Sudha Deepthi Project Work

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PROJECT REPORT

ON

INVESTMENT

IN

EQUITIES

CONDUCTED AT

ITI FINANCIAL SERVICES LIMITED

BY

D.SUDHA DEEPTHI

ROLL.NO: 2129-09-672-017

Submitted in partial fulfillment of award of Degree of

MASTER OF BUSINESS ADMINISTRATION

INFORMATION AND RESEARCH INSTITUTE OF AURORA,

MOOSARAMBAGH,HYDERABAD.

2009-2011.

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CERTIFICATE

This is to certify that the project entitled INVESTMENT IN EQUITIES IN ITI

FINANCIAL SERVICES LIMITED submitted to the Osmania University in

partial fulfillment for the award of degree ofMaster of Business Administration has

been carried out by MR K A JAYACHANDRA, Hall-Ticket Number2129-09-672-

017, who is a bonafide student of Information and Research Institute of

AURORA ,Moosarambagh, Hyderabad for the academic year 2009-11.

HEADOF THE

DEPARTMENT PRINCIPAL

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CERTIFICATE

This is to certify that the project report titled INVESTMENT IN EQUITIES IN

ITI FINANCIAL SERVICES LIMITED submitted in partial fulfillment

for the award of MBA Programme of Department of Business Management, Osmania

University, Hyderabad, was carried out by MR K A JAYACHANDRA, under my

guidance. This has not been submitted to any other university or institution for the

award of any degree / diploma / certificate.

Name and Address of the Guide Signature of the Guide

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DECLARATION

I hereby declare that this project report titled INVESTMENT IN

EQUITIES IN ITI FINANCIAL SERVICES LIMITED submitted

by me to the Department of Business Management, Osmania University,

Hyderabad, is a bonafide work undertaken by me and it is not submitted

to any other university or institution for the award of any degree /

diploma / certificate or published any time before.

Place:

Date:

MR K A JAYACHANDRA)

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ACKNOWLEDGEMENT

I express my gratitude to Mr. Shiva Kumar for giving me this opportunity to

carry out the project work on INVESTMENT IN EQUITIES in ITI Financial

services limited.

I also express my sincere thanks to the StaffOfITI Financial services limited.

who were of ready help in answering my various quires related to the project work.

It is with great pleasure that I Express my gratitude to Ms.Soumya, under

whose inspiring guidance and advice this study has been carried out.

MR K A JAYACHANDRA

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CONTENTS

Chapter no Name of the concept Page no

I Introduction 1-9

Objectives 10

Need of the study 10

Scope of the study 10

Research Methodology 11

Limitations 12

II Review of literature 13- 44

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III Industry profile 45-51

Roles and responsibilities 51

Key learnings 52

IV Data analysis and interpretation 53-71

V Summary 72-73

VI Suggestions 74-75

VII Conclusion 76-78

Bibliography 79-80

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Introduction

INTRODUCTION

Investment management once seemed a simple process. Well-heeled investors

would hold portfolios composed of stocks and bonds of blue chip industrial

companies, treasury bonds, notes and bills. The choices available to less well-off

investors were much more limited, confirmed primarily to passbook savings accounts.

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If the investment environment can be thought of as an ice cream parlor, then the

customers of past decades were offered only chocolate and vanilla.

Mirroring the diversity of modern society, the investment ice cream parlor

now makes available a myriad of flavors to the investing public. Investors face a

dizzying array of choices. The ability to purchase different securities has become both

less expensive and more convenient with the advent of advanced communications and

computer networks, along with the proliferating market for mutual funds that has

developed to serve large or small investors.

Investment environment encompasses the kinds of marketable securities that

exist and where and how they are bought and sold. Investment process is concerned

with how an investor should proceed in making decisions about what marketable

securities to invest in, how extensive the investments should be and when the

investments should made.

Investment means the sacrifice of current rupees for future rupees. Two different

attributes are involved time and risk. The sacrifice takes place in the present

and is certain. The reward comes later and the magnitude is uncertain. In some cases,

risk is the dominant attribute. These are two types of investments. They are:

1) Real Investments

2) Financial Investments

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Real investments involve some kind of tangible assets such as land,

machinery, factories.

Financial investments involve contracts written on pieces of paper such as

common stocks and bonds.

Investment in securities such as shares, debentures and bonds is profitable as wellas exciting, but it involves great deal of risk. Investing in financial securities isconsidered to be one of the best avenues for investing ones savings while it isacknowledged to be one of the most risky avenues of investment. Even Indiangovernment wants to encourage people in rural areas to invest in equities. Thiswill help the markets to stabilize by tapping the rural areas and decreases thedependency on foreign institutional investors.

NEED FOR THE STUDY

PURPOSE OF THE STUDY

The purpose of the study is to know about stock markets in India, how they

work, fundamental requirements before entering the stock market, how to enter the

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stock market, market design, stock selection, when to buy or sell a stock, how to

invest and knowing about market intermediaries.

OBJECTIVES OF THE STUDY

The objective of the study is to look into the scientific approach for selecting a

stock where Fundamental Analysis and Technical Analysis are looked into.

For that purpose the most happening banking sector was taken for study and

from that sector, two stocks were picked up and analyzed.

The study deals with analysis of performance of the company, share price

fluctuations and comparing it with another company from same sector.

The purpose of the study is to locate a stock which gives good returns with

minimum risk.

SCOPE OF THE STUDY

For the purpose of study, banking sector is selected. ICICI-(Industrial

Credit and Investment Corporation of India) and SBI-(STATE BANK OF

INDIA) are the two companies that are taken for analysis.

RESEARCH METHODLOGY

The following are the steps involved in the study:

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1. SELECTION OF THE SCRIP:

The scrip selection is done on random and the scrip selected is ICICI bank and

(SBI)-State bank of india.

2. DATA COLLECTION :

The data of the ICICI bank and SBI have been collected from Business line

and the internet. The data consist of the November 1st to Nov 30th.

3.ANALYSIS:

The analysis consists of the tabulation of the data assessing the profitability

positions of the equity buyer, representing the data with graphs and making the

interpretation using data.

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LIMITATIONS OF THE STUDY

The study is confined to only one sector.

All the limitations of Fundamental Analysis, Technical Analysis are

applicable to the study.

The factors which affect the markets and intangible are not considered.

Risk perception is considered to be moderate which may not be acceptable to

all.

The data for the study considered is of past two years, so analysis is restricted

to that period only.

In the application of Dow Theory, only daily price fluctuations were

considered due to time constraint.

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INTRODUCTION TO STOCKS

The first step for you to understand the stock market is to understand stocks.

A share of stock is the smallest unit of ownership in a company. If you own a

share of a companys stock, you are a part owner of the company.

You have the right to vote on members of the board of directors and other

important matters before the company. If the company distributes profits to

shareholders, you will likely receive a proportionate share.

One of the unique features of stock ownership is the notion of limited liability. If

the company loses a lawsuit and must pay a huge judgment, the worse that can

happen is your stock becomes worthless. The creditors cant come after your personal

assets. Thats necessarily true in private-held companies.

There are two types of stock:

Common stock

Preferred stock

Most of the stock held by individuals is common stock.

Common Stock:

Common stock represents the majority of stock held by the public. It has

voting rights, along with the right to share in dividends.

