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Fundamental Analysis of ICICI Bank

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					                      A Research Project On

        Fundamental Analysis of ICICI Bank
                   On the fulfillment of two year

          Full time Post Graduate Diploma in Management




           Guru Nanak Institute of Management,
                  Punjabi Bagh, New Delhi




Submitted By                                   Supervised By
NEETU HANS                                     Mr. N.P Singh
Roll No-6003                                   Asst. Prof.
Specialization: Finance                        Finance
PGDM
                     A Research Project On

        Fundamental Analysis of ICICI Bank
                   On the fulfillment of two year

          Full time Post Graduate Diploma in Management




           Guru Nanak Institute of Management,
                  Punjabi Bagh, New Delhi




Submitted By                                   Supervised By
NEETU HANS                                     Mr. N.P Singh
Roll No-6003                                   Asst. Prof.
Specialization: Finance                        Finance
PGDM


                                 2
                         Certificate
This is to certify that the project work done on “Fundamental
analysis of ICICI bank” is a bonafide work carried out by Neetu Hans
under my supervision and guidance. The project report is
submitted towards the fulfillment of two year, full time Post
Graduate Diploma in Management.

This work has not been submitted anywhere else for any other
degree/diploma.




Prof N.P Singh                               R.P Singh
(Project Guide)                             (Director General)




                                 3
                        Acknowledgement
The present research work cannot see the light of the day unless it is blessed
by the benign assistance of eminent person. The help and co-ordination that I
have received from various quarters of in bringing this work to completion
makes me feel deeply indebted. This is not a work of individual but a number
of persons who helped me directly or indirectly in this journey. So, I wish to
express great fullness to all those who have helped & assisted me in bringing
the final shape of this report.
First of all, I wish to express my deep sense of gratitude to our Director Dr R.P.
Singh for his guidance and moral support all along the period of my study in
the institute.
I am deeply indebted to my project guide Prof N.P Singh for his kind advice,
encouragement, support & proper guidance during the course of preparation
of this project. I got tremendous support in mastering fact & figures from him.
Really He had been a great source of information during the period of study.
Last but not the least I wish to express my deep sense of gratitude to all those
who were knowingly or unknowingly with me during the project tenure.




                                                               NEETU HANS




                                        4
TABLE CONTENTS
Sr.no TITLE                                  Page no.
 1.   Introduction to fundamental analysis        6
 2.   Economic analysis                           14
 3.   Industry analysis                           17
 4.   Company analysis                            26
 5.   Research methodology                        33
 6.   Data analysis                               36

           Economic                               38

           Industry                               45

           Company                                52

 7.   Finding & Limitations                       72
 8.   Conclusion & Suggestion                     76
 9.   Bibliography                                80




                                5
INTRODUCTION TO FUNDAMENTAL
         ANALYSIS
       (Chapter-1)




             6
What is analysis?
The examination and evaluation of the relevant information to select the best course of action
from among various alternatives. The methods used to analyze securities and make investment
decisions fall into two very broad categories: fundamental analysis and technical analysis.
Fundamental analysis involves analyzing the characteristics of a company in order to estimate its
value. Technical analysis takes a completely different approach; it doesn't care one bit about the
"value" of a company or a commodity. Technicians (sometimes called chartists) are only
interested in the price movement in the market.

What is technical analysis?
Technical analysis is a method of evaluating securities by analyzing the statistics generated by
market activity, such as past prices and volume. Technical analysts do not attempt to measure a
security's intrinsic value, but instead use charts and other tools to identify patterns that can
suggest future activity.

What is fundamental analysis?
Fundamental Analysis involves examining the economic, financial and other qualitative and
quantitative factors related to a security in order to determine its intrinsic value. It attempts to
study everything that can affect the security's value, including macroeconomic factors (like the
overall economy and industry conditions) and individually specific factors (like the financial
condition and management of companies). Fundamental analysis, which is also known as
quantitative analysis, involves delving into a company‟s financial statements (such as profit and
loss account and balance sheet) in order to study various financial indicators (such as revenues,
earnings, liabilities, expenses and assets). Such analysis is usually carried out by analysts,
brokers and savvy investors.

Many analysts and investors focus on a single number--net income (or earnings)--to evaluate
performance. When investors attempt to forecast the market value of a firm, they frequently rely
on earnings. Many institutional investors, analysts and regulators believe earnings are not as
relevant as they once were. Due to nonrecurring events, disparities in measuring risk and
management's ability to disguise fundamental earnings problems, other measures beyond net
income can assist in predicting future firm earnings.

Two Approaches of fundamental analysis
While carrying out fundamental analysis, investors can use either of the following approaches:

1 .Top-down approach: In this approach, an analyst investigates both international and national
economic indicators, such as GDP growth rates, energy prices, inflation and interest rates. The



                                                 8
search for the best security then trickles down to the analysis of total sales, price levels and
foreign competition in a sector in order to identify the best business in the sector.

2. Bottom-up approach: In this approach, an analyst starts the search with specific businesses,
irrespective of their industry/region.

How does fundamental analysis works?
Fundamental analysis is carried out with the aim of predicting the future performance of a
company. It is based on the theory that the market price of a security tends to move towards its
'real value' or 'intrinsic value.' Thus, the intrinsic value of a security being higher than the
security‟s market value represents a time to buy. If the value of the security is lower than its
market price, investors should sell it.



 The steps involved in fundamental analysis are:
1. Macroeconomic analysis, which involves considering currencies, commodities and indices.

2. Industry sector analysis, which involves the analysis of companies that are a part of the sector.

3. Situational analysis of a company.

4. Financial analysis of the company.

5. Valuation

The valuation of any security is done through the discounted cash flow (DCF) model, which
takes into consideration:

1. Dividends received by investors

2. Earnings or cash flows of a company

3. Debt, which is calculated by using the debt to equity ratio and the current ratio (current
assets/current liabilities)



Fundamental Analysis Tools

These are the most popular tools of fundamental analysis.

Earnings per Share – EPS

Price to Earnings Ratio – P/E

                                                 9
Projected Earnings Growth – PEG

Price to Sales – P/S

Price to Book – P/B

Dividend Payout Ratio

Dividend Yield

Book Value

Return on Equity

Ratio analysis



Financial ratios are tools for interpreting financial statements to provide a basis for valuing
securities and appraising financial and management performance.

A good financial analyst will build in financial ratio calculations extensively in a financial
modeling exercise to enable robust analysis. Financial ratios allow a financial analyst to:

Standardize information from financial statements across multiple financial years to allow
comparison of a firm‟s performance over time in a financial model.

Standardize information from financial statements from different companies to allow apples to
apples comparison between firms of differing size in a financial model.

Measure key relationships by relating inputs (costs) with outputs (benefits) and facilitates
comparison of these relationships over time and across firms in a financial model.



In general, there are 4 kinds of financial ratios that a financial analyst will use most frequently,
these are:

Performance ratios

Working capital ratios

Liquidity ratios

Solvency ratios

These 4 financial ratios allow a good financial analyst to quickly and efficiently address the
following questions or concerns:

                                                10
Performance ratios

What return is the company making on its capital investment?

What are its profit margins?

Working capital ratios

How quickly are debts paid?

How many times is inventory turned?

Liquidity ratios

Can the company continue to pay its liabilities and debts?



Solvency ratios (Longer term)

What is the level of debt in relation to other assets and to equity?

Is the level of interest payable out of profits?



WHY ONLY FUNDAMENTAL ANALYSIS

Long-term Trends

Fundamental analysis is good for long-term investments based on long-term trends, very long-term. The
ability to identify and predict long-term economic, demographic, technological or consumer trends can
benefit patient investors who pick the right industry groups or companies.

Value Spotting

Sound fundamental analysis will help identify companies that represent a good value. Some of the most
legendary investors think long-term and value. Graham and Dodd, Warren Buffett and John Neff are seen
as the champions of value investing. Fundamental analysis can help uncover companies with valuable
assets, a strong balance sheet, stable earnings, and staying power.

Business insights

One of the most obvious, but less tangible, rewards of fundamental analysis is the development of a
thorough understanding of the business. After such pains taking research and analysis, an investor will be
familiar with the key revenue and profit drivers behind a company. Earnings and earnings expectations
can be potent drivers of equity prices. Even some technicians will agree to that.



                                                   11
A good understanding can help investors avoid companies that are prone to shortfalls and identify those
that continue to deliver. In addition to understanding the business, fundamental analysis allows investors
to develop an understanding of the key value drivers and companies within an industry. A stock's price is
heavily influenced by its industry group. By studying these groups, investors can better position
themselves to identify opportunities that are high-risk (tech), low-risk (utilities), growth oriented
(computer), value driven (oil), non-cyclical (consumer staples), cyclical (transportation) or income-
oriented (high yield).

Knowing Who's Who

Stocks move as a group. By understanding a company's business, investors can better position themselves
to categorize stocks within their relevant industry group. Business can change rapidly and with it the
revenue mix of a company. This has happened with many of the pure internet retailers, which were not
really internet companies, but plain retailers. Knowing a company's business and being able to place it in
a group can make a huge difference in relative valuations. The charts of the technical analyst may
give all kinds of profit alerts, signals and alarms, but there‟s little in the charts that tell us why a
group of people make the choices that create the price patterns



Objective of the study
        To analyze economy by using some economic indicators like GDP, and inflation rate etc
        for the selected period of 5 years.

        To analyze the industry especially private bank industry for the selected period of 5
        years.

        To carry out financial and non-financial analysis of ICICI bank as a whole for the
        selected period.



