Internship Project Report on

“Fundamental and Technical Analysis of Banking and

NBFC Sector”

Submitted By:

Mehal Dhongade

PGDM (e-business) 2014-16

Roll No. PG14061

Under the guidance of,

Mr. Nikesh Ruparel

Senior Business Mentor

ACADEMIC YEAR 2015-2016

 DECLARATION

I, Mehal Dhongade, student of Mumbai Educational Trust (MET), hereby declare that this
project report titled “Fundamental and Technical analysis of Banking and NBFC sector” at
Aditya Birla Financial Services Group, carried out under the guidance of Mr. Nikesh Ruparel
at Aditya Birla Financial Services Group, is the record of authentic work carried out by me

during the period from 4th May 2015 to 4th of July 2015.

Sign:

Mehal Dhongade

PGD 14061

MET ICS, Mumbai

 CERTIFICATE

This is to certify that Mr. Mehal Dhongade has successfully completed the project work titled
“Fundamental and Technical analysis of Banking and NBFC sector” in partial fulfilment of
requirement for the completion of Post-Graduation Course as prescribed by the College of
Management.

This project report is the record of authentic work carried out by him during the period from

4thMay, 2015 to 4th July, 2015. He has worked under my guidance.

Sign:

(Mr. Nikesh Ruparel,

Senior Business Mentor,
ABFSG, Mumbai)
 INDEX
Sr no. Particulars Page no
1 Introduction to Banking
2 Evolution of Indian Banking sector
3 Prospects of Banking sector

4 Fundamental Analysis of Banking Sector

5 Banking company vs Benchmark

6 Hedging

7 Technical Analysis of Banking Sector

8 Trend continuation pattern

9 Trend reversal pattern

10 Candlesticks

11 Introduction to NBFC

12 NBFC vs BANKS

13 Prospects of NBFC

14 Fundamental Analysis of NBFC

15 NBFC vs Benchmark

16 Technical Analysis of NBFC

17 MET Large Cap Fund

18 Fund performance vs Benchmark

19 Conclusion

20 Webliography
Banking Sector
Introduction
According to the Reserve Bank of India (RBI), the banking sector in India is sound,
adequately capitalised and well-regulated. Indian financial and economic conditions are much
better than in many other countries of the world. Credit, market and liquidity risk studies
show that Indian banks are generally resilient and have withstood the global downturn well.
With a sense of optimism slowly creeping in, the banking industry expects that 2015 will
bring better growth prospects. This optimism stems from factors such as the Government
working hard to revitalise the industrial growth in the country and the RBI initiating a
number of measures that would go a long way in helping the banks to restructure. The recent
announcements of RBI, it is felt, are a clear pointer to the future of the restructured domestic
banking industry.

The Structure of Indian Banking Sector

Evolution of Indian Banking Sector

Growth of Indian Banking Sector

Deposits have grown at a CAGR of 19.7 per cent during FY07–14 to an estimated USD 1.31
trillion

Deposit growth has been mainly driven by strong growth in savings amid rising disposable
income levels

Access to the banking system has also improved over the years due to persistent government
efforts to promote banking-technology, and promote expansion in unbanked and non-
metropolitan regions
Net Interest Income (NII) and Net Interest Margin (NIM)
Financial Year 2014

India's underlying economic growth trends remained weak during FY14. High and persistent
inflation remained a key macroeconomic challenge facing India throughout the FY14. During
the year, the operating environment for the banking system continued to be challenging with
persistent high inflation, muted growth, and slowdown in credit off-take, concerns over
higher non-performing assets and a high incidence of restructured assets. Against the
backdrop of a slowdown in the domestic economy and tepid global recovery, the growth of
Indian banking sector too remained under pressure in FY14. That said, the deposit and credit
growth was marginally better than that in FY13. The growth in deposits of scheduled
commercial banks (SCBs) at 14.6% in FY14 was marginally better than the growth at 14.2%
in the previous financial year. However, this growth came on the back of the liberal policy
adopted by the RBI towards non-resident Indian deposits. The credit growth at 14.3% in
FY14 too was marginally better than that at 14.1% in FY13. As a part of monetary
transmission, base rate of major banks inched up from 9.70%-10.25% in April 2013 to 10.0%
-10.25% in March 2014, while deposit rates were readjusted from 7.5%-9.00% to 8.0%-
9.25% in the same period.