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Preferred Stock:

Despite its name, preferred stock has fewer rights than common stock, except

in one important are dividends. Companies that issue preferred stocks usually pay

consistent dividends and preferred stock has first call on dividends over common

stock.

Investors buy preferred stock for its current income from dividends, so look

for companies that make big profits to use preferred stock to return some of those

profits via dividends.

DEMAT ACCOUNT

What is Demat account and why it is required?

Securities and Exchange Board of India (SEBI) is a board (corporate body)

appointed by the Government of India in 1992 with its head office at Mumbai. Its one

of the function is helping the business in stock exchanges and any other securities

markets. Demat (short form of Dematerialization) is the process by which an investor

can get stocks (also called as physical certificates) converted into electronic form

maintained in an account with the Depository Participant (DP).

DP could be organizations involved in the business of providing financial

services like banks, brokers, financial institutions etc. DPs are like agents of

Depository.

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Depository is an organization responsible to maintain investor's securities

(securities can be stocks or any other form of investments) in the electronic form. In

India there are two such organizations called NSDL (National Securities Depository

Ltd.) and CDSL (Central Depository Services India Ltd.)

Investors wishing to open Demat account has to go DP and open the account.

Opening the Demat account is as simple as opening the bank account with any bank.

As we need bank account to save our money, make cheque payments etc, likewise we

need to open a demat account if we want to buy or sell stocks. All stocks what we

possess will show in our demat account. So we don't have to possess any physical

certificates. They are all held electronically in our demat account. As we buy and sell

the stocks, accordingly our stocks will get adjusted in our account.

Is a demat account must?

The market regulator, the Securities and Exchange Board of India (SEBI), has

made it compulsory to open the demat account if you want to buy and sell stocks.

So a demat account is a must for trading and investing.

How to start to open a Demat account?

We have to approach a DP to open a Demat account. Most banks are DP

participants so we may approach them.

A broker and a DP are two different people. A broker is a member of the stock

exchange, who buys and sells stocks on his behalf and also on behalf of his

customers.

Following are the documents required to open Demat account.

When we approach any DP, we will be guided through the formalities of

opening an account. The DP will ask to provide some documents as proof of our

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identity and address. Below is a list but we may not require all of them.

PAN card, Voter's ID, Passport, Ration card, Drivers license, Photo credit card

Employee ID card, IT returns, Electricity/ Landline phone bill etc.

Do we need any stocks to open a Demat account?

No. We need not need any stocks to open a demat account. A demat account

can be opened with no balance of stocks. And there is no minimum balance to be

maintained either. You can have a zero balance in your account.

How much it cost to open a Demat account?

The charges for account opening, annual account maintenance fees and

transaction charges vary between various DPs.

Finally After successfully opening the demat account, the DP will allot Beneficial

Owner Identification Number, which will be needed to mention for all our future

transactions.

If we want to sell our stocks, we need to place an order with our broker and

give a 'Delivery Instruction' to your DP. The DP will debit our account with the

number of stocks sold. We will receive the payment from our broker.

If we want to buy stocks, inform our broker about our Depository Account

Number, so that the stocks bought are credited into our account.

Points to remember while opening online accounta) Make multiple enquiries and try getting low brokerage trading and demattingaccount.

b) Also discuss about the margin they provide for day trading.c) Discuss about fund transfer. The fund transfer should be reliable and easy. Fundtransfer from our bank account to trading account and visa versa. Some online sharetrading account has integrated savings account which makes easy for us to transfer

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funds from our saving account to trading account.d) Very important is about service they provide, the research calls, intraday or dailytrading tips.e) Also enquire about their services charges and any other hidden charges if any.f) And also see how reliable and easy is to contact them in case if any emergency.

LiteratureReview

Investment process Fundamental

analysis

Technical analysis

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INVESTMENT PROCESS

Investment process describes how an investor should go about making

decisions with regard to what marketable securities to invest in, how extensive the

investment should be and when the investment should be made. An eight-step

procedure for making these decisions forms the basis for the investment process.

1) What is Investment

2) Understanding stocks

3) Finding a broker

4) Evaluation of stocks

5) Research tools

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6) Investing strategy

7) Investing technique

8) What moves the market

Step 1: What is investment?

Investing is making your money work for you without taking any more risks than

necessary for your comfort.

Investing is the proactive use of your money to make more money.

How to calculate Risk Premium?

Risk premium is what a stock should return over a risk-free investment. It is

your reward for taking a risk with your money.

Weak demand is the important factor in stock pricing:

Despite high crude oil prices, its weak demand for gasoline that holds back oil

stock prices. Supply and demand is an important factor in determining price of stocks.

Corrections are natural part of stock market cycle.

Dont be too conservative with stocks in retirement:

There is a danger you can be too conservative in your investment strategy as you

approach retirement dont back off stocks too soon.

Step 2: Understanding stocks

Stocks are the basic units of ownership in publicly traded companies. There are

two basic types of stocks.

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a. Common Stock: Common stock represents the majority of stock held by

the public. It has voting rights, along with the right to share in dividends.

b. Preferred Stock: Companies that issue preferred stocks usually pay

consistent dividends and preferred stock has first call on dividends over

common stock.

Bull and Bear stock markets are the two sides of same coin:

Bull and bear markets go together and are necessary for an efficient market.

Poll results show confidence in stocks:

The results of a poll on where the sensex be at the end of 2008 show stock

investors are positive.

Step 3: Finding a Broker

To decide which type of broker is right for you, you need to use these resources to

find the brokerage arrangement that best fits your needs.

Thirteen of the top online stock trading sites offer investors a wide variety of

services including research and advice.

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Brokers offer different levels of service. A broker fills in the gaps in knowledge

and experience.

Broker explains what types of accounts are available and how to open an account.

Financial advisers can map a blue print that will get you from where you are to

your financial goals.

Financial advisers come in a variety of flavors. Finding the one right for you

involves knowing how each is compensated and what they do.

The new year poses many challenges for stocks, including high oil prices, the

credit crisis, and a potential recession.

Stock prices are driven by the relationship between buyers and sellers. Attractive

stocks have more buyers than sellers, which drives up prices, while less attractive

stocks feel the reverse effect.

Step 4: Evaluating stocks for investment

Fundamental analysis relies on several tools to give investors an accurate

picture of the financial health of a company and how the market values the stock. The

following are the most popular tools of fundamental analysis. They focus on earnings,

growth, and value in the market.

a) Earnings per Share EPS

b) Price to Earnings Ratio P/E

c) Projected Earnings Growth PEG

d) Price to Sales P/S

e) Price to Book P/B

f) Dividend Payout Ratio

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g) Dividend Yield

h) Book Value

i) Return on Equity

Step 5: Research Tools

The internet is a gold mine of information, but youll need some tools to get to the

nuggets. Research tools make the job easier if you know where to find them and how

to use them.

The better stock screens offer similar characteristics that give you greater

flexibility when looking for investment candidates and eliminate other companies.

Stock screens will save time and help to build a thoughtful portfolio by focusing

on those companies that meet your investing requirements.

Stock screens can help any investor make better stock selections by reducing the

number of companies to research.

Dividend ratios can tell much about a stock and its future payout prospects.

One of the best sources of information on companies is free and as near as your

computer.

Step 6: Investing Strategies

What strategy to use as an investor? The different investment strategies and

how to develop personal investment strategy is explained below:

When and how to sell a winning stock?

