Project Report Neha-1

PROJECT REPORT
ON
“FUNDAMENTAL AND TECHNICAL ANALYSIS OF
BANKING SECTOR”
A Project Submitted to
University of Mumbai for Partial Completion of the Degree of
Master in Commerce
Under the Faculty of Commerce
BY:
NEHA PURAN GUR
ROLL NO: 1762147
UNDER THE GUIDANCE OF

PROF. RAVINDRA PHADKE
1
SHRI SIDH THAKURNATH COLLEGE OF ARTS & COMMERCE
ULHASNAGAR - 421 004.
UNIVERSITY OF MUMBAI
2017-18
(embossing page)
PROJECT REPORT
ON
“FUNDAMENTAL AND TECHNICAL ANALYSIS OF
BANKING SECTOR”
A Project Submitted to
University of Mumbai for Partial Completion of the Degree of
Master in Commerce
Under the Faculty of Commerce
BY:
NEHA PURAN GUR
ROLL NO: 1762147
UNDER THE GUIDANCE OF
PROF. RAVINDRA PHADKE
2
SHRI SIDH THAKURNATH COLLEGE OF ARTS & COMMERCE
ULHASNAGAR - 421 004.
UNIVERSITY OF MUMBAI
2017-18
3
COLLEGE CERTIFICATE
4
DATE: 13th SEPTEMBER, 2010.
This is to certify that Miss Neha Puran Gur, Roll no.1762147 a student of
Masters of Commerce (M.Com) of S.S.T. College of Arts & Commerce,
Ulhasnagar – 421 004, has approached us for her project on “Fundamental and
Technical Analysis of Banking sector” to collect the primary data. We have
provided the information at our best. We wish her / his all the success.
(INVESTMENT MANAGER)
MR. I’ONARE KHARE
5
DECLARATION
I the undersigned Mr. Ravindra Phadke here by, declare that the work
embodied in this project work titled “Fundamental and Technical
Analysis of Banking Sector” forms my own contribution to the
research work carried out under the guidance of Ravindra Phadke is a
result of my own research work and has not been previously
submitted to any other University for any other Degree / Diploma to
this or any other University.
Wherever reference has been made to previous works of others, it has

been clearly indicated as such and included in the bibliography.
(Ravindra Phadke)
6
ACKNOWLEDGEMENT
To list who all have helped me is difficult because they are so numerous and the
depth is so enormous.
I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.
I take this opportunity to thank the University of Mumbai for giving me chance
to do this project.
I would like to thank my Principal, Prof. Purswani for providing the

necessary facilities required for completion of this project.
I take this opportunity to thank our Coordinator Prof. Varsha Sawlani for her
moral support and guidance.
I would also like to express my sincere gratitude towards my Project Guide

Ravindra Phadke whose guidance and care made the project successful.
I would like to thank my College Library, for having provided various

reference books and magazines related to my project.
Lastly, I would like to thank each and every person who directly or indirectly
helped me in the completion of the project especially my Parents and Peers
who supported me throughout my project.
7
INDEX
1 Abstract 10
2 Fundamental Analysis Introduction 10
2.1 Objective 11
2.2 Scope of study 11
3 Introduction of Bank 11
3.1 Products 11
3.2 Business Banking 12
4 Financial Ratios 13
5 Profile of selected banks
5.1 SBI
a) About the bank 16
b) Dividend 16
c) Listing and shareholding 17
d) Ratios 17
e) Explanation of ratios 18
5.2 ICICI
b) Dividend 19
d) Ratios 20
5.3 HDFC
b) Dividend 22
d) Ratios 23
5.4 Bank Of Baroda
b) Dividend 25
d) Ratios 26
5.5 Yes Bank

b) Dividend 28
8
d) Ratios 29
6 Intrinsic value calculation of:
6.1 SBI 32
6.2 ICICI 33
6.3 HDFC 34
6.4 Bank Of Baroda 35
6.5 Yes bank 36
7 Company wise comparison & Interpretation 37
8 Findings & suggestions 38
9 Technical Analysis Introduction 40
9.1 Types of trend 41
9.2 Trend lines 41
9.2 Channels 42
9.4 Support & Resistance 43
9.5 Volume 45
9.6 Types of chart 47
10 Chart Patterns 50
11 Technical chart of:
11.1 SBI 56
11.2 ICICI 57
11.3 HDFC 58
11.4 Bank Of Baroda 59
11.5 Yes Bank 60
12 Suggestions 61
12.1 Conclusion 61
13 Reference 62
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ABSTRACT
It is felt that the Share market is fluctuating very quickly and the real worth of the shares
also is unstable. The investors need to know the trend of the share value fluctuations and
the stability of share price movements. In banking industry, the intrinsic value of the shares
is to be computed to ascertain the share values of the banks which may either be
undervalued or overvalued based on the performance of the banks.
In this study, an analysis is done to help make decision as regard to whether it is wise to
invest in banking institutions in India or not. Five of the banks have been selected for the
analysis of investment decision over banking companies whether it is wise to hold or to sell
the shares. The investment decision is made on the basis of analysis of general trend on
banking sector. The study helps to select securities which maximizes the yield and minimizes
risk.
FUNDAMENTAL ANALYSIS
Fundamental analysis involves finding the intrinsic value of the selected banks and their
share value. It provides additional strength to the investor in choosing the option of buy /
sell strategy. The analysis incorporates with various financial ratios and their calculations to
arrive out the intrinsic value of the shares of the banks finally. The intrinsic value is the
yardstick to measure the financial performance of any bank.
Real worth of the share may not always be reflecting in the market price. Banking
companies are selected for investment based on the real worth of the shares and the
intrinsic value of the shares will be calculated thus. In this way, we can make appropriate
investment decisions with the help of intrinsic value of shares.
Fundamental analysis is always the proper method to arrive at the results of the company or
industry on its financial performance. If the company is fundamentally strong, that will help
the investor to get a very good return in the long run. Hence, before making an investment
decision the investor has to check the results of the fundamental analysis of the companies.
The study has thrown more light on the strength of banking sector performance and as a
tool for generating and distributing the wealth of nation.
Fundamental analysis is done to ascertain the financial performance of selected banks in the
banking sector in India so as to facilitate a buy or sell option through the intrinsic value of
the shares and the prevalent market price using fundamental analysis. It is basically to know
the investment opportunities for the investors in buying the shares of banking companies.
It is felt that the Share market is fluctuating very quickly and the real worth of the shares
also is unstable. The value of the shares of a bank is either undervalued or overvalued. To
know the trend of the share value fluctuations, the intrinsic value of the shares is to be
computed. The share values of the banks may be either undervalued or overvalued based
on the performance of the banks in purview.
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OBJECTIVES
· To do the fundamental analysis of the selected banking companies

