprice imovements.

Fundamental ianalysis iis ithe icornerstone iof iinvesting. iThe ibasic iphilosophy
underlying ithe ifundamental ianalysis iis ithat iif ian iinvestor iinvests ire.1 iin ibuying ia ishare
iof ia icompany, ihow imuch iexpected ireturns ifrom ithis iinvestment ihe ihas

The ifundamental ianalysis iis ito iappraise ithe iintrinsic ivalue iof ia isecurity. iIt
insists ithat ino ione ishould ipurchase ior isell ia ishare ion ithe ibasis iof itips iand irumours.
iThe ifundamental iapproach icalls iupon ithe iinvestors ito imake ihis ibuy ior isell idecision ion

ithe ibasis iof ia idetailed ianalysis iof ithe iinformation iabout ithe icompany, iabout ithe

iindustry, iand ieconomy. iIt iis ialso iknown ias i"top-down iapproach". iThis iapproach

iattempts ito istudy ieconomic iscenario, iindustry iposition iand ithe icompany iexpectations

iand iis ialso iknown iThus, ithe iEIC iapproach iinvolves ithree isteps:

Economic-industry-company iapproach i(EIC iapproach)

1. Economic ianalysis

2. Industry ianalysis

3. Company ianalysis
 I. ECONOMIC iANALYSIS

The ilevel iof ieconomic iactivity ihas ian iimpact ion iinvestment iin imany iways. iIf
the ieconomy igrows irapidly, ithe iindustry ican ialso ibe iexpected ito ishow irapid igrowth
iand ivice iversa. iWhen ithe ilevel iof ieconomic iactivity iis ilow, istock iprices iare ilow, iand

iwhen ithe ilevel iof ieconomic iactivity iis ihigh, istock iprices iare ihigh ireflecting ithe

iprosperous

outlook ifor isales iand iprofits iof ithe ifirms. iThe ianalysis iof imacro-economic
ienvironment iis iessential ito iunderstand ithe ibehaviour iof ithe istock iprices.

The icommonly ianalysed imacro-economic ifactors iare ias ifollows:

Gross iDomestic iProduct i(GDP): iGDP iindicates ithe irate iof igrowth iof ithe

economy. iIt irepresents ithe iaggregate ivalue iof ithe igoods iand iservices iproduced iin ithe
ieconomy. iIt iconsists iof ipersonal iconsumption iexpenditure, igross iprivate idomestic

iinvestment iand igovernment iexpenditure ion igoods iand iservices iand inet iexports iof

igoods iand iservices. iThe igrowth irate iof ieconomy ipoints iout ithe iprospects ifor ithe

iindustrial isector iand ithe ireturn iinvestors ican iexpect ifrom iinvestment iin ishares. iThe

ihigher igrowth irate iis imore ifavourable ito ithe istock imarket.
Savings iand iinvestment: iIt iis iobvious ithat igrowth irequires iinvestment iwhich
in iturn irequires isubstantial iamount iof idomestic isavings. iStock imarket iis ia ichannel
ithrough iwhich ithe isavings iare imade iavailable ito ithe icorporate ibodies. iSavings iare

idistributed iover ivarious iassets ilike iequity ishares, ideposits, imutual ifunds, ireal iestate

iand ibullion. iThe isavings iand iinvestment ipatterns iof ithe ipublic iaffect ithe istock ito ia

igreat iextent.

Inflation: iAlong iwith ithe igrowth iof iGDP, iif ithe iinflation irate ialso iincreases,

then ithe ireal igrowth iwould ibe ivery ilittle. iThe ieffects iof iinflation ion icapital imarkets
iare inumerous. iAn iincrease iin ithe iexpected irate iof iinflation iis iexpected ito icause ia

inominal irise iin iinterest irates. iAlso, iit iincreases iuncertainty iof ifuture ibusiness iand

iinvestment idecisions. iAs iinflation iincreases, iit iresults iin iextra icosts ito ibusinesses,

ithereby isqueezing itheir iprofit imargins iand ileading ito ireal ideclines iin iprofitability.

Interest irates: iThe iinterest irate iaffects ithe icost iof ifinancing ito ithe ifirms. iA idecrease iin
iinterest irate iimplies ilower icost iof ifinance ifor ifirms iand imore iprofitability. iMore imoney iis

iavailable iat ia ilower iinterest irate ifor ithe ibrokers iwho iare idoing ibusiness iwith iborrowed

imoney. iAvailability iof icheap ifunds iencourage ispeculation iand irise iin ithe

price iof ishares. iTax istructure: iEvery iyear iin iMarch, ithe ibusiness icommunity ieagerly
iawaits ithe iGovernment's iannouncement iregarding ithe itax ipolicy. iConcessions iand

iincentives igiven ito ia icertain iindustry iencourage iinvestment iin ithat iparticular iindustry.

iTax irelief's igiven ito isavings iencourage isavings. iThe itype iof itax iexemption ihas iimpact

ion ithe

profitability iof ithe iindustries. iInfrastructure ifacilities: iInfrastructure ifacilities iare iessential ifor
ithe igrowth iof iindustrial iand iagricultural isector. iA iWide inetwork iat icommunication isystem iis ia

imust ifor ithe igrowth iof ithe ieconomy. iRegular isupply iof ipower iwithout iany ipower icut iwould

boost ithe iproduction. iBanking iand ifinancial isectors ialso ishould ibe isound ienough ito
iprovide iadequate isupport ito ithe iindustry. iGood iinfrastructure ifacilities iaffect ithe istock

imarket ifavourably.
II. INDUSTRY iANALYSIS

An iindustry iis ia igroup iof ifirms ithat ihave isimilar itechnological istructure ior iproduction iand

produce isimilar iproducts iand iIndustry ianalysis iis ia itype iof ibusiness iresearch ithat ifocuses
on ithe istatus iof ian iindustry ior ian iindustrial isector i(a ibroad iindustry iclassification, ilike
i"manufacturing"). iIrrespective iof ispecific ieconomic isituations, isome iindustries imight
ibe iexpected ito iperform ibetter, iand ishare iprices iin ithese iindustries imay inot idecline ias
imuch ias iin iother iindustries. iThis iidentification iof ieconomic iand iindustry ispecific
ifactors iinfluencing ishare iprices iwill ihelp iinvestors ito iidentify ithe ishares ithat ifit
iindividual iexpectations

Industry iLife iCycle: iThe iindustry ilife icycle itheory iis igenerally iattributed ito
Julius iGreenSky. iThe ilife icycle iof ithe iindustry iis iseparated iinto ifour iwell idefined
istages.

1. Pioneering istage: iThe iprospective idemand ifor ithe iproduct iis ipromising iin ithis
stage iand ithe itechnology iof ithe iproduct iis ilow. iThe idemand ifor ithe iproduct iattracts imany

producers ito iproduce ithe iparticular iproduct. iThere iwould ibe isevere icompetition iand
ionly ifittest

companies isurvive ithis istage. iThe iproducers itry ito idevelop ibrand iname, idifferentiate ithe iproduct
iand icreate ia iproduct iimage. iIn ithis isituation, iit iis idifficult ito iselect icompanies ifor iinvestment

ibecause ithe isurvival irate iis iunknown.

2. Rapid igrowth istage: iThis istage istarts iwith ithe iappearance iof isurviving
ifirms ifrom ithe ipioneering istage. iThe icompanies ithat ihave iwithstood ithe

icompetition igrow istrongly iin i market ishare iand i financial iperformance. iThe

itechnology iof ithe iproduction iwould ihave iimproved iresulting iin ilow icost iof

iproduction iand igood iquality iproducts. iThe icompanies ihave istable igrowth

irate iin ithis istage

and ithey ideclare idividend ito ithe ishareholders. iIt iis iadvisable ito iinvest iin
ithe ishares iof ithese icompanies.

3. Maturity iand istabilization istage: ithe igrowth irate itends ito imoderate iand
ithe irate iof igrowth iwould ibe imore ior iless iequal ito ithe iindustrial igrowth irate
ior ithe igross idomestic iproduct igrowth irate, iSymptoms iof iobsolescence imay

iappear iin
the itechnology. iTo ikeep igoing, itechnological iinnovations iin ithe
iproduction iprocess iand iproducts ishould ibe iintroduced. iThe iinvestors

ihave itoo iclosely imonitor ithe ievents ithat itake iplace iin ithe imaturity

istage iof ithe iindustry.

4. Decline istage: idemand ifor ithe iparticular iproduct iand ithe iearnings iof
ithe icompanies iin ithe iindustry idecline. iIt iis ibetter ito iavoid iinvesting iin ithe

ishares iof ithe ilow igrowth iindustry ieven iin ithe iboom iperiod. iInvestment iin

ithe ishares iof ithese itypes iof icompanies ileads ito ierosion iof icapital.

Growth iof ithe iindustry: iThe ihistorical iperformance iof ithe iindustry iin iterms iof
growth iand iprofitability ishould ibe ianalysed. iThe ipast ivariability iin ireturn iand igrowth
iin ireaction ito imacro-economic ifactors iprovide ian iinsight iinto ithe ifuture.

Nature iof icompetition: iNature iof icompetition iis ian iessential ifactor ithat idetermines
ithe idemand ifor ithe iparticular iproduct, iits iprofitability iand ithe iprice iof ithe

iconcerned

company iscrips. iThe icompanies' iability ito iwithstand ithe ilocal ias iwell ias ithe
imultinational icompetition icounts imuch. iIf it00 imany ifirms iare ipresent iin ithe iorganized

isector, ithe icompetition iwould ibe isevere. iThe icompetition iwould ilead ito ia idecline iin

ithe iprice iof ithe iproduct. iThe iinvestor ibefore iinvesting iin ithe iscrip iof ia icompany

ishould ianalyse ithe imarket ishare iof ithe iparticular icompany's iproduct iand ishould

icompare iit iwith ithe itop ifive icompanies.

SWOT ianalysis: iSWOT ianalysis irepresents ithe istrength, iweakness, iopportunity iand
ithreat ifor ian iindustry. iEvery iinvestor ishould icarry iout ia iSWOT ianalysis ifor ithe

ichosen iindustry. iTake ifor iinstance, iincrease iin idemand ifor ithe iindustry's iproduct

ibecomes iits

Strength, ipresence iof inumerous iplayers iin ithe imarket, i1.e. icompetition ibecomes ithe
ithreat iLo ia iparticular icompany. iThe iprogress iin ik i& iD iin ithat iindustry iis ian iopportunity

iand

entry iof imultinationals iin ithe iindustry iis ia ithreat. iIn ithis iway ithe ifactors iare ito ibe
iarranged iand ianalysed.
III. COMPANY iANALYSIS

n ithe icompany ianalysis ithe iinvestor iassimilates ithe iseveral ibits iof iinformation irelated ito ithe
icompany iand ievaluates ithe ipresent iand ifuture ivalues iof ithe istock. iThe irisk iand ireturn
iassociated iwith ithe ipurchase iof ithe istock iis ianalysed ito itake ibetter iinvestment idecisions. iThe
ipresent iand ifuture ivalues iare iaffected iby ia inumber iof ifactors.