DATA SOURCES

Secondary data has been collected from various sources to analyze the fundamentals.

The secondary data has been collected from

        Books

        ACE equity database

        Internet-websites




                                                   12
PERIOD OF STUDY: The period of study for the analysis is five years from 2006-2010.



CHAPTER PLAN
It is proposed to divide the project into following chapters.

 CHAPTER 1: INTRODUCTION TO STUDY

This chapter will be introductory in nature covering the relevance of study.

 CHAPTER 2: CONCEPTUAL FRAMEWORK OF FUNDAMENTAL ANALYSIS

 This chapter will include a comprehensive study of the concept of Fundamental analysis

 And its tools.

 CHAPTER 3: DATA SOURCE AND RESEARCH METHODOLOGY

This chapter will give an inside into source of data and method of undertaking research.

 CHAPTER 4: DATA ANALYSIS

This is the chapter of all observations, inferences, analysis and conclusions that will be made
out of the data analysis during the course of study.

 CHAPTER 5: LIMITATIONS AND SUGGESTIONS

All the limitations and stumbling blocks that will be encountered during the study will be
discussed in this chapter along with the future scope and suggestions.

 BIBLIOGRAPHY




                                             13
ECONOMIC ANALYSIS
  (Chapter- 2)




        14
The economic analysis aims at determining if the economic climate is conclusive and is capable of
encouraging the growth of business sector, especially the capital market. When the economy expands,
most industry groups and companies are expected to benefit and grow. When the economy declines,
most sectors and companies usually face survival problems. Hence, to predict share prices, an investor
has to spend time exploring the forces operating in overall economy. Exploring the global economy is
essential in an international investment setting. The selection of country for investment has to focus itself
to examination of a national economic scenario. It is important to predict the direction of the national
economy because economic activity affects corporate profits, not necessarily through tax policies but
also through foreign policies and administrative procedures.



Tools for Economy Analysis
The most used tools for performing economic analysis are:

Gross Domestic Product (GDP)

Monetary policy and Liquidity

Inflation

Interest rates

International influences

Fiscal policy

Influences on long term expectations

Influences on short term expectations



    1) Gross Domestic product

          GDP is one measure of economic activity. This is the total amount of goods and services produced
    in a country in a year. It is calculated by adding the market values of all the final goods and services
    produced in a year.

                 It is a gross measurement because it includes the total amount of goods and services
                 produced, of which some merely replace goods that have depreciated or have worn out.

                 It is domestic production because it includes only goods and services produced within the
                 country.


                                                     15
    2) Inflation

          Inflation can be defined as a trend of rising prices caused by demand exceeding supply. Over time,
    even a small annual increase in prices of say 1 % will tend to influence the purchasing power of the
    nation. In others word, if prices rise steadily, after a number of years, consumers will be able to buy only
    fewer goods and services assuming income level does not change with inflation.

    3) Interest rate
            Interest rate is the price of credit. It is the percentage fee received or paid by individual or
    organization when they lend and borrow money. In general, increases in interest rate, whether caused by
    inflation, government policy, rising risk premium, or other factors, will lead to reduced borrowing and
    economic slowdown.

    4) International influences
             Rapid growth in overseas market can create surges in demand for exports, leading to growth in
    export sensitive industries and overall GDP. In contrast, the erection of trade barriers, quotas, currency
    restrictions can hinder the free flow of currency, goods, and services, and harm the export sector of an
    economy.

    5) Fiscal policy
            The fiscal policy of the government involves the collection and spending of revenue. In particular,
    fiscal policy refers to the efforts by the government to stimulate the economic directly, through spending.




.




                                                    16
Industry Analysis
  (Chapter-3)




        17
An industry analysis helps inform business managers about the viability of their current strategy
and on where to focus a business among its competitors in an industry. The analysis examines
factors such as competition and the external business environment, substitute products,
management preferences, buyers and suppliers. Industry analysis involves reviewing the
economic, political and market factors that influence the way the industry develops. Major
factors can include the power wielded by suppliers and buyers, the condition of competitors. And
the likelihood of new market entrants.

Data needs for industry analysis
Industry analysis requires a variety of quantitative and qualitative data. Though one single source
for all the data needs might not found, industry associates, business publications and the
department of economic analysis perform a comprehensive industry analysis. A suggestive list of
data categories that are utilized for performing industry analysis is listed below.

       Product lines

       Product growth

       Complementary product

       Economics of scale

       Suppliers

       Labors

       Substitute products

       Buyers and their behavior

       Product pattern (cyclical, seasonal)

       Cost structure

Tools for industry analysis
       Cross-sectional industry

       Industry performance over time

       Differences in industry risk

       Prediction about market behavior

       Competitors over the industry life cycle

                                                  18
THE INDIAN BANKING SECTOR REVIEW
Without a sound and effective banking system in India it cannot have a healthy economy. The
banking system of India should not only be hassle free but it should be able to meet new
challenges posed by the technology and any other external and internal factors.

For the past three decades India's banking system has several outstanding achievements to its
credit. It is no longer confined to only metropolitans or cosmopolitans in India; in fact, Indian
banking system has reached even to the remote corners of the country. This is one of the main
reasons of India's growth process. The government's regular policy for Indian bank since 1969
has paid rich dividends with the nationalization of 14 major private banks of India. Not long ago,
an account holder had to wait for hours at the bank counters for getting a draft or for
withdrawing his own money. Today, he has a choice. Gone are days when the most efficient
bank transferred money from one branch to other in two days. Now it is simple as instant
messaging or dial a pizza. Money has become the order of the day.



Post independence

In 1948, the Reserve Bank of India, India's central banking authority, was nationalized, and it
became an institution owned by the Government of India.

In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India
(RBI) "to regulate, control, and inspect the banks in India."

The Banking Regulation Act also provided that no new bank or branch of an existing bank may
be opened without a license from the RBI, and no two banks could have common directors.



Liberalization

The new policy shook the Banking sector in India completely. Bankers, till this time, were used
to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4) of functioning. In the early
1990s the then Narsimha Rao government embarked on a policy of liberalization and gave
licenses to a small number of private banks, which came to be known as New Generation tech-
savvy banks, which included banks such as Global Trust Bank (the first of such new generation
banks to be set up) which later amalgamated with Oriental Bank of Commerce, UTI Bank (now
re-named as Axis Bank), ICICI Bank and HDFC Bank.




                                               19
Current situation

Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector banks (that is
with the Government of India holding a stake), 29 private banks (these do not have government
stake; they may be publicly listed and traded on stock exchanges) and 31 foreign banks. They
have a combined network of over 67,000 branches and 17,000 ATMs. According to a report by
ICRA Limited, a rating agency, the public sector banks hold over 78 percent of total assets of the
banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively.

Over the last four years, India‟s economy has been on a high growth trajectory, creating
unprecedented opportunities for its banking sector. Most banks have enjoyed high growth and
their valuations have appreciated significantly during this period. Looking ahead, the most
pertinent issue is how well the banking sector is positioned to cater to continued growth. A
holistic assessment of the banking sector is possible only by looking at the roles and actions of
banks, their core capabilities and their ability to meet systemic objectives, which include
increasing shareholder value, fostering financial inclusion, contributing to GDP growth,
efficiently managing intermediation cost, and effectively allocating capital and maintaining
system stability.



BANKING STRUCTURE IN INDIA
The banking institutions in the organized sector, commercial banks are the oldest institutions,
some them having their genesis in the nineteenth century. Initially they were set up in large
numbers, mostly as corporate bodies with shareholding with private individuals. Today 27 banks
constitute a strong Public Sector in Indian Commercial Banking. Commercial Banks operating in
India fall under different sub categories on the basis of their ownership and control over
management;

Public Sector Banks

Public Sector Banks emerged in India in three stages. First the conversion of the then existing
Imperial Bank of India into State Bank of India in 1955, followed by the taking over of the seven
associated banks as its subsidiary. Second the nationalization of 14 major commercial banks in
1969and last the nationalization of 6 more commercial Bank in 1980. Thus 27 banks constitute
the Public Sector Banks.



New Private Sector Banks

After the nationalization of the major banks in the private sector in 1969 and 1980, no new bank
could be setup in India for about two decades, though there was no legal bar to that effect. The

                                               20
Narasimham Committee on financial sector reforms recommended the establishment of new
banks of India. RBI thereafter issued guidelines for setting up of new private sector banks in
India in January 1993. These guidelines aim at ensuring that new banks are financially viable
and technologically up to date from the start. They have to work in a professional manner, so as
to improve the image of commercial banking system and to win the confidence of the public.
Eight private sector banks have been established including banks sector by financially
institutions like IDBI, ICICI, and UTI etc.



Local Area Banks

Such Banks can be established as public limited companies in the private sector and can be
promoted by individuals, companies, trusts and societies. The minimum paid up capital of such
banks would be 5 crores with promoters contribution at least Rs. 2 crores. They are to be set up
in district towns and the area of their operations would be limited to a maximum of 3 districts. At
present, four local area banks are functional, one each in Punjab, Gujarat, Maharashtra and
Andhra Pradesh.

Foreign Banks

Foreign commercial banks are the branches in India of the joint stock banks incorporated abroad.
There number was 38 as on 31.03.2009.



Scheduled Commercial Banks in India

The commercial banking structure in India consists of:

Scheduled Commercial Banks in India

Unscheduled Banks in India



Scheduled Banks in India constitute those banks which have been included in the Second
Schedule of Reserve Bank of India (RBI) Act, 1934. RBI in turn includes only those banks in
this schedule which satisfy the criteria laid down vide section42 (6) a) of the Act.