· Evaluating the intrinsic value of shares for decision making
· To recommend for a buy or sell option by comparing the intrinsic value of the share with
the market price using fundamental analysis.
SCOPE OF THE STUDY
The scope of the study is limited to five selected banks in India. The significance of the study
lies in the fact that it helps to make decision as regard to whether it is wise to invest in
banking institutions in India and in case of investment which is already made in the with
banking companies whether it is wise to hold or to sell the shares. The investment decision
is made on the basis of analysis of general trend on banking sector. The study helps to select
securities which maximizes the yield and minimizes risk.
Bank
A bank is a financial institution that accepts deposits from the public and
creates credit. Lending activities can be performed either directly or indirectly
through capital markets. Due to their importance in the financial stability of a country,
banks are highly regulated in most countries. Most nations have institutionalized a system
known as fractional reserve banking under which banks hold liquid assets equal to only a
portion of their current liabilities. In addition to other regulations intended to ensure
liquidity, banks are generally subject to minimum capital requirements based on an
international set of capital standards, known as the Basel Accords.
PRODUCTS
Retail
 Savings account
 Recurring deposit account
 Fixed deposit account
 Money market account
 Certificate of deposit (CD)
 Individual retirement account (IRA)
 Credit card
 Debit card
 Mortgage
 Mutual fund
 Personal loan
 Time deposits
 ATM card
 Current accounts
 Cheque books
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 Automated Teller Machine (ATM)
Business (or commercial/investment) banking
 Business loan
 Capital raising (equity / debt / hybrids)
 Revolving credit
 Risk management (foreign exchange (FX)), interest rates, commodities, derivatives)
 Term loan
 Cash management services (lock box, remote deposit capture, merchant processing)
 Credit services
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Financial Ratios
1. Price to Earnings Ratio
The price-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its
current share price relative to its per-share earnings. The price-earnings ratio is also
sometimes known as the price multiple or the earnings multiple.
P/E ratio = Market Value per Share / Earnings per Share
2. Price to Book Value
The price-to-book ratio (P/B Ratio) is a ratio used to compare a stock's market value to
its book value. It is calculated by dividing the current closing price of the stock by the latest
quarter's book value per share.
Price to book value = Market Price per share / Book Value per share
3. Dividend Pay Out Ratio

The dividend payout ratio is the amount of dividends paid to stockholders relative to the
amount of total net income of a company. The amount that is not paid out in dividends to
stockholders is held by the company for growth. The amount that is kept by the company is
called retained earnings.
Dividend payout ratio = Dividend / Net income
4. Dividend Per Share

Dividend per share (DPS) is the sum of declared dividends issued by a company for
every ordinary share outstanding. Dividend per share (DPS) is the total dividends paid out by
a business, including interim dividends, divided by the number of outstanding ordinary
shares issued. A company's DPS is usually derived using the dividend paid in the most recent
quarter, which is also used to calculate the dividend yield. DPS can be calculated by using
the following formula:
Dividend per share = Total Dividend paid / No of shares outstanding
5. Return On Equity
The return on equity ratio or ROE is a profitability ratio that measures the ability of a firm to
generate profits from its shareholders investments in the company. In other words, the
return on equity ratio shows how much profit each dollar of common stockholders' equity
generates.
Return On Equity = Net Income / shareholder’s Equity
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6. Earnings Per Share
Earning per share, also called net income per share, is a market prospect ratio that
measures the amount of net income earned per share of stock outstanding. In other words,
this is the amount of money each share of stock would receive if all of the profits were
distributed to the outstanding shares at the end of the year.
Earning per Share = Net Income - preference dividend / No of shares outstanding
7. Net Profit Margin

Net profit margin is the ratio of net profits to revenues for a company or business segment .
Typically expressed as a percentage, net profit margins show how much of each dollar
collected by a company as revenue translates into profit.
Net Profit Margin = Net Profit After tax / Net Sales
8. Current Ratio
The current ratio is a liquidity ratio that measures a company's ability to pay short-
term and long-term obligations. To gauge this ability, the current ratio considers the current
total assets of a company (both liquid and illiquid) relative to that company’s current
total liabilities.
Current Ratio = Current Assets / Current Liabilities
9. Return on Asset ratio
Return on assets (ROA) is an indicator of how profitable a company is relative to its total
assets. ROA gives an idea as to how efficient management is at using its assets to generate
earnings. Calculated by dividing a company's annual earnings by its total assets, ROA is
displayed as a percentage. Sometimes this is referred to as "return on investment".
The formula for return on assets is:
10. Debt to equity ratio

The debt to equity ratio is a financial, liquidity ratio that compares a company's total debt to
total equity. The debt to equity ratio shows the percentage of company financing that
comes from creditors and investors. A higher debt to equity ratio indicates that more
creditor financing (bank loans) is used than investor financing (shareholders).
Debt to equity ratio = Total debt / total Equity
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11. NPA ratio
The net NPA to loans (advances) ratio is used as a measure of the overall quality of the
bank's loan book. An NPA are those assets for which interest is overdue for more than 90
days (or 3 months).
Higher ratio reflects rising bad quality of loans.
NPA ratio = Net non-performing assets / Loans given
12 Capital Adequacy ratio

A bank's capital ratio is the ratio of qualifying capital to risk adjusted (or weighted) assets.
The RBI has set the minimum capital adequacy ratio at 9% for all banks. A ratio below the
minimum indicates that the bank is not adequately capitalized to expand its operations. The
ratio ensures that the bank do not expand their business without having adequate capital.
CAR = Tier one capital + Tier two capital / Risk weighted average
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PROFILE OF SELECTED BANKS
I. SBI
a)About the Bank:

State Bank of India (SBI) is an Indian multinational, public sector banking and financial
services company. It is a government-owned corporation with its headquarters in Mumbai,
Maharashtra. The company is ranked 232nd on the Fortune Global 500 list of the world's
biggest corporations as of 2016.
On April 1, 2017, State Bank of India merged five of its associate banks (State Bank of
Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of
Patiala and State Bank of Travancore) and Bharatiya Mahila Bank with itself.
Products – Consumer banking, corporate banking, finance and insuranc e,
investment banking, mortgage loans, private banking, private equity, savings,
securities, asset management, wealth management, credit cards .
b)Dividend declared of 5 years
Announcement Effective Dividend

Date Date Type Dividend(%) Remarks
19/05/2017 26/05/2017 Final 260% Rs.2.6000 per share(260%)Dividend
Rs.15.0000 per share(150%)Interim

04/03/2014 11/03/2014 Interim 150% Dividend
16
c)Listing and shareholding
Shareholders Shareholding
President of India 61.23%
Banks/FIs/Insurance Cos., etc 10.00%
Private corporate bodies 2.70%

Non-residents 11.17%
(FIIs/OCBs/NRIs/GDRs)
Mutual Funds & UTI 8.29%
Others 6.61%
Total 100%
d)Ratios of SBI
Ratios 2017
Current ratio 17.15
Earning per share ratio 13.34
Price to Earning ratio 21.99
Price to Book value 1.54
Dividend per share 2.60
Dividend payout ratio (%) 20.11
Net profit margin (%) 5.36
Debt to equity ratio 1.69
Return on asset ratio (%) 0.41
Return on equity ratio (%) 7.25
NPA ratio 3.71
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Capital adequacy ratio(%) 13.11
e)Explanation of ratios.
Current ratio – The current ratio of SBI is 17.15 which indicates that the liquidity position of
the company is very strong in short term thus the company can pay its short term liabilities
very easily.
Earning per share ratio – The EPS ratio of SBI is 13.34 which means the company is earning
profit of Rs. 13.34 from each share.
Price to Earning ratio – The P/E ratio of SBI is 21.99 which means that the investors are
willing to pay Rs. 21.99 more based on its current earnings.
Price to Book value ratio – This means that SBI stock costs 1.54 times as much as the net
assets reported on the balance sheet. This company would be considered over valued
because investors are willing to pay more for the assets than they are worth. This could
indicate that the company has healthy future profit projections and the investors are willing
to pay a premium for that possibility.
Dividend per share – The shareholders of SBI are paid the final dividend of Rs. 2.60 per
share.
Dividend payout ratio – The Dividend payout ratio of SBI is 20.11 which means the company
had distributed 20.11 % of its net profit as dividend to shareholders.
Debt to Equity ratio – The debt to equity ratio of SBI is 1.69% which shows that the
percentage of company financing that comes is more from creditors and less from investors.
Return On Asset – The ROA ratio of SBI is 0.41 which means out of the total net profit only
0.41 % is generated by the assets of the bank.
Return on Equity – The ROE ratio of SBI is 7.25 % which mean that 7.25 % of net profit is
generated from the investments of equity shareholders.
NPA ratio – The NPA ratio of SBI is 3.71. It is said that the NPA ratio above 1% is not healthy.
Capital Adequacy Ratio(CAR) – Higher the bank’s capital adequacy ratio, the higher the
degree of protection of depositor's money. The CAR of SBI is 13.11% which is above the set
level of RBI i.e 9%.
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II. ICICI
a)About ICICI
ICICI bank (Industrial Credit and Investment Corporation of India) is an Indian multinational
banking and financial services company headquartered in Mumbai, Maharashtra< India<
with its registered office in Vadodara.
ICICI Bank Limited is a banking company which with its subsidiaries, joint ventures and
associates, is a diversified financial services group providing a range of banking and
financial services, including commercial banking, retail banking, project and corporate
finance, working capital finance, insurance, venture capital and private equity, investment
banking, broking and treasury products and services. It operates under four segments: retail
banking, wholesale banking, treasury and other banking.
Products: Credit cards, consumer banking, corporate banking, finance and insurance, investment
banking, mortgage loans, private banking, wealth management, personal loans, payment solutions.
b)Dividend declared of 5 years
Announcement Dividend
Date Effective Date Type Dividend(%) Remarks
Rs.23.0000 per
25/04/2014 05/06/2014 Final 230% share(230%)Dividend
Rs.20.0000 per
19
c)Listing and Shareholding
Deutsche Bank Trust
Company Americas
25.30%
(Depositary for ADS holders)
FIIs, NRIs, Foreign Banks,