Competitive iedge iof ithe icompany: iMajor iindustries iin iIndia iare icomposed iof
ihundreds iof iindividual icompanies. iThough ithe inumber iof icompanies iis ilarge, ionly ifew
icompanies icontrol ithe imajor imarket ishare. iThe icompetitiveness iof ithe icompany ican ibe
istudied iwith ithe ihelp iof ithe ifollowing;

 Market ishare: iThe imarket ishare iof ithe iannual isales ihelps ito
idetermine ia icompany's irelative icompetitive iposition iwithin ithe iindustry. iIf ithe

imarket

share iis ihigh, ithe icompany iwould ibe iable ito imeet ithe icompetition
isuccessfully. iThe icompanies iin ithe imarket ishould ibe icompared iwith

ilike iproduct igroups iotherwise, ithe iresults iwill ibe imisleading.

 Growth iof isales: iThe irapid igrowth iin isales iwould ikeep ithe ishareholder
iina ibetter iposition ithan i one iwith istagnant igrowth irate. iInvestors i generally

i prefer isize iand igrowth iin isales ibecause ithe ilarger isize icompanies imay ibe iable

ito iwithstand ithe ibusiness icycle irather ithan ithe icompany iof ismaller isize.

 Stability iof isales: iIf ia ifirm ihas istable isales irevenue, iit iwill ihave imore
istable iearnings. iThe ifall iin ithe imarket ishare iindicates ithe ideclining itrend iof

company, ieven iif ithe isales iare istable. iHence ithe istability iof isales ishould ibe
icompared iwith iits imarket ishare iand ithe icompetitor's imarket ishare.

 Earnings iof ithe icompany: iSales ialone ido inot iincrease ithe iearnings ibut ithe icosts
iand iexpenses iof ithe icompany ialso iinfluence ithe iearnings. iFurther, iearnings ido inot

ialways iincrease iwith iincrease iin isales. iThe icompany's isales imight ihave iincreased ibut iits

earnings iper ishare imay idecline idue ito irise iin icosts. iHence, ithe iinvestor ishould inot
ionly idepend ion ithe isales, ibut ishould ianalyse ithe iearnings iof ithe icompany.
Financial ianalysis: iThe ibest isource i of ifinancial iinformation iabout ia icompany iis i its
iown ifinancial istatements. iThis iis ia iprimary isource iof iinformation ifor ievaluating ithe

iinvestment iprospects iin ithe iparticular icompany's istock. iFinancial istatement ianalysis

iis ithe istudy iof ia icompany's ifinancial istatement ifrom ivarious iviewpoints. iThe

istatement

gives ithe ihistorical iand icurrent iinformation iabout ithe icompany's ioperations. iHistorical
ifinancial istatement ihelps ito ipredict ithe ifuture iand ithe icurrent iinformation iaids ito

ianalyze ithe ipresent istatus iof ithe icompany. iThe itwo imain istatements iused iin ithe

ianalysis iare iBalance isheet iand iProfit iand iLoss iAccount.

The ibalance isheet iis ione iof ithe ifinancial istatements ithat icompanies
iprepare ievery iyear ifor itheir ishareholders. iIt iis ilike ia ifinancial isnapshot, ithe icompany's

ifinancial isituation iat ia imoment iin itime. iIt iis iprepared iat ithe iyear iend, ilisting ithe

icompany's icurrent iassets iand iliabilities. iIt ihelps ito istudy ithe icapital istructure iof ithe

icompany. iIt iis ibetter ifor ithe iinvestor ito iavoid ia icompany iwith iexcessive idebt

icomponent iin iits icapital istructure.

From ithe ibalance isheet, iliquidity iposition iof ithe icompany ican ialso ibe iassessed iwith
ithe iinformation ion icurrent iassets iand icurrent iliabilities.

Ratio ianalysis: iRatio iis ia i relationship ibetween imathematically. iFinancial iratios iprovide
inumerical irelationship ibetween itwo irelevant ifinancial idata. iFinancial iratios iare icalculated

ifrom ithe ibalance isheet iand iprofit iand iloss iaccount. iThe irelationship ican ibe ieither iexpressed

ias ia ipercent ior ias ia iquotient. iRatios iSummarize ithe idata ifor ieasy iunderstanding, icomparison

iand iinterpretations. iratios ifor iinvestment ipurposes ican ibe iclassified iinto iprofitability iratios,

iturnover iratios, iand ileverage iratios. iProfitability iratios iare ithe imost ipopular iratios isince

iinvestors

Prefer ito imeasure ithe ipresent iprofit iperformance iand iuse ithis iinformation ito iforecast
ithe ifuture istrength iof ithe icompany. iThe imost ioften iused iprofitability iratios iare ireturn

ion iassets. idividend iyield, ireturn ion iequity, ipresent ivalue iof icash iflows, iand iprofit

imargins. iprice iearnings imultiplier, iprice ito ibook ivalue, iprice ito icash iflow, iand iprice ito

a) Return ion iAssets i(ROA)

OA iIS iComputed ias ithe iproduct iof ithe inet iprofit imargin iand ithe itotal iasset
iturnover iRatios
 ROA i= i(Net iProfit/Total iincome) ix i(Total iincome/Total iAssets)

This iratio iindicates ithe ifirm's istrategic isuccess., iCompanies ican ihave ione ior itwo
istrategies: icost ileadership, ior iproduct idifferentiation. iROA ishould ibe irising ior

ikeeping ipace iwith ithe icompany's icompetitors iif ithe icompany iis isuccessfully ipursuing

ieither ior ithese istrategies, ibut ihow iROA irises iwill idepend ion ithe icompany's istrategy.

iROA iShould irise iwith ia isuccessful icost ileadership istrategy ibecause ithe icompany's

iincreasing ioperating iefficiency. iAn iexample iis ian iincreasing, itotal iasset, iturnover

iratio ias ithe icompany iexpands iinto inew imarkets, iincreasing iits imarket ishare. iThe

icompany imay iachieve ileadership iby iusing iits iassets imore iefficiently. iWith ia

isuccessful iproduct idifferentiation istrategy, iROA iwill irise ibecause iof ia irising iprofit

imargin.

b) Return ion iInvestment i(RO)

ROI iis ithe ireturn ion icapital iinvested iin ibusiness, ii.e., iif ian iinvestment iRs i1 icrore iin
imen, imachines, iland iand imaterial iis imade ito igenerate iRs. i25 ilakhs iof inet iprofit, ithen

ithe iROI iis i25%. iThe icomputation iof ireturn ion iinvestment iis ias ifollows:

Return ion iInvestment i(RO) i= i(Net iprofit/Equity iinvestments) ix i100

As ithis iratio ireveals ihow iwell ithe iresources iof ia ifirm iare ibeing iused, ihigher ithe iratio,
ibetter iare ithe iresults. iThe ireturn ion ishareholder's iinvestment ishould ibe icompared

iwith ithe ireturn iof iother isimilar ifirms iin ithe isame iindustry. iThe iinert-firm icomparison

iof ithis iratio idetermines iwhether ithe iinvestments iin ithe ifirm iare iattractive ior inot ias ithe

iinvestors iwould ilike ito iinvest ionly iwhere ithe ireturn iis ihigher.

c) Return ion iEquity

Return ion iequity imeasures ihow imuch ian iequity ishareholder's iinvestment iis iactually
iearning. iThe ireturn ion iequity itells ithe iinvestor ihow imuch ithe iinvested irupee iis iearning

ifrom ithe icompany. iThe ihigher ithe inumber, ithe ibetter iis ithe iperformance iof ithe

icompany iand isuggests ithe iusefulness iof ithe iprojects ithe icompany ihas iinvested iin.

The icomputation iof ireturn ion iequity iis ias ifollows:

Return ion iequity= i(Net iprofit ito iowners/value iof ithe ispecific iowner's
Contribution ito ithe ibusiness) ix i100
The iratio ione’s imore imeaningful ito ithe iequity ishareholders iwho iare iinvested ito iknow
iprofits iearned iby ithe icompany iand ithose iprofits iwhich ican ibe imade iavailable ito ipay

idividend ito ithem.

d) Earnings iper iShare i(EPS)

This iratio idetermines iwhat ithe icompany iis iearning ifor ievery ishare. iPor imany
investors, iearnings iare ithe imost iimportant itool. iEPS iis icalculated iby idividing ithe iearnings
i(Net iprofit) iby ithe itotal inumber iof iequity ishares.

The icomputation iof iEPS iis ias ifollows:

Earnings iper ishare i= iNet iprofit/Number iof ishares ioutstanding
The iEPS iis ia igood imeasure iof iprofitability iand iwhen icompared iwith iEPS iof isimilar
other icompanies, iit igives ia iview iof ithe icomparative iearnings ior iearnings ipower iof ia ifirm.
iEPS icalculated ifor ia inumber iof iyears iindicates iwhether ior inot iearning ipower iof ithe

icompany ihas iincreased.

e) Dividend iper iShare i(DPS)

The iextent iof ipayment iof idividend ito ithe ishareholders iis imeasured iin ithe iform
iof idividend iper ishare. iThe idividend iper ishare igives ithe iamount iof icash iflow

ifrom ithe icompany ito ithe iowners iand iis icalculated ias ifollows:

Dividend iper ishare iTotal idividend ipayment/ iNumber iof ishares ioutstanding

The ipayment iof idividend ican ihave iseveral iinterpretations ito ithe ishareholder. iThe
idistribution iof idividend icould ibe ithought iof ias ithe idistribution iof iexcess

iprofits/abnormal iprofits iby ithe icompany. iOn ithe iother ihand, iit icould ialso ibe

inegatively iinterpreted ias ilack iof iinvestment iopportunities. iIn iall, idividend ipay-out

igives ithe iextent iof iinflows ito ithe ishareholders ifrom ithe icompany

f) Dividend iPay-out iRatio

From ithe iprofits iof ieach icompany ia icash iflow icalled idividend iis idistributed iamong iits
ishareholders. iThis iis ithe icontinuous istream iof icash iflow ito ithe iowners iof ishares, iapar

ifrom ithe iprice idifferentials i(capital igains) iin ithe imarket. iThe ireturn ito ithe ishareholders,

iin
the iform iof idividend, iout iof ithe icompany's iprofit iis imeasured ithrough ithe ipay-out irati1o.
iThe ipay-out iratio iis icomputed ias ifollows:

Pay-out iRatio i= i(Dividend iper ishare/ iEarnings iper ishare) i* i100

The ipercentage iof ipay-out iratio ican ialso ibe iused ito icompute ithe ipercentage iof iretained
iearnings. iThe iprofits iavailable ifor idistribution iare ieither ipaid ias idividends ior iretained

iinternally ifor ibusiness igrowth iopportunities. iHence, iwhen idividends iare inot ideclared, ithe

ientire iprofit iis iploughed iback iinto ithe ibusiness ifor iits ifuture iinvestments.

g) Price/Earnings iRatio i(P/E)

The iP/E imultiplier ior ithe iprice iearnings iratio irelates ithe icurrent imarket iprice iof ithe
ishare ito ithe iearnings iper ishare. iThis iis icomputed ias ifollows:

Price/earnings iratio i= iCurrent imarket iprice/ iEarnings iper ishare

This iratio iis icalculated ito imake ian iestimate iof iappreciation iin ithe ivalue iof ia ishare iof ia
icompany iand iis iwidely iused iby iinvestors ito idecide iwhether ior inot ito ibuy ishares iin ia

iparticular icompany. iMany iinvestors iprefer ito ibuy ithe icompany's ishares iat ia ilow iP/E iratio

isince ithe igeneral iinterpretation iis ithat ithe imarket iis iundervaluing ithe ishare iand ithere iwill

ibe ia icorrection iin ithe imarket iprice isooner ior i later. iA ivery ihigh iP/E i ratio ion ithe iother

ihand iimplies ithat ithe icompany's ishares iare iovervalued iand ithe iinvestor ican ibenefit iby

iselling ithe ishares iat ithis ihigh imarket iprice

h) Debt-to-Equity iRatio
Debt-Equity iratio iis iused ito imeasure ithe iclaims iof ioutsiders iand ithe iowners iagainst
ithe ifirm's iassets.

Debt-to-equity iratio= iOutsiders iFunds i/ iShareholders iFunds

The idebt-equity iratio iis icalculated ito imeasure ithe iextent ito iwhich idebt ifinancing ihas
been iused iin ia ibusiness. iIt iindicates ine iproportionate iclaims iof iowners iand ithe ioutsiders iagainst
ithe ifirm’s iassets. iThe ipurpose iis ito iget ian iidea iof ithe icushion iavailable ito ioutsiders ion ithe

iliquidation iof ithe ifirm.

 CHAPTER 5
DATA ANALYSIS AND INTERPRETATIONS
1. ECONOMY ANALYSIS

Economic analysis is the analysis of forces operating the overall economy a

country. Economic analysis is a process whereby strengths and weaknesses of an
economy Is analyzed. Economic analysis is important in order to understand exact
condition of an economy.

The level of economic activity has an impact on investment in many ways. If the economy
grows rapidly, the industry can also be expected to show rapid growth and vice versa. When
the level of economic activity is low, stock prices are low, and when the level of economic
activity is high, stock prices are high reflecting the prosperous outlook for sales and profits of
the firms. The analysis of macroeconomic environment is essential to understand the
behaviors of the stock prices.
Economy analysis includes:
1. GDP (Gross Domestic Product)

2. INTEREST RATES

3. INFLATION RATES

4. EXCHANGE RATES
GROSS DOMESTIC PRODUCT

The Gross Domestic Product growth rate measures the increase in value of the goods and
services produced by an economy. Economic growth is usually calculated in real terms or
inflation-adjusted terms, in order to net out the effect of changes on the price of the goods
and services produced. The Gross Domestic Product can be determined using three different
approaches, which should give the same result. These different methods are the product
technique, the income technique, and the expenditure technique. In sum, the product
technique sums the outputs of every class of enterprise to arrive at the total. The expenditure
technique works on the principle that every product must be bought by somebody; therefore,
the value of the total product must be equal to people’s total expenditures in buying products
and services. The income technique works on the principle that the incomes of the productive
factors must be equal to the value of their product, and determines GDP by finding the sum of
all producers' incomes. The real GDP per capita of an economy is olden used as an indicator of
the average standard of living of individuals in that country, and economic growth are
therefore often seen as indicating an increase in the average standard of living.
 INDIAN GDP GROWTH RATES: -2019 TO 2022

The Indian economy expanded 13.5% year-on-year in the second quarter of 2022, the

most in a year but less than market forecasts of 15.2%. Gross value added increased

faster for agriculture, forestry & fishing (4.5% vs 2.2% in Q2 2021); electricity, gas,

water supply & other utility services (14.7% vs 13.8%); financial, real estate &

professional services (9.2% vs 2.3%) and public administration, defense & other

services (26.3% vs 6.2%). On the other hand, a slowdown was seen for mining &

quarrying (6.5% vs 18%); manufacturing (4.8% vs 49%); construction (16.8% vs

71.3%) and trade, hotels, transport, communication & services related to

broadcasting (25.7% vs 34.3%). On the expenditure side, household consumption

accelerated (25.9% vs 14.4% in Q2 2021) and government expenditure rebounded

(1.3% vs –4.8%). Meanwhile, gross fixed capital formation slowed (20.1% vs 62.5%)

and net foreign demand contributed negatively to growth, as exports rose 14.7%

while imports advanced at a faster 37.2%.

INTREST RATES: -2019 TO 2022

Interest rates will have an effect on stocks. If interest rates decrease the
Borrowing capacity of a company increases so company can go for further expansion

and generates more profits. So, demand for stock increases and stock price will rise. In

India, interstate decisions are taken by the Reserve Bank of India's Central Board of

Directors. The official interest rate is the benchmark repurchase rate.

Reserve Bank of India hikes rates again in September

On 30 September, the Reserve Bank of India (RBI) hiked the repo rate by 50 basis

points to 5.90%. Consequently, it also hiked its standing deposit facility rate and

marginal standing facility rate by 50 basis points each, to 5.65% and 6.15%

respectively.

Five board members voted for the hike, with one voting for a 35 basis points increase.

The Bank said that the hike was needed to pre-empt second-round effects—where

higher prices lead to higher wages, sparking a vicious cycle—and ensure that inflation

converges to the Bank’s 2.0–6.0% target in the medium-run. The Bank pointed out

upside risks to the inflation outlook, including a weaker rupee versus the dollar, food

prices, geopolitical tensions and supply disruptions. The Bank expects inflation to

remain above target until January–March 2023. The recent weakening of the rupee

also prompted the Bank to state it was prepared to intervene in the FX market should

it proves necessary. Meanwhile, the Bank highlighted a healthier economic outlook

as providing room for the hike: It expects a boost to agricultural activity from recent

rainfall and a rebound in services as the economy reopens from Covid-19.

The Bank did not provide explicit forward guidance. However, it stated it would

continue to “remain focused on the withdrawal of accommodation” to ensure inflation

returns to target “going forward”, and as a result further hikes are likely ahead. The

Bank asserted that risks to the inflation outlook appeared balanced; however,

unexpected spikes or drops in inflation—such as due to a swing in commodity prices

—could prompt the Bank to change course. A sharper-than-expected economic

slowdown or rebound could also affect the speed of policy tightening. The next

monetary policy meeting is scheduled to take place on 5–7 December.

Analyst at Nomura commented on the outlook:

“We continue to think the RBI will be guided primarily by local considerations, but our

house view of a higher US terminal fed funds rate (5.25-5.50% by March 2023) and

a weak currency (USD/INR at 85 by November) does add some upside risks to our

forecast. Therefore, we are raising our terminal repo rate forecast to 6.50% (from

6.15% earlier), with a 35bp hike in December and a final 25bp hike in February.”

Focus Economics panelists forecast the repurchase rate to end FY 2022 at 5.94%

and FY 2023 at 6.07%.

INFLATION RATES: -

Current Inflation in India

Current Retail price inflation in India jumped to 5.03 percent in February of 2021

from 4.06 percent in January which is below the average inflation rate of 7.5 %.

The Inflation in India in the future is expected to rise in the coming years.

Average Inflation Rates in India

The average Inflation in India from the year 1960 to 2021 is 7.55%. So on an

average the Indian Currency is losing value at a rate of 7.5%.

 The average Inflation in India in the last five years is 5.16%.

 The average Inflation in the last 10 years is 7.32%
 and the average inflation from the year 2000 to 2020 is 6.4%
 In the last 3 years the average inflation in India is below 5%
EXCHANGE RATES: -

Exchange rates will also have an impact on stock. If exchange rates decrease then
company can import at lower rates which leads to increase in profits and causes an
increase in profits. The USDINR spot exchange rate specifies how much one
currency, the USD, is currently worth in terms of the other, the INR. While the
USDINR spot exchange rate is quoted and exchanged in the same day, the USDINR
forward rate is quoted today but for delivery and payment on a specific future date.
The USDINR spot exchange rate specifies how much one currency, the USD, is
currently worth in terms of the other, the INR. While the USDINR spot exchange rate
Is quoted and exchanged in the same day, the USDINR forward rate is quoted today
but for delivery and payment o a specific future date.

The USDINR traded at INR ON

1 January 2022 $1 USD = ₹74.5133

$1 USD = ₹76.4636
22 April 2022

$1 USD = ₹80.9944
14 November 2022

The Indian Rupee averaged 37.89 from 1973 until 2022.