"Scheduled banks in India" means the State Bank of India constituted under the State Bank of
India Act, 1955 (23 of 1955), a subsidiary bank as defined in the State Bank of India (Subsidiary
Banks) Act, 1959 (38 of 1959), a corresponding new bank constituted under section 3 of the
Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or under
section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40


                                                21
of 1980), or any other bank being a bank included in the Second Schedule to the Reserve Bank
of India Act, 1934 (2 of 1934), but does not include a co-operative bank". "Non-scheduled bank
in India" means a banking company as defined in clause (c) of section 5 of the Banking
Regulation Act, 1949 (10 of 1949), which is not a scheduled bank".



Cooperative Banks

Besides the commercial banks, there exists in India another set of banking institutions called
cooperative credit institutions. These have been made in existence in India since long. They
undertake the business of banking both in urban and rural areas on the principle of cooperation.
They have served a useful role in spreading the banking habit throughout the country. Yet, there
financial position is not sound and a majority of cooperative banks has yet to achieve financial
viability on a sustainable basis.

The cooperative banks have been set up under various Cooperative Societies Acts enacted by
State Governments. Hence the State Governments regulate these banks. In 1966, need was felt to
regulate their activities to ensure their soundness and to protect the interests of depositors

According to the RBI in March 2009, number of all Scheduled Commercial Banks (SCBs) was
171 of which, 86 were Regional Rural Banks and the number of Non-Scheduled Commercial
Banks including Local Area Banks stood at 5. Taking into account all banks in India, there are
overall 56,640 branches or offices, 893,356 employees and 27,088 ATMs. Public sector banks
made up a large chunk of the infrastructure, with 87.7 per cent of all offices, 82 per cent of staff
and 60.3 per cent of all automated teller machines (ATMs).

SWOT ANALYSIS OF BANKING SECTOR
STRENGTH

Indian banks have compared favorably on growth, asset quality and profitability with other
regional banks over the last few years. The banking index has grown at a compounded annual
rate of over 51 per cent since April 2001 as compared to a 27 per cent growth in the market index
for the same period.

Policy makers have made some notable changes in policy and regulation to help strengthen the
sector. These changes include strengthening prudential norms, enhancing the payments system
and integrating regulations between commercial and co-operative banks.

Bank lending has been a significant driver of GDP growth and employment. Extensive reach:
the vast networking & growing number of branches & ATMs. Indian banking system has
reached even to the remote corners of the country.


                                                22
In terms of quality of assets and capital adequacy, Indian banks are considered to have clean,
strong and transparent balance sheets relative to other banks in comparable economies in its
region.

WEAKNESS

Public Sector Banks need to fundamentally strengthen institutional skill levels especially in sales
and marketing, service operations, risk management and the overall organizational performance
ethic & strengthen human capital.

Old private sector banks also have the need to fundamentally strengthen skill levels.

The cost of intermediation remains high and bank penetration is limited to only a few customer
segments and geographies.

Structural weaknesses such as a fragmented industry structure, restrictions on capital availability
and deployment, lack of institutional support infrastructure, restrictive labour laws, weak
corporate governance and ineffective regulations beyond Scheduled Commercial Banks (SCBs),
unless industry utilities and service bureaus.

Refusal to dilute stake in PSU banks: The government has refused to dilute its stake in PSU
banks below 51% thus choking the headroom available to these banks for raining equity capital.

Impediments in sectoral reforms: Opposition from Left and resultant cautious approach from
the North Block in terms of approving merger of PSU banks may hamper their growth prospects
in the medium term.



OPPORTUNITY

The market is seeing discontinuous growth driven by new products and services that include
opportunities in credit cards, consumer finance and wealth management on the retail side, and in
fee-based income and investment banking on the wholesale banking side. These require new
skills in sales & marketing, credit and operations.

With increased interest in India, competition from foreign banks will only intensify.

Given the demographic shifts resulting from changes in age profile and household income,
consumers will increasingly demand enhanced institutional capabilities and service levels from
banks.

New private banks could reach the next level of their growth in the Indian banking sector by
continuing to innovate and develop differentiated business models to profitably serve segments
like the rural/low income and affluent/HNI segments; actively adopting acquisitions as a means


                                                23
to grow and reaching the next level of performance in their service platforms. Attracting,
developing and retaining more leadership capacity

Foreign banks committed to making a play in India will need to adopt alternative approaches to
win the “race for the customer” and build a value-creating customer franchise in advance of
regulations potentially opening up post 2009.

Reach in rural India for the private sector and foreign banks

Liberalization of ECB norms: The government also liberalised the ECB norms to permit
financial sector entities engaged in infrastructure funding to raise ECBs. This enabled banks and
financial institutions, which were earlier not permitted to raise such funds, explore this route for
raising cheaper funds in the overseas markets.

Hybrid capital: In an attempt to relieve banks of their capital crunch, the RBI has allowed them
to raise perpetual bonds and other hybrid capital securities to shore up their capital. If the new
instruments find takers, it would help PSU banks, left with little headroom for raising equity.



THREATS

Threat of stability of the system: failure of some weak banks has often threatened the stability of
the system.

Rise in inflation figures which would lead to increase in interest rates.

Increase in the number of foreign players would pose a threat to the Public Sector Bank as well
as the private players.




                                                 24
Key players
Andhra Bank             State Bank of India


Allahabad Bank          Vijaya Bank


Punjab National Bank    HDFC Bank


UTI Bank                ICICI Bank


Kotak Mahindra Bank     Centurion Bank of Punjab


Citibank                Standard Chartered Bank


HSBC Bank               State Bank of Mysore


American Express Bank   ABN AMRO




                        25
Company analysis
  (Chapter-4)




       26
Analysis of the company consists of measuring its performance and ascertaining the cause of this
performance. When some companies have done well irrespective of economic or industry failure,
this implies that there are certain unique characteristics for this particular company that had made
it a success. The identification of these characteristics, whether quantitative or qualitative, is
referred to as company analysis. Quantitative indicators of company analysis are the financial
indicators and operational efficiency indicators. Financial indicators are the profitability
indicators and financial position indicators analyzed through the income and balance sheet
statements, respectively, of the company. Operational indicators are capacity utilization and cost
versus sales efficiency of the company, which includes the marketing edge of the company.

Besides the quantitative factors, qualitative factors of a company also influence investment
decision process of an institutional investor. The focus of the qualitative data, as revealed in the
annual report- as in the director‟s speech. Rather than on quantitative data.

Tools for company analysis
Company analysis involves choice of investment opportunities within a specific industry that
comprises of several individual companies. The choice of an investible company broadly
depends on the expectations about its future performance in general. Here, the business cycle that
a company is undergoing is a very useful tool to assess the future performance from the
company.

Company analysis ought to examine the levels of competition, demand, and other forces that
affect the company‟s ability to be profitable. Of these factors, understanding the competitive
environment is most important.

A business faces five forces of competition (porter‟s model) namely, seller‟s competition,
buyer‟s competition, competition from new entrants, exit competition. Competitive forces
include the power of those who sell the business, those who buy the business; those who buy
from the business, how easily new businesses can enter the industry, how costly it is to exit, and
finally, the competition from those who already in the industry. How well a company deals with
each of these forces will determine whether the company earns above or below average profit.
Each of these forces is discussed below.

   1. Porter model

Porter's Five Forces is a framework for industry analysis and business strategy development
formed by Michael E. Porter of Harvard Business School in 1979. It draws upon Industrial
Organization (IO) economics to derive five forces that determine the competitive intensity and
therefore attractiveness of a market. Attractiveness in this context refers to the overall industry
profitability. An "unattractive" industry is one in which the combination of these five forces acts
to drive down overall profitability. A very unattractive industry would be one approaching "pure
competition", in which available profits for all firms are driven down to zero.

Three of Porter's five forces refer to competition from external sources. The remainder are
internal threats.

                                                27
Porter referred to these forces as the micro environment, to contrast it with the more general term
macro environment. They consist of those forces close to a company that affect its ability to
serve its customers and make a profit. A change in any of the forces normally, requires a
business unit to re-assess the marketplace given the overall change in industry information. The
overall industry attractiveness does not imply that every firm in the industry will return the same
profitability. Firms are able to apply their core competencies, business model or network to
achieve a profit above the industry average. A clear example of this is the airline industry. As an
industry, profitability is low and yet individual companies, by applying unique business models,
have been able to make a return in excess of the industry average.

Porter's five forces include - three forces from 'horizontal' competition: threat of substitute
products, the threat of established rivals, and the threat of new entrants; and two forces from
'vertical' competition: the bargaining power of suppliers and the bargaining power of customers.

This five forces analysis is just one part of the complete Porter strategic models. The other
elements are the value chain and the generic strategies




   (a) The threat of the entry of new competitors

Profitable markets that yield high returns will attract new firms. This results in many new
entrants, which eventually will decrease profitability for all firms in the industry. Unless the
entry of new firms can be blocked by incumbents, the abnormal profit rate will fall towards zero
(perfect competition).

       The existence of barriers to entry (patents, rights, etc.) The most attractive segment is one
       in which entry barriers are high and exit barriers are low. Few new firms can enter and
       non-performing firms can exit easily.
       Economies of product differences
       Brand equity
       Switching costs or sunk costs
       Capital requirements
       Access to distribution

                                                28
       Customer loyalty to established brands
       Absolute cost
       Industry profitability; the more profitable the industry the more attractive it will be to
       new competitors

  (b) The threat of substitute products or services

The existence of products outside of the realm of the common product boundaries increases the
propensity of customers to switch to alternatives:

       Buyer propensity to substitute
       Relative price performance of substitute
       Buyer switching costs
       Perceived level of product differentiation
       Number of substitute products available in the market
       Ease of substitution. Information-based products are more prone to substitution, as online
       product can easily replace material product.
       Substandard product
       Quality depreciation

  (c) The bargaining power of customers (buyers)

The bargaining power of customers is also described as the market of outputs: the ability of
customers to put the firm under pressure, which also affects the customer's sensitivity to price
changes.