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What makes the market rise or fall? Sometimes it seems to have a mind of its

own that reacts poorly to good news and with enthusiasm to bad news. One should

learn the factors that are the major influences on the markets and how to use this

information.

Basic steps in how stock trading works

Trade = Buy or Sell

To trade means to buy and sell in the jargon of the financial markets. How a

system that can accommodate one billion shares trading in a single day works is a

mystery to most people. No doubt, our financial markets are marvels of technological

efficiency.

We dont need to know all of the technical details of how to buy or sell stocks,

however it is important to have a basic understanding of how the markets work.

Important terms in stock market and in stock trading

Open - The first price at which the stock opens when market opens in the

morning.

High - The stock price reached at the highest level in a day.

Low - The stock price reached the lowest level in a day.

Close - The stock price at which it remains after the end of market timings or the final

price of the stock when the market closes for a day.

Volume - Volume is nothing but quantity.

Bid - The Buying price is called as Bid price.

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Offer - The selling price is called offer price.

Bid Quantity - The total number of stocks available for buying is called Bid

Quantity.

Offer Quantity - The total number of stocks available for selling is called Offer

Quantity.

Buying and selling of stocks - Buy is also called as demand or bid and selling is also

called as supply or offer. First selling and then buying (this only happens in day

trading) is called as shorting of stocks or short sell.

Stock Trading - Buying and Selling of stocks is called stock trading.

Transaction - One complete cycle of buying and selling of stocks is called One

Transaction.

Squaring off - This term is used to complete one transaction. Means if we buy then

we have to sell (means square-off) and if we sell then we have to buy (means square-

off).

Limit Order - In limit order the buying or selling price has to be mentioned and

when the stock price comes to that price then our order will get executed with the

mentioned price by us.

Market Order- When we put buy or sell price at market rate then the price get

executes at the current rate of market. The market order get immediately executed at

the current available price.

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Success Mantra

There are two steps to achieve success in the stock market.

1) How not to loose

When you learn what to do and what not to do in order to lose nothing means you

have won the half battle. Only then you can learn how to gain or what to do in order

to win. A new investor should do paper trading in order to get the market knowledge

before actually entering into the market.

2) How to gain

How to gain requires deep understanding about the market trends and fluctuations.

A new investor can take the route ofmutual fund.

The average person generally falls into one of two categories.

The first believe investing is a form of gambling; they are certain that if

you invest, you will more than likely end up losing your money.

The second category consists of those who know they should invest for

the long-run, but dont know where to begin.

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Their characteristics.

feel investing in some sort of black-magic that only a few people hold the

key to

they leave their financial decisions up to professionals

cannot tell you why they own a particular stock / mutual fund.

investment style is blind faith or limited to this stock is going up. We

should but it.

This group is in far more danger than the first. They invest like the

masses and then wonder why their results are mediocre [or in some cases,

devastating.

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FUNDAMENTAL ANALYSIS

To determine the intrinsic value of an equity share, the security analyst must forecast

the earnings and dividends expected from the stock and choose a discount rate which

reflects the riskiness of the stock. This is what is involved in fundamental analysis,

perhaps the most popular method used by investment professionals. The earnings

potential and riskiness of a firm are linked to the prospects of the industry to which it

belongs. The prospects of various industries, in turn, are largely influenced by the

developments in the macro economy.

Researchers have found that stock price changes can be attributed to the

following factors:

Economy-wide factors: 30-35 percent

Industry factors: 15-20 percent

Company factors: 30-35 percent

Others factors: 15-25 percent

Based on the above evidence, a commonly advocated procedure of

fundamental analysis involves a three-step examination, which calls for:

1) Understanding of the macro-economic environment and developments.

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The GDP growth rate represents the average of the growth rates of the three

principal sectors of the economy, viz. the services sector, the industrial sector and the

agricultural sector.

Publicly listed companies play a major role in the industrial sector but only a

minor role in the services sector and the agricultural sector. Hence stock market

analysts focus more on the industrial sector. They look at the overall industrial growth

rate as well as the growth rates of different industries. The higher the growth rate of

the industrial sector, other things being equal, the more favorable it is for the stock

market.

c) Agriculture and Monsoons

Agriculture accounts for about a quarter of the Indian economy and has important

linkages, direct and indirect, with industry. Companies using agricultural raw

materials as inputs or supplying inputs to agriculture are directly affected by the

changes in agricultural production. Other companies also tend to be affected due to

indirect linkages.

A spell of good monsoons imparts dynamism to the industrial sector and

buoyancy to the stock market. Likewise, a streak of bad monsoons casts its shadow

over the industrial sector and the stock market.

d) Savings and Investment

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expenditures over governmental revenues represents the deficit. While there are

several measures of deficit, the most popular measure is the fiscal deficit.

The fiscal deficit has to be financed with government a borrowing which is done

in three ways. First, the government can borrow from the Reserve Bank of India. This

leads to increase in money supply which has an inflationary impact on the economy.

Second, the government can resort to borrowing in domestic capital market. This

tends to push up domestic interest rates and crowd out private sector investment.

Third, the government may borrow from abroad.

Investment analysts examine the government budget to assess how it is likely to

impact on the stock market.

f) Money Supply

There are several definitions of money. The two more commonly used ones are:

M1 = currency with public + demand deposits with bank + other

deposits with RBI.

M3 = M1 + time deposits with banks

When we talk of money supply, we usually refer to M3. The growth rate of M3 in

India has been around 15 percent per year. This growth can be explained by three

factors in the main: growth in the real economy, monetization of a portion of

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deficit financing and financial deepening of the economy. Monetization of a

portion of deficit financing means the RBI buys the securities issued by the

government.

g) Price Level and Inflation

The price level measures the degree to which the nominal rate of growth in GDP

is attributable to the factor of inflation. The effect of inflation on the corporate sector

tends to be uneven. While certain industries may benefit, others tends to suffer.

Industries that enjoy a strong market for their products and which do not come under

the purview of price control may benefit. On the whole, it appears that a mild level of

inflation is good for the stock market.

h) Interest Rate

Interest rates vary with maturity, default risk, inflation rate, and productivity of

capital and so on. The interest rates on money market instruments which are virtually

risk free tend to be the lowest. Long dated government securities generally carry

slightly higher interest rates. Corporate debentures which have some default risk

associated with them carry still higher interest rates.

A rise in interest rates depresses corporate profitability and also leads to an

increase in the discount rate applied by equity investors, both of which have an

adverse impact on stock prices.

i) Foreign Investment

Foreign investment in India comes in two forms: foreign direct investment and

foreign portfolio investment. The former represents investment for setting up new

projects and hence is long term in nature; the latter is in the form of purchase of

outstanding securities in the capital market and hence can be reversed easily.

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j) Infrastructural Facilities and Arrangements

Infrastructural facilities and arrangements significantly influence industrial

performance. More specifically, the following are important:

Adequate and regular supply of electric power at a reasonable tariff.

A well-developed transportation and communication system.

An assured supply of basic industrial raw materials like steel, coal, petroleum

products and cement.