Foreign Companies, OCBs
35.48%
and Foreign Nationals
Insurance Companies
15.23%
Bodies Corporate (including
Government Companies) 2.51%
Banks & Financial Institutions

0.10%
Mutual Funds
14.97%
Individuals, HUF and Trusts
5.83%
NBFC Registered with RBI
0.02%
Provident Fund / Pension
Fund 0.56%
Total 100%
d)Financial ratios
Ratios 2017
Current ratio 22.31
20
Dividend payout ratio (%) --
Return on Equity ratio (%) 10.34
NPA ratio 4.86
Capital Adequacy ratio(%) 17.39
Current ratio – The current ratio of ICICI is 22.31 which indicates that the liquidity position
of the company in short run is very strong and it can pay its short term liabilities very easily.
Earning per share – The EPS ratio of ICICI is 16.84 which indicates that the company is
earning a profit of Rs. 16.84 from each share.
Price to Earning ratio – The P/E ratio of ICICI is 17.02 which means that the investors are
willing to pay Rs. 17.02 more based o its current earnings.
Dividend Per Share – The shareholders of ICICI are paid the dividend of Rs. 2.50 per share.
Dividend payout ratio – There is no dividend pay out ratio in this company because as per
the Basel III guidelines of RBI the company has to pay its dividend from capital funds and not
from net earnings.
Debt to Equity ratio – The debt to equity ratio of ICICI is 1.48% which shows that the
percentage of company financing that comes is more from creditors and less from investors.
Return On Asset – The ROA ratio of ICICI is 1.35% which means out of the total net profit
the bank is generating profit of 1.35% from assets.
Return on Equity – The ROE ratio of ICICI bank is 10.34 % which means 10.34 % of the net
income is generated from the investments of shareholders.
NPA ratio – The NPA of ICICI bank is 4.86. NPA ratio above 1% is unhealthy.
21
Capital Adequacy Ratio – Higher the bank’s capital adequacy ratio, the higher the degree of
protection of depositor's money. The CAR of ICICI is 17.39% which is above the set level of
RBI i.e 9%.
III. HDFC
a)About HDFC
HDFC Bank Limited is an Indian banking and financial services company headquartered
in Mumbai, Maharashtra. It has 84,325 employees and has a presence in Bahrain, Hong
Kong and Dubai. HDFC Bank is India’s largest private sector lender by assets. It is the largest
bank in India by market capitalization as of February 2016.
Products and services
Market leader in e-commerce, HDFC Bank provides a series of digital offerings like - 10
second personal loan, Chillr, PayZapp, SME Bank, Watch Banking, 30-Minute Auto Loan, 15-
minute Two-Wheeler Loan, e-payment gateways, Digital Wallet, etc.
HDFC Bank is rated 0-1 out of 10 in terms of Disclosure about charges and interest rates,
Trustworthiness, Complaint Resolution, Professionalism, Convenient banking hours, Well-
trained staff, Courteous and friendly staff, Faster service at branches, Knowing the customer
and their needs, Good Internet banking, Efficient processes, Effective communication on
developments, Innovation and Good phone banking. The ratings found that the only scale
HDFC bank stood out was Wide ATM coverage.
HDFC Bank provides a number of products and services which includes Wholesale banking,
Retail banking, Treasury, Auto (car) Loans, Two Wheeler Loans, Personal loans, Loan Against
Property and Credit Cards.
The latest entry in the league is 'Project AI', under which HDFC Bank, over the next few
weeks, would deploy robots at select bank branches. These robots will offer options such as
cash withdrawal or deposit, forex, fixed deposits and demat services displaying on the
screen to persons coming into the branch.
B)Dividend declared of last 5 years
Announcement Effective Dividend Dividend(%) Remarks

Date Date Type
24/04/2017 29/06/2017 Final 550% Rs.11.0000 per

share(550%)Dividend
22
22/04/2014 05/06/2014 Final 342.5% Rs.6.8500 per

share(342.5%)Dividend

Indian promoters 21.20%
Mutual Funds 8.05%
Banks/FI 0.09%
Central Govt. 0.11%
Insurance companies 2.40%
FIIs 34.36%
Others 15.33%
Custodian for GDRs and ADRs 18.46%
Total 100%
d)Financial ratios
Ratios 2017
Current ratio 15.17
Dividend pay out ratio (%) 23.32
23
NPA ratio 0.44
Current ratio – The current ratio of HDFC is 15.17 which indicates that the liquidity position
of the company is very strong and it can easily pay its short term liabilities.
Earning per share – The EPS ratio of HDFC is 57.20 which indicates that the company is
earning a profit of Rs. 57.20 per share.
Price to Earning ratio – The P/E ratio of HDFC is 25.23 which means that the investors are
willing to pay Rs. 25.23 more based on its current earnings.
Dividend Per Share – The shareholders of HDFC are paid the dividend of Rs. 11 per share.
Dividend payout ratio – The Dividend payout ratio of HDFC is 23.32 which means the
company pays 23.32 % of its net earnings as dividend to its shareholders.
Debt to Equity ratio – The debt to equity ratio of HDFC is 0.83% which shows that the
percentage of company financing that comes from creditors is 83% and from investors is
17%.
Return On Asset – The ROA ratio of HDFC is 1.68% which means out of the total net profit
the bank is generating profit of 1.68% from assets.
Return on Equity – The ROE ratio of HDFC is 16.26 % which mean that 16.26 % of the net
profit is generated from the investment of equity shareholders.
NPA ratio – The NPA ratio of HDFC is 0.44. It is said that the NPA ratio below 1% is healthy.
degree of protection of depositor's money. The CAR of HDFC is 14.60% which is above the
set level of RBI i.e 9%.
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IV. BANK OF BARODA
a)About BOB
Bank of Baroda is an Indian state-owned International banking and financial services
company headquartered in vadodara (earlier known as Baroda) in Gujarat, India. It is the
second largest bank in India, next to State Bank of India. Its headquarters is in Vadodara, it
has a corporate office in Mumbai.
BOB has total assets in excess of ₹ 3.58 trillion, a network of 5493 branches in India and
abroad, and 10441 ATMs as of Sept, 2016.
As many as 10 banks have been merged with Bank of Baroda during its journey so far:
 Hind Bank Ltd (1958)