ANALYSIS iOF iBANKING iSECTOR

Introduction

According ito ithe iReserve iBank iof iIndia i(RB), ithe ibanking isector iin iIndia iis isound, i

adequately icapitalized iand iwell-regulated. iIndian ifinancial iand ieconomic iconditions i

are imuch ibetter ithan iin imany iother icountries iof ithe iworld. iCredit, imarket iand i

liquidity irisk istudies ishow ithat iIndian ibanks iare igenerally iresilient iand ihave i

withstood ithe iglobal idownturn iwell. i

With ia isense iof ioptimism islowly icreeping iin, ithe ibanking iindustry iexpects ithat i2015 i

will ibring ibetter igrowth iprospects. iThis ioptimism istems ifrom ifactors isuch ias ithe i

Government iworking ihard ito irevitalize ithe iindustrial igrowth iin ithe icountry iand ithe i

RBI iinitiating ia inumber iof imeasures ithat iwould igo ia ilong iway iin ihelping ithe ibanks ito i

restructure. iThe irecent iannouncements iof iRBI, iit iis ifelt, iare ia iclear ipointer ito ithe i

future iof ithe irestructured idomestic ibanking iindustry. i

Market iSize

The iIndian ibanking isector iis ifragmented, iwith i46 icommercial ibanks ijostling ifor i

business iwith idozens iof iforeign ibanks ias iwell ias irural iand ico-operative ilenders.
iState ibanks icontrol i80 ipercent iof ithe imarket, ileaving irelatively ismall ishares ifor

iPrivate irivals. i

At ithe iend iof iFebruary, i13.7 icrore iaccounts ihad ibeen iopened iunder iPradhan iMantri i

Jan iDhan iYojana i(PM.JDY) iand i12.2 icrore iRepay idebit icards iwere iissued. iThese
ine iaccounts ihave imobilised ideposits iof iRs i12,694 icrore i(US$ i2.01 ibillion). i

Standard i& iPoor's iestimates ithat icredit igrowth iin iIndia's ibanking isector iwould
iimprove ito i12-13 iper icent iin iFY16 ifrom iless ithan i10% iin ithe isecond ihalf iof iCY14.

iInvestments/developments i

There ihave ibeen imany iinvestments iand idevelopments iin ithe iIndian ibanking
isector iin ithe ipast ifew imonths. i

 The iUnited iEconomic iForum i(UEF), ian iorganisation ithat iworks ito iimprove
isocio-economic istatus iof ithe iminority icommunity iin iIndia ihas isigned ia

i memorandum iof iunderstanding i(MoU) iwith iIndian iOverseas iBank i(IOB)

ifor ifinancing ientrepreneurs ifrom ibackward icommunities ito iset iup

ibusinesses iin iTamil iNadu i

 The i RBI i has i allowed i third-party i white i label i automated i teller i machines
i(ATM) ito i accept iinternational i cards, i including iinternational i prepaid icards,

iand isaid iwhite ilabel i ATMs ican inow itie iup iwith iany icommercial ibank ifor

icash i

Supply i
  With ithe iobjective iof iincreasing iinvestment iopportunities ifor iIndian

iAlternative iinvestment ifunds i(AIFs), ithe iRBI ihas iallowed ithese ifunds ito i . i

invest ioverseas. i

 In ia imajor iboost ifor ithe iinfrastructure isector, ias iwell ias ifor ibanks ifinancing i

long igestation iprojects, ithe iRBI ihas iextended iits iflexible irefinancing iand
irepayment ioption ifor ilong-term iinfrastructure iprojects ito iexisting iones iwere

ithe itotal iexposure iof ilenders iis imore ithan iRs i500 icrore i(USS i78.98 imillion).

Syndicate iBank iis iplanning ito iopen i300-500 ibranches iin ithe inext ifinancial iYear i

 At ithe iend iof iFebruary, i13.7 icrore iaccounts ihad ibeen iopened

iunder iPradhan iMantri i Scheme. i

 Jan iDhan iYojana i(PMJDY) iand i12.2 icrore iRepay idebit icards iwere iissued.

iThese inew iaccounts ihave imobilised ideposits iof iRs i12,694 icrore i(US$

i2.01 ibillion). iStandard i& iPoor's iestimates ithat icredit igrowth iin iIndia’s

ibanking isector iwould iimprove ito i12-13 iper icent iin iFY16 ifrom iless ithan

i10% iin ithe isecond ihalf iof iCY14. i

Investments/developments

 There ihave ibeen imany iinvestments iand idevelopments iin ithe iIndian

ibanking isector iin ithe ipast ifew imonths. i

 The iUnited iEconomic iForum i(UEF), ian iorganisation ithat iworks ito iimprove
isocio-economic istatus iof ithe iminority icommunity iin iIndia ihas isigned ia

imemorandum iof iunderstanding i(MoU) iwith iIndian iOverseas iBank i(IOB) ifor

i\ ifinancing ientrepreneurs ifrom ibackward… i

 RBI igovernor iSHAKTHIKANTH iDAS iand iEuropean iCentral iBank iPresident i

Mr iMario iDraghi ihave isigned ian iMoU ion icooperation iin icentral ibanking.
i"The imemorandum iof iunderstanding iprovides ia iframework ifor iregular

iexchange iof iinformation, ipolicy idialogue iand itechnical icooperation ibetween

ithe itwo iinstitutions. iTechnical icooperation imay itake ithe iform iof ijoint

iseminars iand iworkshops i in i areas i of i mutual i interest i in i the i field i of i central

i banking," i RBI isaid ion iits iwebsite. i

 RBL iBank ihas iannounced ithat iit iwould ibe ithe ianchor iinvestor iin iTrifecta
iCapital's iVenture iDebt iFund, ithe ifirst ialternative iinvestment ifund i(AIF) iof

iits ikind iin iIndia iwith ia i commitment iof iRs i50 icrore i(US$ i7.89 imillion). iThis

imove iprovides iRBL iBank ithe iopportunity ito isupport ithe iemerging iventure

idebt imarket iin iIndia. i

 The iRBI ihas iallowed ibanks ito ibecome iinsurance ibrokers, ipermitting ithem
ito isell ipolicies iof i different iinsurance ifirms isubject ito icertain iconditions.

iBandhan iFinancial iServices iPvt. iLtd ihas iraised iRs i1,600 icrore i(USS

i252.69 imillion) ifrom itwo iinternational iinstitutional iinvestors ito ihelp iconvert

iits imicrofinance ibusiness iinto ia ifull iservice ibank. iBandhan iwas ione iof ithe

itwo ientities ito iget ia ibanking ilicence iin iApril i 2014 ialong iwith iinfrastructure

ifinance icompany iIDFC iLtd. i

 Yes iBank iLtd ihas isigned ian iMoU iwith ithe iUS igovernment's idevelopment
ifinance iinstitution iOverseas iPrivate iInvestment iCorp i(OPIC) ito iexplore

iUSS i220 imillion iof ifinancing ito ilend ito imicro, ismall iand imedium

ienterprises i(MSMEs) iin iIndia. i

 Reliance iIndustries iLimited i(RIL) ihas isaid ithat iit ihas iapplied ifor ia iPayments
iBank ilicence, iwhere ithe icompany iwill ibe ithe ipromoter iand iState iBank iof

iIndia iwill ibe iits ijoint iventure ipartner iwith ian iequity iinvestment iof iup ito

i30percent. i
  The iRBI ihas iallowed ibonds iissued iby imultilateral ifinancial iinstitutions ilike
iWorld iBank iGroup, ithe iAsian iDevelopment iBank iand ithe iAfrican

iDevelopment iBank iin iIndia ias ieligible isecurities ifor iinterbank iborrowing.

iThe imove iwill ifurther idevelop ithe icorporate ibonds imarket, iRBI isaid iin ia

inotification. i

 The iCompetition iCommission iof iIndia i(CCI) ihas icleared ithe imerger iof iING
iVysya iBank iwith iKotak iMahindra iBank, iwhich iwould icreate ithe icountry's

ifourth ilargest iprivate isector ilender. iThe iproposed iRs i15,000 icrore i(USS

i2.36 ibillion) i deal i is i not i likely i to ihave i any iappreciable i adverse i effect ion

icompetition iin iIndia, ias iper ithe icompetition i"The ishare iof iboth ientities iin

ivarious irelevant imarkets iis iinsignificant," ithe iCCI isaid. i

 . iTata iConsultancy iServices iLtd i(TCS), iIndia's ilargest isoftware iservices

iexporter, ihas iannounced ithat iit ihas iexpanded iits ipresence iin iSingapore

iwith ithe iopening iof ia inew i1,000-seat iTCS iSingapore ibanking iand ifinancial

iservices i(BFS) icentre. iThe inew icentre ireplaces ia i500-seat icentre iopened

iin i2011 iand iwill ioffer ia ibroader irange iof iservices ito iglobal ibanks iin ithe

iAsia- iPacific iregion, iwith ia imajor ifocus ion idigital iofferings. i

Government iInitiatives

There ihave ibeen ia ilot iof idevelopments iin ithe iIndian ibanking isector. i

 The iGovernment ihas iannounced ia icapital iinfusion iof iRs i6,990 icrore
i(USS i1.1billion) iin inine istate irun ibanks, iincluding iState iBank iof iIndia
i(SBI) iand i

Punjab i National i Bank i(PNB), i but ibased i on inew iefficiency iparameters i such
iAs ireturn ion iassets iand ireturn ion iequity. iIn ia istatement, ithe ifinance

iministry isaid, iThis iyear, ithe iGovernment iof iIndia ihas iadopted inew icriteria iin

iwhich ithe ibanks iwhich iare imore iefficient iwould ionly ibe irewarded iwith iextra

icapital ifor itheir iequity iso ithat ithey ican ifurther istrengthen itheir iposition." i
  The iUnion icabinet ihas iapproved ithe iestablishment iof ithe iUS$ i100 ibillion
iNew iDevelopment iBank i(NDB) ienvisaged iby ithe ifive-member iBRICS

igroup ias iwell ias ithe iBRICS i"contingent ireserve iarrangement" i(CRA). i

 The iRBI ihas idecided ito iallow inominated ibanks ito iimport igold, iincluding
icoins, ion ia iconsignment ibasis, iextending iits iclarification iissued iin

iNovember i2014, iwhich ihad ieased icertain icategories iof igold iimports. i

 To ihelp iMicro iSmall iand iMedium iEnterprises i(MSME), iRBI ihas ipermitted
isetting iup iof ian iexchange-based itrading iplatform ito ifacilitate ifinancing iof

ibills iraised iby isuch ismall ientities ito icorporate iand iother ibuyers, iincluding

igovernment idepartments iand iPSUs. i

Indian ibanking isector icredit igrowth ihas igrown iat ia ihealthy ipace

 Credit ioff-take ihas ibeen isurging iahead iover ithe ipast idecade, iaided iby
istrong ieconomic igrowth, irising idisposable iincomes, iincreasing

iconsumerism iand ieasier iaccess ito icredit i

 Total icredit iextended iwent iup ito iUSS i1,089 ibillion iby iFY15 i

 Credit ito inon-food iindustries iincreased i9.75 iper icent ito iUSS i1,073.4 ibillion
iin iFY15, ifrom ithe iprevious ifinancial i year i

 Demand ihas igrown ifor iboth icorporate iand iretail iloans i

Credit iofftake iin iFY21 iat i₹109.51 ilakh icrore iwas ilower ithan iFY20’s iwhen iit
ihad iclocked i a igrowth iof i6.14% i — iwhich i was ithe islowest iin i as imany ias i58

iyears. iIt iwas iway iback iin i FY1962 iwhen i credit igrowth iwas islower i than ithis iat

i5.38%.

Only iabout i₹3 ilakh icrore iof ithe i₹20 ilakh i crore istimulus iamounting ito i11%
iof ithe iGDP i was iactually iused iin ifiscal i stimulus ito ifight i the i impact iof

iCOVID-19
as ithe iremaining iamount iwas ithrough icredit isupport iwith i no iimpact ion ithe
ifiscal i numbers iof i the i government.