Responsive financial support for fixed assets and working capital.

a) Sentiments

The sentiments of consumers and businessmen can have an important bearing on

economic performance. Higher consumer confidence leads to higher expenditure on

big ticket items. Higher business confidence gets translated into greater business

investment that has a stimulating effect on the economy. Thus, sentiments influence

consumption and investment decisions and have a bearing on the aggregate demand

for goods and services.

A. INDUSTRY ANALYSIS

The objective of industry analysis is to assess the prospects of various industrial

groupings. It is almost impossible to forecast exactly which industrial groupings will

appreciate the most. Yet careful analysis can suggest which industries have a brighter

future than others and which industries are plagued with problems that are likely to

persist for a while.

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Industrial analysis is divided into three parts namely,

I. Industry life cycle analysis

II.Structure and characteristics of an industry

III.Profit potential of industries: Porter model.

I.Industry Life Cycle Analysis

Many industrial economists believe that the development of almost every

industry may be analyzed in terms of a life cycle with four well-defined

stages:

a. Pioneering Stage

b. Rapid Growth Stage

c. Maturity and Stabilization Stage

d. Decline Stage

a. Pioneering Stage: During this stage, the technology and or the product is

relatively new. Lured by promising prospects, many entrepreneurs enter this field.

As a result, there is keen, and often chaotic, competition. Only a few entrants may

survive this stage.

b. Rapid Growth Stage: Once the period of chaotic developments is over, the rapid

growth stage arise. Firms which survive the intense competition of the pioneering

stage, witness significant expansion in their sales and profits.

c. Maturity and Stabilization Stage: During this stage, when the industry is more

or less fully developed, its growth rate is comparable to that of the economy as a

whole.

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d. Decline Stage: With the satiation of demand, encroachment of new products, and

changes in consumer preferences, the industry enters the decline stage, relative to

the economy as a whole. In this stage, the industry may grow slightly during

prosperous periods, stagnate during normal periods and decline during

recessionary periods.

The experience of most industries suggests that they go through the 4

phases of the industry life cycle though there are considerable variations in terms

of the relative duration of various stages and the rates of growth during these

stages.

I.Structure and Characteristics of an Industry

Since each industry is unique, a systematic study of its specific features and

characteristics must be an integral part of the investment decision process. Industry

analysis should focus on the following:

a. Structure of the industry and nature of competition:

The number of the firms in the industry and market share of

the top few firms in the industry.

Licensing policy of the government.

Entry barriers, if any.

Pricing policies of the firm.

Differentiation among products.

Competition from foreign firms.

b. Nature and prospects of demand:

Major customers and their requirements.

Key determinants of demand.

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Degree of cyclicality in demand.

Expected rate of growth in the foreseeable future.

c. Cost, efficiency and profitability:

Proportions of the key cost elements raw materials, labor,

utilities and fuel.

Productivity of labor.

Turnover of inventory, receivables and fixed assets.

Control over prices of outputs and inputs.

Gross profit, operating profit and net profit margins.

Return on assets, earning power and return on equity.

d. Technology and research:

Degree of technological stability.

Important technological changes on the horizon and their

implications.

Research and development outlays as a percentage of

industry sales.

Proportion of sales growth attributable to new products.

II.Profit Potential of Industries: Porter Model

Michael Porter has argued that the profit potential of an industry

depends on the combined strength of the following five basic competitive

forces:

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a. Threat of new entrants

b. Rivalry among the existing firms

c. Pressure from substitute products

d. Bargaining power of buyers

e. Bargaining power of sellers

Following figure shows the forces that drive competition and

determine industry profit potential:

a. Threat of new entrance

New entrants add capacity, inflate costs, push prices down, and reduce

profitability. If an industry faces the threat of new entrants, its profit potential would

be limited. The threat of new entrants is low if the entry barriers confer an advantage

on existing firms and deter new entrants. Entry barriers are high when:

The new entrants have to invest substantial resources to enter the industry.

Economies of scale are enjoyed by the industry.

Existing firms control the distribution channels, benefit from product

differentiation in the form of brand image and customer loyalty.

Switching costs these are essentially onetime cost of switching from the

products of one supplier to another-are high.

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a. Rivalry between existing firms

Firms in an industry compete on the basis of price quality, promotion, service,

warranties, and so on if the rivalry between the firms in an industry is strong,

competitive moves and counter moves dampen the average profitability of the

industry. The intensity of rivalry in an industry tends to be high when:

The number of competitors in an industry is large.

At least a few firms are relatively balanced and capable of engaging in a

sustained competitive battle.

The industry growth is sluggish, prodding firms to strive for a higher market

share.

There is chronic over capacity in the industry.

The industry confronts high exit barriers.

a. Pressure from substitute products

All firms in an industry face competition from industries producing substitute

products. Substitute products may limit a profit potential of the industry by imposing

a ceiling on the prices that can be charged by the firms in the industry. The threat

from substitute products is high when:

The price- performance trade off offered by the substitute products is

attractive.

The switching costs for prospective buyers are minimal

The substitute products are being produced by industries earning superior

profits.

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a. Bargaining power of buyers

Buyers are competitive force. They can bargain for price cut, ask for superior

quality and better service and induce rivalry among competitors. If they are powerful,

they can depress the profitability of the supplier industry. The bargaining power of a

buyer group is high when:

Its purchases are large relative to the sales of the seller.

Its switching costs are low.

It poses a strong threat of back ward integration.

a. Bargaining power of suppliers:

Suppliers can exert a competitive force in an industry as they can raise prices,

lower quality and curtail the range of free services they provide. Suppliers have strong

bargaining power when;

There is hardly any viable substitute for the products supplied.

Few suppliers dominate and the supplier group is more concentrated than the

buyer group.

The switching cost for the buyers is high.

Suppliers do present a real threat of forward integration.

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A. COMPANY ANALYSIS

Company analysis is concerned with fundamental analysis of equity shares.

Fundamental analysts take two somewhat different approaches in their search for

mispriced securities. The first approach involves estimating the intrinsic value and

comparing the same with the prevailing market price to determine whether the

security is underpriced or fairly priced or overpriced. The second approach

involves estimating a securitys expected return, given its current price and

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intrinsic value, and then comparing it with the appropriate return for securities

with similar characteristics.

Company analysis is the last leg in the economy-industry-company

analysis sequence. It may be organized into two parts (a) a study of financials, and

(b) a study of other factors.

Investment analysts start with a historical analysis of earning (and dividends),

growth, risk, and valuation and use company analysis as a foundation for

developing the forecasts required for estimating the intrinsic value.

TECHNICAL ANALYSIS

Technical analysis is radically different from fundamental analysis. While the

fundamental analyst believes that the market is 90 percent logical and 10 percent

psychological, the technical analyst assumes that it is 90 percent psychological and 10

percent logical. Technical analysts dont evaluate a large number of fundamental

factors relating to the company, the industry and the economy. Instead, they analyze

internal market data with the help of charts and graphs. Subscribing to the castles-in-

the-air approach, they view the investment game as an exercise in anticipating the

behavior of market participants. They look at charts to understand what the market

participants have been doing and believe that this provides a basis for predicting

future behavior.

The technical approach is the oldest approach to equity investment, dating

back to the late 19th century. It continues to flourish in modern times as well. As an

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investor, we will often encounter technical analysis because newspapers cover it,

television programmes routinely call technical experts for their comments, and

investment advisory services circulate technical reports. Technical analysis can be

applied to commodities, currencies, bonds, and equity stocks, our studies are

restricted to equity stocks.