 New Citizen Bank of India Ltd (1961)
 Surat Banking Corporation (1963)
 Tamil Nadu Central Bank (1964)
 Umbergaon People Bank (1964)
 Traders Bank Limited (1988)
 Bareilly Corporation Bank Ltd (1998)
 Benares State Bank Ltd (2002)
 South Gujarat Local Area Bank Ltd(2004)
 Memon Cooperative Bank Limited(2011)
b)Dividend payout of last 5 years

Rs.3.2000 per
Rs.10.5000 per share(105%)Final

13/05/2014 12/06/2014 Final 105% Dividend
25
Rs.11.0000 per
09/01/2014 20/01/2014 Interim 110% share(110%)Interim Dividend
Rs.21.5000 per

Shareholders Shareholdings
Promoters: Govt of India 59.24%
Banks & Insurance companies 10.83%
Qualified foreign investors 11.81%
Mutual Funds & UTI 9.76%
Others 8.36%
Total 100%
d)Financial Ratios
Ratios 2017
Current ratio 30.92
Dividend payout ratio (%) 24.06
26
NPA ratio 4.72
Current ratio – The current ratio of Bank of Baroda is 30.92 which is highest as compared to
other 4 companies and indicates strong liquidity position thus it can repay its short term
liabilities quickly.
Earning per share – The EPS ratio of Bank of Baroda is 6.00 which is lowest as compared to
other companies and indicates that the company is earning a profit of Rs. 6 from each share.
Lower the EPS lower will be the dividend.
Price to Earning ratio – The P/E ratio of Bank Of Baroda is 27.53 which is highest among
other companies which indicates that the investors are willing to pay Rs. 27.53 more based
on its current earnings. Higher P/E ratio also indicates higher performance and growth in
future.
Dividend per share – The shareholders of Bank Of Baroda are paid a dividend of Rs. 1.20 per
share.
Dividend payout ratio – The Dividend payout ratio of Bank Of Baroda is 24.06 which means
that the company pays 24.06 % of its net earnings as a dividend to its shareholders.
Debt to Equity ratio – The debt to equity ratio of BOB is 0.83% which shows that the
percentage of company financing that comes from creditors is 83% and from investors is
17%.
Return On Asset – The ROA ratio of BOB is 0.20% which means out of the total net profit the
bank is generating profit of 0.20% from assets.
Return on Equity – The ROE ratio of BOB is 4.53 % which mean that 4.53 % of the net profit
is generated from the investment of equity shareholders.
NPA ratio – The NPA ratio of Bank Of Baroda is 4.72. It is said the NPA ratio above 1% is
unhealthy.
degree of protection of depositor's money. The CAR of Bank Of Baroda is 12.29% which is
above the set level of RBI i.e 9%. But lowest among the other banks considered.
27
V. YES BANK
a)About Yes Bank

YES BANK, India’s 4th largest private sector bank is a high quality, customer centric, service
driven, private Indian Bank catering to the Future Businesses of India. Since inception in
2004, YES BANK has fructified into a ‘Full Service Commercial Bank’ that has steadily built
corporate Banking, Financial Markets, Investment Banking, Corporate Finance, Branch
Banking, Business and Transaction Banking, Digital Banking and wealth Management
business lines across the country, and is well equipped to offer a range of comprehensive
products and services to corporate and Retail customers.
YES BANK is headquartered in the lower Parel Innovation District (LPID) of Mumbai, and now
has a pan-India presence with a footprint of 1000 branches and 1800 ATMs across all 29
states and 7 union Territories in India.
Area served -
Products and services
 Corporate and Institutional Banking-The Corporate & Institutional Banking (C&IB)

division at Yes Bank contribute a major part of the bank with a turnover of over ₹ 1,000
crores.
 Commercial Banking
 Investment Banking-Yes Bank's is a major player in Investment Banking in India and is
involved in the identification, structuring and execution of transactions for its clients in
diverse industries and geographies. Some of the typical transactions include mergers &
acquisitions, divestitures, private equity syndication and IPO advisory.
 Corporate Finance-YES BANK's Corporate Finance practice offers a combination of
advisory services and customised products to optimise risk based on "Knowledge
Arbitrage"
 Financial Marketing-The Financial Markets (FM) business model provides Risk
Management solutions related to foreign currency and interest rate exposures of
clients.
 Retail Banking-YES BANK has banking network of over 600 branches and 2,000 ATMs
giving it a major presence in urban India. Yes bank is one of the fastest growing private
bank in India.
b)Dividend declared of last 5 years

28

27/04/2016 30/05/2016 Final 100% Dividend

22/04/2015 21/05/2015 Final 90% Dividend

23/04/2014 29/05/2014 Final 80% Dividend

17/04/2013 23/05/2013 Final 60% Dividend
c)Listing and shareholding
Shareholders Shareholdings
Promoters 21.85%
Mutual funds 10.39%
Banks/FI 0.16%
Insurance companies 12.59%
FIIs 42.63%
Shareholders 8.22%
Others 4.16%
Total 100%
d)Financial ratios
Ratios 2017
Current ratio 18.60
Dividend pay out ratio (%) --
29
NPA ratio 0.81
Capital adequacy ratio(%) 17
Current ratio – The current ratio of Yes bank is 18.60 which indicates that the liquidity
position of the company is strong and it can repay its short term liabilities very easily.
Earning per share – The EPS ratio of Yes bank is 78.90 which is highest as compared to other
companies and indicates that the company is earning a profit of Rs. 78.90 from each share.
Higher the EPS higher will be the dividend.
Price to Earning ratio – The P/E ratio of Yes bank is 18.41 which indicates that the investors
are willing to pay Rs. 18.41 more based on its current earnings.
Dividend Per share – The shareholders of Yes Bank are paid the dividend of Rs. 12 per share.
Dividend payout ratio – The dividend payout ratio of Yes Bank is NIL because the dividends
are paid from the capital fund and not from net profits.
Debt to Equity ratio – The debt to equity ratio of HDFC is 0.05% which shows that the
percentage of company financing that comes from creditors is only 5% and from investors is
95%.
Return On Asset – The ROA ratio of Yes Bank is 1.75% which means out of the total net
profit the bank is generating profit of 1.75% from assets.
Return on Equity – The ROE ratio of Yes Bank is 21.50 % which mean that 21.50 % of the
net profit is generated from the investment of equity shareholders.
NPA ratio – The NPA ratio of Yes Bank is 0.88. It is said the NPA below 1% is healthy.
30
Capital Adequacy Ratio – Higher the bank’s capital adequacy ratio, the higher the degree of
protection of depositor's money. The CAR of Yes Bank is 17% which is above the set level
of RBI i.e 9% and also highest among other banks considered.
31
Intrisic value calculation of SBI
Sum of DPOR for 5 Years
Average Dividend Payout 5 Years
Ratio for 5 Years = (0.2012+0.2056+0.2021+0.2028+0.2011)/5
=0. 2026
1 – Average DPOR
Average Retention Ratio = 1 – 0.2026
= 0.7974
Sum of ROE for 5 Years
5 Years
Average Return on Equity
= (0.1594+0.1049+0.1117+0.774+0.725)/5
= 0.1052
Average Retention Ratio x Average Return on Equity
Long Term Growth Rate in
Dividend & Earnings = 0.7974*0.1052
= 0.08389
Sum of P/E Ratios for 5 Years
Normalized Average Price 5 Years
Earnings Ratio = (8.3+10.3+11.50+14.4+21.99)/5
= 13.30
(Earnings Per Share for the Current Year) x (1+Growth
Rate)
Projected EPS = 13.34*(1+0.0997)
= 14.6699
Projected EPS x Normalized Average P/E Ratio
`Intrinsic Value = 14.6699*13.30
= 195.12
(Dividend Per Share for the Current Year) x (1+Growth
Rate)
Projected DPS = 2.60*(1+9.97)
= 28.52
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Intrinsic value calculation of ICICI
Ratio for 5 Years = (0.2771+0.2707+0.2593+0.2989+0)/5
= 0.22012
1 – Average DPOR
= 0.7788
5 Years
= (0.1248+0.1340+0.1389+0.1163+0.1034)/5
= 0.1235
Long Term Growth Rate in = 0.7788*0.1235
Dividend & Earnings
= 0.09617
Earnings Ratio = (12+10.7+14.8+14.7+17.02)/5
= 13.844
Rate)
Projected EPS = 16.84*(1+0.0823)
= 18.2259
= 252.32
Rate)
Projected DPS = 2.50(1+0.0823)
= 2.7058
33
Intrinsic value calculation of HDFC
Ratio for 5 Years = (0.2277+0.2268+0.2362+0.2351+0.2332)/5
= 0.2318
1 – Average DPOR
= 0.7682
5 Years
= (0.1857+0.1950+0.1647+0.1691+0.1626)/5
= 0.1754
Dividend & Earnings
= 0.1348
Earnings Ratio = (20.60+17.70+21.30+20.30+25.23)/5
= 21.026
Rate)
Projected EPS = 57.20*(1+0.2350)
= 70.642
= 1485.32
Rate)
Projected DPS = 11*(1+0.2350)
= 13.59
34
Intrinsic value calculation of Bank of Baroda
Ratio for 5 Years = (0.2365+0.2386+0.2506+0+0.2406)/5
= 0.1933
1 – Average DPOR
= 0.8067
5 Years
= (0.14+0.1261+0.085+(-0.1342)+0.453)/5
= 0.13398
Dividend & Earnings
= 0.10808
Earnings Ratio = (6.60+5.10+10.80+(-7.40)+27.53)/5
= 128.41
Rate)
Projected EPS = 6*(1+(-0.00208)
= 5.9875
= 768.86
Rate)
Projected DPS = 2.60*(1+0.00208)
= 2.6054
35
Intrinsic value calculation of Yes Bank
Ratio for 5 Years = (0.1654+0.1783+0.1874+0.1655+0)/5
= 0.13932
1 – Average DPOR
= 0.86068
5 Years
= (0.2239+0.2271+0.1716+0.1841+0.2150)/5
= 0.20434
Dividend & Earnings
= 0.17587
Earnings Ratio = (8.50+13.70+12.40+16.30+18.41)/5
= 13.862
Rate)
Projected EPS = 78.90*(1+0.2669)
= 99.96
= 1385.65
Rate)
Projected DPS = 12*(1+0.2669)
= 15.20
36
Company wise comparison
Ratios SBI ICICI HDFC BOB YES BANK