In FY14, private sector lenders experienced significant growth in credit cards and personal
loan businesses. Owing to elevated inflation levels, the banks were compelled to offer
attractive interest rates on their term deposits so as to protect their liability franchise. The
higher deposit rates coupled with lower credit offtake impacted the net interest income and
thereby the earnings profile of commercial banks. Additionally, the macroeconomic
challenges and poor repayment capacity of borrower's deteriorated the banks' asset quality
further in FY14. Consequently, the restructured assets moved north during the year.
However, despite the challenging environment, few banks with prudent risk management
systems and the ones with robust cash recovery delivered a sound performance during FY14.

The aggregated profit after tax (PAT) of PSBs declined by 27% YoY during FY14. The gross
NPAs of banks (PSBs + private) increased over the last one year from 3.3% to 3.9% as on
March 2014. Restructured advances of the PSBs remain at elevated levels of 6.2% as on
March 31, 2014. Private sector banks were able to hold on good asset quality as reflected in
their gross NPAs of 1.8% as on March 2014. Banks started reporting capital adequacy as per
Basel III norms since June 2013. The Tier 1 capital of PSBs stood at around 8.6% as on
March 31, 2014 as against the required Tier 1 capital of 6.5%, while that of private sector
banks was well above the norms around 12.8%. Return on net worth for PSBs dropped to
single digit in FY14.

Prospects
The Indian economy is now on the threshold of a major transformation, with expectations of
policy initiatives being implemented. Positive business sentiments, improved consumer
confidence and more controlled inflation should help boost the economic growth. Higher
spending on infrastructure, speedy implementation of projects and continuation of reforms
will provide further impetus to growth. All this translates into a strong growth for the banking
sector too, as rapidly growing business turn to banks for their credit needs, thus helping them
grow.
Also, with the advancements in technology, mobile and internet banking services have come
to the fore. Banks in India are focusing more and more to provide better services to their
clients and have also started upgrading their technology infrastructure, which can help
improve customer experience as well as give banks a competitive edge.
Many banks, including HDFC, ICICI and AXIS are exploring the option to launch contact-
less credit and debit cards in the market soon. The cards, which use near field communication
(NFC) mechanism, will allow customers to transact without having to insert or swipe.
Fundamental Analysis of Banking Sector
In the fundamental analysis of private sector I have taken mostly large sector banks. I have
got 10 companies on which I have done the analysis. Firstly I have found out the Earnings per
share (EPS) then P/E ratio of all the companies. Formula of EPS is Profit / Number of
outstanding shares and P/E ratio is Market value per share / Earnings per share. After finding
P/E ratio I have founded the Sector P/E which is average of all the P/E ratio.

If P/E of company is less than Sector P/E then it’s a Value pick so out of 10 companies I have
got 4 Value pick companies, name of those banks are Karur Vysya Bank, Yes Bank, ICICI
Bank, City Union Bank. For remaining banks I have founded PEG ratio formula for the same
is P/E / EPS growth. If the PEG is less than 1 then it’s a Growth pick. I have got one Growth
pick that is IndusInd Bank. For all the 5 companies I have computed Long Term Price Target
(LTPT) which is calculated by multiplying Sector P/E and EPS, LTPT is the target which is
likely to be achieved by the companies in the near future. Net Interest Income (NII), Net
Interest Margin (NIM), CASA ratio and Return on Asset (ROA) is computed and based on
comparison of this four I have invested in the five banks.

Based on the Value and the Growth picks I have decided to invest 6 Cr. out of 10 Cr. in
private banking sector. Out of 6 Cr. I have kept some of fund as cash in hand which will be
utilized for hedging of some of the companies the same is explained in the further part.
Allocation of Fund

Banks
Market price (11th June) No. of Shares Total value
1 Karur Vysya 453.45 39695 17999697.75
2 Yes Bank 812 17734 14400008
3 ICICI Bank 287.6 41724 11999822.4
4 City Union Bank 101.5 59113 5999969.5
5 IndusInd Bank 807.2 11149 8999472.8

59398970.45

Weightage of Banking Companies

Banking companies weightage

25.00%

20.00%
Karur Vysya

15.00% Yes Bank

ICICI Bank
10.00% 21.77%
18.00% City Union Bank
IndusInd Bank
5.00% 10.00%
5.24% 5.00%
0.00%
KARUR YES BANK ICICI BANK CITY UNION INDUSIND
VYSYA BANK BANK
 From 11th june I have started monitoring fund till 9th july, in this time period there was
various ups and downs in the market and the price of all the stock were moving accordingly.
The position of the fund on 9th july was as follows