       Buyer concentration to firm concentration ratio
       Degree of dependency upon existing channels of distribution
       Bargaining leverage, particularly in industries with high fixed costs
       Buyer volume
       Buyer switching costs relative to firm switching costs
       Buyer information availability
       Ability to backward integrate
       Availability of existing substitute products
       Buyer price sensitivity
       Differential advantage (uniqueness) of industry products
       RFM Analysis

  (d) The bargaining power of suppliers

The bargaining power of suppliers is also described as the market of inputs. Suppliers of raw
materials, components, labor, and services (such as expertise) to the firm can be a source of
power over the firm, when there are few substitutes. Suppliers may refuse to work with the firm,
or, e.g., charge excessively high prices for unique resources.



                                                29
       Supplier switching costs relative to firm switching costs
       Degree of differentiation of inputs
       Impact of inputs on cost or differentiation
       Presence of substitute inputs
       Strength of distribution channel
       Supplier concentration to firm concentration ratio
       Employee solidarity (e.g. labor unions)
       Supplier competition - ability to forward vertically integrate and cut out the BUYER

   (e) The intensity of competitive rivalry

For most industries, the intensity of competitive rivalry is the major determinant of the
competitiveness of the industry.

       Sustainable competitive advantage through innovation
       Competition between online and offline companies; click-and-mortar -v- slags on a
       bridge
       Level of advertising expense
       Powerful competitive strategy
       The visibility of proprietary items on the Web used by a company which can intensify
       competitive pressures on their rivals.

How will competition react to a certain behavior by another firm? Competitive rivalry is likely to
be based on dimensions such as price, quality, and innovation. Technological advances protect
companies from competition. This applies to products and services. Companies that are
successful with introducing new technology are able to charge higher prices and achieve higher
profits, until competitors imitate them. Examples of recent technology advantage in have been
mp3 players and mobile telephones. Vertical integration is a strategy to reduce a business' own
cost and thereby intensify pressure on its rival.



   2. The financial statements of the company: Records that outline the financial activities
      of a business, an individual or any other entity. Financial statements are meant to present
      the financial information of the entity in question as clearly and concisely as possible for
      both the entity and for readers. Financial statements for businesses usually include:
      income statements, balance sheet, statements of retained earnings and cash flows, as well
      as other possible statements



   3. Ratio analysis: A tool used by individuals to conduct a quantitative analysis of
      information in a company's financial statements. Ratios are calculated from current year
      numbers and are then compared to previous years, other companies, the industry, or even
      the economy to judge the performance of the company. Ratio analysis is predominately
      used by proponents of fundamental analysis. There are many ratios that can be calculated

                                               30
   +from the financial statements pertaining to a company's performance, activity, financing
   and liquidity. Some common ratios include the price-earnings ratio, debt-equity ratio,
   earnings per share, asset turnover and working capital.



4. ROA: Return on assets, which, offering a different take on management's effectiveness
   reveals how much profit a company earns for every dollar of its assets. Assets include
   things like cash in the bank, accounts receivable, property, equipment, inventory and
   furniture. ROA is calculated like this:

                                   Annual Net Income
                                      Total Assets




5. ROI: Return on Investment is one of several commonly used approaches for evaluating
the financial consequences of business investments, decisions, or actions. ROI analysis
compares the magnitude and timing of investment gains directly with the magnitude and
timing of investment costs. A high ROI means that investment gains compare favorably
to investment costs

                   GAINS- INVESTMENT COSTS

                      INVESTMENT COSTS




6. ROE: Of all the fundamental ratios that investors look at, one of the most important is
return on equity. It's a basic test of how effectively a company's management uses investors'
money - ROE shows whether management is growing the company's value at an acceptable
rate. ROE is calculated as:

                                  Annual Net Income
                              Average Shareholders' Equity




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

                                           31
Calculated as:




8. DPS: The the sum of declared dividends for every ordinary share issued. Dividend per
share (DPS) is the total dividends paid out over an entire year (including interim dividends
but not including special dividends) divided by the number of outstanding ordinary shares
issued.

DPS can be calculated by using the following formula:




D - Sum of dividends over a period (usually 1 year)
SD - Special, one time dividends
S - Shares outstanding for the period

9. P/O RATIO: The amount of earnings paid out in dividends to shareholders. Investors
can use the payout ratio to determine what companies are doing with their earnings

Calculated




10. DIVIDEND YEILD: financial ratio that shows how much a company pays out in
dividends each year relative to its share price. In the absence of any capital gains, the
dividend yield is the return on investment for a stock. Dividend yield is calculated as follows:




                                             32
RESEARCH METHODOLOGY
    (Chapter-5)




         33
Research methodology
Research methodology is a way to systematically solve the research problem. The research
methodology using for find out the solution of the research problem is analytical research
methodology and some extend descriptive research methodology


 Secondary Data

    The sources of secondary data for solve the problems are:-

        Company Annual Report

        ACE equity database

        Internet-websites

Period of study
The period of the study is 5 years i.e. (2006-2010). Company 5 years data has been taken for the
analysis.

Tools

These are the most popular tools of fundamental analysis. They focus on earnings, growth, and
value in the market.

   Earnings per Share – EPS

   Price to Earnings Ratio – P/E

   Projected Earning Growth – PEG

   Price to Sales – P/S

   Price to Book – P/B

   Dividend Payout Ratio

   Dividend Yield

   Book Value

   Ratio Analysis

   Liquid ratio

                                              34
Turnover ratio

Valuation ratio

Techniques

The technique used in the analysis of the company is excel sheets, graphs and tables of
financial statement for example balance sheet, profit loss a/c, cash flow statement, dividend
per share, ratio analysis, valuation ratio etc.




                                           35
DATA ANALYSIS
 (Chapter-6)




      36
The process of evaluating data using analytical and logical reasoning to examine each
component of the data provided. This form of analysis is just one of the many steps that must be
completed when conducting a research experiment. Data from various sources is gathered,
reviewed, and then analyzed to form some sort of finding or conclusion. There are a variety of
specific data analysis method, some of which include data mining, text analytics, business
intelligence, and data visualizations

Data can be of several types

       Quantitative data is a number
       Qualitative data is a pass/fail or the presence of a characteristic

Quantitative data is data measured or identified on a numerical scale. Numerical data can be
analyzed using statistical methods, and results can be displayed using tables, charts, histograms
and graphs.

The term qualitative data is used to describe certain types of information. This is almost the
converse of quantitative data, in which items are more precisely described as data in terms of
quantity and in which numerical values are used. However, data originally obtained as
qualitative information about individual items may give rise to quantitative data if they are
summarized by means of counts.

Qualitative data described items in terms of some quality or categorization that may be 'informal'
or may use relatively ill-defined characteristics such as warmth and flavor. However, qualitative
data can include well-defined aspects such as gender, nationality or commodity type.




                                                 37
ECONOMY ANALYSIS




       38
Analysis of Indian Economy
India's economy expanded 8.8% in the second quarter from a year earlier, compared to an 8.6% on-year
expansion in the first, lifted by robust activity in manufacturing. Agricultural output along with strong
development in the Industrial, Mining and banking sector have helped to boost the Indian economy.
Agricultural output raised 2.8 per cent y-o-y thanks to improved harvests. Industrial production
increased by 12% and in the mining sector by 9%. According to 2010 data the shares of
banking sector value add in GDP has been increased 7.7% from 2.5%. The forecasters
have assigned highest 29.6 per cent chance that it will fall in 6.0-6.9 per cent in 2010- 11. They raised
their forecasts slightly for agriculture growth to 4.0 percent from 3.5 percent, for industry to 9.0
percent from 8.1 percent and for services it was steady at 9.0 percent . The survey showed
the economists expect GDP growth in the April-June quarter to be 8.1 percent up from 7.9 percent in the
last survey. For the July-September quarter, GDP growth is placed at 8.3 percent. The
Reserve Bank of India has stated that it had seen an annual growth of 8.5% steadily. The main priority of
the Reserve Bank is to curb the ongoing inflation, which peaked at 11% last month. Interest rates have
been increased by the banks to contain the inflation, but it could slow down the growth of the Indian
economy in the coming months. But even thought there has been a rise in the interest rates there
hasn‟t been much change in the distribution of loans, the Indian customer is hardly affected
with the hiked interest rates. Almost every sector of the economy is poised to grow faster and a 9 per
cent growth in 2010-11 is not difficult if domestic policies and external factors do not come in the way.
Expert expects that India s economy to grow by 8.1% in 2010 based on a steep gain in industrial
output and resurgent private consumption investment and exports. Were these scenarios to
continue growth would lift further to 8.3% in 2011 said Chief Economist. They also expect the
Reserve Bank of India (RBI) to continue gradually raising interest rates and to keep a
tight leash on liquidity to tame inflation. Recently RBI changed the repo rate from
5.75% to 6% and reverse repo rate 4.5% to 5%. CRR rate they keeping unchanged.
This six time I a year they revise key parameter to control inflation.