However, isystem-wide ideposits ijumped ialmost i11.4% iin ithe i year ito i₹151.13
ilakh icrore, ifrom i7.93% i growth iin i FY20, i SBI iResearch i said, iciting iRBI idata

Road iAhead

Indian ieconomy iis inow ion ithe ithreshold iof ia imajor itransformation, iwith
iExpectations iof ipolicy iinitiatives ibeing iimplemented. iPositive ibusiness

isentiments, iimproved iconsumer iconfidence iand imore icontrolled iinflation ishould

ihelp iboost ithe ieconomic igrowth. iHigher ispending ion iinfrastructure, ispeedy

iimplementation ior iprojects iand icontinuation iof ireforms iwill iprovide ifurther

iimpetus ito igrowth. iAll ithis iTranslates iinto ia istrong igrowth ifor ithe ibanking isector

itoo, ias irapidly igrowing iBusiness iturn ito ibanks ifor itheir icredit ineeds, ithus ihelping

ithem igrow. i

Also, iwith ithe iadvancements iin itechnology, imobile iand iinternet ibanking iservices i
have icome ito ithe ifore. iBanks iin iIndia iare ifocusing imore iand imore ito iprovide ibetter
iservices ito itheir iclients iand ihave ialso istarted iupgrading itheir itechnology

iinfrastructure, iwhich ican ihelp iimprove icustomer iexperience ias iwell ias igive ibankS

ia icompetitive iedge. iMany ibanks, iincluding iHDFC, iICICI iand iAXIS iare iexploring

ithe ioption ito ilaunch icontact-less icredit iand idebit icards iin ithe imarket isoon. iThe

icards, iwhich iuse inear ifield icommunication i(NFC) imechanism, iwill iallow icustomers

ito itransact iwithout ihaving ito iinsert ior iSwipe. i

COMPANY iANALYSIS

The icompany ianalysis ishows ithe ilong-term istrength iof ithe icompany ithat iwhat iis
ithe ifinancial i position iof ithe icompany iin ithe imarket, iwhere iit istands iamong iits

icompetitors iand iwho iare ithe ikey idrivers iof ithe icompany, iwhat iare ithe ifuture iplans

iof ithe icompany, iand ithe ipolicies iof igovernment itowards ithe icompany iand ihow ithe

istake iof ithe icompany idivested iamong idifferent igroups iof ipeople. i

Here, iI ihave itaken ithree ibanking icompanies inamely iICICI iBank, iHDFC iBank iand
iAxis iBank ifor ithe iFundamental iAnalysis: i
ICICI iBANK

ICICI iBank iLimited iprovides ibanking iproducts iand ifinancial iservices iin ithe iareas iof
iInvestment ibanking, ilife iand inon-life iinsurance, iventure icapital, iand iasset

iManagement ito icorporate iand iretail icustomers. iIt ioffers isavings iaccounts, ifixed

ideposits, irecurring ideposits, iand isalary iaccounts; iand iconsumer iand icommercial

icards. iThe icompany ialso iprovides ihome iloans, icommercial ivehicle iloans, ipersonal

iloans, icar iloans, iand iloans iagainst isecurities. iIn iaddition, iit ioffers itax isaving ibonds,

igovernment iof iIndia ibonds, imutual ifunds, iinitial ipublic ioffers, iforeign iexchange

iservices, iand isenior icitizens isavings ischemes; iand ihealth, ioverseas itravel, istudent

imedical, imotor, iand ihome, iinsurance i products, ias iwell ias iinvests iin igold. i

Further, iit iprovides icash imanagement iservices iand iglobal itrade iservices; imergers
iand iacquisitions iadvisory iservices iand iprivate iequity isyndication iservices; ifinancial

iinstitution, icapital imarket, iand icustodial iservices, iand istructured iand iproject

ifinance iproducts. iAdditionally, ithe icompany ioffers ibusiness iadvantage iloans,

ivendor/dealer ifinance, iand iindustry ispecific iloans, itransaction ibanking iand iCMS

iservices: itrade iservices; iand iprivate iequity iplacement iservices. i

It ialso iprovides iNRI ibanking, iinternational ibanking, irural iand iagri ibanking, iInternet
ibanking. imobile ibanking, iand iphone ibanking iservices i, ias iwell ias idematerialization

iservices iICICI iBank iLimited iwas ifounded iin i1955 iand iis ibased iin iMumbi,india. i
HDFC iBANK

HDFC iBank iLimited iprovides icommercial ibanking iproducts iand iservices iin iIndia.
ioperates iin ithree isegments: iRetail iBanking, iWholesale iBanking, iand iTreasury.

iThe iRetail iBanking isegment ioffers ivarious ideposit iproducts, iincluding isavings

iaccounts, icurrent iaccounts, ifixed ideposits, irecurring ideposits, iand iDemat

iaccounts. iIt ialso iprovides iauto, ipersonal, icommercial ivehicle, ihome, igold, iand

ieducational iloans; iloans iagainst igold, isecurities, iproperty, iand irental ireceivables;

iand ihealth icare ifinance, iretail iagri iand itractor iloans, iworking icapital ifinance,

iconstruction iequipment ifinance, iand iwarehouse ireceipt iloans, ias iwell ias icredit

icards, idebit icards, idepository, iinvestment iadvisory, ibill ipayments, iand

itransactional iservices; iand idistributes ilife, ihealth, iand igeneral iinsurance, iand

imutual i fund iproducts. i

In iaddition, ithis isegment ioffers iwealth iadvisory, itax iplanning, ibonds, iforex iand
itrade iservices, iand iprivate ibanking iservices. iThe iWholesale iBanking isegment

iprovides i\ iloans, inon-fund ifacilities, iand itransaction iservices ito ilarge icorporate,

iemerging icorporate, ismall iand imedium ienterprise, ipublic iSector iunits, igovernment

ibodies, ifinancial iinstitutions, iand imedium iscale ienterprises. iIt ioffers icommercial

iand itransactional ibanking iservices, iincluding iworking icapital ifinance, itrade

iservices, itransactional iservices, icash imanagement istructured isolutions ito

icorporate icustomers, imutual ifunds, istock imanagement, iand istructured isolutions i

members, iand ibanks. iThe iTreasury isegment ioffers iproducts iin ithe iareas iof
iexchange imembers, ichange iand iderivatives, imoney imarket iand idebt isecurities,

iand iequities i

the icompany ialso ioffers iNRI ibanking iservices. iThe icompany iwas ifounded iin i1994
iand iis ibased iin iMumbai, iIndia. i
AXIS iBANK

Axis iBank iLimited iprovides icorporate, iretail, iand ibusiness ibanking iproducts iand
iservices iin iIndia. iThe icompany’s ideposit iproducts iinclude idemand, isavings ibank,

icurrent iaccount, iand iterm ideposits. iThe icompany ialso iprovides ihome iloans, icar

iloans, ipersonal iloans, iloan iagainst ishares iand isecurity, iloan iagainst iproperty,

ieducation iand iconsumer iloans, istructured ifinance iand imicrofinance iproducts,

ishort- iterm iloans, iloans ifor ismall iand imedium ienterprises, iagriculture iloans, ias

iwell ias icredit iand idebit icards, iand iinsurance i services. i

In iaddition, iit iengages iin iinvesting iin isovereign iand icorporate idebt, iequity, iand
imutual ifunds; itrading ioperations; iderivative itrading iand iforeign iexchange

ioperations; iand icentral ifunding ioperations. iFurther, ithe icompany ioffers icorporate

iadvisory, iplacements iand isyndication, ipublic iissue imanagement, iproject iappraisal,

icapital imarket irelated, icard, iInternet ibanking, iATM, idepository, ifinancial iadvisory,

iNRI, iinternational ibanking, icash imanagement, iand iother iservices, ias iwell ias

iliability iproducts iand igovernment iservices. i

Further, ithe icompany iprovides imergers iand iacquisitions, iprivate iequity isyndication,
iand itransaction iand imerchant ibanking iservices, ias iwell ias iinvolves iin iequity icapital

imarkets ibusiness. iIt ialso ihas ibranches iin iSingapore, iHong iKong, iand iDubai. iThe

iCompany iwas iformerly iknown ias iUTT iBank iLimited iand ichanged iits iname ito iAxis

iBank iLimited iin iJuly i2007. iAxis iBank iLimited iwas ifounded iin i1993 iand iis ibased iin

iMumbai, iIndia. i
ICICI iBANK i– iComparative iBalance
isheets i(Rs. iIn icrores)

Standalone iBalance iSheet --------- iin iRs. iCr i---------------- i

Mar i16 Mar i15 Mar i14 Mar i13 Mar i'12

Capital iand iLiabilities i

Total iShare iCapital i 1,159.66 i 1,155.04 i 1,153.64 i 1,152.77 i 1,151.82 i

Equity iShare iCapital: i 1,159.66 i 1,155.04 i 1,153.64 i 1,152.77 i 1,151.82 i

Share iApplication iMoney i 7.44 i 6.57 i 4.48 i 2.39 i 0.29 i

Preference iShare iCapital i 0.00 i 0.00 i 0.00 i 0.00 i 0.00 i

Reserves i 79,262.26 i 72,051.71 i 65,547.84 i 59,250.09 i 53,938.82 i

Net iWorth 80,429.36 73,213.32 66,705.96 60,405.25 55,090.93

Deposits i 361,562.73 i 331,913.66 i 2,92,613.63 i 255,499.96 i 225,602.11 i

Borrowings i 172,417.35 i 154,759.05 i 145,341.49 i 1 i40,164.91 i 109,554.28 i

Total iDebt 533,980.08 486,672.71 437,955.12 395,664.87 335,156.39

Other iLiabilities i& iProvisions i 31,719.86 i 34,755.55 i 32,133.60 i 17,576.98 i 15,986.35 i

Total iLiabilities i 646,129.30 i 594,641.58 i 536,794.68 i 473,647.10 i 406,233.67 i

Assets

Cash i& iBalances iwith iRBI i 25,652.91 i 21,821.83 i 19,052.73 i 20,461.29 i 20,906.97 i

Balance iwith iBanks, iMoney iat 16,651.71 i 19,707.77 i 22,364.79 i 15,768.02 i 13,183.11 i
iCall i
Advances 387,522.07 338,702.65 290,249.44 253,727.66 216,365.90

Investments 186,580.03 177,021.82 171,393.60 159, i560.04 134,685.96

Gross iBlock i 4,725.52 i 4,678.14 4,647.06 i 4,614.69 i 4,744.26 i

Revaluation iReserves i 0.00 i 0.00 0.00 i 0.00 i 0.00 i

Accumulated iDepreciation i 0.00 i 0.00 0.00 i 0.00 i 0.00 i

Net iBlock 4,725.52 4,678.14 4,647.06 4,614.69 4,744.26
Capital iWork iIn iProgres i 0.00 i 0.0 0.00 i 0.00 i 0.00 i