Current ratio 17.15 22.31 15.17 30.92 18.60
Earning per share ratio 13.34 16.84 57.20 6.00 78.90
Price to Earning ratio 21.99 17.02 25.23 27.53 18.41
Price to Book value 1.54 1.67 4.13 1.04 3.21
Dividend per share 2.60 2.50 11.00 1.20 12.00
Dividend payout ratio (%) 20.11 -- 23.32 24.06 --
Net profit margin (%) 5.36 18.09 20.99 3.28 20.27
Debt to equity ratio 1.69 1.48 0.83 0.83 0.05
Return on asset ratio (%) 0.41 1.35 1.68 0.20 1.75
Return on Equity ratio (%) 7.25 10.34 16.26 4.53 21.50
NPA ratio 3.71 4.86 0.44 4.72 0.81
Capital adequacy ratio 13.11 17.39 14.60 12.29 17.00
Market value 293.40 251.91 1442.55 172.95 1545.80
Intrinsic value 195.12 252.32 1485.32 768.86 1385.65
Interpretation
The intrinsic value of SBI and Yes bank is less than its market value,
that means it is overvalued. Such a share is considered to be
overpriced and not suitable for long term investment purpose.
Because in future the prices of these share may fall down. On the
other hand the intrinsic value of remaining 3 banks is more than its
market value. Such stock is considered to be suitable for long term
investment purpose.
37
FINDINGS
SBI
The short term and long term solvency of the bank is satisfactory as the current ratio is
17.15, which is above the benchmark of 2:1 and the debt equity ratio is 1.69 which is below
the benchmark of 2:1. The stock is overpriced as the intrinsic value is less than the market
value of share. The NPA ratio of SBI is 3.71 which is unhealthy as it affects the core
performance area of bank. capital Adequacy ratio is 13.11 which is above the set level of 9%
by RBI, indicating higher protection to depositors money.
ICICI
23.31 which is above the benchmark of 2:1 and the debt equity ratio is 1.48 which is below
the benchmark of 2:1. The stock is underpriced as the intrinsic value is more than the
market value of share. The NPA ratio of ICICI is 4.86 which is unhealthy as it affects the core
performance area of bank. capital Adequacy ratio is 17.39 which is above the set level of 9%
by RBI, indicating higher protection to depositors money.
HDFC
15.17 which is above the benchmark of 2:1 and debt equity ratio is 0.83 which is below the
benchmark of 2:1. The stock is underpriced as the intrinsic value is more than the market
value. The NPA ratio of HDFC is 0.44 which is healthy for bank. capital Adequacy ratio is
14.60 which is above the set level of 9% by RBI, indicating higher protection to depositors
money.
Bank Of Baroda
30.92 which is above the benchmark of 2:1 and debt equity ratio is 0.83 which is below the
benchmark of 2:1. The stock is underpriced as the intrinsic value is more than the market
value. The NPA ratio of SBI is 4.72 which is unhealthy as it affects the core performance area
of bank. capital Adequacy ratio is 12.29 which is above the set level of 9% by RBI, indicating
higher protection to depositors money, but is lowest among other banks.
Yes Bank
The short and long term solvency of the bank is satisfactory as the current ratio is 18.60
which is above the benchmark of 2:1 and debt equity ratio is 0.05 which is below the
benchmark of 2:1. The stock is overpriced as the intrinsic value is less than the market value
of share. This means the investor should sell the shares as the price of the shares may fall
down in future. The NPA ratio of SBI is 0.88 which is healthy for bank. capital Adequacy ratio
is 17 which is above the set level of 9% by RBI, indicating higher protection to depositors
money and highest among other banks.
38
Recommendation
 The shares of SBI are good to invest for long term as the ratios shows the good
performance of the bank during the year 2016-18 and there are changes that the price
of the shares may rise in future.
 The share price of ICICI went down during the year 2016-17. But looking at the ratios
and as the share price of ICICI is undervalued it is recommended to hold or buy the
shares as the prices of shares may rise in future.
 The shares of HDFC are best to invest in as compared to other banks. Because the
performance of HDFC is good as compared to other banks, also the shares of HDFC are
undervalued so the price of the shares may rise in future.
 The performance of Bank Of Baroda was not good in 2015-16 however it has improved
in the current year. Also the shares of the bank are undervalued so it is recommended
to hold or buy the shares of the bank as the prices may rise in future.
 The shares of Yes Bank are overvalued and also highly volatile thus the shares of Yes
Bank are good to invest for short period but not recommended to hold for log term.
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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.
Just as there are many investment styles on the fundamental side, there are also many
different types of technical traders. Some rely on chart patterns, others use technical
indicators and oscillators, and most use some combination of the two. In any case, technical
analysts' exclusive use of historical price and volume data is what separates them from their
fundamental counterparts. Unlike fundamental analysts, technical analysts don't care
whether a stock is undervalued - the only thing that matters is a security's past trading data
and what information this data can provide about where the security might move in the
future.
The field of technical analysis is based on three assumptions:
1. The market discounts everything.
2. Price moves in trends.
3. History tends to repeat itself.
1. The Market Discounts Everything
A major criticism of technical analysis is that it only considers price movement, ignoring the
fundamental factors of the company. However, technical analysis assumes that, at any given time, a
stock's price reflects everything that has or could affect the company - including fundamental
factors. Technical analysts believe that the company's fundamentals, along with broader economic
factors and market psychology, are all priced into the stock, removing the need to actually consider
these factors separately. This only leaves the analysis of price movement, which technical theory
views as a product of the supply and demand for a particular stock in the market.
2. Price Moves in Trends
In technical analysis, price movements are believed to follow trends. This means that after a trend
has been established, the future price movement is more likely to be in the same direction as the
trend than to be against it. Most technical trading strategies are based on this assumption.
3. History Tends To Repeat Itself
Another important idea in technical analysis is that history tends to repeat itself, mainly in terms of
price movement. The repetitive nature of price movements is attributed to market psychology; in
other words, market participants tend to provide a consistent reaction to similar market stimuli over
time. Technical analysis uses chart patterns to analyze market movements and understand trends.
40
Although many of these charts have been used for more than 100 years, they are still believed to be
relevant because they illustrate patterns in price movements that often repeat themselves.
a)Types of Trend
There are three types of trend:
Uptrends
Downtrends
Sideways/Horizontal Trends As the names imply, when each successive peak and trough is
higher, it's referred to as an upward trend. If the peaks and troughs are getting lower, it's a
downtrend. When there is little movement up or down in the peaks and troughs, it's a
sideways or horizontal trend. If you want to get really technical, you might even say that a
sideways trend is actually not a trend on its own, but a lack of a well-defined trend in either
direction. In any case, the market can really only trend in these three ways: up, down or
nowhere. (For more insight, see Peak-And-Trough Analysis.)
b)Trendlines
A trendline is a simple charting technique that adds a line to a chart to represent the trend
in the market or a stock. Drawing a trendline is as simple as drawing a straight line that
follows a general trend. These lines are used to clearly show the trend and are also used in
the identification of trend reversals.
As you can see in Figure , an upward trendline is drawn at the lows of an upward trend. This
line represents the support the stock has every time it moves from a high to a low. Notice
how the price is propped up by this support. This type of trendline helps traders to
anticipate the point at which a stock's price will begin moving upwards again. Similarly, a
downward trendline is drawn at the highs of the downward trend. This line represents the
resistance level that a stock faces every time the price moves from a low to a high. (To read
more, see Support & Resistance Basics and Support And Resistance Zones - Part 1 and Part
2.
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c)Channels
A channel, or channel lines, is the addition of two parallel trendlines that act as strong areas
of support and resistance. The upper trendline connects a series of highs, while the lower
trendline connects a series of lows. A channel can slope upward, downward or sideways
but, regardless of the direction, the interpretation remains the same. Traders will expect a
given security to trade between the two levels of support and resistance until it breaks
beyond one of the levels, in which case traders can expect a sharp move in the direction of
the break. Along with clearly displaying the trend, channels are mainly used to illustrate
important areas of support and resistance.
Figure 6 illustrates a descending channel on a stock chart; the upper trendline has been
placed on the highs and the lower trendline is on the lows. The price has bounced off of
these lines several times, and has remained range-bound for several months. As long as the
price does not fall below the lower line or move beyond the upper resistance, the range-
bound downtrend is expected to continue.
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d)Support and resistance
Once you understand the concept of a trend, the next major concept is that of support and
resistance. You'll often hear technical analysts talk about the ongoing battle between the
bulls and the bears, or the struggle between buyers (demand) and sellers (supply). This is
revealed by the prices a security seldom moves above (resistance) or below (support).
As you can see in Figure, support is the price level through which a stock or market seldom
falls (illustrated by the blue arrows). Resistance, on the other hand, is the price level that a
stock or market seldom surpasses (illustrated by the red arrows).
Why Does it Happen?
These support and resistance levels are seen as important in terms of market psychology
and supply and demand. Support and resistance levels are the levels at which a lot of
traders are willing to buy the stock (in the case of a support) or sell it (in the case of
resistance). When these trendlines are broken, the supply and demand and the psychology
behind the stock's movements is thought to have shifted, in which case new levels of
support and resistance will likely be established.
Round Numbers and Support and Resistance
One type of universal support and resistance that tends to be seen across a large number of
securities is round numbers. Round numbers like 10, 20, 35, 50, 100 and 1,000 tend be
important in support and resistance levels because they often represent the major
psychological turning points at which many traders will make buy or sell decisions.
Buyers will often purchase large amounts of stock once the price starts to fall toward a
major round number such as $50, which makes it more difficult for shares to fall below the
level. On the other hand, sellers start to sell off a stock as it moves toward a round number
peak, making it difficult to move past this upper level as well. It is the increased buying and
43
selling pressure at these levels that makes them important points of support and resistance
and, in many cases, major psychological points as well.
Role Reversal
Once a resistance or support level is broken, its role is reversed. If the price falls below a
support level, that level will become resistance. If the price rises above a resistance level, it
will often become support. As the price moves past a level of support or resistance, it is
thought that supply and demand has shifted, causing the breached level to reverse its role.
For a true reversal to occur, however, it is important that the price make a strong move
through either the support or resistance.
For example, as you can see in Figure, the dotted line is shown as a level of resistance that
has prevented the price from heading higher on two previous occasions (Points 1 and 2).
However, once the resistance is broken, it becomes a level of support (shown by Points 3
and 4) by propping up the price and preventing it from heading lower again.
Many traders who begin using technical analysis find this concept hard to believe and don't
realize that this phenomenon occurs rather frequently, even with some of the most well-
known companies. For example, as you can see in Figure 3, this phenomenon is evident on
the Wal-Mart Stores Inc. (WMT) chart between 2003 and 2006. Notice how the role of the
$51 level changes from a strong level of support to a level of resistance.
44
In almost every case, a stock will have both a level of support and a level of resistance and
will trade in this range as it bounces between these levels. This is most often seen when a
stock is trading in a generally sideways manner as the price moves through successive peaks
and troughs, testing resistance and support.
The Importance of Support and Resistance
Support and resistance analysis is an important part of trends because it can be used to
make trading decisions and identify when a trend is reversing. For example, if a trader
identifies an important level of resistance that has been tested several times but never
broken, he or she may decide to take profits as the security moves toward this point
because it is unlikely that it will move past this level.
Support and resistance levels both test and confirm trends and need to be monitored by
anyone who uses technical analysis. As long as the price of the share remains between these
levels of support and resistance, the trend is likely to continue. It is important to note,
however, that a break beyond a level of support or resistance does not always have to be a
reversal. For example, if prices moved above the resistance levels of an upward trending
channel, the trend has accelerated, not reversed. This means that the price appreciation is
expected to be faster than it was in the channel.
Being aware of these important support and resistance points should affect the way that
you trade a stock. Traders should avoid placing orders at these major points, as the area
around them is usually marked by a lot of volatility. If you feel confident about making a
trade near a support or resistance level, it is important that you follow this simple rule: do
not place orders directly at the support or resistance level. This is because in many cases,
the price never actually reaches the whole number, but flirts with it instead. So if you're
bullish on a stock that is moving toward an important support level, do not place the trade
at the support level. Instead, place it above the support level, but within a few points. On
the other hand, if you are placing stops or short selling, set up your trade price at or below
the level of support.
e)What is Volume?
Volume is simply the number of shares or contracts that trade over a given period of time,
usually a day. The higher the volume, the more active the security. To determine the
movement of the volume (up or down), chartists look at the volume bars that can usually be
found at the bottom of any chart. Volume bars illustrate how many shares have traded per
period and show trends in the same way that prices do.
45
Why Volume is Important
Volume is an important aspect of technical analysis because it is used to confirm trends and
chart patterns. Any price movement up or down with relatively high volume is seen as a
stronger, more relevant move than a similar move with weak volume. Therefore, if you are
looking at a large price movement, you should also examine the volume to see whether it
tells the same story.
Say, for example, that a stock jumps 5% in one trading day after being in a long downtrend.
Is this a sign of a trend reversal? This is where volume helps traders. If volume is high during
the day relative to the average daily volume, it is a sign that the reversal is probably for real.
On the other hand, if the volume is below average, there may not be enough conviction to
support a true trend reversal. (To read more, check out Trading Volume - Crowd
Psychology.)
Volume should move with the trend. If prices are moving in an upward trend, volume should
increase (and vice versa). If the previous relationship between volume and price movements
starts to deteriorate, it is usually a sign of weakness in the trend. For example, if the stock is
in an uptrend but the up trading days are marked with lower volume, it is a sign that the
trend is starting to lose its legs and may soon end.
When volume tells a different story, it is a case of divergence, which refers to a