                                                   39
INDIA GDP SURGES 8.9% IN THE THIRD QUARTER

India's domestically-powered economy grew more than expected in the September quarter,
defying weakness elsewhere and putting pressure on the Reserve Bank of India (RBI) to tighten
monetary policy although a rate increase next month still looks unlikely. Annual gross domestic
product grew 8.9 percent in the September quarter -- matching the revised figure for the previous
quarter.
Consumer price inflation eased to an annual 9.7 percent in October from 9.82 percent the
previous month, data showed on Tuesday. Wholesale price inflation, which is more closely
watched as it covers a higher number of products, eased to 8.58 percent in October from 8.62
percent a month earlier. Investment growth slowed on an annualized basis to 11.1 percent from
19 percent in the previous quarter, while annualized private consumption accelerated to 9.3
percent from 7.8 percent in the previous quarter, pointing to inflationary risks. The services
sector, which accounts for over 50 percent of GDP, grew 9.8 percent in the September quarter,
higher than 9.3 percent in the previous quarter. Signs of easing inflation, a fragile global
economy and weaker industrial output in September were likely to forestall any rise in rates in
the near-term, some analysts said. "Unless the full year growth looks likely to cross 9 percent,
the central bank is unlikely to get aggressive again in raising rates," said Anjali Varma,
economist at MF Global in Mumbai. Industrial output growth -- a key indicator of growth
momentum -- in Asia's third-largest economy slowed unexpectedly in September to 4.4 percent
from a year earlier, down from the previous month's upwardly revised 6.92 percent growth




                            Year     Mar     Jun     Sep     Dec

                            2010     8.60    8.90    8.90    -

                            2009     5.80    6.00    8.60    6.50

                            2008     8.50    7.80    7.50    6.10


                                               40
Healthy economic growth, especially since 2005, has also facilitated impressive growth in the
commercial banking sector (Chart 5.2). Though the growth rate of the consolidated balance sheet
of commercial banks moderated in 2008-09 at 21 per cent as compared to 25 per cent in 2007-08,
the sector continued to grow at a rate higher than that of the nominal GDP (at current market
prices). Accordingly, the ratio of commercial banking assets to GDP increased to 98.5 per cent at
end- March 2009 from 91.6 per cent as at end-March 2008.




                                               41
With the impact of the financial crisis gradually affecting the global economy, credit off-take
slowed down further and the year on year growth in bank credit during the first half year of
2009-10 stood at 12.3 per cent. During the same period, investments grew by 34.5 per cent (as
compared to 6.3 per cent as on September 2008). However, there are early signs of credit growth
recovering in line with the economy, on the back of fiscal and monetary measures. This trend is
clearly shown by the movements in incremental credit-deposit (CD) and investment-deposit (ID)
ratio in recent periods (Chart 5.5).




                                              42
INDIA INFLATION RATE
The inflation rate in India was last reported at 9.47 percent in December of 2010. From 1969
until 2010, the average inflation rate in India was 7.99 percent reaching an historical high of
34.68 percent in September of 1974 and a record low of -11.31 percent in May of 1976. Inflation
rate refers to a general rise in prices measured against a standard level of purchasing power. The
most well known measures of Inflation are the CPI which measures consumer prices, and the
GDP deflator, which measures inflation in the whole of the domestic economy. This page
includes: India Inflation Rate chart, historical data and news.




year Jan      Feb     Mar     Apr     May     Jun    Jul     Aug     Sep     Oct     Nov    Dec

2010 16.22 14.86 14.86 13.33 13.91 13.73 11.25 9.88                  9.82    9.70    8.33   9.47

2009 10.45 9.63       8.03    8.70    8.63    9.29   11.89 11.72 11.64 11.49 13.51 14.97

2008 5.51     5.47    7.87    7.81    7.75    7.69   8.33    9.02    9.77    10.45 10.45 9.70




                                               43
India Interest Rate
The benchmark interest rate (reverse repo) in India was last reported at 5.5 percent. In India,
interest rate decisions are taken by the Reserve Bank of India's Central Board of Directors. The
official interest rate is the benchmark repurchase rate. From 2000 until 2010, India's average
interest rate was 5.82 percent reaching an historical high of 14.50 percent in August of 2000
and a record low of 3.25 percent in April of 2009.




Year    Jan     Feb    Mar     Apr    May     Jun     Jul    Aug     Sep    Oct    Nov     Dec

2011    5.50

2010    3.25    3.25   3.38    3.63   3.75    3.75    4.08   4.50    5.00          5.25    5.25

2009    4.50    4.00   3.75    3.38   3.25    3.25    3.25   3.25    3.25   3.25   3.25    3.25

2008    6.00    6.00   6.00    6.00   6.00    6.00    6.00   6.00    6.00   6.00   6.00    5.50




                                              44
INDUSTRY ANALYSIS




        45
The last decade has seen many positive developments in the Indian banking sector. The policy
makers, which comprise the Reserve Bank of India (RBI), Ministry of Finance and related
government and financial sector regulatory entities, have made several notable efforts to Improve
regulation in the sector. The sector now compares favorably with banking sectors in the region
on metrics like growth, profitability and non-performing assets (NPAs). A few banks have
established an outstanding track record of innovation, growth and value creation. This is
Reflected in their market valuation. However, improved regulations, innovation, growth and
value creation in the sector remain limited to a small part of it. The cost of banking
intermediation in India is higher and bank penetration is far lower than in other markets. India‟s
banking industry must strengthen itself significantly if it has to support the modern and vibrant
economy which India aspires to be. While the onus for this change lies mainly with bank
managements, an enabling policy and regulatory framework will also be critical to their success.
The failure to respond to changing market realities has stunted the development of the financial
sector in many developing countries. A weak banking structure has been unable to fuel continued
growth, which has harmed the long-term health of their economies. In this “white paper”, we
emphasize the need to act both decisively and quickly to build an enabling, rather than a limiting,
banking sector in India.

OPPORTUNITIES AND CHALLENGES
FOR PLAYERS
The bar for what it means to be a successful player in the sector has been raised. Four challenges
must be addressed before success can be achieved. First, the market is seeing discontinuous
growth driven by new products and services that include opportunities in credit cards, consumer
finance and wealth management on the retail side, and in fee-based income and investment
banking on the wholesale banking side. These require new skills in sales & marketing, credit and
operations. Second, banks will no longer enjoy windfall treasury gains that the decade-long
secular decline in interest rates provided. This will expose the weaker banks. Third, with
increased interest in India, competition from foreign banks will only intensify. Fourth, given the
demographic shifts resulting from changes in age profile and household income, consumers will
increasingly demand enhanced institutional capabilities and service levels from banks.

Growth in the Indian banking industry
The growth in the Indian Banking Industry has been more qualitative than quantitative and it is
expected to remain the same in the coming years. Based on the projections made in the "India
Vision 2020" prepared by the Planning Commission and the Draft 10th Plan, the report forecasts
that the pace of expansion in the balance-sheets of banks is likely to decelerate. The total assets
of all scheduled commercial banks by end-March 2010 are estimated at Rs 40, 90,000 crores
That will comprise about 65 per cent of GDP at current market prices as compared to 67 per cent
in 2002-03. Bank assets are expected to grow at an annual composite rate of 13.4 per cent during
the rest of the decade as against the growth rate of 16.7 per cent that existed between 1994-95
and 2002-03. It is expected that there will be large additions to the capital base and reserves on
the liability side.



                                                46
Peer Group Comparison (Standalone)                                    (Rs. In Crore)

Company        Year       Net                           Adj.
                                  PBIDT       PAT              PBIDTM%    PATM%        ROCE%    ROE%
Name           End      Sales                        EPS(Rs)


Indusind
             201003    2706.99    703.89    350.31      8.53        26     12.94         7.53   19.51
Bank


ICICI Bank   201003   25706.93   9732.18   4024.98      36.1      37.86    15.66         6.18   7.96


Kotak
             201003    3255.62     1297     561.11      8.06      39.84    17.23         6.68   13.52
Bank


HDFC
             201003    16172.9   6429.73    2948.7     64.42      39.76    18.23         5.95   16.31
Bank


Axis Bank    201003   11638.02   5240.56   2514.53     62.06      45.03    21.61         6.39   19.15




Interpretation
Here we can see that ICICI has highest net sales with 25706.93 cr. And PAT is also highest
among the peer group with 4027.93 cr. That means ICICI is most favorable company to invest in
terms of profit.




                                                       47
Bank – Private Industry Ratios



Description                 2010    2009    2008    2007     2006
No Of Companies               74      89      83      71       68
Margin Ratios
Yield on Advances           13.31   14.23   12.87   12.04    11.36
Yield on Investments         6.22    7.44    7.21    6.37     6.41
Cost of Liabilities          5.02    6.09    5.87     5.1     4.27
NIM                          5.63    5.38    4.69    4.38     4.92
Interest Spread              8.28    8.14       7    6.94      7.1
Performance Ratios
ROA (%)                      1.17    1.28    1.34    1.19     1.18
ROE (%)                     10.65   11.07   12.02   14.45    13.36
ROCE (%)                     5.96    7.11    7.04     6.4     5.56
Efficiency Ratios
Cost Income Ratio           42.89   42.45   46.35   50.66    51.38
Core Cost Income Ratio      44.25   45.19   48.74   51.78     50.8
Operating Costs to Assets    7.46    7.55    7.49    7.82      8.2
Growth Ratio


Core Operating Income
Growth                       9.09   30.55   44.08   32.44   107.35
Operating Profit Growth      2.45   20.79    60.6    37.8   127.56
Net Profit Growth            3.73   16.84   55.86   37.48   102.66
Advances Growth              8.99   14.77   46.44   38.42    86.72
Liquidity Ratios


Loans/Deposits(x)             0.2    0.26    0.22    0.18     0.19
Cash/Deposits(x)             0.09    0.07     0.1    0.07     0.06
Investment/Deposits(x)       0.47    0.44    0.43    0.41     0.43
Inc Loan/Deposit (%)        19.63   25.72   22.28   17.58    18.73




                                              48
Interpretation

        ROE: ROE examines profitably from the perspective of equity investors by relating
        profits available for the equity share holders with the book value of equity
        investments. The return from the point of view of equity shareholders may be
        calculated by comparing the net profit less preference dividend with there total
        contribution to the firm. Over the years ROE of the industry have declined

        ROA: ROA measures a profitability of the firm in terms of assets employed in the
        firm. ROE is calculated by establishing the relationship between the profits and the
        assets employed to earn that profit. ROA shows as to how much is the profit earn by
        the firm per rupee of assets used. Here industry ROA is almost stable.