Price at Inception Units Value in Rupees % Latest Market Price Value in Rupees Gain or Loss Gain or Loss %
BUY Per Share Purchased at Inception Weightage As on As on In Rupees Percentage wise Weightage
11-Jun-15 11-Jun-15 11-Jun-15 11-Jun-15 09-Jul-15 09-Jul-15 09-Jul-15 09-Jul-15 09-Jul-15
Banking Companies
Karur Vysya ₹ 453.45 39695 ₹ 179,99,697.75 18.00% ₹ 490.90 ₹ 194,86,275.50 ₹ 14,86,577.75 8.26% 18.16%
Yes Bank ₹ 812.00 17734 ₹ 144,00,008.00 14.40% ₹ 799.80 ₹ 141,83,653.20 ₹ -2,16,354.80 -1.50% 13.22%
ICICI Bank ₹ 287.60 41724 ₹ 119,99,822.40 12.00% ₹ 309.50 ₹ 129,13,578.00 ₹ 9,13,755.60 7.61% 12.03%
City Union Bank ₹ 101.50 59113 ₹ 59,99,969.50 6.00% ₹ 100.95 ₹ 59,67,457.35 ₹ -32,512.15 -0.54% 5.56%
IndusInd Bank ₹ 807.20 11149 ₹ 89,99,472.80 9.00% ₹ 893.00 ₹ 99,56,057.00 ₹ 9,56,584.20 10.63% 9.28%
Total ₹ 593,98,970.45 59.40% ₹ 625,07,021.05 ₹ 31,08,050.60 5.23% 58.25%

Gain of Banking companies

₹16,00,000.00
₹14,86,577.75
₹14,00,000.00
₹12,00,000.00
₹10,00,000.00 ₹9,13,755.60 ₹9,56,584.20

₹8,00,000.00
₹6,00,000.00
₹4,00,000.00
(₹2,04,717.30) (₹32,512.15)
₹2,00,000.00
₹0.00
KARUR YES BANK ICICI BANK CITY UNION INDUSIND
(₹2,00,000.00)
VYSYA BANK BANK
(₹4,00,000.00)
 Gain in percentages
12.00%

10.00%

8.00%
Karur Vysya
6.00%
10.63% Yes Bank
4.00% 8.26% 7.61% ICICI Bank
2.00%
-1.50% City Union Bank
-0.54%
0.00% IndusInd Bank
KARUR YES BANK ICICI BANK CITY UNION INDUSIND
-2.00% VYSYA BANK BANK
-4.00%

Banking Co' vs Benchmark

Banking Co' vs Bank Nifty

11.00
10.00
9.00
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
-1.00

FUND BankNifty

As you can see that the returns of Banking sector fund is more than that of the Benchmark
BankNifty. The returns given by the Banking sector is 7.25% where as the return given by the
BankNifty is 4.95%.
Hedging

What is Hedging?

Making an investment to reduce the risk of adverse price movements in an asset. Normally, a
hedge consists of taking an offsetting position in a related security, such as a futures contract.
An example of a hedge would be if you owned a stock, then sold a futures contract stating that
you will sell your stock at a set price, therefore avoiding market fluctuations.
Investors use this strategy when they are unsure of what the market will do. A perfect hedge
reduces your risk to nothing (except for the cost of the hedge).

Hedging in Fund

In the Banking fund I was not sure about the Yes Bank so I decided to hedge it. I hedged 10%
of the Yes Bank stock which was in the equity market so I sold (i.e. I went short) 10% of it in
the Future market. Now in the Future market you need not to pay all the money, the margin
amount has to be paid. This margin differs from stock to stock, for Yes Bank indicative span
margin is 8% and gross exposure margin is 5%, so the total margin is 13%. Only 13% of
amount of the total amount has to be paid. In the Futures market you can’t take single share
you have to take it in lot so the lot for Yes Bank is 250 and I have shorted 7 such lots.

