A

PROJECT REPORT
ON

FUNDAMENTAL ANALYSIS

OF SELECTED

PSU BANKS
IN

GLOBE CAPITAL MARKET LTD.

SUBMITTED TO UNIVERSITY OF PUNE
IN PARTIAL FULFILMENT OF TWO YEARS FULL TIME
COURSE OF MASTERS IN BUSINESS ADMINISTRATION
(MBA)
SUBMITTED BY
Mr. NIKESH GOLANI
UNDER THE GUIDANCE OF
Prof. AISHWARYA PRABHU
SINHGAD INTITUTE OF MANAGEMENT AND COMPUTER
APPLICATION

Batch: 2012-2014

DECLARATION

DECLARATION

I, the undersigned, hereby declare that the Project Report entitled Fundamental Analysis
of selected PSU Banks written and submitted by me to the University of Pune, Pune in
partial fulfilment of the requirements for the award of degree of Master of Business
Administration under the guidance of Mrs. Aishwarya Prabhu is my original work and the
conclusions drawn therein are based on the material collected by myself.

Place: Pune

(Nikesh Golani)

Date:

Research Student

GUIDES CERTIFICATE

CERTIFICATE

This is to certify that the Project Report entitled Fundamental Analysis of Selected
PSU Banks which is being submitted herewith for the award of the degree of Master of
Business Administration University of Pune, Pune is the result of the original research
work completed by Mr. Nikesh Golani under my supervision and guidance and to the
best of my knowledge and belief the work embodied in this Project Report has not formed
earlier the basis for the award of any degree or similar title of this or any other University
or examining body.

Project Guide

Director

(Mrs. Aishwarya Prabhu)

Marathe

Dr. Milind

CONTENT PAGE

CONTENTS
SR NO.

TITLE

PAGE NO.

ACKNOWLEDGEMENT

LIST OF TABLES

LIST OF FIGURES

EXECUTIVE SUMMARY

INTRODUCTION

9-24

COMPANYS PROFILE

25-32

RESEARCH DESIGN AND METHODOLOGY

33-35

DATA PRESENTATION, ANALYSIS &

INTERPRETATION

36-82

FINDINGS AND SUGGESTIONS

83-86

10

CONCLUSION

87

11

BIBLIOGRAPHY

88

ACKNOWLEDGEMENT

I am extremely thankful to Mr. Prafull Ramteke (Senior Relationship Manager) Globe Capital
Market Pvt. Ltd, Pune for giving me a golden chance to complete this project and guiding me
by giving valuable suggestions at all stage.
I am also thankful to my Project Co-ordinator Mrs. Aishwarya Prabhu for her guidance and
encouragement in taking up this project work and completing it in a planned way.
I am really thankful to Globe Capital Market Ltd, Pune for giving me the permission to
carry out my summer internship in their esteemed organisation.
I want to express my deep sense of gratitude to the management and staff of Globe Capital
Market Ltd., for the support, cooperation and briefings they provided during the internship to
make it a success.

Thank you.
Yours Sincerely,
(Nikesh Golani)

LIST OF TABLES

LIST OF TABLES
Table No.

Title of the Table

Page No.

Table No. 1.1

Table No. 1.2
Table No. 4.1
Table No. 4.2
Table No. 4.3
Table No. 4.4
Table No. 4.5
Table No. 4.6
Table No. 4.7
Table No. 4.8
Table No. 4.9
Table No. 4.10
Table No. 4.11
Table No. 4.12
Table No. 4.13
Table No. 4.14
Table No. 4.15
Table No. 4.16
Table No. 4.17
Table No. 4.18
Table No. 4.19
Table No. 4.20
Table No. 4.21
Table No. 4.22
Table No. 4.23
Table No. 4.24

BSE STOCK LIST

NSE STOCK LIST
SHARE HOLDING PATTERN OF SBI
BALANCE SHEET OF SBI
NET WORTH OF SBI
PROFIT AND LOSS ACCOUNT OF SBI
TOTAL INCOME OF SBI
TOTAL EXPENSES OF SBI
NET PROFIT OF SBI
KEY FINANCIAL RATIOS OF SBI
SHARE HOLDING PATTERN OF IDBI
BALANCE SHEET OF IDBI
NET WORTH OF IDBI
PROFIT AND LOSS ACCOUNT OF IDBI
TOTAL INCOME OF IDBI
TOTAL EXPENSES OF IDBI
NET PROFIT OF IDBI
KEY FINANCIAL RATIOS OF IDBI
SHARE HOLDING PATTERN OF BOI
BALANCE SHEET OF BOI
NET WORTH OF BOI
PROFIT AND LOSS ACCOUNT OF BOI
TOTAL INCOME OF BOI
TOTAL EXPENSES OF BOI
NET PROFIT OF BOI
KEY FINANCIAL RATIOS OF BOI

19
20
39
40
41
42
43
44
45
46
54
55
56
57
58
59
60
61
69
70
71
72
73
74
75
76

LIST OF FIGURES

Figure No. 4.1

Figure No. 4.2
Figure No. 4.3
Figure No. 4.4
Figure No. 4.5
Figure No. 4.6
Figure No. 4.7
Figure No. 4.8
Figure No. 4.9
Figure No. 4.10
Figure No. 4.11
Figure No. 4.12
Figure No. 4.13
Figure No. 4.14
Figure No. 4.15
Figure No. 4.16
Figure No. 4.17
Figure No. 4.18
Figure No. 4.19
Figure No. 4.20
Figure No. 4.21
Figure No. 4.22
Figure No. 4.23
Figure No. 4.24
Figure No. 4.25
Figure No. 4.26
Figure No. 4.27
Figure No. 4.28
Figure No. 4.29
Figure No. 4.30

LIST OF FIGURES
NET WORTH OF SBI
TOTAL INCOME OF SBI
TOTAL EXPENSES OF SBI
NET PROFIT OF SBI
P/E RATIO
ADVANCES TO DEPOSIT RATIO
ROE
CAPITAL ADEQUACY RATIO
NET INTEREST MARGIN
NET NPA RATIO
NET WORTH OF IDBI
TOTAL INCOME OF IDBI
TOTAL EXPENSES OF IDBI
NET PROFIT OF IDBI
P/E RATIO
ADVANCES TO DEPOSIT RATIO
ROE
CAPITAL ADEQUACY RATIO
NET INTEREST MARGIN
NET NPA RATIO
NET WORTH OF BOI
TOTAL INCOME OF BOI
TOTAL EXPENSES OF BOI
NET PROFIT OF BOI
P/E RATIO
ADVANCES TO DEPOSIT RATIO
ROE
CAPITAL ADEQUACY RATIO
NET INTEREST MARGIN
NET NPA RATIO

41
43
44
45
47
48
49
50
51
52
56
58
59
60
62
63
64
65
66
67
71
73
74
75
77
78
79
80
81
82

EXECUTIVE SUMMARY

Fundamental analysis is the study of economic and company related factors that will
influence share price. Fundamental analysis of a business involves analyzing its financial
statements and health, its management and competitive advantages, and its competitors and
markets.

The Project is concern with the Fundamental Analysis of selected PSU Banks. The project
included as part of MBA Program and the project is done from 14th May to 14th July in
Globe Capital Market Limited.

The main object of the study is to understand the concept of fundamental analysis and study
the public sector banks present in Indian stock market and also to find the best investment for
investors. It is important to understand the performances of the companies through
fundamental analysis with the help of various ratios financial statements.

Research type was exploratory. The research was done through the financial statements and
ratios which are collected by the secondary data like internet, news, newspaper, etc.

The data analysis has been done by bank capitalization wise. It gives idea about the
fundamentals of the banks. It gives information regarding their market share.

By analyzing the ratios of all the three PSU Banks SBI was found fundamentally strong to
invest than the other two PSU Banks.

It was concluded that SBI has a high potential in the market and it is investors preference in
regards for buying in Share.

CHAPTER I

INTRODUCTION

INTRODUCTION

Fundamental analysis is the study of economic and company related factors that will
influence share price. Fundamental analysis of a business involves analyzing its financial
statement s and health, its management and competitive advantages and its competitors and
markets. When applied to futures and forex, it focuses on the overall state of economy,
interest rates, production, earnings and management when analyzing a stock, futures contract,
or currency using fundamental analysis there are two basic approaches one can use: bottom
up analysis and top down analysis. The term is used to distinguish such as analysis from other
types of investment analysis, such as Quantitative analysis and technical analysis.
Fundamental analysis is about using real data to evaluate a securitys value. Although most
analysts use fundamental analysis to value stocks, this method of valuation can be used for
just about any type of security. Fundamental analysis is performed on historical and present
data but with the goal of making financial forecast, there are several possible objectives;
To conduct a company stock valuation and predict its probable price evolution,
To make a projection on its business performance.
To evaluate its management and make internal business decisions,
To calculate its credit risk.

When the objective of the analysis is to determine what stock to buy and at what price, there
are two basic methodologies

1. Fundamental analysis maintains that may misprice a security in the short run but that the
correct price will eventually be reached. Profits can be made by purchasing the mispriced
security and then waiting for the market to recognize its mistake and re price the security.

2. Technical analysis maintains that all information is reflected all tread in the stock price.
Investor emotional responses to price movement lead to recognizable price chart technical
analysis does not care what the value of stock is

10

Fundamental analysis is the process of looking at the business at the basic or fundamental
financial level this type of analysis examine key ratio of business to determine its financial
health and gives you idea of f the value its stock .

Many investors use f fundamental analysis alone or in combination with other tools to
evaluate stock for investment purpose the goal is to determine current worth and more
importantly the market value the stock.

