3. This study help to identify whether the price of the share is
undervalued or overvalued at the current market price.
Fundamental analysis gave a better foundation for investment
decisions.
It gives overview of banking industry to investors while
investing.
The scope was limited to the five securities from the banking
sector. The scrip I selected was of HDFC bank, Federal Bank,
YES Bank, Axis Bank and ICICI Bank.
4. To identify the best investment decision.
To study about how the fundamental factors are affecting the
stock prices.
To find the intrinsic value of the stock and compare with
market value.
5. The research methodology used in my research is empirical
research
Empirical research is research using empirical evidence.
Secondary data is used for this study.
6. The study was confined only to one particular sector.
The study was more confined with secondary data.
There is no guarantee that what happened in the past will
continue in the future.
The economy and industry are so wide and broad that is
difficult to include all the likely factors influencing the
performance of bank.
7. Fundamental Analysis is a stock valuation methodology that
uses financial and economic analysis to envisage the
movement of stock price.
Its all about getting an understanding of a company, the health
of its business and its future prospects.
8. Phase Nature of
Analysis
Purpose Tools and
techniques
First Phase Economic analysis To access the
general economic
situation of the
nation
Economic Indicators
Second Phase Industry Analysis To assess the
prospects of various
industry groupings
SWOT Analysis
Third Phase Company Analysis To analyse the
financial and non-
financial aspects of
the company to
determine whether
to sell, buy or hold
the company share.
Analysis of financial
aspects:-
Profitability, EPS
etc.
Analysis of Non
Financial aspects:-
Management,
corporate image etc.
9. The ratings are assigned based on a ratio analysis of the
financial statements.
Banking supervision should focus on the parameters of the
Financial Soundness, Managerial and Operational Efficiency.
The components of a bank's condition that are assessed:
• (C)apital adequacy
• (A)ssets
• (M)anagement Capability
• (E)arnings
• (L)iquidity (also called asset liability management)
10. The actual value of a company or an asset, based on an
underlying perception of its true value, including all
aspects of the business, in terms of both tangible and
intangible factors.
11. The economy of India is the tenth-largest in the world
by nominal GDP. Currently India GDP Annual Growth Rate
averaged 5.83 percentages.
Based on the macroeconomic indicators analysis, the Indian
economy anticipated to grow at 4.9% as compared to
previous years.
India is considered among the top economies in the world,
with tremendous potential for its banking sector to flourish.
On the basis of liquidity position YES bank and Axis bank
scored the last position due to its poor performance.
Based on earning quality YES bank and Federal bank
scored first position.
12. HDFC bank scored highest rate in management efficiency.
On the basis of assets quality ratio analysis ICICI bank and Federal
was at the first position.
On the basis of group averages of capital adequacy HDFC Bank was
at the top position with group average of (8.69), followed by Federal
bank (8.45),Yes Bank (8.38), ICICI bank( 7.79) and Axis bank
(7.76).
Based on the overall performance of CAMEL rating ICICI bank was
at the top position with group average of 4.121.
Axis bank and HDFC bank intrinsic value of the share is more than
its present market value because their Earning per share value is
more.
There is no significant difference in market value and intrinsic
value of Yes Bank, ICICI bank and Federal bank.
13. Profitability of the private sector banks seems too
satisfactory. So most of the banks in the group are
undervalued stocks.
It is suggested that since the intrinsic value for HDFC
bank and Axis bank is more than the current market
price the share can be used for buying purpose.
The rest of the three banks that is federal bank and YES
bank has average normalized CAMEL score states that
there is no significant difference in the intrinsic value
and current market price. So it is suggested to Hold
both of these bank stocks.
14. Volatility in the market has significant influence on the market
price movement of ICICI bank. So it is suggested to carefully
look at the fundamental parameters as well as the company
specific news to choose the same stock.
Investors can analyse the movement in CRR and Repo to
choose large market capitalized stocks like HDFC and ICICI
banks.
Since the operating expense of HDFC bank is well controlled.
So the market share can be used for buying purpose.
Earnings per share value of Axis bank is much better than
other banks so it seems to be undervalued.
15. The investment during this period is highly
profitable.
The investment can be made without any proper
valuation during this period.
With the help of this project I concluded that banking
companies are playing very important role in the share
market.