After hedging total portfolio of the banks is as follows

Banks
Market price No. of Shares Total value
1 Karur Vysya 453.45 39695 17999697.75
2 Yes Bank 812 17734 14400008
3 ICICI Bank 287.6 41724 11999822.4
4 City Union Bank 101.5 59113 5999969.5
5 IndusInd Bank 807.2 11149 8999472.8

59398970.45
Hedging 184422.88
Cash in hand 416606.67
60000000
The performance of the Banking sector after hedging is as follows

Banking Co' Vs Bank Nifty

12.00

10.00

8.00

6.00

4.00

2.00

0.00

-2.00

FUND(with hedging) BankNifty

As you can clearly see that without hedging the percentage return is 7.25% and with hedging
is 7.34% so it clearly shows that when market goes in the opposite direction of what you need
and if you have used hedging then it will give more returns.
Technical Analysis
“Technical Analysis is the study of market action, primarily through the use of charts, for the
purpose of future price trends.” The term “market action” includes the three principal sources
of information available to the technician – price, volume and open interest.

Technical analysis depends on DOW THEORY and its principles are as follows

1. The Averages Discount Everything

2. The Market Has Three Trends
3. Major Trends Have Three Phases
4. The Averages Must Confirm Each Other
5. Volume Must Confirm the Trend
6. A Trend Is Assumed to Be Continuous Until Definite Signals of Its Reversal
Technical Analysis is based on the following 3 principles:

• Price Discounts Everything

According to technical analysts, price reflects everything that can affect the market. Factors,
affecting the market, are economic, political, psychological and fundamental. Technical
analysis is mainly concerned with the price movements going up or going down, and it does
not take into consideration the factors that affect the price changes.

• Prices Move in Trends

In technical analysis it is accepted to say that price movements follow the trend. That is to say
after the trend has been established it is more likely that the future price movement will be in
the same direction as the trend.

• History Repeats Itself

History tends to repeat itself mostly in terms of price movements. Technical analysis uses
chart patterns for analyzing the historical data of price movements for forecasting the future
movements. The repetition of the price movements is closely connected to market
psychology, and the market participants are expected to react the same way to the similar
events which are likely to occur in future.
Trend continuation pattern

Trend continuation patterns are formed during a pause in the trend, and they are quite easily
recognized on the charts. Continuation patterns are usually shorter in their duration than the
reversal patterns, and in contrast to reversal patterns, continuation patterns indicate trend
consolidations, and continuations and not trend reversals. Continuation patterns include the
following formations:

1. Ascending Triangle

2. Descending Triangle

3. Symmetric Triangle

4. Bullish Rectangle

5. Rectangle (Bearish)

6. Forex Flag

7. Pennant

8. Wedge

Trend reversal pattern

Trend reversal patterns indicate the end of a previous trend and show that the market is ready
to begin a new trend. The most well-known reversal patterns are the following:

1. Head and Shoulders

2. Inverse Head and Shoulders

3. Double Top

4. Double Bottom

5. Triple Top

6. Triple Bottom
Candlesticks

The Japanese began using technical analysis to trade rice in the 17th century. While this early
version of technical analysis was different from the US version initiated by Charles
Dow around 1900, many of the guiding principles were very similar:

 The “what” (price action) is more important than the “why” (news, earnings, and so on).
 All known information is reflected in the price.
 Buyers and sellers move markets based on expectations and emotions (fear and greed).
 Markets fluctuate.
 The actual price may not reflect the underlying value.

Formation

In order to create a candlestick chart, you must have a data set that contains open, high, low
and close values for each time period you want to display. The hollow or filled portion of the
candlestick is called “the body” (also referred to as “the real body”). The long thin lines
above and below the body represent the high/low range and are called “shadows” (also
referred to as “wicks” and “tails”). The high is marked by the top of the upper shadow and
the low by the bottom of the lower shadow. If the stock closes higher than its opening price, a
hollow candlestick is drawn with the bottom of the body representing the opening price and
the top of the body representing the closing price. If the stock closes lower than its opening
price, a filled candlestick is drawn with the top of the body representing the opening price
and the bottom of the body representing the closing price.
Doji

Doji are important candlesticks that provide information on their own and as components of
in a number of important patterns. Doji form when a security's open and close are virtually
equal. The length of the upper and lower shadows can vary and the resulting candlestick
looks like a cross, inverted cross or plus sign. Alone, doji are neutral patterns. Any bullish or
bearish bias is based on preceding price action and future confirmation. The word “Doji”
refers to both the singular and plural form.