Technical analysis involves a study of market generated data like prices and

volumes to determine the future direction of price movement.

Martin J. Pring explains: The technical approach to investing is essentially a

reflection of the idea that prices move in trends which are determined by the changing

attitudes of investors toward a variety of economic, monetary, political and

psychological forces. The art of technical analysis--for it is artis to identify trend

changes at an early stage and to maintain an investment posture until the weight of the

evidence indicates that the trend has been reversed.

THE DOW THEORY

Originally proposed in the late nineteenth century by Charles H. Dow, the

editor of the Wall Street Journal, the Dow Theory is perhaps the oldest and best

known theory of technical analysis.

In the words of Charles Dow:

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The market is always considered as having three movements, all going at the

same time. The first is the narrow movement from day to day. The second is the short

swing, running from two weeks to a month or more; the third is the main movement,

covering at least four years in its duration.

Proponents of the Dow Theory refer to the three movements as: (a) daily

fluctuations that are random day-to-day wiggles; (b) secondary movements or

corrections that may last for a few weeks to some months; and (c) primary trends

representing bull and bear phases of the market.

An upward primary trend represents a bull market, whereas a downward

primary trend represents a bear market. A major upward move is said to occur when

the high point of each rally is higher than the low point of the preceding decline.

Likewise, a major downward move is said to occur when the high point of each rally

is lower than the low point of the preceding decline.

The secondary movements represent technical correction. They represent

adjustments to the excesses that may have occurred in the primary movements. These

movements are considered quite significant in the application of the Dow Theory.

The daily fluctuations are considered to be minor significance. Even zealous

technical analysts do not usually try to forecast day-to-day movements in the market.

Bar and Line Charts

The bar chart, one of the simplest and most commonly used tool of technical

analysis, depicts the daily price range along with the closing price. In addition, it may

show the daily volume of transactions. The upper end of each bar represents the days

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More complex than a bar chart, a point and figure chart (PFC) has the following

features:

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CompanyProfile

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COMPANY PROFILE

ITIFSL-(INVESTMENT TRUST OF INDIA) is emerging as one of the topmost wealth management companies in India with a daily turnover of over 200 crores

and 116 branches spread all over the country. ITIFSL, originally promoted by the

Investment Trust of India, is now a part of the Sharyans and Inga Group. The

Sharyans Group has an impressive portfolio of businesses under its fold which mainly

fall under the real estate and financial services categories. The prominent subsidiaries

of this Group are Prebone Yamane (Countrys largest debt broking company), Intime

Spectrum (Indias largest Registry & Transfer Agents), and Collin Stewarts India

Private Limited (Portfolio Management Services & Research along with institutional

broking operations for Collin Stewarts which is the largest wealth management

company in the UK). Under the guidance of the Sharyans and Inga Group, ITIFSL

will soon touch the pinnacles of success in the financial services industry by being a

dominant force in the broking as well as the distribution arena. With an unblemished

and reputed track record, ITIFSL is all set become an imposing wealth management

firm in the country by giving the best to its clients as well as stakeholders.

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ITI FSL has been set up to engage in

Stock Broking

Institutional Broking

Derivatives

Depository Services

Distribution of Investment Products

Distribution of Insurance

Commodities Broking

Headquartered in Chennai, ITI FSL has a growing network of offices across

several states to ensure easy accessibility to our clients wherever they are. ITIFSL has

over 116 Branch Offices spread across the country to offer better reach and service to

the investor. The company currently marks its presence in the following regions:

Andhra Pradesh

Delhi

Karnataka

Maharashtra

Madhya Pradesh

Tamil Nadu

West Bengal

Mission:

ITI FSL's mission is to deliver value with commitment. Emerging as one ofthe front-line Brokerage Houses and a dominant force in the Distribution arena,

we are continuously engaged in the assessment of market conditions to balance

risk and reward so as to optimize returns to our investors.

Vision:

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"To be the most Preferred Financial Advisor, Creator, Wealth Manager and to

deliver the Highest Standards of Service to customers and be Prominent in the

horde of Finance Companies offering similar services".

Why ITIFSL?

ITIFSLs services are offered under total confidentiality and integrity with the

sole purpose of maximizing returns for their clients.

Equity Broking - Corporate Member of The Stock Exchange, Mumbai (BSE) and

National Stock Exchange of India Ltd. (NSE).

Pan India reach - 380 terminals spread across 75 different locations, in semi

urban, urban and metropolitan areas.

More than 100,000 retail clients serviced from the above locations

ITIFSL have heavily invested in technology (customized and ready to use

software) involving front and back end operations offering seamless process and

flawless execution and raising our service levels.

ITIFSL operate on an alert and well-defined system in risk management and

settlement mechanism

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OFFERINGS

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ADVANTAGES TO INVESTERS:

Why you need a financial planner?

The financial planner is someone who can help you invest across investment avenuesbased on your risk profile and investment objectives. Post-investment, he monitorsyour investments and ensures that you are on course to achieve your investmentobjectives. If necessary, he suggests changes to your financial plan so that you areable to achieve your investment objectives as planned.

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Given the critical inputs provided by the financial planner in helping you achieveyour financial goals, it is important that you select the right financial planner. Here

are the reasons why ITI is the right planner for youCertification/Membership

More than anything else, this is a pre-requisite from the compliance point of view.Your financial planner should be certified and registered as a broker or mutual fundagent with NSE, BSE, AMFI etc. ITI FSL has Trading and Clearing Membershipswith major Stock Exchanges in India to offer broking services across marketsegments at all of the National-level Exchanges. ITI FSL is a Depository Participantwith CDSL. We also have memberships with commodity exchanges. We have AMFIcertified professionals to advice you on mutual funds.

Competence

Gone are the days when financial planning simply required delivering applicationforms. The traditional "one-size fits all" approach is pass.

With the increasing list of investment avenues on offer, selecting the one that suitsyou the best is becoming a challenge. To that end, competence and skill set are the

basic criteria that investors should look for in an investment planner.

With ITI fine staff of professionals, you can be sure that you will get the best adviceand service to achieve your financial goals. Furthermore, the recommendationsoffered by ITI are backed by solid research.

Value-add services

In addition to financial planning, ITI provides related, value-add services that canassist you in the investment process. On-line tools and calculators are some of ourmore popular value-add services. These tools can help you keep track of yourinvestments. These value-add services form an integral part of our offering.

One-stop shop

Every individual has different needs and the same undergo a change over a period oftime. The financial planner should be capable enough to understand these needs andoffer suitable products to fulfill them. For this purpose, ITI provides you with the

entire range of investment products from stocks, mutual funds, bonds to fixeddeposits. In other words, we offer a "one-stop" solution for all your investment needs.

Accessibility

One of the common complaints from investors is that their financial planner isunavailable/inaccessible and therefore unable to provide adequate/prompt service.This is particularly common in a one-man setup where the financial planner's services

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begin and end with him, with little or no backup.