These are most popular tools for the Fundamental analysis they focus on earning, growth and
value in the market. .
It discusses related ratios.
1. Profit Earning Ratio- P/E
2. Advances to deposit ratio
3. Return on Equity- ROE
4. Capital adequacy Ratio
5. Net Interest Margin
6. NPA margin.

11

BANKING SECTOR ANALYSIS

Banking sector in India:

Currently overall, banking in India is considered as fairly mature in terms of supply, product
range and reach-even though reach in rural India still remains a challenge for the private
sector and foreign banks. Even in terms of quality of assets and capital adequacy, Indian
banks are considered to have clean, strong and transparent balance sheets- as compared to
other banks in comparable economies in its region. The Reserve Bank of India is an
autonomous body, with minimal pressure from the government. The stated policy of the Bank
on the Indian Rupee is to mange volatility-without any stated exchange rate and this has
mostly been true.

With the growth in the Indian economy expected to be strong for quite some time especially
in its services sector, the demand for banking services-especially retail banking, mortgages
and investment services are expected to be strong.

This is the first time an investor has been allowed to hold more than 5% in a private sector
bank since the RBI announced norms in 2005 that any stake exceeding 5% in the private
sector banks would need to be vetted by them.

Currently, India has 88 Scheduled Commercial Banks (SCBs) 28 public sector banks, 29
private banks (these do not have government stake; they may be publicly listed and traded on
stock exchanges) and 31 foreign banks.

They have a combined network of over 53,000 branches. According to a report by ICRA
Limited, a rating agency, the public sector banks hold over 75 percent of total assets of the
banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively.

12

About Public Sector Banks:

The shares undertaken here for the analysis belongs to the banking industry. All the firms
herein mention are from the public sector. This means that all the banks are Public Sector
Undertaking (PSUs).

A Public sector undertaking is a wherein the majority of the stake is with either the state or
the central government. A better word instead of stake can be control, i.e. either the control is
in the hands of the state government or the central government. We can see in each of the
bank that the majority of the shares are held by the promoters that is the government.
Nationalized of the banks took place on 19th July, 1969. Initially fourteen banks were
nationalized. Later on six more banks were added to the list. At present nineteen banks are
under the public sector.

The government had contributed an aggregated of Rs. 20,446.12 crore towards

recapitalization of the nationalized banks by the end of March 1999. The government of India
decided to allow some of the public sector banks to tap directly the domestic capital markets.
In order to enable the nationalized banks to access the capital markets to strengthen their
capital base and meet the capital adequacy norms. The authorized capital of each of the
public sector banks was been set at Rs.1500 crore, dividend into 150 crore fully paid up share
of Rs.10 each. The Oriental Bank of Commerce was the first nationalized bank to have access
to the capital markets. It raised a sum of Rs.387.24 crore in October 1994, reducing the
government shareholding to 66.5%.

In this way all the public sector banks came down to the capital market as and when required.
The government share holding is still the highest in all the public sector banks though all the
banks have bought their IPOs to the market.

13

Why Public Sector Banks?

A Public sector undertaking is a wherein the majority of the stake is with either the state or
the central government. A better word instead of stake can be control, i.e. either the control is
in the hands of the state or central government. We can see in each of the bank that majority
of the shares are held by the promoters that is the government.
The public sector banks are one of the major sources of finance for small, medium as well as
large firms. These banks are very important from the point of deposit mobilization. The
public sector banks are those which have a strong network of branches and they have reached
the remote areas of the country. For e.g. the state bank of India has a great network of
branches and ATMs. SBI is the largest bank of the country and is an agent of the Reserve
Bank of India.

The public sector is a great source for fund mobilization and asset allocation. The banks
considered herein are the banks that have highest market capitalization among the Public
Sector Banks of the banking industry.

14

THEORITICAL BACKGROUND

STOCK INDUSTRY
There are 23 stock exchanges in India, the first being the Bombay Stock Exchange
(BSE), which began formal trading in 1875, making it one of the oldest in Asia. Over the last
few years, there has been rapid change in the Indian securities market, especially in the
secondary market. Advanced technology and online-based transactions have modernized the
stock exchanges.
In terms of the number of companies listed and total market capitalization, the
Indian equity market is considered large relative to the companys stage of economic
development. The number of listed companies increased from 5,968 in March 1990 to about
10,000 by May 1998 and market capitalization has grown almost 11 times during the same
period.

Role of Stock Market

Stock exchanges have multiple roles in Indian economy. This may include the
following:
1. Raising capital for businesses
2. Mobilizing savings for investment
3. Facilitating company growth
4. Profit sharing
5. Corporate governance
6. Creating investment opportunities for small investors
7. Government capital-raising for development projects
8. Barometer of the economy

15

BOMBAY STOCK EXCHANGE:

Bombay Stock Exchange, commonly referred to as the BSE, (Bombay hareBzar) is a
stock exchange located on Dalal Street, Mumbai, and Maharashtra, India. It is the 10 th largest
stock exchange in the world by market capitalization. Established in 1875, BSE Ltd.
(formerly known as Bombay Stock Exchange Ltd.), is Asias first Stock Exchange and one of
Indias leading exchange groups. Over the past 137 years, BSE has facilitated the growth of
the Indian corporate sector by providing it an efficient capital-raising platform. Popularly
known as BSE, the bourse was established as The Native Share & Stock Brokers
Association in 1875. BSE is a corporatized and demutualised entity, with a broad
shareholder-base which includes two leading global exchanges, Deutsche Bourse and
Singapore Exchange as strategic partners.
BSE provides an efficient and transparent market for trading in equity, debt
instruments, derivatives, mutual funds. It also has a platform for trading in equities of smalland-medium enterprises (SME). Around 5000 companies are listed on BSE making it worlds
No. 1 exchange in terms of listed members.

The S&P BSE SENSEX (S&P Bombay Stock Exchange Sensitive Index), also-called
the BSE 30 or simply the SENSEX, is a free float market capitalization weighted stock
market index of 30 well-established and financially sound companies listed on BSE Ltd. The
30 component companies which are some of the largest and most actively traded stocks are
representative of various industrial sectors of the Indian economy. Published since 1 January
1986, the S&P BSE SENSEX is regarded as the pulse of the domestic stock markets in India.
The base value of the S&P BSE SENSEX is taken as 100 on 1 April 1979, and its base year
as 197879. On 25 July 2001 BSE launched DOLLEX-30, a dollar-linked version of S&P
BSE SENSEX. As of 21 April 2011, the market capitalization of S&P BSE SENSEX was
about 29,733 billion (US$511 billion) (47.68% of market capitalization of BSE), while its
free-float market capitalization was 15,690 billion (US$270 billion).
It operates one of the most respected capital market educational institutes in the
country (the BSE Institute Ltd.). BSE also provides depository services through its Central
Depository Services Ltd. (CDSL) arm.

16

NATIONAL STOCK EXCHANGE:

The National Stock Exchange of India was set up by Government of India on the
recommendation of Pherwani Committee in 1991. Promoted by leading Financial Institution
essentially led by IDBI at the behest of the Government of India, it was incorporated in
November 1992 as a tax-paying company. In April 1993, it was recognized as a Stock
Exchange under the Securities Contracts (Regulation) Act, 1956. NSE commenced operations
in the Wholesale Debt Market (WDM) segment in June 1994. The Capital Market (Equities)
segment of the NSE commenced operations in November 1994, while operations in the
Derivatives segment commenced in June 2000

The CNX Nifty, also called the Nifty 50 or simply the Nifty, is a stock market index and
benchmark index for Indian equity market. Nifty is owned and managed by India Index
Services and Products Ltd (iisl), which is a joint venture between NSE and CRISIL (Credit
Rating and Information Services of India Ltd). IISL is India's first specialized company
focused upon the index as a core product. IISL has marketing and licensing agreement with
standard and poors for co-branding equity indices. 'CNX' in its name stands for 'CRISIL
NSE Index'.

CNX Nifty has shaped up as the largest single financial product in India, with an ecosystem
comprising: exchange traded funds (onshore and offshore), exchange-traded futures and
options (at NSE in India and at SGX and CME abroad), other index funds and OTC
derivatives (mostly offshore).

The CNX Nifty covers 22 sectors of the Indian Economy and offers investment managers
exposure to the Indian market in one portfolio. The CNX Nifty stocks represent about
67.27% of the free float market capitalization of the stocks listed at National Stock Exchange
(NSE) as on September 30, 2012.

The CNX Nifty index is a free float market capitalization weighted index. The index was
initially calculated on full market capitalization methodology. From June 26, 2009, the
17

computation was changed to free float methodology. The base period for the CNX Nifty
index is November 3, 1995, which marked the completion of one year of operations of NSE's
Capital Market Segment. The base value of the index has been set at 1000, and a base capital
of Rs 2.06 trillion. The CNX Nifty Index was developed by Ajay Shah and Susan Thomas.
The CNX Nifty currently consists of the following 50 major Indian companies

BSE STOCK LIST WITH THEIR WEIGHTAGE

TABLE NO. 1.1
SR NO.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.

COMPANIES
ITC
Reliance Industries
HDFC
HDFC Bank
ICICI Bank
Infosys
TCS
Larsen & Toubro
ONGC
Hindustan Unilever
Tata Motors
SBI
Mahindra & Mahindra
Sun PharmaInds
BhartiAirtel
NTPC
Dr Reddys Lab
Bajaj Auto
Wipro
Maruti Suzuki
Cipla
Coal India
Tata Steel
Hero Motocorp
BHEL
GAIL India
Tata Power
Hindalco
SterliteInds
Jindal Steel & Power

WEIGHTAGE
11.13
8.91
7.91
7.71
7.71
7.17
5.17
4.89
4.05
3.90
3.46
3.43
2.76
2.45
2.39
1.88
1.66
1.59
1.26
1.21
1.20
1.16
1.14
0.98
0.95
0.92
0.83
0.83
0.75
0.61

18

NSE STOCK LIST WITH THEIR WEIGHTAGE:

TABLE NO. 1.2
SR NO.
1.