Star Position

A candlestick that gaps away from the previous candlestick is said to be in star position. The
first candlestick usually has a large real body, but not always, and the second candlestick in
star position has a small real body. Depending on the previous candlestick, the star position
candlestick gaps up or down and appears isolated from previous price action. The two
candlesticks can be any combination of white and black. Doji,hammers, shooting stars and
spinning tops have small real bodies, and can form in the star position. Later we will examine
2- and 3-candlestick patterns that utilize the star position.
Harami Position

A candlestick that forms within the real body of the previous candlestick is in Harami
position. Harami means pregnant in Japanese and the second candlestick is nestled inside the
first. The first candlestick usually has a large real body and the second a smaller real body
than the first. The shadows (high/low) of the second candlestick do not have to be contained
within the first, though it's preferable if they are. Doji and spinning tops have small real
bodies, and can form in the harami position as well. Later we will examine candlestick
patterns that utilize the harami position.

Hammer and Hanging Man

The Hammer and Hanging Man look exactly alike, but have different implications based on
the preceding price action. Both have small real bodies (black or white), long lower shadows
and short or non-existent upper shadows. As with most single and double candlestick
formations, the Hammer and Hanging Man require confirmation before action. The Hammer
is a bullish reversal pattern that forms after a decline. In addition to a potential trend reversal,
hammers can mark bottoms or support levels. After a decline, hammers signal a bullish
revival. The low of the long lower shadow implies that sellers drove prices lower during the
session. However, the strong finish indicates that buyers regained their footing to end the
session on a strong note. While this may seem enough to act on, hammers require further
bullish confirmation. The low of the hammer shows that plenty of sellers remain. Further
buying pressure, and preferably on expanding volume, is needed before acting. Such
confirmation could come from a gap up or long white candlestick. Hammers are similar to
selling climaxes, and heavy volume can serve to reinforce the validity of the reversal.
Inverted Hammer and Shooting Star

The Inverted Hammer and Shooting Star look exactly alike, but have different implications
based on previous price action. Both candlesticks have small real bodies (black or white),
long upper shadows and small or nonexistent lower shadows. These candlesticks mark
potential trend reversals, but require confirmation before action.

The Shooting Star is a bearish reversal pattern that forms after an advance and in the star
position, hence its name. A Shooting Star can mark a potential trend reversal or resistance
level. The candlestick forms when prices gap higher on the open, advance during the session
and close well off their highs. The resulting candlestick has a long upper shadow and small
black or white body. After a large advance (the upper shadow), the ability of the bears to
force prices down raises the yellow flag. To indicate a substantial reversal, the upper shadow
should relatively long and at least 2 times the length of the body. Bearish confirmation is
required after the Shooting Star and can take the form of a gap down or long black
candlestick on heavy volume.

The Inverted Hammer looks exactly like a Shooting Star, but forms after a decline or
downtrend. Inverted Hammers represent a potential trend reversal or support levels. After a
decline, the long upper shadow indicates buying pressure during the session. However, the
bulls were not able to sustain this buying pressure and prices closed well off of their highs to
create the long upper shadow. Because of this failure, bullish confirmation is required before
action. An Inverted Hammer followed by a gap up or long white candlestick with heavy
volume could act as bullish confirmation.
Parabolic SAR

MACD
EMA (Exponential Moving Average)

SMA (Simple Moving Average)

Bearish Harami
NBFC

Introduction

The Indian economy is currently recovering from the phase of sluggish growth and is
characterized by tangible progress towards fiscal consolidation and strong macro-economic
fundamentals. The Make in India campaign, government’s initiative on bringing regulatory
reforms to facilitate ease of doing business in India, thrust towards growth of infrastructure
sector and financial inclusion will also demand NBFCs to shoulder the growth and
development phase, India is seemingly walking into.

NBFCs in India have been complimenting the banks in rendering financial services and over
the last few years have also been instrumental in bringing about financial inclusion in the
country. NBFCs have a critical role playing in infrastructure financing, micro lending, asset
backed lending, factoring and have a network which is far wider and granular than banks in
some cases. NBFCs accounted for 13% of the banks assets as on 31st March, 2013. While the
NBFCs assets as a percentage to GDP has increased from 8.4 per cent in 2006 to 12.5 per
cent in 2013, the NBFC sector has a share of 8% in the total financial sector assets of the
Indian economy.