If the financial planner is preoccupied with some important clients or if he re-locates,it leaves you in a soup because your financial plan is in limbo. It is best to go with afinancial planning initiative that is run by teams (as opposed to one-man setups) toensure continuity of your financial plan. ITI has a team of professionals who are everready to serve you at any point of time. We are spread across the country so that youcan have access to us always

KEY LEARNINGS IN THE ORGANIZATION

EQUITY

FUTURES

OPTIONS

COMMODITIES

IPO

MUTUAL FUNDS

SIP

TAX SAVING SCHEMES IN INDIA

ONLINE AND OFFLINE TRADING

PORTFOLIO MANAGEMENT

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Data

Analysis

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ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the

National Stock Exchange of India Limited and its American Depositary Receipts

(ADRs) are listed on the New York Stock Exchange (NYSE).

History:

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,

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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 Ahmadabad 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.

Board of Directors :

ICICI Bank's Board members include eminent individuals with a wealth of experience

in international business, management consulting, banking and financial services

Director's Profiles

Chanda KochharManaging Director and Chief Executive Officer

N.S. Kannan K. Ramkumar Rajiv SabharwalExecutive Director & CFO Executive Director Executive Director

Board Members:

Mr. K. V. Kamath, Chairman

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Mr. Sridar Iyengar

Mr. Homi R. Khusrokhan

Dr. Anup K. Pujari

Mr. M.S. Ramachandran

Dr. Tushaar Shah

Mr. M.K. Sharma

Mr.V.Sridar

Mr. V. Prem Watsa

Ms.C handa D .Kochhar,

Managing Director & CEO

Mr.N.S.Kannan,

Executive Director & CFO

Mr.K.Ramkumar,

Executive Director

Mr.Rajiv S abharwal,

Executive Director

Investor Relations:

All the latest, in-depth information about ICICI Bank's financial performanceand business initiatives.

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http://www.icicibank.com/aboutus/board-of-members-iyengar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-homi.htmlhttp://www.icicibank.com/aboutus/board-of-members-pujari.htmlhttp://www.icicibank.com/aboutus/board-of-members-ramachandran.htmlhttp://www.icicibank.com/aboutus/board-of-members-tushaar.htmlhttp://www.icicibank.com/aboutus/board-of-members-sharma.htmlhttp://www.icicibank.com/aboutus/board-of-directors-sridhar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-sridhar.htmlhttp://www.icicibank.com/aboutus/board-of-members-watsa.htmlhttp://www.icicibank.com/aboutus/board-of-directors-kochhar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-kochhar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-kochhar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-kannan.htmlhttp://www.icicibank.com/aboutus/board-of-directors-kannan.htmlhttp://www.icicibank.com/aboutus/board-of-directors-ramkumar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-ramkumar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-rajiv-sabharwal.htmlhttp://www.icicibank.com/aboutus/board-of-directors-rajiv-sabharwal.htmlhttp://www.icicibank.com/aboutus/board-of-directors-rajiv-sabharwal.htmlhttp://www.icicibank.com/aboutus/board-of-members-iyengar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-homi.htmlhttp://www.icicibank.com/aboutus/board-of-members-pujari.htmlhttp://www.icicibank.com/aboutus/board-of-members-ramachandran.htmlhttp://www.icicibank.com/aboutus/board-of-members-tushaar.htmlhttp://www.icicibank.com/aboutus/board-of-members-sharma.htmlhttp://www.icicibank.com/aboutus/board-of-directors-sridhar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-sridhar.htmlhttp://www.icicibank.com/aboutus/board-of-members-watsa.htmlhttp://www.icicibank.com/aboutus/board-of-directors-kochhar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-kochhar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-kannan.htmlhttp://www.icicibank.com/aboutus/board-of-directors-kannan.htmlhttp://www.icicibank.com/aboutus/board-of-directors-ramkumar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-ramkumar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-rajiv-sabharwal.htmlhttp://www.icicibank.com/aboutus/board-of-directors-rajiv-sabharwal.html


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ICICI Bank disseminates information on its operations and initiatives on a

regular basis. The ICICI Bank website serves as a key investor awareness

facility, allowing stakeholders to access information on ICICI Bank at their

convenience. ICICI Bank's dedicated investor relations personnel play a

proactive role in disseminating information to both analysts and investors and

respond to specific queries.

BALANCE SHEET AS AT MARCH 31, 2010

PARTICULARS As atMarch

31, 2010Rs.in crores

As atMarch 31, 2009

Rs. in crores

SOURCES OF FUNDS:

Share Capital11148.89 11132.90

Share warrants and outstanding0.00 0.00

Total reserve505034.77 484197.29

Deposits2020165.97 2183478.25

Borrowings942635.69 931554.54

Other liabilities and provisions155011.83 182646.64

TOTAL LIABILITIES

3633997.15

3793009.62

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APPLICATION OF FUNDS:

Cash and balance with reserve bankof india 275142.92 175363.94

Balance with banks and money at calland short notice

113594.02 124302.30

Investments1208928.01 1030583.08

Advances1812055.97 2183108.49

(a) Gross Block71141.15 74437.06

(b) Less:- Accumulated Depreciation

39014.25 36420.85

Less: impairment of assets0 0

(c) Net Block32126.90 38016.21

Lease adjustment 0 0

(d) Capital Work-in-Progress0 0

OTHER ASSETS

3633997.15

3793009.62

Contingent liability

7270840.59

8346830.03

Bills of collection

64749.54

60004.38

CASH FLOW STATEMENT(Rs. in Million)

Year ended March 31,

2010 2009

Net profit before tax 53453.22 51169.69

Adjustments for expenses and provisions 52409.07 55240.66

Adjustments for liabilities and assets -71184.82 -232835.55

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Cash flow from investing activities 61507.32 38578.81

Cash flow from financing activities 13826.17 16253.59

Effect of exchange fluctuation on translation reserve -4954.30 6306.85

Net increase (decrease) in cash and cash equivalents 94025.60 -87052.50

Cash and cash equivalents at 1st April 299665.64 280411.29

Cash and cash equivalents at 31st march 388736.94 299665.64

APPLICATION OF DOW THEORY:

DATE CLOSING PRICE1st-Nov 1243.47

2nd-Nov 1250.79

3rd-Nov 1258.15

4th-Nov 1274.50

5th-Nov 1285.02

8th-Nov 1274.50

9th-Nov 1279

10thNov 1271.52

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11thNov 1267.04

12thNov 1240.55

15thNov 1243.4716thNov 1242.01

18th-Nov 1210.35

19th-Nov 1168.47

22ndNov 1197.63

23rdNov 1175.34

24th-Nov 1173.97

25th-Nov 1158.90

26th-Nov 1156.19

29th-Nov 1164.36

30th-Nov 1157.54

INFERENCE:The above graph represents the daily fluctuations in the market which is one of themajor proponent in Dow Theory. It is difficult to forecast day-to-day movements inthe market. In the above 15 days of trading, the share price of ICICI was highest on

5th

Nov.- Rs.1285.02 and the lowest was on 25th

Nov. Rs. 1156.19.