COMPANIES
Tata Consultancy Services Ltd

2.

Reliance industries

3.

Oil & gas corporation

4.

Coal India Ltd

WEIGHTAGE
7.09
6.78
6.65
6.10

5.

ITC
5.51

6.

SBI
4.32

7.

Infosys
4.11

8.

HDFC
3.70

9.

NTPC
3.68

10.

BhartiAirtel
3.38

11.

Hindustan liver

12.

ICICI Bank

13.

Wipro

14.

Housing development finance corporation

15.

Larsen &toubro

16.

Tata Motors

17.

Cairn India

2.86
2.83
2.83
2.81
2.39
2.20
1.78
19

18.

Sun Pharmaceuticals Industries

1.77

19.

Bharat Heavy Electricals

1.56

20.

Power Grid Corporation of India

1.44

21.

Bajaj auto
1.31

22.

Kotak Mahindra Bank

1.26

23.

Axis Bank
1.25

24.

GAIL
1.24

25.

Mahindra & Mahindra

1.21

26.

Jindal steel and power

27.

Tata Steel

28.

Steel Authority of India

29.

Hero MotoCorp

30.

Asian Paints

31.

Sterlite Industries

32.

Hcl technologies

1.19
1.16
1.14
1.13
1.08
0.99
0.98
33.

DLF
0.96

34.

Maruti Suzuki india

0.93

35.

Bank of baroda
0.86

36.

Punjab National Bank

0.80

37.

DrReddys Laboratories
0.77

38.

Bharat Petroleum Corporation

0.76

39.

Ambuja cements

40.

Cipla

0.73
0.71

20

SR NO.

COMPANIES

WEIGHTAGE

41.

Siemens

0.68

42.

Hindalco industries

0.68

43.

Tata Power Company

0.65

44.

ACC

0.64

45.

Grasim industries

0.63

46.

IDFC

0.59

47.

Ranbaxy Laboratories

0.59

48.

Sesa Goa

0.47

49.

Jaiprakash associates

0.43

50.

Reliance Infrastructure

0.39

21

PRIMARY MARKET:
The primary market is that part of the capital markets that deals with the issuance of new
securities. Companies, governments or public sector institutions can obtain bonds through the
sale of a new stock or bond issue. This is typically done through a syndicate [disambiguation
needed] of securities dealers. The process of selling new issues to investors is called
underwriting. In the case of a new stock issue, this sale is an initial public offering (IPO).
Dealers earn a commission that is built into the price of the security offering, though it can be
found in the prospectus. Primary markets create long term instruments through which
corporate entities borrow from capital market.
Features of primary markets are:

This is the market for new long term equity capital. The primary market is the market
where the securities are sold for the first time. Therefore it is also called the new issue
market (NIM).
In a primary issue, the securities are issued by the company directly to investors.
The company receives the money and issues new security certificates to the investors.
Primary issues are used by companies for the purpose of setting up new business or
for expanding or modernizing the existing business.
The primary market performs the crucial function of facilitating capital formation in
the economy.
The new issue market does not include certain other sources of new long term
external finance, such as loans from financial institutions. Borrowers in the new issue
market may be raising capital for converting private capital into public capital; this is
known as "going public."
The financial assets sold can only be redeemed by the original holder.

Methods of issuing securities in the primary market are:

Public issuance, including initial public offering;
Rights issue (for existing companies);
Preferential issue.

22

SECONDARY MARKET:
The secondary market, also called aftermarket, is the financial market in which previously
issued financial instruments such as stock, bonds, options, and futures are bought and sold.
Another frequent usage of "secondary market" is to refer to loans which are sold by a
mortgage bank to investors such as Fannie Mae and Freddie Mac.
The term "secondary market" is also used to refer to the market for any used goods or assets,
or alternative use for an existing product or asset where the customer base is the second
market (for example, corn has been traditionally used primarily for food production and
feedstock, but a "second" or
"Third" market shares developed for use in ethanol production).
With primary issuances of securities or financial instruments, or the primary market,
investors purchase these securities directly from issuers such as corporations issuing shares in
an IPO or private placement, or directly from the federal government in the case of treasuries.
After the initial issuance, investors can purchase from other investors in the secondary
market.
In the secondary market, securities are sold by and transferred from one investor or
speculator to another. It is therefore important that the secondary market be highly liquid
(originally, the only way to create this liquidity was for investors and speculators to meet at a
fixed place regularly; this is how stock exchanges originated, see History of the Stock
Exchange). As a general rule, the greater the number of investors that participate in a given
market place and the greater the centralization of that market place, the more liquid the
market.
Accurate share price allocates scarce capital more efficiently when new projects are financed
through a new primary market offering, but accuracy may also matter in the secondary
market because:

23

1) price accuracy can reduce the agency costs of management, and make hostile takeover a
less risky proposition and thus move capital into the hands of better managers, and
2) Accurate share price aids the efficient allocation of debt finance whether debt offerings or
institutional borrowing.

OBJECTIVES OF STUDY

To understand the concept of fundamental analysis.

To find the best investment for investors.
To analyse various financial statements.
To know the shareholding patterns of the selected PSU Banks.
To study the public sector banks present in Indian stock market.
To know the performance of banks through fundamental analysis.

24

SCOPE OF STUDY:

This project deals with the fundamental analysis aspect of the equity research. The researcher
in this project has tried to look into the details of the financial statements of the companies,
the environment surrounding, the banking sector, the latest development in this regard, the
management discussions on the part of every company and the government policies
concerned with the banking sector.

Fundamental analysis of public sector banks is done only for investment decision making
process, which shows how important it is to study the fundamentals of the particular
investing firm, for the purpose of investing in it.

25

CHAPTER II
COMPANYS PROFILE

26

COMPANY PROFILE

Introduction:

Operating in capital market for more than 16 years

Growing since inception
Provides state of art services in Securities, Commodities, Broking, Depository,
Portfolio Management and Clearing Operations
PAN India presence through extensive network of branches, franchisees and sub
brokers
Known for its ethical practices and complete transparent dealings

Promoters

The group is headed by:

Mr. Ashok Agarwal and Mr. Yashpal Mendiratta. Both are qualified Chartered
Accountants and possess immense knowledge of capital markets. Have more than 40 years of
combined experience in Capital, Derivative and Commodity market. Mr. Ashok Agarwal has
thrice been elected as the president of Delhi Stock Exchange.

Vision

Vision for the company is,

To become the leading and the most respected financial solutions company

Core Purpose

27

No matter what the size of our client is; No matter what the market condition is; No matter
what the asset nature is; we will always be driven by the sole mission for our clients that their
money must grow.

Company Values

Always be CLIENT CENTRIC

Always be TRANSPARENT
Always be PRUDENT
Always be FORESIGHTED

Membership and Registration

National Stock Exchange (NSE)

Bombay Stock Exchange (BSE)

Multi Commodity Exchange (MCX)

National Commodities & Derivatives Exchange (NCDEX)

National Multi-commodities Exchange of India Limited (NMCE)

National Securities Depository Limited (NSDL)

Dubai Gold & Commodity Exchange (DGCX) (Registered with ESCA, Dubai)

London Stock Exchange

(FSA registered Broking Entity, London)

Central Depository Services Limited (CDSL)

Portfolio Manager (Registered with SEBI)

28

GLOBAL PRESENCE

Globe Capital Market Ltd along with India has its office at London and Dubai as well.

Dubai

The Globe Group Company,

Globe Comex International DMCC, which is a subsidiary of Globe Commodities Private
Limited, the Indian arm, is devoted to trading on Dubai Metals and Commodities Exchange.

London

The Globe Group Company,

Icon Capital Limited is an India centric broking company which was incubated within Credo
Capital Plc since 2002. The company was incorporated in January 2006, received FSA
authorization in January 2007 and in March 2007 obtained membership of the London Stock
Exchange (LSE).

CITI GROUP INVESTMENT

29

In 2008, Globe Capital Market Limited attracted US$ 42 million of equity capital in Foreign
Direct Investment (FDI) from Citi Group and its representative is also on the Board of the
company.

MILESTONES

In 1991, Globe group acquired the membership of the Delhi Stock Exchange
In 1994, Globe became the member of National Stock Exchange
In 1999, Globe became the depository participant of NSDL
In 2000, Globe acquired as Trading as well as Clearing membership of NSE F&O
In 2000, Globe became the depository participant of CDSL
In 2003, Globe acquired the membership of NCDEX, MCX AND NMCE
In 2006, Globe expanded globally and acquired the Trading & Clearing Membership
of Dubai Gold and Commodity Exchange (DGCX) and London Stock Exchange in
2007
In 2007, Globe became the trading & clearing member of Bombay Stock Exchange
In 2008, Globe became clearing and trading member of currency derivatives in NSE,
BSE & MCX
In 2008, Globe Capital Market Ltd. attracted US$ 42 million of equity capital in
Foreign Direct Investment (FDI) from Citi Group and its representative is also a
member of the Board of the Company.

30

PRODUCTS AND SERVICES

1.
2.
3.
4.
5.
6.
7.

Hassle Free Support System

Flexible Trading Limits for Key Clients
Guaranteed 24 hour Response Time and Query Resolution
Special Technical Analysis Software to Sub Brokers and HNI Clients
In-house Research
IPO and Mutual Fund Distribution
Brand GLOBE: warm and lasting relationship

One of the most respected name in Clearing & Settlement among the Trading members of
various exchanges of India.

Leading Clearing Member in terms of volumes handling 15% NSE Clearing Volumes in
F&O.