NBFCs versus Banks

The financial sector in India consists of two main players – Banks and NBFCs. Primarily,
banks are highly regulated; they are covered by directed lending requirements where they
have to lend 40% of their assets into so-called priority sector. NBFCs, on the contrary, have
no similar requirements. It is quite difficult to get a banking license; however, there are
nearly 11000 NBFCs in the country, and many of them are available for acquisitions too.
Therefore, many people feel that the NBFC-route is the easiest way to enter the financial
sector of India. Most of the leading banks also have affiliated NBFCs.

Performance of major NBFC in 2013-14

Similar to previous year NBFCs have been pioneering with respect loan against property,
retail asset backed lending, lending against securities, microfinance etc and have been
extending credit to retail customers in under-served areas and to unbanked customers.
Subdued economy, weak business outlook and high delinquency levels had created
challenging period for the NBFCs in 2013-14 but the economic conditions are expected to
improve in the coming financial year and so is the expectation of credit growth and
performance of NBFCs expected to improve. The operating environment has been
challenging for businesses putting constraints on credit recoveries for NBFCs as well.
However, in the financial year 13-14 the retail credit growth rate deteriorated due to a slow
economy and high interest rates unfavourably affecting demand for credit, mainly in the asset
financing segments. In the financial year 13-14 only 8% growth in retail credit was achieved
as compared to a growth of 19% in the previous year.

Prospects

 The economy has been seeing early signs of improvement in various macroeconomic
parameters. These events are expected to give further boost to the economic growth of
the nation.

 Factors like higher industrial growth and clearance of stalled projects are likely to
reduce cyclical pressure on major non-bank finance companies from the second half
of the next fiscal.
 Fundamental Analysis of NBFC Sector
Fundamental analysis of NBFC sector is done in the same manner of that of Banking sector
first finding the P/E ratio and then comparing it with the sector P/E and if individual P/E is
less than Sector P/E then it’s a value pick otherwise it is a growth pick

The illustration of the same is as follows

EPS
P/E Sector P/E 2015 LTPT EPS growth PEG NPA gross Net Profit profit growth
21.31

Muthoot Finance Q4 2014 1.57% 180.94

Q4 2015 10.96 16.77 357.35 1.88% 165.19 -8.70

L&T Finance Q4 2014 3.18% 0.96

Q4 2015 39.67 1.52 32.39 117.142857 0.338646 Growth 3.01% 190.08 19700.00

Bajaj Holding Q4 2014 72.94

Q4 2015 17.14 78.17 1665.72 41.76 -42.75

Reliance Capital Q4 2014 Value 165

Q4 2015 12.11 30.06 640.55 481 191.52

Sks Microfinance Q4 2014 27.11

Q4 2015 28.92 14.79 315.16 129.302326 0.223662 Growth 40.54 49.54

IIFL Holding Q4 2014

Q4 2015 55.32 3.12 66.48 -5.4545455

Hdfc Q4 2014 1,723.10

Q4 2015 31.31 38.16 813.15 9.46643718 3.307475 1,862.43 8.09

India Bulls Housing Q4 2014 458.52

Q4 2015 10.41 55.7 1186.91 Value 526.93 14.92

Lic Housing Finance Q4 2014 370.02

Q4 2015 14.61 27.45 584.93 378.18 2.21

Gruh finance Q4 2014 35.24

Q4 2015 40.05 5.68 121.04 -0.1757469 74.06 110.16

Dewan housing Q4 2014 141.17

Q4 2015 9.26 42.83 912.66 Value 162.28 14.95

Bajaj Finance Q4 2014

Q4 2015 25.4 179.23 3819.21 24.9947695 1.016213

Shiram Transport Q4 2014 294.96

Q4 2015 15.27 54.42 1159.64 316.73 7.38

Sundaram Finance Q4 2014

Q4 2015 35.37 41.03 874.31 3.01280442 11.73989

M&M Finance Q4 2014 310.7

Q4 2015 16.62 14.73 313.88 333.4 7.31

Shriram City Q4 2014 147.44

Q4 2015 18.92 85.52 1822.35 149.6 1.47

Cholamandalam Q4 2014 90.73

Q4 2015 19.69 30.14 642.25 Value 135.64 49.50

Powar finance Q4 2014 1,534.31

Q4 2015 5.87 45.14 961.89 1,560.75 1.72

REC Q4 2014 1,191.70

Q4 2015 5.36 53.27 1135.13 1,096.50 -7.99

IDFC Q4 2014 213.04

Q4 2015 13.92 10.58 225.45 Value 365.47 71.55
In the above Cholamandalam, Reliance capital, Dewan Housing, India Bulls, IDFC are the
value picks and L&T finance and SKS microfinance are Growth picks.