contradiction between two different indicators. The simplest example of divergence is a
clear upward trend on declining volume. (For additional insight, read Divergences,
Momentum And Rate Of Change.)
46
f)Technical Analysis: Chart Types
There are four main types of charts that are used by investors and traders depending on the
information that they are seeking and their individual skill levels. The chart types are: the
line chart, the bar chart, the candlestick chart and the point and figure chart. In the
following sections, we will focus on the S&P 500 Index during the period of January 2006
through May 2006. Notice how the data used to create the charts is the same, but the way
the data is plotted and shown in the charts is different.
Line Chart
The most basic of the four charts is the line chart because it represents only the closing
prices over a set period of time. The line is formed by connecting the closing prices over the
time frame. Line charts do not provide visual information of the trading range for the
individual points such as the high, low and opening prices. However, the closing price is
often considered to be the most important price in stock data compared to the high and low
for the day and this is why it is the only value used in line charts.
Bar Charts
The bar chart expands on the line chart by adding several more key pieces of information to
each data point. The chart is made up of a series of vertical lines that represent each data
point. This vertical line represents the high and low for the trading period, along with the
closing price. The close and open are represented on the vertical line by a horizontal dash.
The opening price on a bar chart is illustrated by the dash that is located on the left side of
the vertical bar. Conversely, the close is represented by the dash on the right. Generally, if
the left dash (open) is lower than the right dash (close) then the bar will be shaded black,
representing an up period for the stock, which means it has gained value. A bar that is
colored red signals that the stock has gone down in value over that period. When this is the
case, the dash on the right (close) is lower than the dash on the left (open).
47
Candlestick Charts
The candlestick chart is similar to a bar chart, but it differs in the way that it is visually
constructed. Similar to the bar chart, the candlestick also has a thin vertical line showing the
period's trading range. The difference comes in the formation of a wide bar on the vertical
line, which illustrates the difference between the open and close. And, like bar charts,
candlesticks also rely heavily on the use of colors to explain what has happened during the
trading period. A major problem with the candlestick color configuration, however, is that
different sites use different standards; therefore, it is important to understand the
candlestick configuration used at the chart site you are working with. There are two color
constructs for days up and one for days that the price falls. When the price of the stock is up
and closes above the opening trade, the candlestick will usually be white or clear. If the
stock has traded down for the period, then the candlestick will usually be red or black,
depending on the site. If the stock's price has closed above the previous day’s close but
below the day's open, the candlestick will be black or filled with the color that is used to
indicate an up day. (To read more, see The Art Of Candlestick Charting - Part 1, Part 2, Part 3
and Part 4.)
48
Point and Figure Charts
The point and figure chart is not well known or used by the average investor but it has had a
long history of use dating back to the first technical traders. This type of chart reflects price
movements and is not as concerned about time and volume in the formulation of the
points. The point and figure chart removes the noise, or insignificant price movements, in
the stock, which can distort traders' views of the price trends. These types of charts also try
to neutralize the skewing effect that time has on chart analysis. (For further reading, see
Point And Figure Charting.)
When first looking at a point and figure chart, you will notice a series of Xs and Os. The Xs
represent upward price trends and the Os represent downward price trends. There are also
numbers and letters in the chart; these represent months, and give investors an idea of the
date. Each box on the chart represents the price scale, which adjusts depending on the price
of the stock: the higher the stock's price the more each box represents. On most charts
where the price is between $20 and $100, a box represents $1, or 1 point for the stock. The
other critical point of a point and figure chart is the reversal criteria. This is usually set at
three but it can also be set according to the chartist's discretion. The reversal criteria set
how much the price has to move away from the high or low in the price trend to create a
new trend or, in other words, how much the price has to move in order for a column of Xs
to become a column of Os, or vice versa. When the price trend has moved from one trend
to another, it shifts to the right, signaling a trend changes.
Conclusion
Charts are one of the most fundamental aspects of technical analysis. It is important that
you clearly understand what is being shown on a chart and the information that it provides.
49
Now that we have an idea of how charts are constructed, we can move on to the different
types of chart patterns.
g)Technical Analysis: Chart Patterns
A chart pattern is a distinct formation on a stock chart that creates a trading signal, or a sign
of future price movements. Chartists use these patterns to identify current trends and trend
reversals and to trigger buy and sell signals.
In the first section of this tutorial, we talked about the three assumptions of technical
analysis, the third of which was that in technical analysis, history repeats itself. The theory
behind chart patters is based on this assumption. The idea is that certain patterns are seen
many times, and that these patterns signal a certain high probability move in a stock. Based
on the historic trend of a chart pattern setting up a certain price movement, chartists look
for these patterns to identify trading opportunities.
While there are general ideas and components to every chart pattern, there is no chart
pattern that will tell you with 100% certainty where a security is headed. This creates some
leeway and debate as to what a good pattern looks like, and is a major reason why charting
is often seen as more of an art than a science. (For more insight, see Is finance an art or a
science?)
There are two types of patterns within this area of technical analysis, reversal and
continuation. A reversal pattern signals that a prior trend will reverse upon completion of
the pattern. A continuation pattern, on the other hand, signals that a trend will continue
once the pattern is complete. These patterns can be found over charts of any timeframe. In
this section, we will review some of the more popular chart patterns. (To learn more, check
out Continuation Patterns - Part 1, Part 2, Part 3 and Part 4.)
Head and Shoulders
This is one of the most popular and reliable chart patterns in technical analysis. Head and
shoulders is a reversal chart pattern that when formed, signals that the security is likely to
move against the previous trend. As you can see in Figure 1, there are two versions of the
head and shoulders chart pattern. Head and shoulders top (shown on the left) is a chart
pattern that is formed at the high of an upward movement and signals that the upward
trend is about to end. Head and shoulders bottom, also known as inverse head and
shoulders (shown on the right) is the lesser known of the two, but is used to signal a reversal
in a downtrend.
50
Figure 1: Head and shoulders top is shown on the left. Head and shoulders bottom, or
inverse head and shoulders, is on the right.
Both of these head and shoulders patterns are similar in that there are four main parts: two
shoulders, a head and a neckline. Also, each individual head and shoulder is comprised of a
high and a low. For example, in the head and shoulders top image shown on the left side in
Figure 1, the left shoulder is made up of a high followed by a low. In this pattern, the
neckline is a level of support or resistance. Remember that an upward trend is a period of
successive rising highs and rising lows. The head and shoulders chart pattern, therefore,
51
illustrates a weakening in a trend by showing the deterioration in the successive movements
of the highs and lows. (To learn more, see Price Patterns - Part 2.)
Cup and Handle
A cup and handle chart is a bullish continuation pattern in which the upward trend has
paused but will continue in an upward direction once the pattern is confirmed.
As you can see in Figure 2, this price pattern forms what looks like a cup, which is preceded
by an upward trend. The handle follows the cup formation and is formed by a generally
downward/sideways movement in the security's price. Once the price movement pushes
above the resistance lines formed in the handle, the upward trend can continue. There is a
wide ranging time frame for this type of pattern, with the span ranging from several months
to more than a year.
Double Tops and Bottoms
This chart pattern is another well-known pattern that signals a trend reversal - it is
considered to be one of the most reliable and is commonly used. These patterns are formed
after a sustained trend and signal to chartists that the trend is about to reverse. The pattern
is created when a price movement tests support or resistance levels twice and is unable to
break through. This pattern is often used to signal intermediate and long-term trend
reversals.
52
In the case of the double top pattern, the price movement has twice tried to move above a
certain price level. After two unsuccessful attempts at pushing the price higher, the trend
reverses and the price heads lower. In the case of a double bottom, the price movement has
tried to go lower twice, but has found support each time. After the second bounce off of the
support, the security enters a new trend and heads upward.
53
Triangles
Triangles are some of the most well-known chart patterns used in technical analysis. The
three types of triangles, which vary in construct and implication, are the symmetrical
triangle, ascending and descending triangle. These chart patterns are considered to last
anywhere from a couple of weeks to several months.
The symmetrical triangle in Figure 4 is a pattern in which two trendlines converge toward
each other. This pattern is neutral in that a breakout to the upside or downside is a
confirmation of a trend in that direction. In an ascending triangle, the upper trendline is flat,
while the bottom trendline is upward sloping. This is generally thought of as a bullish
pattern in which chartists look for an upside breakout. In a descending triangle, the lower
trendline is flat and the upper trendline is descending. This is generally seen as a bearish
pattern where chartists look for a downside breakout.
Triple Tops and Bottoms