Substantial market share in NSE & MCX-SX and number of Trading Members attached to it
40% volume in Currency
Derivatives segment of MCX-SX and NSEPersonalized
Services and Support Sizeable Capital Base.

Experienced and Professional Management.

Complete confidentiality maintained for our TMs.

31

RESEARCH HEAD

Mr. KK Mittal is a fellow member and gold medalist from the Institute of Chartered
Accountants of India. Before joining Globe Capital he worked as the head of theEscorts
Asset Management Company and was the man behind the strong performance of the Escorts
Mutual Fund. During his tenure the fund won the Lipper Award Best Fund 3 years category
for 2 consecutive years.

PRODUCT PROFILE

GLOBE CAPITAL MARKET Ltd provides end to end equity solutions to all categories of its
valued clients by using a combination of its numerous products and services. It offers you
world-class research-based investment and trading ideas coupled with efficient and reliable
trade execution & settlement. Its default free record since inception is a unique feature in
the Indian Stock Markets.

GLOBE CAPITAL MARKET Ltd understands the Client profile and uses a combination of
the following products and services to look after various client needs.

End to equity solutions:

Advice-based broking on BSE/NSE (cash & derivatives)

Portfolio Management Services (PMS)
Internet Trading
Timely & Researched investment and trading ideas
Depository Services
Initial Public Offer (IPO)

32

Trading PMS:

The scheme takes a professional and disciplined approach to trading. The philosophy is to
treat market trend as a friend and generate decent returns for the clients. This is a high risk
return scheme.

Depositories Services:

It is an investor friendly proactive Demat service which the company provides. Globe Capital
Market Ltd is a depository participant of Central Depository Service Ltd (CDSL) and
National Securities Depository Ltd (NSDL).

33

Chapter III
RESEARCH DESIGN AND METHODOLOGY

34

RESEARCH METHODOLOGY

Definition of Research:

The systematic investigation and study of materials and sources in order to establish facts and
reach new conclusions.

Definition of Research Methodology:

Procedures used in making systematic observations or otherwise obtaining data, evidence or

information as part of a research project or study.

Meaning of Research Methodology:

Research is often described as an active, diligent and systematic process of inquiry aimed at
discovering, interpreting and revising facts. This intellectual investigation produces a greater
understanding of events, behaviour or theories and makes practical applications through laws
and theories. The term research is also used to describe a collection of information about a
particular subject, and is usually associated with science and scientific method.

35

TOOLS OF DATA COLLECTION:

Primary data is the information collected during the course of experiment during the
research. It can also be obtained through observations or direct communication.

Secondary data pertains to those that are already available in various reports, diaries, letters,
and books. Also, it is that data, which has been used previously for some research and is now
in use for second time.

SECONDARY DATA for a project would be the collection of information that has a bearing
on the outcome of the project from secondary sources like news, press releases, internet, etc.
The data collected is from a secondary source.
The data was compiled with the help of sources like News article, internet, and Capitoline
software. In this research, primary data could not be gathered as the company officials could
not be contacted for a one to one interview or a telephonic interview.

RESEARCH DESIGN: Exploratory

POPULATION: 26 Public Sector Banks

SAMPLE SIZE: 3 Public Sector Banks

36

SAMPLING TECHNIQUE: Probability Technique Simple Random Technique

FINANCIAL TOOLS USED: Ratios and Financial Statements

STATISTICAL TOOLS USED: Pie charts and Bar charts.

CHAPTER IV
DATA PRESENTATION, ANALYSIS &
INTERPRETATION

37

Economic Analysis

A report by the Reserve Bank of India on 'Trends and Progress of Banking in India
2012-13' says that "... even in a period of overall slowdown in credit growth, retail credit
maintained its growth.

Banks get more capital to offer cheaper loans

RBI raises concerns over bank loans, debt recovery

Public Sector Undertakings (PSUs) have always played a significant role in the overall socioeconomic development of the country. Over the past few years, the public sector companies
have made conscious efforts to improve their operational efficiencies and financial
performance. The publication, Indias Top PSUs 2012 charts the financial performance of
top PSUs during FY11 and attempts to highlight key opportunities and challenges for these
companies.

SBI, ICICI Bank, Bank of India, and Axis Bank, among others, are aggressive in retail
banking. In fact, retail banking is actually compensating for the lower credit growth in the
corporate book.

Demand across most sectors remained healthy during FY11, which helped the
aggregate overall income of Top PSUs increase 15.04% to ` 21,381.7 bn.
PSUs paid dividends of ` 459.7 bn during FY11, which was 8.5% higher compared
with FY10.
During FY11, aggregate net profit of Top 137 PSUs increased a meagre 6% to `
1,533.7 bn.

The overall business environment in FY12 has been challenging for corporate India,
including PSUs. However, we are confident that PSUs will continue to strengthen their
financial health in the coming years through various prudent measures of product
diversification, collaborations, technological advances and customer satisfaction, among
others.
38

INDUSTRY: Banking PSU.

State Bank of India is the largest state-owned banking and financial services company in
India. The Bank provides banking services to the customer. In addition to the banking
services, the Bank through their subsidiaries, provides a range of financial services, which
include life insurance, merchant banking, mutual funds, credit card, factoring, security
trading, pension fund management and primary dealership in the money market.
The State Bank Group, with over 16,000 branches, has the largest banking branch network in
India. The State bank of India is the 10th most reputed company in the world according to
Forbes. The bank has 156 overseas offices spread over 32 countries. They have branches of
the parent in Colombo, Dhaka, Frankfurt, Hong Kong, Johannesburg, London and environs,
Los Angeles, Male in the Maldives, Muscat, New York, Osaka, Sydney, and Tokyo.
The Bank traces their ancestry to British India, through the Imperial Bank of India, to the
founding in 1806 of the Bank of Calcutta, making them the oldest commercial bank in the
Indian Sub-continent. The Government of India nationalized the Imperial Bank of India in the
year 1955, with the Reserve Bank of India taking a 60% stake, and name was changed to
State Bank of India. In the year 2001, the SBI Life Insurance Company was started by the
Bank. They are the only Bank that have been permitted 74% stake in the insurance business.
The Bank's insurance subsidiary 'SBI Life Insurance Company' is a joint venture with Cardiff
S.A in which Cardiff holds 26% of the stake.
They signed a MoU with the Indian railways for installing ATMs at 682 railway stations. In
March 2008, the Bank opened their 10,000th branch and became only the second bank in the
world to have more than 10,000 branches after China's ICBC.
In August 2010, State Bank of Indore was amalgamated with the Bank as per the scheme of
amalgamation approved by the Central Board. During the year, the Bank opened 576 new
branches besides merger of 470 branches of erstwhile State Bank of Indore. Also, they

39

opened 14 foreign offices during the year, taking the total to 156. In July 1, 2010, the Bank
launched their 'Green Channel Counter' at select branches across the country.
During the first quarter of the financial year 2012-13, the Government of India issued the
'Acquisition of State Bank of India Commercial & International Bank Ltd. vide notification
dated July 29, 2012. Consequent to the said notification, the undertaking of State Bank of
India Commercial & International stands transferred to and vest in State Bank of India with
effect from July 29, 2012.

40

DATA ANALYSIS AND INTERPRETATION

STATE BANK OF INDIA
a) SHARE HOLDING PATTERNS OF STATE BANK OF INDIA
TABLE NO. 4.1

Particulars

No of Shares
(Mn)

% Holdings

Promoter & Group

Foreign
Sub Total
Indian
Sub Total
Total Share Holding

Institution
Financial Institutions / Banks
Foreign Institutional Investors
Mutual Funds / UTI
Sub Total
Non Institution
Bodies Corporate
NRIs/Foreign
Individuals/Foreign Nationals
Individuals holding nominal
share capital in excess of Rs. 1
lakh
Individuals holding nominal
share capital up to Rs. 1 lakh
Sub Total

ADR
GDR
Other Custodians
Total Shares
Grand Total

0.00

0.00

426.24
426.24
Non Promoters / Public
Shareholding

62.31
62.31

1.41
73.45
33.20
183.18

0.21
10.74
4.85
26.78

16.52

2.41

1.06

0.16

1.62

0.24

37.81

5.53

58.09
Shares held by Custodians and
against issued Depository
Receipts
0.00
16.52
0.00
16.52
684.03

8.49

41

0.00
2.42
0.00
2.42
100.00

b) BALANCE SHEET 0F STATE BANK OF INDIA (Rs. in Crore)

TABLE NO. 4.2

Particulars
SOURCES OF FUNDS :
Capital
Reserves Total
Deposits
Borrowings
Other Liabilities & Provisions
TOTAL LIABILITIES
APPLICATION OF FUNDS :
Cash & Balances with RBI
Balances with Banks & money at
Call
Investments
Advances
Fixed Assets
Other Assets
Miscellaneous Expenditure not
written off
TOTAL ASSETS
Contingent Liability
Bills for collection

Mar-13

Mar-12

Mar-11

684.03
671.04
635.00
98,199.65
83,280.16
64,351.04
1,202,739.5 1,043,647.3
933,932.81
7
6
169,182.71 127,005.57 119,568.96
95,455.08
82,805.30 106,206.00
1,566,261.0 1,337,409.4
1,224,693.81
4
3
65,830.41

54,075.94

94,395.50

48,989.75

43,087.22

28,478.64

350,927.27
1,045,616.5
5
7,005.02
47,892.04

312,197.61

295,600.57

867,578.89

756,719.45

5,466.55
55,003.22

4,764.19
44,735.46

0.00

0.00

0.00

1,566,261.0 1,337,409.4
1,224,693.81
4
3
926,378.91 832,605.33 730,484.61
66,639.54
66,959.85
59,904.98

42

I) NET WORTH OF STATE BANK OF INDIA

TABLE NO. 4.3

PARTICULAR

YEAR2013

Equity Share
Capital
Reserves
Net Worth

684.03

YEAR 2012
671.04

YEAR 2011
635.00

98,199.65

83,280.16

64,351.04

83,951.20

64,986.04

65,949.20

120000
100000
80000
Equity Share Capital

60000

Reserves
Net worth

40000
20000
0
YEAR2013

YEAR 2012

YEAR 2011

Figure No. 4.1

INTERPRETATION:
Net worth which is also known as book of value or shareholder equity, it is the amount by
which assets exceeds liabilities. Hence in this case it is seen that the net worth is increasing
by 18965.16 from 2012 to 2013 which clearly states that STATE BANK OF INDIA has more
assets over liabilities which indicates that rise in book values over time may be rewarded by
an increase in stock market value.