NBFC companies weightage

9.00%
8.00%
7.00%
6.00% L&T Finance
5.00%
Reliance Capital
4.00% 8.50%
7.80% 7.70% IDFC
3.00% 6.00% 4.00%
Sks Microfinance
2.00% 3.00% 3.00%
1.00% Cholamandalam
0.00% Dewan housing
India Bulls Housing

Gain of NBFC companies

₹14,00,000.00 ₹13,77,854.40

₹12,00,000.00

₹10,00,000.00 ₹9,15,370.75

₹8,00,000.00
₹5,64,135.00
₹6,00,000.00 ₹4,83,516.80
₹3,66,157.55
₹4,00,000.00 ₹2,88,585.00
₹1,93,376.80
₹2,00,000.00

₹0.00
 Gain in Percentage

17.66%
15.26%
14.10%
12.21%

5.69% 6.45%
3.75%

NBFC Fund Vs Benchmark

NBFC Fund Vs Sensex

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-2

NBFC Fund Sensex

As you can see that the returns of NBFC fund is more than that of the Benchmark Sensex. The returns
given by the NBFC sector is 10.2% where as the return given by the Sensex is 4.8%.
Technical Analysis

SMA (Simple Moving Average)

EMA (Exponential Moving Average)

MACD

Bearish Engulfing
Bollinger Bands

Parabolic SAR
MET Large Cap Fund
Objective: This fund seeks to invest in large, profitable and well-known companies, and
aims to benefit from the long term investments that the market has to offer in the large-cap
space. The investments are spread across sectors to ensure risk diversification, and stocks are
selected through fundamental analysis
Key Benefits
 It allows you to invest in a portfolio targeted at large-cap stocks which are the
preferred picks in their respective sectors.
 It offers a mitigated risk through diversification across sectors.
Scheme Name Latest NAV (Rs.)
MET Large Cap Fund 10.73

Particulars June 11, 2015 to Since Inception

July 15, 2015 July 15th, 2015
Current Value of
Investment of Rs.
Absolute Returns (%) 10,00,000
Scheme 7.32% ₹ 10,73,200.00
Benchmark* 7.18% ₹ 10,71,800.00
S&P BSE Sensex 6.93% ₹ 10,69,300.00
*S&P BSE 100

Portfolio as on July 15, 2015

Company Name % to Company Name % to
NAV NAV
Infrastructure Companies 8.85% Banking Companies 5.82%
EngineersInd 3.27% Karur Vysya 2.12%
Larsen 2.60% Yes Bank 1.66%
NBCC 2.45% ICICI Bank 1.02%
Siemens 0.53% City Union Bank 0.49%
IndusInd Bank 0.54%
Automobile Companies 2.02%
Hero Motocorp 1.38% NBFC Companies 4.20%
Ashok Leyland 0.63% L&T Finance 0.87%
Reliance Capital 0.84%
Pharma Companies 10.47% IDFC 0.76%
Aurobindo Pharma 1.00% Sks Microfinance 0.68%
Piramal Enterprises 2.17% Cholamandalam 0.43%
Wockhardt 0.78% Dewan housing 0.32%
Strides Acrolab 4.60% India Bulls Housing 0.30%
Glenmark 1.07%
Biocon 0.86% FMCG 8.61%
ITC 1.39%
Oil And Shipping 10.40% HUL 0.74%
ONGC 1.34% Colgate Palmolive 0.50%
RELIANCE 1.60% Jyothi Laboratories 1.05%
GAIL 0.88% GlaxoSmithKline Consumer 0.48%
Healthcare
Essar Oil 1.51% Tata Global Beverage 1.01%
HPCL 1.14% Relaxo Footwear 1.18%
BPCL 1.01% Britannia Industries 1.06%
Gujarat Pipavav 1.46% Bajaj Corp 1.19%
Adani Port 1.45%
Retail 1.63%
Capital Goods Companies 4.79% Bata India 0.45%
Larsen 0.82% Arvind 0.47%
Crompton Greaves 1.62% Raymond 0.31%
AIA Engineering 0.59% Trent 0.19%
Bharat Elect 0.55% V-mart 0.21%
BHEL 0.60%
Thermax 0.61% IT Companies 6.14%
Persistent Systems 0.80%
Power Sector Companies 4.71% Cyient 0.99%
NTPC 0.30% HCL Tech 2.42%
Neyveli Lignite 0.30% Infosys 0.46%
SJVN 0.83% Wipro 1.48%
Reliance Infra 0.58%
CESC 0.26% Media and Entertainment 3.94%
Torrent Power 0.53% Jagranprakashan 0.55%
JSW Energy 1.04% Shemaroo 0.55%
Tata Power 0.62% INOX Leisure 0.58%
Inox Wind 0.24% TV Today Network 1.14%
Entertainment Network India 1.12%
Steel and Aluminium 8.70%
TATA Steel 2.61% Telecommunication 5.24%
JSW Steel 0.87% Bharti Airtel 2.33%
Ratnamani Metal 0.97% Idea Cellular 1.97%
NALCO 4.26% Tata Communication 0.94%
Cement 10.08% Paints 4.41%
KCP 1.07% Kansai Nerolac paints 0.45%
Birla Corp 2.08% Akzo Nobel India 3.96%
Orient Cement 2.52%
JK Lakshmi Cement 3.42%
ACC 0.98%
Fund Performance VS S&P BSE 100
8.00%