        NET PROFIT: the NP ratio establishes the relationship between the net profit (after
        tax) of the firm and the net sales. Its measures the efficiency of the management in
        generating additional revenue over and above the total cost of operations.

     Net profit ratio has decreased over the years which mean that the overall profitability of
     the industry has fallen down.




                                             49
Bank – Private Industry profit & Loss A/C



DESCRIPTION                 Latest           2010        2009        2008        2007       2006
No of Companies                    98          74          89          83          71         68
Interest Earned             135486.15   113327.71   136806.93    107590.8    71311.52   50355.01
Other Income                 35136.24    29599.54    35299.77    28016.66    20011.95   14051.36
Total Income                170622.38   142927.25   172106.71   135607.47    91323.48   64406.36
Interest Expended            78145.22    65332.36    84711.83    68370.19    42996.95    28555.1
Operating Expenses           38681.01    33282.45    36938.65    31161.41    24155.71   18421.37
Provisions and
Contingencies                19010.41    16440.68     16710.7     8910.47     6848.84    4792.74
Profit Before Tax            34785.74    27871.76    33745.53    27165.39    17321.97   12637.15
Taxes                        12304.43     9657.77    12149.69     8925.72      5498.1    3904.43
Total                       148141.07   124713.26   150510.87   117367.79    79499.61   55673.64
Profit After Tax             22481.31    18213.99    21595.84    18239.68    11823.87    8732.73
Extra items                    -22.08      -19.49       -30.5       -1.46      133.84      62.51
Profit brought forward       15392.55    14902.92    11246.87     5710.75     3893.12    1766.31
Adjustments to PAT              24.84      -23.31       15.64      140.12      182.71      85.56
Total Profit & Loss           37898.7     33093.6    32858.35    24090.55     15899.7    10584.6
IV. APPROPRIATIONS           37886.23    33074.11    32827.85    24089.09    16043.16   10647.11




Interpretation

Private bank industry profit & loss account shows that banking industry is having a large profit
yoy and growing rapidly. This is a good sign for the investor who want to invest in the banking
industry.

                                               50
Competition

                 Last Price    Market Cap.          Net Interest    Net Profit   Total Assets
                                  (Rs. Cr.)             Income


ICICI Bank       1,105.45     127,322.68           25,706.93       4,024.98      363,399.71

HDFC Bank        2,350.05     109,330.36           19,928.21       3,926.39      222,458.56

Axis Bank        1,333.45     54,744.24            15,154.81       3,388.49      180,647.87

Kotak Mahindra   458.00       33,748.71            3,255.62        561.11         37,436.31

IndusInd Bank    267.00       12,418.17            3,589.36        577.32         35,369.52

YES BANK         316.25       10,978.53            4,041.74        727.13         36,382.50

Federal Bank     436.05        7,454.92            3,673.23        464.55         43,675.61

Karur Vysya      417.00        4,449.13            1,757.94        336.03         21,993.49

ING Vysya
                 353.15        4,272.65            2,694.06        318.65         33,880.24
Bank

JK Bank          823.50        3,992.15            3,056.88        512.38         42,546.80




                                              51
COMPANY ANALYSIS




       52
ICICI BANK LTD
ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution,
and was its wholly-owned subsidiary. ICICI‟s shareholding in ICICI Bank was reduced to 46%
through a public offering of shares in India in fiscal 1998, an equity offering in the form of
ADRs listed on the NYSE in fiscal 2000, ICICI Bank‟s acquisition of Bank of Madura Limited
in an all-stock amalgamation in fiscal 2001, and secondary market sales by ICICI to institutional
investors in fiscal 2001 and fiscal 2002.

ICICI was formed in 1955 at the initiative of the World Bank, the Government of India and
representatives of Indian industry. The principal objective was to create a development financial
institution for providing medium-term and long-term project financing to Indian businesses. In
the 1990s, ICICI transformed its business from a development financial institution offering only
project finance to a diversified financial services group offering a wide variety of products and
services, both directly and through a number of subsidiaries and affiliates like ICICI Bank. In
1999, ICICI become the first Indian company and the first bank or financial institution from non-
Japan Asia to be listed on the NYSE.

After consideration of various corporate structuring alternatives in the context of the emerging
competitive scenario in the Indian banking industry, and the move towards universal banking,
the managements of ICICI and ICICI Bank formed the view that the merger of ICICI with ICICI
Bank would be the optimal strategic alternative for both entities, and would create the optimal
legal structure for the ICICI group‟s universal banking strategy. The merger would enhance
value for ICICI shareholders through the merged entity‟s access to low-cost deposits, greater
opportunities for earning fee-based income and the ability to participate in the payments system
and provide transaction-banking services. The merger would enhance value for ICICI Bank
shareholders through a large capital base and scale of operations, seamless access to ICICI‟s
strong corporate relationships built up over five decades, entry into new business segments,
higher market share in various business segments, particularly fee-based services, and access to
the vast talent pool of ICICI and its subsidiaries.

In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger of ICICI
and two of its wholly-owned retail finance subsidiaries, ICICI Personal Financial Services
Limited and ICICI Capital Services Limited, with ICICI Bank. The merger was approved by
shareholders of ICICI and ICICI Bank in January 2002, by the High Court of Gujarat at
Ahmedabad in March 2002, and by the High Court of Judicature at Mumbai and the Reserve
Bank of India in April 2002. Consequent to the merger, the ICICI group‟s financing and banking
operations, both wholesale and retail, have been integrated in a single entity.




                                               53
ICICI Bank is India‟s second-largest bank with total assets of Rs.3,793.01 billion (US$ 75
billion) at March 31, 2009 and profit after tax Rs.37.58 billion for the year ended March 31,
2009. The Bank has a network of 1,454 branches and about 4,721 ATMs in India and presence in
18 countries. ICICI Bank offers a wide range of banking products and financial services to
corporate and retail customers through a variety of delivery channels and through its specialized
subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture
capital and asset management.

The Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in
United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International
Finance Centre and representative offices in United Arab Emirates, China, South Africa,
Bangladesh, Thailand, Malaysia and Indonesia. Their UK subsidiary has established branches in
Belgium and Germany.




                                                54
                                     SNAPSHORT OF ICICI BANK LTD

Company Details
Industry                              Bank – Private

Chairman                              K V Kamath


Managing Director                     Chanda D Kochhar

Company Secretary                     Sandeep Batra

ISIN                                  INE090A01013


Bloomberg Code                        ICICIBC IN


Reuters Code                          ICBK.BO




Company Address
Registered Office     Landmark,Race Course Circle,Vadodara,390007,Gujarat

Phone                 91-0265-6617200/3983200


Fax                   91-0265-2339926


Website               www.icicibank.com

Email                 investor@icicibank.com


Price Information
Latest Date                                        09-Mar-11
Latest Price (Rs)                                   1033.55
Previous Close (Rs)                                 1020.85
1 Day Price Var%                                         1.24
1 Year Price Var%                                       11.76
52 Week High (Rs)                                       1277
52 Week Low (Rs)                                        803.3
Beta                                                   1.4927
Face Value (Rs)                                           10

Industry PE                                             20.04




                                                                55
PRICE V/S SENSEX CHART                               Period: From 10/03/2010 To 09/03/2011




Company Size (Standalone)
Market Cap(Rs Crore)                             118741.77

EV (Rs Crore)                                    185491.05

Latest no. of shares                         1148873022

Share holding pattern as on 201012

Promoter No of shares                                    0

Promoter %                                               0

FII No of Shares                                 451680100

FII %                                                39.23

Total No of Shares                           1151422189

Free Float %                                           100

Financial Highlights (Standalone)                                            (Rs. In Crore)
Description              201003        200903        200803        200703       200603
Equity Paid Up           1114.81       1113.21       1112.6         899.27        889.8

Reserve                 50503.48      48419.73     45357.53     23413.92      21316.16

Deposits                202016.6     218347.83    244431.05    230510.19     165083.17

Gross Block              7114.12       7443.71         7036        6298.56     5968.57

Interest Earned         25706.93      31092.55     30788.34     21995.59      14306.13

Operating Profit         9732.18       8925.23      7960.68        5874.41     3888.42

PAT                      4024.98       3758.13      4157.73        3110.22     2540.08

Dividend %                  120           110           110           100            85

Adj. EPS(Rs)                36.1         33.76        37.37          34.59        28.55

Adj. Book
                          463.02        444.95       417.67         270.37      249.56
Value(Rs)




                                                              56
Key Market Ratio (Standalone)
Latest EPS (Rs)                                  40.95
Latest CEPS (Rs)                                 45.11

Price/TTM CEPS(x)                                22.91

TTM PE (x)                                       25.24
Price/BV(x)                                       2.14

EV/TTM EBIDTA(x)                                 20.29

EV/TTM Sales(x)                                   7.53

Dividend Yield%                                   1.16

Mcap/TTM Sales(x)                                 4.82

Latest Book Value (Rs)                          482.44




Quarter on Quarter (Standalone)                                          (Rs. In Crore)
                                                                            Y on Y
Particulars          201012       201009    Q on Q Var%        200912
                                                                             Var%

Interest Earned     6695.96        6309.1          6.13        6089.57         9.96

Total
                    1717.92       1570.37           9.4        1362.39         26.1
Expenditure

Operating
                    2342.61       2211.94          5.91        2368.84        -1.11
Profit

PAT                 1437.02       1236.27         16.24        1101.06       30.51

PBIDTM%                  34.99      35.06          -0.2           38.9       -10.05

PATM%                    21.46       19.6          9.49          18.08       18.69

Adj. EPS(Rs)             12.48      10.74          16.2           9.88       26.32




                                                          57
Interpretation
BETA: A measure of the volatility, or systematic risk, of a security or a portfolio in
comparison to the market as a whole. Beta is used in the capital asset pricing model
(CAPM), a model that calculates the expected return of an asset based on its beta and
expected market returns.