43

C) Profit & Loss account of State Bank of India (Rs. in Crore)

TABLE NO. 4.4
Particulars
INCOME :
Interest Earned
Other Income

Mar-13

Mar-12

Mar-11

119,657.10

106,521.4
5

81,394.3
6
15,824.6
0
97,218.9
6

16,034.84 14,351.45

Total I

135,691.94

120,872.9
0

II. Expenditure
48,867.9
6
18,380.90 16,974.04 15,211.62

Interest expended

75,325.80 63,230.37

Payments to/Provisions for Employees

Operating Expenses & Administrative
Expenses
Depreciation
Other Expenses, Provisions & Contingencies
Provision for Tax
Fringe Benefit tax
Deferred Tax

5,489.37

4,564.82

4,089.86

1,139.61

1,007.17

990.49
13,104.8
0
5,712.89
0.00
976.82
88,954.4
4

15,405.37 16,613.19
5,953.88
0.00
-107.97

6,320.09
0.00
455.93
109,165.6
121,586.96
1

Total II
III. Profit & Loss
Reported Net Profit
Extraordinary Items
Adjusted Net Profit
Prior Year Adjustments
Profit brought forward
IV. Appropriations
Transfer to Statutory Reserve
Transfer to Other Reserves
Trans. to Government /Proposed Dividend
Balance carried forward to Balance Sheet
Equity Dividend %
Earnings Per Share-Unit Cur
Earnings Per Share(Adj.)-Unit Cur
44

14,104.98
-22.96
14,127.94
0.00
0.34

11,707.29
-27.93
11,735.22
5.71
0.34

8,264.52
-10.23
8,274.75
-894.17
0.34

4,417.86
6,472.43
3,214.69
0.34
415.00
200.71
200.71

3,516.98
5,550.87
2,645.15
0.34
350.00
170.05
170.05

2,479.36
2,739.47
2,151.52
0.34
300.00
126.27
126.27

Book Value-Unit Cur

1,445.60

1,251.06

1,023.40

I) TOTAL INCOME OF STATE BANK OF INDIA

TABLE NO. 4.5

PARTICULAR
Interest Earned
Other Income
Total Income

YEAR2013
119,657.10

YEAR 2012
106,521.45
14,351.45
120,872.90

16,034.84
135,691.94

YEAR 2011
81,394.36
14,935.09
96,329.45

Total Income
160,000.00
140,000.00

135,691.94
120,872.90

120,000.00

96,329.45

100,000.00

Total Income

80,000.00
60,000.00
40,000.00
20,000.00
0.00

YEAR2013

YEAR 2012

YEAR 2011

Figure No. 4.2

INTERPRETATION:
Total income is relatively high by 148190.04 from 2012 to 2013 which is good for the bank,
it has shown a drastic increase from 2011 to 2012 which is increased by 24543.45, which is
shows that the bank has a strong bank done of earnings.

45

ii) TOTAL EXPENSES OF STATE BANK OF INDIA:

TABLE NO. 4.6

PARTICULAR

YEAR2013

Interest expended
Payments
to/Provisions for
Employees
Operating
Expenses &
Administrative
Expenses
Depreciation
Other Expenses,
Provisions &
Contingencies
Provision for Tax
Fringe Benefit tax
Deferred Tax
Total II

YEAR 2012

YEAR 2011

75,325.80

63,230.37

48,867.96

18,380.90

16,974.04

15,211.62

5,489.37

4,564.82

4,089.86

1,139.61

1,007.17

990.49

15,405.37

16,613.19

13,104.80

5,953.88
0.00
-107.97
121,586.96

6,320.09
0.00
455.93
109,165.61

5,712.89
0.00
976.82
88,954.44

121,586.96
140,000.00

109,165.61

120,000.00

88,954.44

100,000.00
80,000.00
60,000.00
40,000.00
20,000.00
0.00

YEAR2013

YEAR 2012
Total II

Figure No. 4.3

INTERPRETATION:
46

YEAR 2011

Whereas even total expenses are increasing by 20211.17 from 2011 to 2012 and 12421.35 by
2012 to 2013 which can be a disappointment, but if compared with total income it is lower
ideally the expenses should be lesser than income, then only there can be a good profit.

iii) Net profit of State Bank of India:TABLE NO. 4.7

PARTICULAR
Total income total
expenses= net profit

YEAR2013
135,691.94
-121,586.96=
14104.98

YEAR 2012
120,872.90109,165.61=
11,686.01

YEAR 2011
96,329.45-88,954.44=
7,370.35

16000
14000
12000

14,104.98
11,686.01

10000
7,370.35

8000
6000
4000
2000
0

YEAR 2013

YEAR 2012

YEAR 2011

Figure No. 4.4

INTERPRETATION:Net profit is often referred as the bottom line, net profit is calculated by subtracting a
companys total expenses from total revenue, thus SBI shows some fluctuation in net profit
which clearly shows a high net profit in 2013 with difference of 2418.97 if compared with
2012, a bit less in 2011 with difference of 4315.66 as comparing with 2013 and lowest in
2011 shown what SBI has earned or lost in the given period of time.

47

D) KEY FINANCIAL RETIO OF STATE BANK OF INDIA

TABLE NO. 4.8

No
.

Particulars

Year 2013

P/E Ratio
( profit Earning Ratio )

11.48

9.9

16.4

ADVANCES TO DEPOSIT RATIO

86.93

83.12

81.02

ROE
( Return on Equity)

17.60

14.4

12.8

CAPITAL ADEQUACY RATIO

12.92

13.86

11.98

NET INTEREST MARGIN %

3.34

3.85

3.32

2.1

1.82

1.63

NET NPA RATIO %

48

Year 2012

Year
2011

I) PROFIT EARNING RATIO OF STATE BANK OF INDIA

YEAR
2013

Formula

Particulars

Price per share

1564.34
= 11.48

Earnings per Share

136.18

2012
Price per share

1725.75
= 9.9

Earnings per Share

174.15

Price per share

1898.15

2011
= 16.4

Earnings per Share

116.07

P/E RATIO
18
16
14
12
10
8
6
4
2
0

16.4
11.48

P/E RETIO
9.9

Figure No. 4.5

49

INTERPRETATION:By comparing price and earnings per share the analysis of stock market is done and the
valuation of company and its shares relative to the income the company is actually generation
is done. A higher p/e ratio of SBI in 2011 with a difference of 6.5and 4.92 by comparing 2012
and 2013 respectively , which means that investors are paying more for each unit of net
income, so the stock is more expensive compared to one with a lower P/E Ratio .
2. ADVANCES TO DEPOSIT RATIO:

YEAR
2013

Formula

Particulars

Total advances

1,045,616.55
= 86.93

Total Deposits

1,202,739.57

Total advances

867,578.89

2012

= 83.12

Total Deposits

1,043,647.36

2011
Total advances

756,719.45
= 81.02

Total Deposits

933,932.81

50

Advances to Deposit Ratio

88
87
86
85
84
83
82
81
80
79
78

86.93

Advances to Deposit
Ratio

83.12
81.02

2013

2012

2011

Figure No. 4.6

3. RETURN ON EQUITY:
2013
Net income

14,105.32

* 100 =
17.60
80123.45

Shareholders Equity

2012
Net income
11686.01
Shareholders Equity

* 100 = 14.4
78817.33

2011
Net income

7370.35
* 100 = 12.8

Shareholders Equity

60554.09

51

Return on equity
18
16
14

Return on eduity

12
10
8
6
4
2
0

Figure No. 4.7

4. CAPITAL ADEQUACY RATIO:

TIER 1 CAPITAL= (paid up capital + statutory reserves + disclosed free reserves)

(Equity investments in subsidiary + intangible assets + current & b/f losses)

TIER 2 CAPITAL = A) Undisclosed Reserves,

B) General Loss reserves,
C) Hybrid debt capital instruments and subordinated debts
Where can either be weighted ( ) or the respective minimum total requirement.
52

100%
90%

3.43

80%

4.07
4.21

70%
60%

TIER 2

50%
40%

9.49

TIER 1
9.79

7.77

30%
20%
10%
0%

Figure No. 4.8

5. NET INTEREST MARGIN %

Net Interest Margin (%) = Net Interest Income/Average Assets

Net Interest Income = Interest Earned Interest Expended

Average Total Assets = [Total Assets CY+ Total Assets PY]/2

53

NET INTEREST MARGIN %

3.85

3.9
3.8
3.7
3.6

NET INTEREST
MARGIN %

3.5
3.4

3.34

3.32

3.3
3.2
3.1
3
2013

2012

2011

Figure No. 4.9

6. NET NPA RATIO %

54

NET NPA RATIO%

2.5
2

2.1
1.82

1.63

1.5
1
0.5
0
2013

2012

2011

Figure No. 4.10

INDUSTRY: Banking PSU.