Other iAssets i 24,997.05 i 32,709.39 i 29,087.07 i 19,515.39 i 16,347.47 i

Total iAssets 646,129.29 594,641.60 536,794.69 473,647.09 406,233.67

Contingent iLiabilities i 868,190.58 i 794,965.35 802,383.84 i 923,037.16 i 931,651.64 i

Bills ifor icollection i 0.00 i 0.00 i 0.00 0.00 i 0.00 i

Book iValue i(Rs) i 138.72 i 633.92 578.21 524.01 i 478.31 i
i
ICICI iBANK i– iComparative iprofit iand iloss iaccounts i(Rs. iIn icrores)
Standard iprofit iand iloss iaccounts--------------------------------------------in iRs. iCr i----------- i

Account Mar i'16 Mar i15 Mar i'14 Mar i'13 Mar i'12

Income

Interest iEarned i 49,091.14 i 44,178.15 i 40,075.60 i 33,542.65 i 25,974.05 i

Other iIncome i 12,176.133 i 10,427.87 i 8,345.70 i 7,502.76 i 6,647.89 i

Total iIncome 61,267.27 54,606.02 48,421.30 41,045.41 32,621.94

Expenditure

Interest iexpended i 30,051.53 i 27,702.59 i 26,209.18 i 22,808.50 i 16,957.15 i

Employee iCost i 4,749.88 i 4,220.11 i 3,893.29 i 3,515.28 i 2,816.93 i

Selling, iAdmin i&Misc iExpenses 14,631.56 i 12,296.88 i 9,503.20 i 7,731.85 i 7,134.05 i

i
Depreciation i 658.95 i 575.97 i 490.16 i 524.53 i 562.44 i

Preoperative iExp iCapitalised i 0.00 i 0.00 i 0.00 i 0.00 i 0.00 i

Operating iExpenses i 11,495.83 i 10,308.86 i 9,012.89 i 7,850.44 i 6,617.25 i

Provisions i& iContingencies i 8,544.56 i 6,784.10 i 4,873.76 i 3,921.22 i 3,896.17 i

Total iExpenses 50,091.92 44,795.55 40,095.83 34,580.16 27,470.57

Net iProfit ifor ithe iYear 11,175.35 9,810.48 8,325.47 6,465.26, 5,151.38

Extraordinary iItems i 0.00 i 0.00 i 0.00 i 0.00 i 0.00 i

Profit ibrought iforward i 13,318.59 i 9,902.29 i 7,054.23 i 5,018.18 i 3,464.38 i

Total 24,493.94 19,712.77 15,379.70 11,483.44 8,615.76
Preference iDividend i 0.00 i 0.00 i 0.00 i 0.00 i 0.00 i

Equity iDividend i 2,898.81 i 2,656.28 i 2,307.23 1,902.04 i 1,612.58 i

Corporate iDividend iTax i 271.15 i 231.25 i 292.16 220.35 202.28 i

Per ishare idata i(annualised) i

Earning iPer iShare i(Rs) i 19.28 i 84.95 i 72.17 56.09 44.73 i

Equity iDividend i(%) i 250.00 i 230.00 i 200.00 i 165.00 i 140.00 i

Book iValue i(Rs) i 138.72 i 633.92 i 578.2 524.01 i 478.31 i

Appropriations

Transfer ito iStatutory iReserves i 4,062.57 i 3,506.65 i 2,878.03 i 2,306.49 i 1,782.45 i

Transfer ito iOther iReserves i 0.00 i 0.00 i 0.00 i 0.00 i 0.00 i

Proposed iDividend/Transfer ito 3,169.96 i 2,887.53 i 2,599.39 2,122.39 i 1,814.86 i

iGovt i i
i
Balance icf ito iBalance iSheet i 17,261.42 i 13,318.59 i 9,902.29 7,054.23 i 5,018.18 i
Total 24,493.95 19,712.77 15,379.71 11,483.44 8,615.75
 HDFC iBANK i–COMPARATIVE iBALANCE iSHEETS i(Rs. iIn icrore)
HDFC iBank i- iComparative iBalance iSheets i(Rs. iin iCrores) i
Standalone iBalance iSheet -----------------in iRs. iCr i------------------------------ i

Mar i'16 i Mar i'15 i Mar i'14 i Mar i'13 i Mar i12 i
Capital iand iLiabilities:

Total iShare iCapital i 501.30 i 479.81 i 475.88 i 469.34 i 465.23 i

Equity iShare iCapital i 501.30 i 479.81 i 475.88 i 469.34 i 465.23 i

Share iApplication iMoney i 0.00 i 0.00 i 0.00 i 0.30 i 2.91 i

Preference iShare iCapital i 0.00 i 0.00 i 0.00 i 0.00 i 0.00 i

Reserves i 61,508.12 i 42,998.82 i 35,738.26 i 29,455.04 i 24,911.13 i

Net iWorth 62,009.42 43,478.63 36,214.14 29,924.68 25,379.27

Deposits i 450,795.64 i 367,337.48 i 296,246.98 i 246,706.45 i 208,586.41 i

Borrowings i 45,213.56 i 39,438.99 i 33,006.60 i 23,846.51 i 14,394.06 i

Total iDebt 496,009.20 406,776.47 i329,253.58 270,552.96 222,980.47

Other iLiabilities& iProvisions i 32,484.46 i 41,344.40 i 34,864.17 i 37,431.87 i 28,992.86 i

Total iLiabilities 590,503.08 491,599.50 400,331.89 337,909.51 277,352.60

Assets

Cash i& iBalances iwith iRBI i 27,510.45 i 25,345.63 i 14,627.40 14,991.09 25,100.82 i

Balance iwith iBanks, iMoney iat l 8,821.00 i 14,238.0 i 12,652.77 5,946.63 4,568.02 i
iCal
Advances 365,495.03 303,000.27 239,720.64 195,420.03 159,982.67

Investments 166,459.95 120,951.07 111,613.60 97,482.91 70,929.37

Gross iBlock i 3,121.73 i 2,939.92 i 2,703.08 i 2,347.19 i 2,170.65 i

Revaluation iReserves i 0.00 i 0.00 i 0.00 i 0.00 0.00 i

i
Accumulated iDepreciation i 0.00 i 0.00 i 0.00 i 0.00 i 0.00 i
Net iBlock 3,121.73 2,939.92 2,703.08 2,347.19 2,170.65
Capital iWork iIn iProgress i 0.00 i 0.00 i 0.00 i 0.00 i 0.00 i
i
Other iAssets i 19,094.91 i 25,124.60 19,014.41 21,721.64 i i i14,601.08 i
Total iAssets 590,503.07 491,599.50 400,331.90 337,909.49 i277,352.61

i i i i i i
Contingent iLiabilities i 997,538.88 i 744,097.98 746,226.39 i 883,985.32 588,550.98 i
i

Bills ifor icollection i 0.00 i 0.00 i 0.00 i 0.00 0.00 i

Book iValue i(Rs) i 247.39 i 181.23 152.20 127.52 i 545.46 i
 HDFC iBANK i– iCOMPARATIVE iPROFIT i AND iLOSS iACCOUNTS i(Rs i, iin icrore)
HDFC iBank i- iComparative iBalance iSheets i(Rs. iin iCrores) i

Standalone iBalance iSheet i

ii in iRs. iCr. i i i ii
i
i Mar i'16 Mar i'15 Mar i'14 Mar i'13 Mar i12
Capital iand iLiabilities:

Total iShare iCapital i 501.30 i 479.81 i 475.88 i 469.34 i 465.23 i

Equity iShare iCapital i 501.30 i 479.81 i 475.88 i 469.34 i 465.23 i

Share iApplication iMoney i 0.00 i 0.00 i 0.00 i 0.30 i 2.91 i

Preference iShare iCapital i 0.00 i 0.00 i 0.00 i 0.00 i 0.00 i

Reserves i 61,508.12 i 42,998.82 i 35,738.26 i 29,455.04 i 24,911.13 i

Net iWorth 62,009.42 43,478.63 36,214.14 29,924.68 25,379.27

Deposits i 450,795.64 i 367,337.48 i 296,246.98 i 246,706.45 i 208,586.41 i

Borrowings i 45,213.56 i 39,438.99 i 33,006.60 i 23,846.51 i 14,394.06 i

Total iDebt 496,009.20 406,776.47 329,253.58 270,552.96 222,980.47
Other iLiabilities& iProvisions i 32,484.46 i 41,344.40 i 34,864.17 i 37,431.87 i 28,992.86 i
i
Total iLiabilities 590,503.08 491,599.50 400,331.89 337,909.51 277,352.60

Assets

Cash i& iBalances iwith iRBI i 27,510.45 i 25,345.63 i 14,627.40 i 14,991.09 i 25,100.82 i

Balance iwith iBanks, iMoney iat iCall 8,821.00 i 14,238.01 i 12,652.77 i 5,946.63 i 4,568.02 i
i
Advances 365,495.03 303,000.27 239,720.64 195,420.03 159,982.67

Investments 166,459.95 120,951.07 111,613.60 97,482.91 70,929.37

Gross iBlock i 3,121.73 i 2,939.92 i 2,703.08 i 2,347.19 i 2,170.65 i

Revaluation iReserves i 0.00 i 0.00 i 0.00 i 0.00 i 0.00 i

Accumulated iDepreciation i 0.00 i 0.00 i 0.00 i 0.00 i 0.00 i

Net iBlock 3,121.73 2,939.92 2,703.08 2,347.19 2,170.65

Capital iWork iIn iProgress i 0.00 i 0.00 i 0.00 i 0.00 i 0.00 i

Other iAssets i 19,094.91 i 25,124.60 i 19,014.41 i 21,721.64 i 14,601.08 i

Total iAssets 590,503.07 491,599.50 400,331.90 337,909.49 277,352.61

Contingent iLiabilities i 997,538.88 i 744,097.98 i 746,226.39 i 883,985.32 i 588,550.98 i

Bills ifor icollection i 0.00 i 0.00 i 0.00 i 0.00 i 0.00 i

Book ivalue i(Rs) i 247.39 181.23 i 152.20 127.52 545.46 i
AXIS iBANK- iComparative ibalance isheets

(Rs. iin iCrores) i

Standalone iBalance iSheet ---------------------------in iRs. iCr. i-----------------

Mar i'16 Mar i'15 Mar i'14 Mar i'13 Mar i12

Capital iand iLiabilities:

Total iShare iCapital i 474.10 i 469.84 i 467.95 i 413.20 i 410.55 i

Equity iShare iCapital i 474.10 i 469.84 i 467.95 i 413.20 i 410.55 i

Share iApplication iMoney i 0.00 i 0.00 i 0.00 i 0.00 i 0.00 i

Preference iShare iCapital i 0.00 i 0.00 i 0.00 i 0.00 i 0.00 i

Reserves i 44,202.41 i 37,750.64 i 32,639.91 i 22,395.34 i 18,588.28 i

Net iWorth i 44,676.51 i 38,220.48 i 33,107.86 i 22,808.54 i 18,998.83 i

Deposits i 322,441.94 i 280,944.56 i 252,613.59 i 220,104.30 i 189,237.80 i

Borrowings i 79,758.27 i 50,290.94 i 43,951.10 i 34,071.67 i 26,267.88 i

Total iDebt i 402,200.21 i 331,235.50 i 296,564.69 i 254,175.97 i 215,505.68 i

Other iLiabilities i& iProvisions 15,055.67 i 13,788.89 i 10,888.11 i 8,643.28 i 8,208.86 i

i
Total iLiabilities i 461,932.39 i 383,244.87 i 340,560.66 i 285,627.79 i 242,713.37 i

Assets

Cash i& iBalances iwith iRBI i 19,818.84 i 17,041.32 i 14,792.09 i 10,702.92 i 13,886.16 i

Balance iwith iBanks, iMoney iat iCall 16,280.19 i 11,197.38 i 5,642.87 i 3,230.99 i 7,522.49 i
i
Advances 281,083.03 230,066.76 196,965.96 169,759.54 142,407.83

Investments 132,342.83 113,548.43 113,737.54 93,192.09 71,991.62

Gross iBlock i 2,413.05 i 2,310.54 i 2,230.54 i 2,188.56 i 2.250.46 i

Revaluation iReserves i 0.00 i 0.00 i 0.00 i 0.00 i 0.00 i

Accumulated iDepreciation i 0.00 i 0.00 i 0.00 i 0.00 i 0.00 i

Net iBlock 2,413.05 2,310.54 2,230.54 2,188.56 2,250.46

Capital iWork iIn iProgress i 101.26 i 99.67 i 125.11 70.77 i 22.69 i

Other iAssets i 9,893.19 i 8,980.79 i 7,066.56 6,482.93 i 4,632.12 i

Total iAssets 461,932.39 383,244.89 340,560.67 285,627.80 242,713.37

Contingent iLiabilities i 640,183.59 i 608,547.25 574,782.38 514,871 .98 477,864.55 i

i
Bills ifor icollection i 0.00 i 0.00 0.00 0. 00 0.00 i
i
Book iValue i(Rs) i 462.77 i 188.47 i 813.47 707.50 i 551.99 i
AXIS iBANK i– icomparative iprofit iand iloss iaccounts i(Rs. iin iCrores) i

Standalone iProfit i&

iLoss iaccount

ii in iRs. iCr. i– i

Mar i16 i Mar i'15 i Mar i'14 i Mar i13 i Mar i12 i

Income

Interest iEarned i 35,478.60 i 30,641.16 i 27,182.57 i 21,994.65 i 15,154.81 i

Other iIncome i 8,365.05 i 7,405.22 i 6,551.11 i 5,420.22 i 4,632.13 i

Total iIncome i 36,485.82 i 31,828.71 i 28,554.24 i 23,172.66 i 16,398.45 i

Expenditure

Interest iexpended i 21,254.46 i 18,689.52 i 17,516.31 i 13,976.90 i 8,591.82 i

Employee iCost i 3,114.97 i 2,601.35 i 2,376.98 i 2,080.17 i 1,613.90 i

Selling, iAdmin i& iMisc. iExpenses i 11,710.72 i 10,173.91 i 8,309.22 i 6,773.355 i 5,903.14 i

Depreciation i 405.67 i 363.93 i 351.73 i 342.24 i 289.59 i

Preoperative iExp iCapitalised 0.00 0.00 i 0.00 i 0.00 i 0.00 i

i
Operating iExpenses i 9,203.74 i 7,900.77 i 6,914.23 i 6,007.10 i 4,779.43 i

Provisions i& iContingencies i 6,027.62 i 5,238.42 i 4,123.70 i 3,188.66 i 3,027.20 i

Total iExpenses 36,485.82 31,828.71 28,554.24 23,172.66 16,398.45

Net iProfit ifor ithe iYear 7,357.82 6,217.67 5,179.43 4,242.21 3,388.49

Profit ibrought iforward i 13,501.45 i 10,029.26 i 7,329.45 i 4,969.77 i 3,427.43 i

Total 20,859.27 16,246.93 12,508.88 9,211.98 6,815.92

Equity iDividend i 1,087.54 i 939.69 i 843.86 i 658.24 i 573.00 i

Corporate iDividend iTax i 221.42 i 161.44 i 143.37 i 111.83 i 97.35 i

Per ishare idata
i(annualised)
Earnings iPer iShare i(Rs) 31.04 132.33 110.68 102.67 82.54

Equity iDividend i(%) i 230.00 i 200.00 i 180.00 i 160.00 i 140.00 i

Book iValue i(Rs) i 188.47 i 813.47 i 707.50 i 551.99 i 462.77 i

Appropriations

Transfer ito iStatutory iReserves i 1,926.82 1,644.36 1,492.38 i 1,112.46 i 836.95 i

Transfer ito iOther iReserves i 0.00 i 0.01 i 0.01 i 0.00 i 338.85 i

Proposed iDividend/Transfer ito iGovt i 1,308.96 1,101.13 i 987.23 i 770.07 i 670.35 i

i
Balance ic/f ito iBalance 17,623.49 i 13,501.45 10,029.26 i 7,329.45 i 4,969.77 i
iSheet i
Total 20,859.27 16,246.93 12,508.88 9,211.98 6,815.9
COMPARATIVE iANALYSIS

1. TOTAL iINCOME i(in iRs iCrores)

S.NO COMPANY iNAME MAR’16 MAR’15 MAR’14 MAR’13 MAR’12

1. i ICICI iBANK i 61,267.27 i 54,606.02 i 48,421.30 i 41,045.41 i 32,621.94 i
2. i HDFC iBANK i 57,466.25 i 49,055.17 i 41,917.49 i 32,530.04 i 24,263.36 i
3. i AXIS iBANK i 43,843.65 i 38,046.38 i 33,733.68 i 27,414.87 i 19,786.94 i

INTERPRETATION

The iincome iindicates ithe igrowth iof ithe icompany. iThe iabove itables iindicates ithat
ithe itotal iincome iof iall ithe ibanks iunder iconsideration ihave iincreased iconsiderably.

iICICI iBANK ihas ibeen iat ithe itop iin iterms iof ithe itotal iincome ifollowed iby iHDFC

iBANK iand iAXIS iBANK. i

Chart
70,000.00 i Title

60,000.00

50,000.00

40,000.00

30,000.00

20,000.00

10,000.00

0.00
MAR’16 MAR’15 MAR’14 MAR’13 MAR’12

1 iICICI iBANK2 iHDFC iBANK3 iAXIS iBANK

 2. NET iPROFIT i(In iRs icrores)

S.NO COMPANY iNAME MAR’16 MAR’15 MAR’14 MAR’13 MAR’12

1. i ICICI iBANK i 11,175.35 i 9,810.48 i 8,325.47 i 6,465.26 i 5,151.38 i
2. i HDFC iBANK i 10,215.92 i 8,478.38 i 6,726.28 i 5,167.09 i 3,926.40 i
3. i AXIS iBANK i 7,357.82 i 67,217.67 5,179.43 i 4,242.21 i 3,388.49 i

INTERPRETAION:-
Net iprofit iindicates ithe iprofitability iof ithe icompanies. iThe iabove itable iindicates ithat iall
icompanies ishowed ia ipositive itrend iin inet iprofit iover ithe ilast ifewyears. iThe inet iProfits

iof iall ithe icompanies ihave isignificantly iin i2021 icompared ito ithe iPrevious iyears. i

CHART i TITLE
1 iICICI iBANK2 iHDFC iBANK3 iAXIS iBANK
67,217.67
11,175.35

10,215.92

9,810.48

8,478.38

8,325.47
7,357.82

6,726.28

6,465.26
5,179.43

5,167.09

5,151.38
4,242.21

3,926.40

3,388.49
3. EARNING iPER iSHARE

S.NO COMPANY iNAME MAR’16 MAR’15 MAR’14 MAR’13 MAR’12

1. i ICICI iBANK i 19.28 i 84.95 i 72.17 i 56.09 i 44.73 i
2. i HDFC iBANK i 40.76 i 35.34 i 28.27 i 22.02 i 84.40 i
3. i AXIS iBANK i 31.04 i 132.33 i 110.68 i 102.67 i 82.54 i

INTERPRETAION:-
EPS imeasures ithe iprofit iavailable ito ithe iequity ishareholders iper ishare, ithat iis, ithe
iamount ithat ithey ican iget ion ievery ishare iheld. iHDFC ihas irecorded ia igradual

iincreases iin iEPS icompared ito ithe iprevious iyear. iEPS iof iICICI iand iAXIX ibank ihas

irecorded ia idrastic ifall iin i2021 icompared ito ithe iprecious iyears. i

Chart
140 i Title

120

100

80

60

40

20

S.NO COMPANY MAR’16 MAR’15 MAR’14 MAR’13 MAR’12

NAME

Series1Series2Series3Series4
4. P/E iRATIO

S.NO COMPANY iNAME MAR’16 MAR’15 MAR’14 MAR’13 MAR’12

1. i ICICI iBANK i 16.8 i 15.0 i 15.0 i 16.4 i 25.9 i
2. i HDFC iBANK i 26.1 i 21.9 i 22.8 i 24.4 i 28.7 i
3. i AXIS iBANK i 18.6 i 56.7 i 12.1 i 11.5 i 17.5 i

INTERPRETAION:-
The iP/E iratio i(ratio-to i–earnings iratio) iof ia istock iis ia i measure iof ithe iprice ipaid ifor ia
ishare irelative iof ithe iannual inet iincome ior iprofit iearned iby ithe ifirm iper ishare. iA

ihigher iP/E iratio imeans ithat iinvestors iare ipaying imore ifor ieach iunit iof inet iincome,

iso ithe istock iis imore iexpansive icompared ito ithe iwith ia ilower iP/E iration. iHDFC ibank

ithe ihighest iP/E iratio iof i26.1 itimes iwhile iICICI iBank ihas ilowest iP/E iratio iof i16.8

itimes i

Chart
60 i Title

50

40

30

20

10

S.NO COMPANY MAR’16 MAR’15 MAR’14 MAR’13 MAR’12

NAME

Series1Series2Series3Series4
5. PRICE iBOOK iVALUE

S.NO COMPANY iNAME MAR’16 MAR’15 MAR’14 MAR’13 MAR’12

1. i ICICI iBANK i 2.3 i 2.0 i 1.8 i 1.7 i 2.3 i
2. i HDFC iBANK i 4.1 i 4.1 i 4.1 i 4.1 i 4.3 i
3. i AXIS iBANK i 3.0 i 9.0 i 1.8 i 2.1 i 3.0 i