Triple tops and triple bottoms are another type of reversal chart pattern in chart analysis.
These are not as prevalent in charts as head and shoulders and double tops and bottoms,
but they act in a similar fashion. These two chart patterns are formed when the price
movement tests a level of support or resistance three times and is unable to break through;
this signals a reversal of the prior trend.
54
Confusion can form with triple tops and bottoms during the formation of the pattern
because they can look similar to other chart patterns. After the first two support/resistance
tests are formed in the price movement, the pattern will look like a double top or bottom,
which could lead a chartist to enter a reversal position too soon.
55
Charts
SBI technical chart
In the above chart we can see the patterns like head and shoulder, cup and
handle, triple bottom higher top and double bottom higher top. The trend of
SBI is uptrend.
56
ICICI technical chart
In the above chart we can see the patterns like head and shoulders, double
bottom higher top, double top lower bottom. The trend of ICICI is uptrend. In
the month of October, January and may due to buying volume the prices of the
share increased.
57
HDFC technical chart
In the above chart we can see the patterns like cup and handle, double
bottom higher top. We can see the trend has started moving upward
from January 2017. The buying volume in the month of January is the reason of
increase in price of the share.
58
Bank of Baroda technical chart
The share of Bank Of Baroda is volatile because the change in price moving
upward and downward is continuous. A trader can make short term profits by
properly analysing the technical chart.
59
Yes Bank technical chart
In the above chart we can see the patterns like double top lower bottom and
double bottom higher top. If a trader refers past technical charts of yes bank
he will find that the trend of yes bank is horizontal and the shares are highly
volatile.
60
Suggestion
 Short term trading involves the study of various parameters like trendlines, volume,
patterns etc. Traders who learn technical analysis can boost their financial status and
be more confident about their decisions.
 An investor can be able to minimize the risk associated with the stock trading by
holding a diversified stocks in their portfolio.
 To make profits in short period a trader should invest in the shares which are
volatile.
 A trader should follow the trend of the stock in which he wants to invest.
 A trader should also follow the past technical charts of shares because it is said the
history tends to repeat itself.
 Follow Bottom Up approach which means buy only on declines. Do not buy on up
move. Buy only small lots.
 Don’t trade without stop loss.
 Do not over trade.
 Do not trade on the basis of rumours.
Conclusion
If we compare the above five banks it will be more profitable for a trader to invest in Bank of
Baroda and Yes Bank because the stock of these banks are volatile.
61
Reference
www.sbi.co.in/portal/web/corporate-governance/annual-report
www.icicibank.com/aboutus/annual.page
www.hdfcbank.com/aboutus/cg/annual_reports.htm
http://www.bankofbaroda.co.in/annual-report.htm
www.yesbank.in/about-us/investors-relation/financial-information/annual-reports
economictimes.indiatimes.com › Markets › Stocks › Stock Price Quotes
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PROJECT REPORT