Here beta is more than 1 (1.4927) beta of greater than 1 indicates that the security‟s price
will be more volatile than the market. Stock‟s beta is 1.4927; it‟s theoretically 49.27%
more volatile than the market.

EPS: EPS indicates the profitability of a company. Earning per Share is the single most
popular variable in dictating a share‟s price. Earning per Share is the Net Income (profit)
of a company divided by the number of outstanding shares. And here EPS of the
company increasing. This shows that company is earning profit.

P/E: price-to-earnings ratio (P/E) is probably the most widely used – and thus misused
investing metric. It‟s easy to calculate, which explains its popularity. The most common
way to calculate :

P/E = share price divided by earnings per share

DPS: The the sum of declared dividends for every ordinary share issued. Dividend per
share (DPS) is the total dividends paid out over an entire year (including interim
dividends but not including special dividends) divided by the number of outstanding
ordinary shares issued. Dividends are a form of profit distribution to the shareholder.
Having a growing dividend per share can be a sign that the company‟s management
believes that the growth can be sustained. Here dividend is highest in last 5 years; it
indicates that company is growing YOY.

ICICI is having highest market capital, net profit and assets value as compared to
competitors this indicates that ICICI is most favorable company for investors.




                                        58
ICICI BANK LTD BALANCE SHEET
DESCRIPTION                               Mar-10      Mar-09        Mar-08     Mar-07      Mar-06

SOURCES OF FUNDS:
Share Capital                             1114.89     1113.29      1462.68     1249.34     1239.83
Share Warrants & Outstanding                 0.00        0.00         0.00        0.00        0.00
Total Reserves                           50503.48    48419.73     45357.53    23413.92    21316.16
Deposits                                202016.60   218347.82    244431.05   230510.19   165083.17
Borrowings                               94263.57    93155.45     65648.43    51256.03    38521.91
Other Liabilities & Provisions           15501.18    18264.66     42895.38    38228.64    25227.88
Total Liabilities                       363399.72   379300.96    399795.08   344658.11   251388.95
APPLICATION OF FUNDS :
Cash and balance with Reserve Bank of
India                                    27514.29    17536.33     29377.53    18706.88     8934.37
Balances with banks and money at call    11359.40    12430.23      8663.60    18414.45     8105.85
Investments                             120892.80   103058.31    111454.34    91257.84    71547.39
Advances                                181205.60   218310.85    225616.08   195865.60   146163.11
Gross block                               7114.12     7443.71      7036.00     6298.56     5968.57
Less: Accumulated Depreciation            3901.43     3642.09      2927.11     2375.14     1987.85
Less: Impairment of Assets
Net Block                                 3212.69     3801.62      4108.90     3923.42     3980.71
Lease Adjustment
Capital Work in Progress
Other Assets                             19214.93    24163.62     20574.63    16489.92    12657.51
Total Assets                            363399.72   379300.96    399795.08   344658.11   251388.95
Contingent Liabilities                  727084.06   834683.00   1211082.33   562959.91   395033.67
Bills for collection                      6474.95     6000.44      4278.28     4046.56     4338.46
Book Value                                 463.02      444.95       417.67      270.37      249.56
Adjusted Book Value                        463.02      444.95       417.67      270.37      249.56




                                            59
60
ICICI BANK LTD PROFIT AND LOSS A/C
DESCRIPTION               Mar-10     Mar-09      Mar-08     Mar-07     Mar-06

No of Months                12.00      12.00       12.00      12.00      12.00
I. INCOME
Interest Earned          25706.93   31092.55    30788.34   21995.59   14306.13
Other Income              7477.65    7603.73     8810.76    6927.87    4180.89
Total Income             33184.58   38696.28    39599.11   28923.46   18487.02
II. EXPENDITURE
Interest Expended        17592.57   22725.93    23484.24   16358.50    9597.45
Operating Expenses        5859.83    7045.11     8154.18    6690.56    5001.15
Provisions and
Contingencies             4386.86    3808.26     2904.58    2226.37     791.81
Profit Before Tax         5345.32    5116.97     5056.10    3648.04    3096.61
Taxes                     1320.34    1358.84      898.37     537.82     556.53
Total                    29159.60   34938.14    35441.38   25813.24   15946.94
III. PROFIT AND LOSS
Profit After Tax          4024.98    3758.13     4157.73    3110.22    2540.07
Extra items
Profit brought forward    2809.65    2436.32      998.27     293.44     188.22
Adjustments to PAT
Total Profit & Loss       6834.63    6194.45     5156.00    3403.66    2728.30
IV. APPROPRIATIONS        6834.63    6194.45     5156.00    3403.66    2728.30
Equity Dividend %          120.00     110.00      110.00     100.00      85.00
Earnings Per Share          36.10      33.76       37.37      34.59      28.55
Adjusted EPS                36.10      33.76       37.37      34.59      28.55




                                           61
62
ICICI BANK LTD FINANCIAL RATIOS

  RATIOS           2010    2009         2008    2007    2006
Per Share Ratios

      EPS          36.10   33.76        37.37   34.59   28.55

      DPS           12      11           11      10     8.50

  Profitability
     ratios

   GP Ratio        15.06   12.36        12.99   11.41   15.10

   NP Ratio        12.17   9.74         10.51   10.81   14.12

      ROE          7.96    7.83         11.75   13.37   14.62

      ROA          1.08     .96         1.12    1.04    1.21

Liquidity Ratios

 Current Ratio     1.94    0.78         0.72    0.61    0.62

  Quick Ratio      14.70   5.94         6.42    6.04    6.64




                                   63
Interpretation
        Earning per share (EPS): EPS is the profitability of the firm measures in terms of
        number of equity shares, which is derived by dividing the profit after tax by the
        number of equity shares. EPS calculation in a time series analysis indicates whether
        the firm EPS is increasing or decreasing.

     Over the years EPS of the firm is increasing which indicates that per share earning of the
     firm has increased, but this increase in EPS is erroneous in the sense that the real earnings
     (ROE) have not increased.




                                              64
   Dividend per share (DPS): sometimes the equity shareholders may not be interested
   in the EPS but in the return which they are actually receiving from the firm in the
   form of dividends. The amount of profits distributed to shareholders per share is
   known as DPS and it is calculated by dividing total profits distributed by number of
   equity share.

Dividend per share over the years has increased which indicates that the amount of
dividend distributed towards the shareholder has increased.




   Gross profit ratio: the GP ratio is also called the average mark up ratio. It is
   calculated by comparing the gross profit of the firm with the net sales.

In 2007 GP ratio had drastically fallen, which means operating efficiency of the firm has
decreased but it has recovered over the next three years and become almost stable.




                                       65
   Net profit ratio: the NP ratio establishes the relationship between the net profit (after
   tax) of the firm and the net sales. Its measures the efficiency of the management in
   generating additional revenue over and above the total cost of operations.

Net profit ratio has decreased over the years which mean that the overall profitability of
the firm has fallen down.




   ROE: ROE examines profitably from the perspective of equity investors by relating
   profits available for the equity share holders with the book value of equity
   investments. The return from the point of view of equity shareholders may be


                                        66
   calculated by comparing the net profit less preference dividend with there total
   contribution to the firm.

Over the years ROE of the firm have declined which indicates that the funds of the owner
have not been used properly by the firm, and the firm has not been able to earn
satisfactory return for the owner.




   ROA: ROA measures a profitability of the firm in terms of assets employed in the
   firm. ROE is calculated by establishing the relationship between the profits and the
   assists employed to earn that profit. ROA shows as to how much is the profit earn by
   the firm per rupee of assets used. ROA of the firm over the year is almost stable.




                                       67
   Current Ratio: current ratio shows the firms ability to pay its current liability out of
   its current assets. Generally a current ratio of 2:1 is considered to be satisfactory but
   sometimes it varies from industry to industry therefore the firms current ratio should
   be compared with the standard for the specific industry only.

Current ratio of the firm has increased over the year which indicates that the firm has
enough current assets to pay off its current liability.




       Quick ratio: this ratio establishes the relationship between quick current assets
       and current liabilities. Quick current assets excludes inventory and prepaid
       expenses from current assets as they are potentially illiquid. This calculated by
       dividing quick assets by total current liabilities. Generally a quick ratio of 1:1 is
       considered to be satisfactory.