55

NET NPA RATIO%

IDBI Bank Ltd was incorporated in the year 1964 as a wholly owned subsidiary of Reserve
Bank of India with the name Industrial Development Bank of India. The company was
regarded as a Public Financial Institution and continued to serve as a DFI for 40 years. In
February 16, 1976, the ownership of the company was transferred to the Government of India
by RBI and the company was made the principal financial institution for coordinating the
activities of institutions engaged in financing, promoting and developing industry in the
country. In the year 1982, the company transferred their International Finance Division to
Export-Import Bank of India. In the year 1993, they formed one wholly owned subsidiary
company, namely IDBI Capital Market Services Ltd for providing broad range of financial
products and services. In June 7, 1995, the company made their Initial Public Offer (IPO),
which brought down GOI holding to below 100%. In March 2000, the company set up one
wholly owned subsidiary company, namely
The Bank operates in four segments, namely Wholesale Banking, Retail Banking, Treasury
Services and Other Banking Operations. They have six wholly-owned subsidiaries, namely
IDBI Home finance Ltd, IDBI Gilts Ltd, IDBI Intec Ltd, IDBI Capital Market Services Ltd,
IDBI Asset Management Ltd and IDBI MF Trustee Company Ltd.
They introduced 3-in-1 saving-cum-demat accounts with trading facility. Also, they increased
their bouquet of retail products by launching Loan against Rent Receivables, Loan against
Commercial Property, Reverse Mortgage Loan, Holiday Travel Loan and Loan to the staff of
IDBI-Assisted units. During the year, the Bank launched the MasterCard Debit Card, relaunched the cash card product and upgraded their Net Banking architecture thereby
enhancing customer experience.
They formalized tie-ups with IDBI Capital Market Services Ltd, a 100% subsidiary of the
Bank, with Motilal Oswal Securities Ltd to offer state-of-the-art internet-based trading
facility in Equities, Futures and Options markets. In March 2008, IDBI Bank entered into a
joint venture with Federal Bank and Fortis Insurance International to form IDBI Fortis Life
Insurance, of which IDBI Bank owns 48%. During the financial year 2008-09, the Bank
increased their branch network to 509 comprising 179 metropolitan branches, 175 urban
branches, 100 semi urban branches and 55 rural branches.

IDBI
A) Share Holding Pattern IDBI
TABLE NO. 4.9

Particulars

No of Shares
(Mn)
Promoter & Group
56

% Holdings

Foreign
Sub Total
Indian
Sub Total
Total Share Holding

0.00
955.8
5
955.8
5
Non Promoters / Public
Shareholding

Institution
Financial Institutions / Banks
Foreign Institutional
Investors
Mutual Funds / UTI
Sub Total
Non Institution
Bodies Corporate

0.00
71.72
71.72

16.80

1.26

44.99

3.3

2.72
228.76

0.20
17.16
1.54

20.59

NRIs/Foreign
Individuals/Foreign Nationals
Individuals holding nominal
share capital in excess ofRs. 1
lakh
Individuals holding nominal
share capital up to Rs. 1 lakh
Sub Total

ADR
GDR
Other Custodians
Total Shares
Grand Total

5.55

0.54

20.27

1.52

100.64

7.55

148.14
Shares held by Custodians
and against issued
Depository Receipts
0.00
0.00
0.00
0.00
1332.75

11.12

0.00
0.00
0.00
0.00
100.00

B) BALANCE SHEET OF IDBI:

TABLE NO. 4.10
Particulars
SOURCES OF FUNDS :
Capital
57

Mar-13

Mar-12

Mar-11

1,278.38

984.57

724.86

Reserves Total
Deposits
Borrowings
Other Liabilities & Provisions
TOTAL LIABILITIES
APPLICATION OF FUNDS :
Cash & Balances with RBI
Balances with Banks & money at Call
Investments
Advances
Fixed Assets
Other Assets
Miscellaneous Expenditure not written off
TOTAL ASSETS
Contingent Liability
Bills for collection

18,148.68 13,582.02
9,438.40
210,492.56 180,485.79 167,667.08
53,477.64 51,569.65 47,709.48
7,485.49
6,990.79
8,227.82
290,882.75 253,612.82 233,767.64
15,090.21 19,559.05 13,903.48
2,967.44
1,207.02
679.36
83,175.36 68,269.18 73,345.46
181,158.43 157,098.07 138,201.85
3,018.81
3,037.34
2,996.96
5,473.35
4,443.15
4,642.11
0.00
0.00
0.00
290,883.60 253,613.81 233,769.22
148,920.09 134,242.01 124,755.80
5,277.34
4,032.77
3,209.64

I) NET WORTH OF IDBI:

TABLE NO. 4.11

PARTICULAR
Equity Share
Capital
Reserves
Net worth

YEAR2013

YEAR 2012

1,278.38

984.57

18,148.68
19,427.06
58

13,582.02

YEAR 2011
724.86
9,438.40

14,566.59

10,163.26

Net worth
25,000.00
20,000.00

19,427.06
14,566.59

15,000.00

10,163.26

10,000.00

Net worth

5,000.00
20
10
YE
AR

20
11
YE
AR

YE
AR

20
12

0.00

Figure No. 4.11

INTERPRETATION:
Net worth which is also known as book of value or shareholder equity, it is the amount by
which assets exceeds liabilities. Hence in this case it is seen that the net worth is increasing
by 4860.47 from 2011 to 2012 which clearly states that IDBI has more assets over liabilities
which indicates that rise in book values over time may be rewarded by an increase in stock
market value.

C) PROFIT AND LOSS A/C OF IDBI:

TABLE NO. 4.12
Particulars
INCOME :
Interest Earned
Other Income
59

Mar-13

Mar-12

Mar-11

23,369.93
2,118.78

18,541.24
2,143.23

15,261.32
2,301.73

Total I
II. Expenditure
Interest expended
Payments to/Provisions for Employees
Operating Expenses & Administrative Expenses
Depreciation
Other Expenses, Provisions & Contingencies
Provision for Tax
Fringe Benefit tax
Deferred Tax
Total II
III. Profit & Loss
Reported Net Profit
Extraordinary Items
Adjusted Net Profit
Prior Year Adjustments
Profit brought forward
IV. Appropriations
Transfer to Statutory Reserve
Transfer to Other Reserves
Trans. to Government /Proposed Dividend
Balance carried forward to Balance Sheet
Equity Dividend %
Earnings Per Share-Unit Curr
Earnings Per Share(Adj)-Unit Curr
Book Value-Unit Curr

25,488.71

20,684.47

17,563.05

18,825.08
1,160.44
779.27
116.06
1,978.16
1,104.93
0.00
-506.84
23,457.10

14,271.93
1,026.50
674.41
127.04
2,303.60
734.94
0.00
-104.27
19,034.15

13,005.22
756.99
565.79
90.98
2,099.36
346.31
0.00
-332.73
16,531.92

2,031.61
-0.89
2,032.50

1,650.32
-1.82
1,652.14

1,031.13
-0.96
1,032.09

0.00

8.72

0.00

615.02

470.40

71.20

507.90
1,017.05
449.04
672.64
35.00
15.42
15.42
137.46

413.00
701.55
399.87
615.02
35.00
16.20
16.20
128.69

258.00
125.00
248.93
470.40
30.00
13.79
13.79
113.48

I) TOTAL INCOME OF IDBI

TABLE NO. 4.13

PARTICULAR
Interest
Earned
Other Income
Total Income

YEAR 2013

YEAR 2012

YEAR 2011

23,369.93

18,541.24

15,261.32

2,118.78

2,143.23

2,301.73

25488.71

60

20684.47

17563.05

Total Income
25488.71
20684.47

17563.05

20
10
YE
AR

YE
AR

YE
AR

20
11

Total Income

20
12

30000
25000
20000
15000
10000
5000
0

Figure No. 4.12

INTERPRETATION:
Income generated by IDBI shows a drastic increase which shows an increase by 4804.71
from 2012 to 2013 and 3121.42 from 2011 to 2012, which is why it stands in second position
in market capitalization with SBI, though SBI being the first.

ii) TOTAL EXPENSES OF IDBI

TABLE NO. 4.14

PARTICULAR
Interest expended
Payments
to/Provisions for
Employees
Operating
Expenses &

YEAR 2013

YEAR 2012

YEAR 2011

18,825.08

14,271.93

13,005.22

1,160.44

1,026.50

756.99

779.27

674.41

565.79

61

Administrative
Expenses
Depreciation
Other Expenses,
Provisions &
Contingencies
Provision for Tax
Fringe Benefit tax
Deferred Tax
Total Expenses

116.06

127.04

90.98

1,978.16

2,303.60

2,099.36

1,104.93
0.00
-506.84
23,457.10

734.94
0.00
-104.27
19,034.15

346.31
0.00
-332.73
16,531.92

TOTAL EXPENSES
25000

23457.1
19034.15

20000

16531.92

15000

TOTAL EXPENSES

10000
5000
0
2011

2012

2013

Figure No. 4.13

INTRPRETATION:
Total expenses are low then total income which indicates that company is in sound position
and is sustained in market as we see upward trend from 2011 to 2012 which is by 4422.95
and from 2010 to 2011it is by 2502.23

iii) NET PROFIT OF IDBI

TABLE NO. 4.15
PARTICULAR
Total income total
expenses= net profit

YEAR2013
YEAR 2012
25,488.71 23,457.10 20,684.47
=2,031.61
19,034.15 = 1,650.32

62

YEAR 2011
17,563.05
16,531.92 = 1,031.13

Net Profit
2,500.00
2,000.00
net profit
1,500.00
1,000.00
500.00
0.00

YEAR 2012

YEAR 2011

YEAR 2010

Figure No. 4.14

INTERPRETATION:
The net profit of IDBI shows an upswing in the consecutive three years, which is increased
by 619.19 and 381.29 from 2011 to 2012 and 2012 to 2013 respectively, which build up the
profit maximization of IDBI.