INTERPRETAION:-
Book ivalue iis ithe icompany’s icommon istock iequity ias iit iappears ion ia ibalance isheet,
iequal ito ithe itotal iassets iminus iliabilities, ipreferred istock, iand iintangible iassets isuch

ias igood iwill. iThis iis ihow imuch ithe icompany iwould ithe ileft iover iin iasset iif iit iwent iout

iof ibusiness iimmediately. iHDFC iis ivalued iat i4.1 itimes iits iBook iValue iwhile iAXIS iand

iICICI iBank iare ivalued iat ionly i3.0 itimes iand i2.3 itimes ieach iat itheir ibook ivalue. i

Chart iTitle
10

MAR’16 MAR’15 MAR’14 MAR’13 MAR’12

1 iICICI iBANK2 iHDFC iBANK3 iAXIS iBANK

6. RETURN iON iNET iWORTH

S.NO COMPANY iNAME MAR’16 MAR’15 MAR’14 MAR’13 MAR’12

1. i ICICI iBANK i 14.6 i 14.0 i 13.1 i 11.2 i 9.7 i
2. i HDFC iBANK i 19.4 i 21.3 i 20.3 i 18.7 i 16.7 i
3. i AXIS iBANK i 17.8 i 17.4 i 18.5 i 20.3 i 19.3 i

INTERPRETAION:-
Return ion iNet iWorth iis ione iof ithe imost iimportant iratios iused ifor imeasuring ithe
ioverall iefficiency iof ia ifirm iand idetermines iwhether ithe iinvestments iin ithe ifirms

iare iattractive iorNot. iAccording ito ithe; itable, iICICI iBank iand iAXIS iBank ihave

irecorded ian i RONW i of i around i 14-20% iwhile i HDFC iBank i has irecorded i a

i RONW i of i19.4.3%. iAs ithe iinvestors iwould ilike ito iinvest ionly iwhere ihe ireturns iis

ihigher, iHDFC iwould ibe iattractive ifor iinvestment ias ithey ihave ithe ihighest iReturn

ion iNet iWorth. i

Chart iTitle
25

20

15

10

MAR’16 MAR’15 MAR’14 MAR’13 MAR’12

1 iICICI iBANK2 iHDFC iBANK3 iAXIS iBANK

i
 CHAPTER i6
FINDINGS, iSUGGESTIONS i&
iCONCLUSION
FINDINGS:

From ithe idata ianalysis iand iinterpretations iof ithe iratios iof ithree icompanies,
inamely iICICI iBank, iHDFC iand iAXIS iBank, ithe ifollowing ifindings ihave ibeen igiven:

 All ithe ithree ibanks ihave ishown iincrease iin itotal iincomes
 The ithree ibanks ihave ibeen iperforming iwell iin ithe iwake iof igrowing
iIndian ieconomy. iICICI iBank iappears ito ihave ireached iits isaturation

ipoint ias iit iis imaintaining istable iratios i in ithe ilast ifive iyears.

 HDFC iand iAXIS ibank ihas ibeen ishowing igood igrowth iin iall ithe iaspects
iover ithe ilast ifew iyears.

 Axis iBank ihas ishown ia iconsiderable iincrease iin ithe itotal iincome, iwhile
iICICI iand iHDFCL ihave imaintained ia igood igrowth iin itheir itotal iincome iin

i2022 icompared ito i2021.

 The itotal iincome iof iICICI iBank ihas istarted iincreasing iin ithe ilast itwo
iyears, iwhile iAXIS ibank iis iimproving iits ipositions iquite irapidly iwhen

icompared ito ithe iprevious iyears.

 All ithe icompanies ishowed ia ipositive itrend iin inet iprofits iover ithe ilast ifew iyears

 All ithe icompanies ihave ideclared iconsistent iEPS iin ithe ilast ifew iyears iexcept iin i2021.

By ianalysing ithe icurrent itrend iof iIndian iEconomy iand iBanking iSectors iit iis
ifound ithat ibeing ia ideveloping ieconomy ithere iis ilot iof iscope ifor igrowth iand ithis

isector istill ihas ito icross imany ilevels iso ithere iare ihuge iopportunities ito iinvest iin.

Increase iin iincome ilevel, iincrease iin iconsumer idemand, itechnology

idevelopment, iglobalization, iforeign iinvestments iare ifew iof ithe iopportunities iwhich

ithe isectors ihas ito iexplore ifor ideveloping ithe ieconomy.

SUGGESTIONS

By ianalysing ithe ibanking isector iwith ithe ihelp iof ifundamental ianalysis, iit ihas ibeen
irevealed ithat ithis isector ihas ia ilot iof ipotential ito igrow. iSo irecommending iinvesting iin

ibanking isector iwith ino idoubt iis igoing ito ibe ia igood iand ismart ioption ibecause ithis

iindustry iis ibooming ilike inever ibefore.

The ithree igiants iof iIndian iBanking iSector iviz. iICICI, iHDFC iand iAXIS iBanks ihave
ioutperformed iin ithe iindustry.

 ICICI iBank, ithe ilargest iprivate isector ibank iin iIndia iseems ito ihave ireached
iits isaturation ipoint iafter ia ivery igood igrowth iover ithe i years.

 HDFC iBank ihas ibeen iperforming iconsistently iand istands iin ibetween
iICICI iand iAXIS iBanks iin iterms iof iincrease iin iits igrowth.

 AXIS iBank iseems ito ibe ithe ibest ibet ifor ithe iinvestors ifrom
iFundamental iAnalysis ias iit ihas iregistered ivery igood igrowth iin ithe

irecent iyears. iAll iits iratios ihave ioutperformed i over iICICI iand iHDFC

iBanks.

Few iSuggestions ifor i"Right iStock iSelection"

There iare ithree ifactors iwhich ian iinvestor imust iconsider ifor iselecting ithe iright istocks.

 Business: iAn iinvestor imust ilook iinto iwhat ikind iof ibusiness ithe icompany
iis idoing, ivisibility iof ithe ibusiness, iits ipast itrack irecord, icapital ineeds iof

ithe icompany ifor iexpansion ietc.

 Balance iSheet: iThe iinvestor imust ifocus ion iits ikey ifinancial iratios isuch ias
iearnings iper ishare, iprice-earnings iratio; idebt-equity iratio, idividends iper

ishare ietc iand ihe imust ialso icheck iwhether ithe icompany iis igenerating icash

iflows. iBargaining: iThis iis ithe imost iimportant ifactor iwhich ishows ithe itrue

iworth iof ithe icompany. iAn iinvestor ineeds it0 ichoose ivaluation iparameters

iwhich isuit iits ibusiness.

Investment i rules

 Invest ifor ilong iterm iin iequity imarkets

 Align iyour ithought iprocess iwith ithe ibusiness icycle iof ithe icompany.
 Set ithe ipurpose ifor iinvestment.
 Long iterm igoals ishould ibe ithe iobjective iof iequity iinvestment.
 Disciplined iinvestment iduring imarket ivolatility ihelps iattains iprofits.
 Planning, iKnowledge iand iDiscipline iare ivery icrucial ifor iinvestment.
CONCLUSION

Indian ibanks ihave ifared iwell ion igrowth, iasset iquality iand iprofitability iwith iother
regional ibanks iover ithe ilast ifew iyears. iPolicy imakers ihave imade isome inotable ichanges iin
ipolicy iand iregulation ito ihelp istrengthen ithe isector. iThese ichanges iinclude istrengthening

iprudential inorms, ienhancing ithe ipayments isystem iand iintegrating iregulations ibetween

icommercial iand i co-operative ibanks.

However, ithe icost iof iintermediation iremains ihigh iand ibank ipenetration iis ilimited ito
ionly ia ifew icustomer isegments iand igeographies. iWhile ibank ilending ihas ibeen ia

isignificant idriver iof iGDP igrowth iand iemployment, iperiodic iinstances iof ithe i"failure"

iof isome iweak ibanks ihave ioften ithreatened ithe istability iof ithe isystem.

Structural iweaknesses isuch ias ia ifragmented iindustry istructure, irestrictions ion icapital
iavailability iand ideployment, ilack iof iinstitutional isupport iinfrastructure, irestrictive

ilabour ilaws, iweak icorporate igovernance iand iineffective iregulations ibeyond iScheduled

iCommercial iBanks i(SCBs), iunless iaddressed, icould iseriously iweaken ithe ihealth iof ithe

isector.

Further, ithe iinability iof ibank imanagements i(with isome inotable iexceptions) ito
iimprove icapital iallocation, iincrease ithe iproductivity iof itheir iservice iplatforms iand

iimprove ithe iperformance iethic iin itheir iorganisations icould iseriously iaffect

ifuture iperformance.

The ibar ifor iwhat iit imeans ito ibe ia iSuccessful iplayer iin ithe isector ihas ibeen iraised. iFour
ichallenges imust ibe iaddressed ibefore isuccess iCan ibe iachieved. iFirst, ithe imarket iis

iseeing iin idissentious igrowth idriven iby inew iproducts iand iservices ithat iinclude

iopportunities iin icredit icards, iconsumer ifinance iand iwealth imanagement ion ithe iretail

iside, iand iin ifee-

on ithe iwholesale ibanking iside.

These irequire inew iskills iin isales i& imarketing, icredit iand ioperations. iSecond, ibankswill
ino ilonger ienjoy iwindfall itreasury igains ithat ithe idecade-long isecular idecline iin

interest irates iprovided. iThis iwill iexpose ithe iweaker ibanks. iThird, iwith iincreased iinterestin
iIndia, icompetition ifrom iforeign ibanks iwill ionly iintensify. iFourth, igiven ithe idemographic

ishifts iresulting ifrom ichanges iin iage iprofile iand ihousehold iincome, iconsumers iwill

iincreasingly idemand ienhanced iinstitutional icapabilities iand iservice ilevelsfrom ibanks.

The ianalysis igives ian ioptimistic iview iabout ithe iindustry iand iits igrowth iwhich irecommends
ithe iinvestors ito ikeep ia igood iwatch ion ithe imajor i players ito ibenefit iin itermsof ireturns ion

itheir iinvestments.