A STUDY ON The Performance of Selected Indian Banking Stocks

Submitted to: Guru Nanak Dev University, Amritsar In Partial Fulfillment of the Requirements for the Award of Degree of Masters of Business Economics (2009-2011)

SUPERVISED BY: Mrs. Renu Bhatia (Faculty)

SUBMITTED BY: Deepika Jain ROLL NO: 892957

NEW DELHI INSTITUTE OF MANAGEMENT 61, Tughlakabad, New Delhi-110062

DECLARATION

I, Deepika Jain hereby declare that the project work entitled A Study on the Performance of Selected Indian Banking Stocks, submitted to Guru Nanak Dev University, Amritsar, is a record of an original work done by me under the guidance of Mrs. Renu Bhatia, Faculty, New Delhi Institute of Management, New Delhi, and this project work has not performed the basis for the award of any degree or diploma and similar project if any.

Place: New Delhi Dated:

Deepika Jain MBE-4th Semester

CERTIFICATE
This is to certify that the project titled A Study on the Performance of Selected Indian Banking Stocks, submitted by Deepika Jain to New Delhi Institute of Management, Guru Nanak Dev University in partial fulfilment of requirement for the award of the M.B.E. Degree is an original piece of work carried out under my guidance and may be submitted for evaluation.

The assistance rendered during the study has been duly acknowledged.

No part of this work has been submitted for any other degree.

Place: New Delhi Dated:

Mrs. Renu Bhatia (Faculty Guide)

ACKNOWLEDGEMENT
I would like to offer my sincere gratitude to various people, who directly or indirectly have contributed in the development of this work and who have influenced my thinking, behaviour and acts during the course of study. I am indebted to Mrs. Renu Bhatia, Faculty, NDIM for her support, co-operation and motivation provided to me during the study. Many others had a direct or indirect, by no means negligible contribution in the completion of the project. The project has been a learning experience for me and would not have been possible without the support and guidance of the above mentioned people. Needless to say, I alone remain responsible for any errors that might have crept into the pages, despite of my best possible efforts to avoid them.

Deepika Jain Roll No.: 892957 MBE-4th Semester

TABLE OF CONTENTS S.No.

Chapter 1 1.1 1.2 1.3 1.4 Chapter 2 Chapter 3 Chapter 4 4.1 4.2 4.3 4.4 Chapter 5 5.1 5.2 5.3 5.4 Chapter 6 6.1 6.2 Introduction Introduction Objective of the Study Scope of the Study Research Limitations Review of Literature Research Approach Indian Banking Sector Nationalisation of Indian Banks Financial and Banking Sector Reforms Current Scenario of Banking Sector in India Employment Scenario in the Banking Sector
Company Profiles of the Selected Banking Stocks

CONTENTS

PAGE NO.
1-16 2 14 15 16 17-21 22-25 2627 29 35 39
41-58

ICICI Bank Ltd. AXIS Bank Ltd. HDFC Bank Ltd. Punjab National Bank Ltd.(PNB) Analysis & Findings Analysis of Liquidity of Selected Banking Stocks Performance Evaluation of Risk & Return of Selected Banking Stocks Conclusion and Suggestions Annexure Bibliography Tables

42
46 49 53

59-70
61 65

Chapter 7

71-73

74-91 75 77

LIST OF TABLES

TABLE NO.
5.1 5.2 5.3 5.4 6.1 6.2 6.3 6.4 6.5 8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8

TITLE
ICICI Bank Ltd. Key Data AXIS Bank Ltd. Key Data HDFC Bank Ltd. Key Data Punjab National Bank Ltd. Key Data Volume, Market Price and Turnover of Stocks of ICICI Bank Ltd. Volume, Market Price and Turnover of Stocks of Axis Bank Ltd. Volume, Market Price and Turnover of Stocks of HDFC Bank Ltd. Volume, Market Price and Turnover of Stocks of Punjab National Bank Ltd. Summary of Results Five years closing prices on monthly basis and calculation of returns (%) of stock of ICICI Bank Results calculated by stocks of ICICI Bank Five years closing prices on monthly basis and calculation of returns (%) of stock of AXIS Bank Results calculated by stocks of AXIS Bank Five years closing prices on monthly basis and calculation of returns (%) of stock of HDFC Bank Results calculated by stocks of HDFC Bank Five years closing prices on monthly basis and calculation of returns (%) of stock of PNB Results calculated by stocks of PNB

PAGE NO.
45 48 53 58 61 61 62 62 65 77 80 80 83 84 87 87 91

LIST OF GRAPHS & CHARTS

CHART NO. LIST OF GRAPHS

5.1 5.2 5.3 5.4

TITLE

PAGE NO.
44 47 53 57

Stock Performance over the Years of ICICI Bank Ltd. Stock Performance over the Years of AXIS Bank Ltd. Stock Performance over the Years of HDFC Bank Ltd. Stock Performance over the Years of Punjab National Bank Ltd.

LIST OF CHARTS
6.1
6.2

6.3 6.4 6.5

Beta of Selected Four Banking Companies Stocks Alpha of Selected Four Banking Companies Stocks Standard Deviation of Selected Four Banking Companies Stocks Sharpes Index of Selected Four Banking Companies Stock Treynors Ratio of Selected Four Banking Companies Stocks

66
67

68 69 70