D) KEY FINANCIAL RATIO OF IDBI:

TABLE NO. 4.16

No
.

Particulars

Year 2013

P/E Ratio

6.4
63

Year 2012

7.4

Year
2011
5

( profit Earning Ratio )

ADVANCES TO DEPOSIT RATIO

86.06

87.04

82.42

ROE
( Return on Equity)

18.4

20.03

20.2

CAPITAL ADEQUACY RATIO

12.7

14.6

13.6

NET INTEREST MARGIN %

2.1

2.0

2.1

1.6

1.6

1.1

NET NPA RATIO %

I) PROFIT EARNING RATIO OF IDBI

YEAR
2013

Formula

Particulars

Price per share

793.65
= 6.4

Earnings per Share

64

121.79

2012
Price per share

812.40
= 7.4

Earnings per Share

108.33

2011
Price per share

425.65
=5.0

Earnings per Share

83.96

P/E RATIO
7.4
8
7
6
5
4
3
2
1
0

6.4
5

PE RATIO

Figure No. 4.15

INTERPRETATION:By comparing price and earnings per share the analysis of stock market is done and the
valuation of company and its shares relative to the income the company is actually generation
is done .a higher p/e ratio of SBI in 2011 with a difference by comparing 2012 and 2013
respectively, which means that investors are paying more for each unit of net income, so the
stock is more expensive compared to one with a lower P/E Ratio.
2. ADVANCES TO DEPOSIT:
YEAR
2013

Formula

Particulars

181158.43

Total advances
65

= 86.06%

Total Deposits

210492.56

2012
Total advances

157098.07
= 87.04%

Total Deposits

180485.79

Total advances

138201.85

2011

= 82.42%

Total Deposits

167667.08

Advances to deposit
88
87
86

87.04
86.06

85

Advances to deposit

84
83

82.42

82
81
80
2013

2012

2011

Figure No. 4.16

3. RETURN ON EQUITY OF IDBI:

YEAR

Formula

Particulars
66

2013
Net income

5006.96
* 100 = 18.4

Shareholders Equity

25135.35

2012
Net income
4241.68
Shareholders Equity

* 100 = 20.03
18693.39

2011
Net income

3058.33
* 100 = 20.2

Shareholders Equity

12821.63

Return on equity
20.00%

15.10%

14.90%

Return on equity
10.40%

15.00%
10.00%
5.00%
0.00%

Figure No. 4.17

INTERPRETATION:
The growth in earnings per Share of Bank of India gives and impact of good fundamentals of
the bank, the difference in increase of EPS from 2011 to 2012 is 13.46 and from 2010 to 2011
are 24.37 which are quite big it is good in a way, for the growth of bank. It has shown a
tremendous increase all together.
4. CAPITAL ADEQUACY RATIO:

67

TIER 1 CAPITAL= (paid up capital + statutory reserves + disclosed free reserves)

(Equity investments in subsidiary + intangible assets + current & b/f losses)

TIER 2 CAPITAL = A) Undisclosed Reserves,

B) General Loss reserves,
C) Hybrid debt capital instruments and subordinated debts
Where can either be weighted ( ) or the respective minimum total requirement.

100%
90%
80%

5.5

70%

6.2

5.6

60%

TIER 2

50%

TIER 1

40%
30%

7.7

8.4

20%
10%
0%

Figure No. 4.18

Minimum capital adequacy ratios required by the reserve bank of India: 9.0% total CRAR
and 6.0% Tier I CRAR
In March 2013, Governments equity holding increased from 70.5% to 71.7% through equity
infusion
5. NET INTEREST MARGIN %
68

Net Interest Margin (%) = Net Interest Income/Average Assets

Net Interest Income = Interest Earned Interest Expended

Average Total Assets = [Total Assets CY+ Total Assets PY]/2

NET INTEREST MARGIN %

2.12
2.1

2.1

2.1

2.08
2.06

NET INTEREST
MARGIN %

2.04
2.02

2
1.98
1.96
1.94
2013

2012

2011

Figure No. 4.19

6. NET NPA RATIO:

69

NET NPA RATIO%

1.8
1.6

1.6

1.6

1.4
1.2

1.1

1
0.8
0.6
0.4
0.2
0
2013

2012

2011

Figure No. 4.20

70

NET NPA RATIO%

INDUSTRY: Banking PSU.

Bank of India is a state-owned commercial bank with headquarters in Mumbai. The Bank
provides a wide range of banking products and financial services to corporate and retail
customers. The bank provides specialized services for businesses (dealing in foreign
exchange), NRIs, merchant banking, etc. They also have specialized branches that deal in
asset recovery, hi-tech agricultural finance, lease finance and treasury, and small scale
industries. The Bank offers products such as mutual funds, venture capital, depository
services, bullion trading and credit cards. The Bank operates in three business segments,
namely Treasury Operations, Wholesale Banking Operations and Retail Banking Operations.

Treasury Operations includes the entire investment portfolio, which include dealing in
government and other securities, money market operations and foreign exchange (Forex)
operations. Wholesale Banking includes all advances, which are not included under Retail
Banking. Retail Banking includes exposures which fulfil two criteria, the maximum
aggregate exposure up to rupees five crore and the total annual turnover is less than rupees 50
crore. The Bank is having their presence at 29 locations in 18 countries across four
continents.

They are having 3101 branches in India spread over all states/ union territories including 141
specialized branches. These branches are controlled through 48 zonal offices. The Bank is
having one Joint Venture Bank in Zambia and a subsidiary each in Tanzania and Indonesia.
They are having global presence through their branches in London, Tokyo, New York, Paris,
Hong Kong, Singapore, etc. Bank of India was incorporated on September 7, 1906 by a group
of eminent businessmen from Mumbai.

The Bank was stared with one office in Mumbai, with a paid-up capital of Rs 50 lakh. The
Bank was the first in India promoted by Indian interests to serve all the communities of India.
In the year 1921, the Bank entered into an agreement with the Bombay Stock Exchange to
manage their clearing house. In the year 1946, they were the first Indian Bank to open a
branch outside the country, at London.

71

BANK OF INDIA

A) Share Holding Pattern Bank of India

TABLE NO. 4.17

Particulars

No of Shares
(Mn)

% Holdings

Promoter & Group

Foreign
Sub Total
Indian
Sub Total
Total Share Holding

Institution
Financial Institutions / Banks
Foreign Institutional
Investors
Mutual Funds / UTI
Sub Total
Non Institution
Bodies Corporate
NRIs/Foreign
Individuals/Foreign Nationals
Individuals holding nominal
share capital in excess of
Rs. 1 lakh
Individuals holding nominal
share capital up to Rs. 1 lakh
Sub Total

ADR
GDR
Other Custodians
Total Shares
Grand Total

0.00

0.00

382.01
382.01
Non Promoters / Public
Shareholding

64.11
64.11

1.20

0.20

80.62

13.53

4.09
177.98

0.69
29.87

3.35

0.56

2.15

0.36

0.66

0.11

29.60

4.97

35.92
Shares held by Custodians
and against issued
Depository Receipts
0.00
0.00
0.00
0.00
595.90

6.03

72

0.00
0.00
0.00
0.00
100.00

B) BALANCE SHEET OF BANK OF INDIA:TABLE NO. 4.18

Particulars
SOURCES OF FUNDS :
Capital
Reserves Total
Deposits
Borrowings
Other Liabilities & Provisions

Mar-13

Mar-12

Mar-11

596.64
574.52
23,321.51
19,151.38
381,839.59 318,216.03
35,367.58
32,114.23
11,477.39
13,243.43

547.22
15,423.99
298,885.81
22,021.38
12,974.69

4,52,602.7 3,83,299.5
3,49,853.09
1
9

TOTAL LIABILITIES
APPLICATION OF FUNDS :
Cash & Balances with RBI
Balances with Banks & money at Call
Investments
Advances

21,967.04
14,986.71
32,868.82
19,724.54
94,613.43
86,753.59
289,367.50 248,833.34

Other Assets
Miscellaneous Expenditure not written
off
TOTAL ASSETS
Contingent Liability
Bills for collection

73

21,782.43
15,527.56
85,872.42
213,096.18

10,915.80

11,465.69

12,413.22

0.00

0.00

0.00

4,19,732.59 3,81,763.87
174,208.24 165,173.07
51,372.78
45,255.10

3,48,691.81
143,699.22
32,505.88

I) NET WORTH OF BANK OF INDIA

TABLE NO. 4.19

PARTICULAR

YEAR 2012

YEAR 2011

YEAR 2010

Equity Share
Capital
Reserves

596.64

574.52

547.22

23,321.51

19,151.38

15,423.99

Net worth

23,918.15

19,725.9

15,971.21

Net worth
30,000.00
25,000.00

23,918.15
19,725.90

20,000.00

15,971.21

Net worth

15,000.00
10,000.00
5,000.00
0.00

YEAR 2013

YEAR 2012

YEAR 2011

Figure No. 4.21

INTERPRETATION:
The net worth is at its peak in 2013 with difference of 4192.25 when compared to 2012, but
shown a decreasing trend in the year 2011 with a difference of 3,754.69 which indicates
growth of assets then that of liabilities.
74

C) PROFIT AND LOSS ACCOUNT OF BANK OF INDIA

TABLE NO. 4.20
Particulars
INCOME :
Interest Earned
Other Income
Total I
II. Expenditure
Interest expended
Operating Expenses
Administrative Expenses
Depreciation
Other Expenses, Provisions & Contingencies
Total II
III. Profit & Loss
Reported Net Profit