7.00%
6.00%

5.00%

4.00%
MET FUND
3.00%
S&P BSE 100
2.00%

1.00%

0.00%
11-Jun-15
13-Jun-15
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25-Jun-15
27-Jun-15
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15-Jul-15
01-Jul-15
03-Jul-15
05-Jul-15
07-Jul-15
09-Jul-15
11-Jul-15
13-Jul-15
-1.00%

Fund Performance VS S&P BSE 100

8.00%

7.00%

6.00%

5.00%

4.00% MET FUND

3.00% S&P BSE SENSEX

2.00%

1.00%

0.00%
11-Jun-15 18-Jun-15 25-Jun-15 02-Jul-15 09-Jul-15
-1.00%
Conclusion
Banking companies

ICICI Bank, Yes Bank, Karur Vysya, City Union Bank are fundamentally strong as their
NIM and Casa ratio is increasing and P/E is less which is good from investors point of view.

IndusInd Bank’s NIM has decreased and P/E is more than Sector P/E but it is a growth pick
and this bank has given good returns in the past.

Technically ICICI is in sideways, Yes Bank is in downtrend, Karur Vysya, City Union Bank,
and IndusInd bank are in uptrend.

NBFC companies

Reliance Capital, India Bulls Housing Finance, Dewan Housing, Cholamandalam investment
and finance, IDFC, L&T Finance Holding, SKS Microfinance are fundamentally strong.

Technically Reliance Capital is in downtrend, Dewan Housing and IDFC are in sideways,
and India Bulls Housing Finance, Cholamandalam investment and finance, L&T Finance
Holding, SKS Microfinance are in uptrend.
WEBLIOGRAPHY

www.india-financing.com/overview-of-the-indian-nbfc-sector.html

www.equitymaster.com/detail.asp?date=9/13/2003&story=5&title=Identifying-an-FI-
stock-Dos-and-Donts

http://stockshastra.moneyworks4me.com/economic-outlook/indian-banking-industry-
indian-banks-structure-business-model/

www.equitymaster.com/research-it/sector-info/bank/Banking-Sector-Analysis-
Report.asp

http://www.india-financing.com/images/Articles/NBFC_Sector_Report_2014.pdf

www.equitymaster.com/research-it/sector-info/finance/Investment-Finance-Sector-
Analysis-Report.asp

http://www.moneycontrol.com/india/stockpricequote/finance-
investments/ltfinanceholdings/LFH

http://www.moneycontrol.com/india/stockpricequote/finance-
investments/cholamandalam

http://www.moneycontrol.com/india/stockpricequote/finance-investments/dewan-
housing

www.investopedia.com/terms/h/hedge.asp

http://www.yourarticlelibrary.com/banking/indian-banking-system-structure-and-
other-details-with-diagrams/23495/

http://www.ibef.org/industry/financial-services-india/showcase