   Quick ratio of the firm is much higher than the ideal and its increasing over the years
   which means that the firm has enough quick assets to payoff its current liability.




                                        68
ICICI BANK LTD VALUATION RATIO

                       Mar-     Mar-    Mar-    Mar-     Mar-
DESCRIPTION              10       09      08      07       06
Adjusted PE (x)       26.39     9.85   20.61   24.67    20.64
PCE(x)                23.59     8.76   18.81   22.13    18.16
Price / Book
Value(x)               2.06     0.75    1.84    3.16     2.36
Dividend Yield(%)      1.26     3.31    1.43    1.17     1.44
EV/Net Sales(x)        7.80     4.19    4.93    5.83     6.38
EV/EBITDA(x)          20.60    14.59   19.05   21.84    23.48
EV/EBIT(x)             8.74     4.68    5.31    6.41     7.19
EV/CE(x)               0.55     0.34    0.38    0.37     0.36
M Cap / Sales          4.13     1.19    2.78    3.49     3.66
High PE               28.45    25.19   42.13   29.50    22.76
Low PE                10.35     7.03   20.61   15.96    13.24


ICICI BANK LTD CASH FLOW RATIO


DESCRIPTION                   Mar-10    Mar-09     Mar-08       Mar-07    Mar-06
Cash Flow Per share            16.77   -127.46    -104.54       256.45     52.29
Price to Cash Flow Ratio       56.82     -2.61      -7.37         3.33     11.27
Free Cash Flow per
Share                         102.15    241.13     198.79       -160.91    30.12
Price to Free Cash Flow         9.33      1.38       3.87         -5.30    19.56
Free Cash Flow Yield            0.11      0.72       0.26         -0.19     0.05
Sales to cash flow ratios      13.75     -2.19      -2.65          0.95     3.07


                                                   69
Intrinsic value of ICICI Bank

    Year               EPS                      P/E
    2006              36.10                    26.39
    2007              33.76                     9.85
    2008              37.37                    20.61
    2009              34.59                    24.67
    2010              28.55                    20.64

     1) Based on the past 5 year EPS data, estimated growth % can be determine. And the
        estimated growth rate is 10.1%
     2) Now, by using the current EPS we can compound it with the estimated growth i.e.
        10.1%
     3) Current EPS is 40.95 compounding of the EPS is 40.95+(40.95*.101)=45.085
     4) Now, based on the past 5 year P/E take the average of P/E value which is 20.432
     5) Now multiply the step 3 & 4 and we will get the estimated share price.
     6) Estimated share price is 921.176 and current share price is 1033 which is higher than
        the estimated its means that share price is overvalued and investor should sell the
        shares for short term.




                                             70
Expected Growth of ICICI in 2011 by Unicon Investment research report

“ICICI Bank registered a good financial performance in Q4FY11 with standalone PAT up by
44% to INR 14.52 Bn from INR 10.06 Bn in Q4FY10. The growth, being the highest in last 7
years, was aided by increase in interest and non interest income. The QoQ increase in Net
Interest Income was better than expected (a rise of 23.3% from INR 20.35 bn in Q4FY10 to INR
25.10 Bn to Q4FY11). Net interest margin increased QoQ & YoY by 10 bps to 2.7%
respectively, on account of lower cost of funds, lower delinquencies and growing CASA
deposits.”

“CASA ratio increased from 41.7% in Q4FY10 to 45.1% in Q4FY11. The total deposits
increased by 11.7% YoY (INR 668.7 Bn on March 31,2011 as compared to INR 532.18 Bn in
March 31,2010). Non interest income decreased by 13.2% QoQ and 11.1% YoY, this was
primarily because of MTM loss in treasury income (Q4FY11 value stood at INR 1.96 Bn) and
reduction in other income by 73.6% (QoQ). However, fee income increased by 17.8% to INR
17.91 Bn on QoQ basis. Advances increased YoY by only 19% which was lower than the
industry level of 21%, advances to domestic 71orporate increased by 42.6% YoY. The retail
advances like vehicle loan and home loan are expected to grow in the near future. The Net
NPA‟s improved from 1.87% in Q4FY10 to 0.94% of net advances in Q4FY11. Loan loss
coverage ratio also increased to 76% on March 31,2011 from 59.5% in March 31,2010, much
above the RBI regulation of 70%. Operating expenses rose YoY by 14.1% to INR 17.89 Bn in
Q4FY11 from INR 14.58 Bn in Q4FY10. Credit to deposit ratio from domestic business stood at
75%, Cost to income ratio was 42% due to healthy operating income growth. This was on
account of expanding network of the bank with 2529 branches and 6104 ATMs.”

“ICICI Bank‟s growth in the past has been mainly retail-driven, the bank is now looking to grow
its large corporate and SME segment loan book as well. Progress on the „4C‟ strategy (CASA,
capital conservation, cost control and credit charges) has been good. At the CMP ICICI is trading
at 2x of its FY12E P/BV (standalone basis). We have Accumulate rating on the stock for a target
price of INR 1306,” says Unicon Investment research report




                                               71
 FINDINGS
(Chapter-7)




     72
In this project report there are many facts which say whether an investor should invest in ICICI
Bank or not. For the conclusion on this part, we have analyzed economic, industry as well as
company (ICICI Bank).

     1) In the Economic Analysis we can see that economic is booming after 2009 and current
        position shows that this is the good time to invest after the recession because GDP
        growth rate is increasing. And overall economy is growing.

     2) In the industry analysis here overall industry PAT is increasing over the years which
        means banking industry is having much profit but on the other side banking industry
        Net Profit growth has decreased very much so investor should invest carefully.

     3) In the analysis of ICICI Bank we can see that EPS is increasing yoy. And dividend is
        also increasing so investor can invest in the company but on other side we company‟s
        intrinsic value is less than the current price it shows that the share price is overvalued
        and invester should sell the share. But if investor want to invest in the company for
        long term than he can have a good profit because company growing rapidly in terms of
        profit and net sales and its EPS & DPS are increasing over the years.




                                               73
LIMITATIONS




     74
Fundamental analysis has some limitation involved in it. This limitation can be explained as
under:

Time Constrain:

         Fundamental analysis may offer excellent insights, but it can be extraordinarily time-
consuming. Time-consuming models often produce valuations that are contradictory to the
current price prevailing on the exchange.

Company Specific:

         Valuation techniques vary depending on the industry group and specifics of each
company. For this reason, a different technique and model is required for different industries and
different companies. This can be quite time-consuming process, which can limit the amount of
research that can be performed.

         The sales and inventory ratio may be very important for the cement sector company but
these ratios are not very useful for the banking sector.

Inadequacies of Data:

         While making analysis one has to often wrestle with inadequate data. While deliberate
falsification of data may be rare, subtle misrepresentation and concealment are common.

Future Uncertainties:

         Future changes are largely unpredictable; more so when the economic and business
environment is buffeted by frequent winds of change. In an environment characterized by
discontinuities, the past record is a poor guide to future performance.

Irrational Market Behavior:

         The market itself presents a major obstacle while making analysis on account of neglect
or prejudice, undervaluation may persist for extended periods; likewise, overvaluations arising
from unsatisfied optimism and misplaced enthusiasm may endure for unreasonable lengths of
time.



                                                 75
CONCLUSION




     76
Fundamental analysis holds that no investment decision should be without processing and
analyzing all relevant information. Its strength lies in the fact that the information analyzed is
real as opposed to hunches or assumptions. On the other hand, while fundamental analysis deals
with tangible facts, it does not tend to ignore the fact that human beings do not always act
rationally. Market prices do sometimes deviate from fundamentals. Prices rise or fall due to
insider trading, speculation, rumor, and a host of other factors.

Fundamental analysis is based on the analysis of the economic, industry as well as the company
and in this research we can see that the economic indicators have an effect on the bank growth
and assets.

The above report says that our economic is growing after the recession and it is the good time for
the one who want to invest. and according to the industry analysis investor can invest in the
banks but he/she should be careful for the investment. But according to financial analysis of
ICICI bank its performance in the private industry is good and expected to grow further in the
near future which is a good sign for investment. EPS and dividend both are increasing yoy and
it‟s on the top in terms of profit and net interest income if we compared it with the other banks in
the same industry but we can‟t ignore the intrinsic value of the company which is lower than the
current value which shows then investor should sell the share of the company if he/she is
investing for short term and for long term it is good for investor to invest in the company.




                                                 77
SUGGESTION




    78
The analysis carried out at on the ICICI Bank, their profit and loss account, balance sheet and
ratios. I shall suggest the investors to invest in ICICI Bank than the other banks as a value
investment.

Reasons:

      Largest private sector bank in India, second largest in entire banking
            Industry

      Strong increase in profit year-on-year basis.
      Increasing EPS indicate good earnings.
      Increase in sharing profit with shareholders in form of dividend.
      ICICI Bank is expanding its footholds on international level also; its
           Insurance and asset management business are also performing well.




                                               79
BIBLIOGRAPHY




     80
Books:

   Investment Analysis & Portfolio Management- Prasanna Chandra.
   Financial management – R.P Rustagi


ACE EQUITY data base

Websites:

   www.google.com
   www.icicibank.com
   www.rbi.org.in
   www.moneycontrol.com
   www.equitymaster.com
   mwww.nseindia.com
   http://www.business-standard.com/india/index2.php
   http://economictimes.indiatimes.com/

   http://en.wikipedia.org/wiki/Magnetic_ink_character_recognition
   http://finance.indiabizclub.com/info/indian_banking_industry
   http://finance.indiamart.com/investment_in_india/banking_in_india.html




                                             81

				
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