Mar-13

Mar-12

Mar-11

31,908.93

28,480.67

21,751.72

3,766.04

3,321.17

2,641.77

35,674.97

31,801.84

24,393.49

22,884.93

20,167.23

13,941.03

5,331.55

6,965.82

6,122.54

0.00

2,827.49

1,720.85

183.89

166.83

140.56

4,709.15

1,991.27

1,841.22

33,109.52

32,118.64

23,766.2

0.00

0.00

0.00

0.00

0.00

0.00

IV. Appropriations
Transfer to Statutory Reserve

1,018.70

926.31

828.54

Transfer to Other Reserves

1,033.56

1,285.23

1,215.87

Trans. to Government /Proposed Dividend

Balance carried forward to Balance Sheet
Equity Dividend %
Earnings Per Share

697.09

465.98

444.30

0.00

0.00

0.00

100.00

70.00

70.00

46.14

46.66

45.54

Book Value-Unit Cur

401.38

343.79

292.26

Extraordinary Items

75

I) TOTAL INCOME OF BANK OF INDIA

TABLE NO. 4.21

PARTICULAR

YEAR 2013

Interest
Earned
Other Income
Total Income

YEAR 2012

YEAR 2011

31,908.93

28,480.67

21,751.72

3,766.04

3,321.17

2,641.77

35,674.97

31,801.84

24,393.49

Total Income
40,000.00
35,000.00
30,000.00
25,000.00
20,000.00
15,000.00
10,000.00
5,000.00
0.00

YEAR 2013

YEAR 2012

YEAR 2013

Figure No. 4.22

INTERPRETATION:
A Drastic increase in the total income has been in the above graph, the income has increased
by 3873.13 which are in greater level from 2012 to 2013. This is a plus point for bank of
India, which clearly shown a greater chance of survival.

76

III) TOTAL EXPENSES OF BANK OF INDIA

TABLE NO. 4.22

PARTICULAR
Interest expended
Operating Expenses
Administrative Expenses
Depreciation
Other Expenses, Provisions &
Contingencies
Total II

YEAR20 YEAR
13
2012

YEAR
2011

22,884.93

20,167.23

13,941.03

5,331.55

6,965.82

6,122.54

0.00

0.00

1,720.85

183.89

166.83

140.56

4,709.15

1,991.27

1,841.22

33,109.52

29,291.15

23,766.2

Total Expenses
35,000.00

33,109.52
29,291.15

30,000.00

23,766.20

25,000.00

Total Expenses

20,000.00
15,000.00
10,000.00
5,000.00
0.00

YEAR 2013

YEAR 2012

YEAR 2011

Figure No. 4.23

INTERPRETATION:
Expenses are increasing as we see in the above graph it has increased by 3818.37 from 2012
to 2013. Expenses are lower than that of income that means there is a balance between the
income and expenses of bank of India. This shown ability and survival of bank in market.
77

iii) NET PROFIT OF BANK OF INDIA

TABLE NO. 4.23
PARTICULAR
Total income total
expenses= net profit

YEAR2013
YEAR 2012
35,974.97 33,109.52 31,801.34
= 2,865.45
29,291.15 = 2,510.19

YEAR 2011
24,393.49 23,766.2
= 627.29

Net profit
3,500.00
3,000.00

2,865.45
2,510.19

2,500.00

Net profit

2,000.00
1,500.00
1,000.00

627.29

500.00
0.00

YEAR2013

YEAR 2012

YEAR 2011

Figure No. 4.24

INTERPRETATION:
Unlike SBI, BOI shows continues increase , it is going in upward movement as we see in the
above graph it has increased by 1882.9 from 2011 to 2012 and 355.26 from 2012 t0 2013.
There are no ups and downs or any fluctuations seen.
78

D) KEY FINANCIAL RATIO OF BANK OF INDIA

TABLE NO. 4.24

No
.

Particulars

Year 2013

P/E Ratio
( profit Earning Ratio )

6.4

7.4

ADVANCES TO DEPOSIT RATIO

ROE
( Return on Equity)

18.4

20.03

20.2

CAPITAL ADEQUACY RATIO

12.7

14.6

13.6

NET INTEREST MARGIN %

2.1

2.0

2.1

1.6

1.6

1.1

NET NPA RATIO %

79

Year 2012

Year
2011

1. PROFIT EARNING RATIO OF BANK OF INDIA

YEAR
2013

Formula

Particulars

Price per share

340.67

Earnings per Share

= 7.0
48.5

2012
Price per share

380.00

Earnings per Share

= 8.0
47.5

2011
Price per share

452.45

Earnings per Share

= 9.7
46.5

P/E Ratio
10
8

PE Ratio

6
4
2
0
1

Figure No. 4.25

INTERPRETATION:-

80

By comparing price and earnings per share the analysis of stock market is done and the
valuation of company and its shares relative to the income the company is actually generation
is done .a higher p/e ratio of SBI in 2011 with a difference by comparing 2012 and 2013
respectively, which means that investors are paying more for each unit of net income, so the
stock is more expensive compared to one with a lower P/E Ratio.
2. ADVANCES TO DEPOSIT:
YEAR
2013

Formula

Particulars

Total advances

289367.50
= 75.78%

Total Deposits

381839.59

2012
Total advances

248833.34
= 78.19%

Total Deposits

318216.03

Total advances

213096.18

2011

= 71.29%

Total Deposits

298885.81

81

Advances to deposit
80

78.19

78
76

75.78
Advances to deposit

74
71.29

72
70
68
66
2013

2012

2011

Figure No. 4.26

3. RETURN ON EQUITY OF BANK OF INDIA:

YEAR
2013

Formula

Particulars

Net income

3457.74
* 100 = 13.75

Shareholders Equity

25135.35

2012
Net income
2677.52
Shareholders Equity

* 100 = 12.7
18238.83

2011
Net income

2488.7
* 100 = 14.4

Shareholders Equity

14924.75

82

RETURN ON EQUITY
15
14.4

14.5
14

13.75
RETURN ON EQUITY

13.5
13

12.7

12.5
12
11.5
2013

2012

2011

Figure No. 4.27

INTERPRETATION:
Also known as return on net worth (RONW). It is the amount of net income returned as a
percentage of shareholders equity. Bank 0f India had the best return on equity in 2010 as
compared to 2012 with a difference of 1.8, it was at the best level, but in 2012 and 2011 it has
shown a tremendous decrease.

4. CAPITAL ADEQUACY RATIO:

TIER 1 CAPITAL= (paid up capital + statutory reserves + disclosed free reserves)

(Equity investments in subsidiary + intangible assets + current & b/f losses)

TIER 2 CAPITAL = A) Undisclosed Reserves,

B) General Loss reserves,
C) Hybrid debt capital instruments and subordinated debts
83

Where can either be weighted ( ) or the respective minimum total requirement.

100%
90%
80%

11.15

70%

11.95

12.17

60%

BASE2

50%

BASE1

40%
30%

11.02

11.57

11.42

20%
10%
0%

Figure No. 4.28

5. NET INTEREST MARGIN:

Net Interest Margin (%) = Net Interest Income/Average Assets

Net Interest Income = Interest Earned Interest Expended

Average Total Assets = [Total Assets CY+ Total Assets PY]/2

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NET INTEREST MARGIN %

2.34

2.32

2.32
2.3
2.28
2.26

NET INTEREST
MARGIN %

2.27
2.25

2.24
2.22
2.2
2013

2012

Figure No. 4.29

6. NET NPA RATIO:

85

2011

NET NPA RATIO%

2.5
2

2.04

1.5

NET NPA RATIO%

1.47

0.91

0.5
0
2013

2012

2011

Figure No. 4.30

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CHAPTER V
FINDINGS AND SUGGESTIONS

FINDINGS:
Profit Earning Ratio of State Bank of India is up to 11.48 than profit earning IDBI and Bank
of India which is 6.4 & 7 in 2013.
Return on Equity of IDBI over powers than return on equity of State Bank of India and Bank
of India by 2 and 5.7.
NPA of SBI is more than IDBI & Bank of India still the bank is performing well & the price
of shares of this bank in increasing.
Advances to deposit ratio of SBI is also more than the two banks. There is very less
difference in SBI & IDBI which is of 0.76.
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SUGGESTIONS:

The analysis carried out at Globe Capital Market Limited for of the public sector banks their
profit and loss account, balance sheet and ratios. I shall suggest the investors to give priority
to State Bank of India and IDBI than other bank as a value investment. The reasons are:
The return that the banks have given on the share holder investment is the substantially good.
The profit growth is showing upward trend.

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The kind of profit the banks are generating over the period is quit appreciable. The capital
appreciation of the share is good for investors.
The fundamental of banks are strong and looks that the market price of shares would be
touching new heights.
The dividend per share will be more than other bank.

LIMITATIONS OF STUDY:

The scope of this project is limited to only one sector i.e. public sector banks.

If the secondary data provided turns to be wrong then the analysis may also differ.

The project is concerned with only three banks among the many players in the
banking sector.
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Scope of study is limited to Equity Market only and it does not cover commodity and
derivatives market.

CONCLUSION:
Fundamental of any company is more important information that any investor must collect
and analyze.
The public sector banks will see an upswing in the near future because there is a huge
requirement of the fund from the sectors, goods as well as services. The banking industry will
have bright future ahead. This industry has huge growth prospects.
On comparing various public sector banks with each other on the basis of the financials data
State Bank of India and IDBI was found to be the best for a value investment.

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Fundamental analysis helps an investor to take rational decisions on buying or selling of a

specific stock.

BIBLIOGRAPHY:
BOOKS
Gordan and Natrajan financial markets and services.
Dr. Mahesh kulkarni (2008) - Research Methodology Nirali Prakashan.

WEBSITES

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 www.sbi.co.in
www.idbi.com
www.bankofindia.co.in
www.investopedia.com
www.moneycontrol.com
www.nseindia.com
www.economictimes.com

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