DATE CLOSINGPRICE

SUM OF THREEYEARS

AVERAGE

1st-Nov 1243.47

2nd-Nov 1250.79 3752.41 1250.80

3rd-Nov 1258.15 3783.44 1261.14

4th-Nov 1274.50 3817.67 1272.55

5th-Nov 1285.02 3834.02 1278

8th-Nov 1274.50 2550.52 850.17

9th-Nov 1279 3817.56 1272.52

10thNov 1271.52 3779.11 1259.70

11thNov 1267.04 3751.06 1250.35

12thNov 1240.55 3726.03 1242.01

15thNov 1243.47 3695.83 1231.94

16thNov 1242.01 3620.83 1206.94

18th-Nov 1210.35 3576.45 1192.15

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19th-Nov 1168.47 3541.44 1180.48

22ndNov 1197.63 3546.94 1182.31

23rd

Nov 1175.34 3508.21 1169.4024th-Nov 1173.97 3489.06 1163.02

25th-Nov 1158.90 3479.45 1159.81

26th-Nov 1156.19 3478.09 1159.36

29th-Nov 1164.36

30th-Nov 1157.54

INFERENCES:

A 15-day moving average of daily prices may be used to detect a short term trend.

This stock price line stands as an indicator to an investor whether to buy the share or

to sell it. In the above 15-day average the highest 3-year moving average is on 05 th

Nov.

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STATE BANK OF INDIA:

Company Profile:

The evolution of State Bank of India can be traced back to the first decade of the 19thcentury. It began with the establishment of the Bank of Calcutta in Calcutta, on 2 June1806. The bank was redesigned as the Bank of Bengal, three years later, on 2 January1809. It was the first ever joint-stock bank of the British India, established under thesponsorship of the Government of Bengal. Subsequently, the Bank of Bombay(established on 15 April 1840) and the Bank of Madras (established on 1 July 1843)followed the Bank of Bengal. These three banks dominated the modern bankingscenario in India, until when they were amalgamated to form the Imperial Bank ofIndia, on 27 January1921

State Bank of India is an India-based bank. In addition to banking, theCompany, through its subsidiaries, provides a range of financial services, whichinclude life insurance, merchant banking, mutual funds, credit card, factoring,security trading, pension fund management and primary dealership in the moneymarket. It operates in four business segments: Treasury, Corporate/WholesaleBanking, Retail Banking and Other Banking Business. The Treasury segmentincludes the investment portfolio and trading in foreign exchange contracts and

derivative contracts. The Corporate/Wholesale Banking segment comprises thelending activities of Corporate Accounts Group, Mid Corporate Accounts Group andStressed Assets Management Group. The Retail Banking segment consists of

branches in National Banking Group, which primarily includes personal bankingactivities, including lending activities to corporate customers having banking relationswith branches in the National Banking Group.

History:An important turning point in the history of State Bank of India is the launch of thefirst Five Year Plan of independent India, in 1951. The Plan aimed at serving theIndian economy in general and the rural sector of the country, in particular. Until thePlan, the commercial banks of the country, including the Imperial Bank of India,confined their services to the urban sector. Moreover, they were not equipped torespond to the growing needs of the economic revival taking shape in the rural areasof the country. Therefore, in order to serve the economy as a whole and rural sector in

particular, the All India Rural Credit Survey Committee recommended the formationof a state-partnered and state-sponsoredbank.

The All India Rural Credit Survey Committee proposed the take over of the ImperialBank of India, and integrating with it, the former state-owned or state-associate

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banks. Subsequently, an Act was passed in the Parliament of India in May 1955. As aresult, the State Bank of India (SBI) was established on 1 July 1955. This resulted inmaking the State Bank of India more powerful, because as much as a quarter of theresources of the Indian banking system were controlled directly by the State. Later on,the State Bank of India (Subsidiary Banks) Act was passed in 1959. The Act enabledthe State Bank of India to make the eight former State-associated banks as itssubsidiaries.

The State Bank of India emerged as a pacesetter, with its operations carried out by the480 offices comprising branches, sub offices and three Local Head Offices, inheritedfrom the Imperial Bank. Instead of serving as mere repositories of the community'ssavings and lending to creditworthy parties, the State Bank of India catered to theneeds of the customers, by banking purposefully. The bank served the heterogeneousfinancial needs of the planned economic development.

INVESTOR RELATIONS :

State Bank of India, the countrys largest commercial Bank in terms of profits, assets,deposits, branches and employees, welcomes you to its Investors Relations Section.SBI, with its heritage dating back to the year 1806, strives to continuously providelatest and up to date information on its financial performance. It is our endeavour towalk on the path of transparency and allow complete access to all the stakeholdersenabling total awareness about the Bank. The Bank communicates with the

stakeholders through a variety of channels, such as through e-mail, website,conference call, one-on-one meeting, analysts meet and attendance at InvestorConference throughout the world.

Please find below Banks financial results, analysis of performance and otherhighlights which will be of interest to Investors, Fund Managers and Analysts. SBIhas always been fundamentally strong in its core business which is mirrored in itsresults year after year.

Board of directors:

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Branches :

The corporate centre of SBI is located in Mumbai. In order to cater to differentfunctions, there are several other establishments in and outside Mumbai, apart fromthe corporate centre. The bank boasts of having as many as 14 local head offices and57 Zonal Offices, located at major cities throughout India. It is recorded that SBI hasabout 10000 branches, well networked to cater to its customers throughout India.

ATMServices:

SBI provides easy access to money to its customers through more than 8500 ATMs inIndia. The Bank also facilitates the free transaction of money at the ATMs of StateBank Group, which includes the ATMs of State Bank of India as

Well as the Associate Banks State Bank of Bikaner & Jaipur,State Bank of Hyderabad,State Bank of Indore, etc.

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1 Mr. P Bhatt Chairman / Chair Person

2 Dr.Ashok Jhunjhunwala Director

3 Dr.(Mrs.)Vasantha BharuchaDirector

4 Mrs.Shyamala GopinathDirector

5 Mr.S VenkatachalamDirector

6 Mr.Ashok ChawlaDirector

7 Mr.D SundaramDirector

8 Mr.Dileep C ChoksiDirector

9 Dr.Rajiv Kumar Director

10 Mr.R SridharanManaging Director


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You may also transact money through SBI Commercial and International Bank Ltdby using the State Bank ATM-cum-Debit (Cash Plus) card.

Subsidiaries :

The State Bank Group includes a network of eight banking subsidiaries and severalnon-banking subsidiaries. Through the establishments, it offers various servicesincluding merchant banking services, fund management, factoring services, primarydealership in government securities, credit cards and insurance.

The eight banking subsidiaries are:

State Bank of Bikaner and Jaipur (SBBJ)

State Bank of Hyderabad (SBH)

State Bank of India (SBI)

State Bank of Indore (SBIR)

State Bank of Mysore (SBM)

State Bank of Patiala (SBP)

State Bank of Saurashtra (SBS)

State Bank of Travancore (SBT)

Personal Banking :

SBI Term Deposits SBI Loan For Pensioners

SBI Recurring Deposits Loan Against Mortgage Of Property

SBI Housing Loan Against Shares & Debentures

SBI Car Loan Rent Plus Scheme

SBI Educational Loan Medi-Plus Scheme

Other Services :

Agriculture/Rural Banking

NRI Services

ATM Services

Demat Services

Corporate Banking

Internet Banking

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Mobile Banking

International Banking

Safe Deposit Locker

RBIEFT

E-Pay

E-Rail

SBI Vishwa Yatra Foreign Travel Card

Broking Services

Gift Cheques

BALANCE SHEET AS AT MARCH 31, 2010

PARTICULARS As at

March31, 2010

Rs.in crores

As at

March 31, 2009Rs. in crores

SOURCES OF FUNDS:

Share Capital6348.83 6348.80

Share warrants and outstanding0.00 0.00

653143.16 573128.16

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Total reserve

Deposits

8041162.27 7420731.28

Borrowings1030116.01 840579.29

Other liabilities and provisions803367.04 9644320.81

TOTAL LIABILITIES

10534137.31

9644320.81

APPLICATION OF FUNDS:

Cash and balance with reserve bankof india

612908.65 555461.73

Balance with banks and money at calland short notice 348929.76 488576.26

Investments2857900.71 2759539.57

Advances6319141.52 5425032.04

(a) Gross Block

118316.27

104030.58

(b) Less:- Accumulated Depreciation

77141.07

68310.06

Less: impairment of assets

0

0

(c) Net Block 41175.20

35720.52

Lease adjustment

2.03

23.57

(d) Capital Work-in-Progress 2951.842634.37

Other assets 351127.60 377332.74

Total assets 10534137.31 9644320.81

Contingent liability 5484468.85 7236997.57

Bills of collection

479223.28

438705.67

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3rd-Nov 3294.58

4th-Nov 3462.86

5th-Nov 3501.028th-Nov 3511.50

9th-Nov 3347.52

10thNov 3297.86

11thNov 3255.42

12thNov 3178.50

15thNov 3184.84

16thNov 3197.56

18th-Nov 3115.79

19th-Nov 3069.57

22ndNov 3060.4123rdNov 3015.02

24th-Nov 2979.18

25th-Nov 2894.33

26th-Nov 2920.40

30th-Nov 3000.03

INFERENCE:The above graph represents the daily fluctuations in the market which is one of themajor proponent in Dow Theory. It is difficult to forecast day-to-day movements inthe market. In the above 15 days of trading, the share price of ICICI was highest on5th Nov.- Rs.3501.02 and the lowest was on 25th Nov. Rs. 2894.33.

DATE CLOSINGPRICE

SUM OF THREEYEARS

AVERAGE

1st-Nov 3223.15

2nd-Nov 3245.71 9763.44 3254.48

3rd-Nov 3294.58 10003.15 3334.38

4th-Nov 3462.86 10258.46 3419.48

5th-Nov 3501.02 10475.38 3491.79

8th-Nov 3511.50 10360.04 3453.34

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9th-Nov 3347.52 10156.88 3385.62

10thNov 3297.86 9900.8 3300.26

11thNov 3255.42 9731.78 3243.9212thNov 3178.50 9618.76 3206.25

15thNov 3184.84 9560.9 3186.96

16thNov 3197.56 9498.19 3166.06

18th-Nov 3115.79 9382.92 3127.64

19th-Nov 3069.57 9245.77 3081.92

22ndNov 3060.41 9145 3048.33

23rdNov 3015.02 9054.61 3018.20

24th-Nov 2979.18 8888.53 2962.84

25th-Nov 2894.33 8793.91 2931.30

26th-Nov 2920.40 8814.76 2938.2530th-Nov 3000.03

INFERENCES:

A 15-day moving average of daily prices may be used to detect a short term trend.

This stock price line stands as an indicator to an investor whether to buy the share or

to sell it. In the above 15-day average the highest 3-year moving average is on 05 th

Nov.

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Summary

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SUMMARY

Investing in financial securities is now considered to be one of the best

avenues for investing ones savings while it is acknowledged to be one of the most

risky avenues of investment. Even Indian Government is planning to encourage

people in rural areas to invest in equity. This will help the markets to stabilize by

tapping the rural areas and decreases the dependency on Foreign Institutional

Investors.

The factors which were studied under this are to know about stock markets in

India, how they work, prerequisites to enter the stock markets, market design, stock

selection, when to buy or sell a stock, how to invest, knowing about market

intermediaries.

For successful investment factors like timing, selection, setting targets,

avoiding speculation and constant review of portfolio is advised.

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FINDINGSFrom the above analysis, it is found that:

ICICI has the worlds best way of delivering banking services and investment

options.ICICI has worldwide branches Due to this, its services are of world

class.Total assets of company have shown an 4.19 percent increase in FY 2009-

2010.

SBI has recorded an 9.22 percent of increase in its total assets.

In comparison to ICICI and SBI share price analysis, it is found out that SBI has

the highest share price value because of its wide spread coverage of market.

If the stock price line falls below the moving average line, the investor should

purchase the stock because the intrinsic value is more than the market price. That

means that is undervalued.

If the stock price line rises above the moving average line, the investor should sell

the stock as the intrinsic value is more than the market price. Therefore, the stock

is overvalued.

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Suggestions

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SUGGESTIONS

Suggestions to an investor for reaping good returns in Equity Investment

Proper scientific way of investigation should be undertaken about sector and

its players before investment

Clear targets should be set before investment

Stock pickup should be always selective and should not depend on rumors of

the market

Define price range first before buying and selling shares

Before buying and selling shares latest price movement trends should be

analyzed

Speculation is not advised in the market

Individual Risk tolerance should be known and then be ready for unexpected

Constant proper review of portfolio should be done and wherever required

buying and selling of shares should be done.

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Conclusions

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CONCLUSIONS

Economic liberalization has accelerated the pace of development in the securities

market. In India, the role of securities market has undergone structural transformation

with the introduction of computerized online trading and interconnected market

system.

Investment in securities such as shares, debentures and bonds is profitable, but

also involves great deal of risk. Even Indian Government wants to encourage Equity

Investment.

According to Fundamental Analysis:

Economy:

While analyzing stock, investor should consider GNP, Price conditions, Economy,

Housing, Construction Activity, Employment, Accumulation of inventories, Personal

Disposable Income, Personal savings, Interest rates, Balance of Trade, Strength of the

Rupee in Forex market and Corporate Taxation (Direct and Indirect)

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Sector Analysis:

It is advised to invest in a sector that is either in a pioneering stage or in its expansion

stage. It is advisable to quickly get out of sectors which are in the stagnation stage

prior to its lapse into the decline stage. The particular phase or stage of a sector can be

determined in terms of sales, profitability and their growth rates amongst other

factors.

Company Analysis:

In company analysis, history of the company and line of business, Product portfolios

strength, Market share, Top Management, Intrinsic Values like Patents and

Trademarks held, Foreign collaboration, its need and availability for future, Quality of

competition in the market, present and future, Future business plans and projects,

Level of trading of the companys listed scrip, EPS, its growth and rating vis--vis

other companies in the industry, P/E Ratio, Growth in Sales are analyzed.

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According to technical analysis:

The fundamental analysis is the determination of price based on future earnings;

where as the price of a security represents a consensus. The price at which an investor

is willing to buy or sell depends primarily on his expectations. For this purpose

technical analysis also forms a strong tool in analyzing a company where the price

movements are recorded in charts and analyzed.

Bibliography

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BIBILIOGRAPHY

BOOKS REFFERED:

Security Analysis and Portfolio Management

- Prasanna Chandra.

Investments

- William, Sharpe

WEBSITES:

www.about.stocks.com

www.nseindia.com

www.buzzingstocks.com

www.moneycontrol.com

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http://www.about.stocks.com/http://www.nseindia.com/http://www.buzzingstocks.com/http://www.moneycontrol.com/http://www.about.stocks.com/http://www.nseindia.com/http://www.buzzingstocks.com/http://www.moneycontrol.com/


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Sudha Deepthi Project Work

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