UNDER THE GUIDANCE OF

MR. I’ONARE KHARE

Wherever reference has been made to previous works of others, it has

I would like to thank my Principal, Prof. Purswani for providing the

I would also like to express my sincere gratitude towards my Project Guide

I would like to thank my College Library, for having provided various

5.5 Yes Bank

· To do the fundamental analysis of the selected banking companies

SCOPE OF THE STUDY

1. Price to Earnings Ratio

P/E ratio = Market Value per Share / Earnings per Share

2. Price to Book Value

3. Dividend Pay Out Ratio

Dividend payout ratio = Dividend / Net income

4. Dividend Per Share

Return On Equity = Net Income / shareholder’s Equity

Earning per Share = Net Income - preference dividend / No of shares outstanding

7. Net Profit Margin

Net Profit Margin = Net Profit After tax / Net Sales

Current Ratio = Current Assets / Current Liabilities

9. Return on Asset ratio

The formula for return on assets is:

10. Debt to equity ratio

Debt to equity ratio = Total debt / total Equity

NPA ratio = Net non-performing assets / Loans given

12 Capital Adequacy ratio

a)About the Bank:

b)Dividend declared of 5 years

Announcement Effective Dividend

19/05/2017 26/05/2017 Final 260% Rs.2.6000 per share(260%)Dividend

16/05/2016 03/06/2016 Final 260% Rs.2.6000 per share(260%)Dividend

22/05/2015 28/05/2015 Final 350% Rs.3.5000 per share(350%)Dividend

14/05/2014 29/05/2014 Final 150% Rs.15.0000 per share(150%)Dividend

Rs.15.0000 per share(150%)Interim

President of India 61.23%

Banks/FIs/Insurance Cos., etc 10.00%

Private corporate bodies 2.70%

Current ratio 17.15

Earning per share ratio 13.34

Price to Earning ratio 21.99

Price to Book value 1.54

Dividend per share 2.60

Dividend payout ratio (%) 20.11

Net profit margin (%) 5.36

Debt to equity ratio 1.69

Return on asset ratio (%) 0.41

Return on equity ratio (%) 7.25

NPA ratio 3.71

b)Dividend declared of 5 years

04/05/2017 20/06/2017 Final 125% Rs.2.5000 per share(125%)Dividend

29/04/2016 16/06/2016 Final 250% Rs.5.0000 per share(250%)Dividend

27/04/2015 04/06/2015 Final 250% Rs.5.0000 per share(250%)Dividend

FIIs, NRIs, Foreign Banks,

Banks & Financial Institutions

Current ratio 22.31

Earning per share ratio 16.84

Price to Earning ratio 17.02

Price to Book value 1.67

Dividend per share 2.50

Net profit margin (%) 18.09

Debt to equity ratio 1.48