INSTITUTE FOR TECHNOLOGY AND MANAGEMENT

EQUITY RESEARCH ON BANKING

SECTOR

FACULTY GUIDE : PROF. VIJAYANTA PAWASE BY : SAGAR MODI

COMPANY GUIDE : MR. NIKESH RUPAREL PGDM 1985
FINANCE 1

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 OBJECTIVES

 To apply principles and theories learned in classroom in a

professional environment
 To understand the formal and informal relationships in an
organization
 To understand the basics of Equity research
 Fundamental analysis of Banking sector
 Technical analysis of selected stocks
 To provide an overview of Banking sector
 To create a virtual mutual fund and to compare total fund’s NAV with
SENSEX
 COMPANY’S PROFILE

 Established in 1994
 The investment manager of Birla Sun Life Mutual Fund
 Joint venture between the Aditya Birla Group and the Sun Life
Financial Inc. of Canada.

 Assure Fund
 Income Advantage Fund
 Protector Fund
 Builder Fund
 Balancer Fund
 Enhancer Fund
 Magnifier Fund
 CLASSROOM TRAINING

• Goal Setting • M&A

• Risk Profiling • Venture Capital
• Asset Allocation • Private Equity
• Equity Market • Sector Analysis
• Debt Market • IPO
• Mutual Fund • FPO
• Life/General Insurance • Technical Analysis
• Fundamental Analysis
• Target Achieved
• Online Share Trading - Sold a Life Insurance Policy
o of Rs. 50000
 BANKING SECTOR IN INDIA

 1876.8 billion US $ - India’s GDP in 2014

 10% contribution from Insurance and banking
 58.7% of the households have access to banking services
 1,15,082 (38.2% in rural) bank branch network
 1,60,055 (14.58% in rural) ATM network

BUSINESS DIVISION
A. Retail Banking
B. Wholesale Banking
C. Treasury Operation
D. Other Banking Businesses
 IMPACT OF UNION BUDGET 2014-15

POSITIVE IMPACT
 Allowed PSU banks to raise capital by selling Govt. stake
 Allowed banks to raise long-term funds for lending to the
Infrastructure sector
 Increase in Tax exemptions

NEGATIVE IMPACT
 PSU Banks would need Rs. 2.4 lakh crore Govt. infusion by 2018
 Hike in farm credit from 7 lakh crore to 8 lakh crore
 RECENT DEVELOPMENT

 PRADHAN MANTRI JAN - DHAN YOJNA

- launched by the Prime Minister of India,
Narendra Modi on 28 August 2014

 OBJECTIVES :
- Universal access to banking facilities
- Providing Basic Banking Accounts with overdraft facility
and RuPay Debit card to all households
- An inbuilt Accident insurance
- Financial Literacy Programme
 SWOT ANALYSIS

STRENTHS WEAKNESSES
- Valuable contributor to GDP - Increasing NPA
- Regulatory environment - Lack of product differentiation
- Government support - Low penetration

OPPORTUNITIES THREATS
- Modern technology - Customer dissatisfaction
- Untapped rural market - Rise of monopolistic structure
- Globalization
 PEST ANALYSIS

POLITICAL FACTORS ECONOMIC FACTORS

- Monitary policy - More saving
- Changes in interest rates - More capital formation
- Budget and budget measures - Increase in production of goods and
s services

SOCIAL FACTORS TECHNOLOGICAL FACTORS

- Increase in population - Internet banking
- Changes in lifestyle - IT services and mobile banking
- Exploring banking facilities - Credit cards
in rural areas
 PORTER’S FIVE FORCES

Supply : Liquidity is controlled by the Reserve Bank of India (RBI).

Demand : India is a growing economy and demand for credit is high

Barriers to entry : Licensing requirement, investment in technology and

b branch network, capital requirements.

Bargaining power : During periods of tight liquidity. Depositors

of suppliers m may invest elsewhere if interest rates fall.

Competition : Public sector, private sector and foreign banks along with
non non banking finance companies competing in similar
business business segments
 TECHNICAL ANALYSIS

CUP WITH HANDLE CUP WITH HANDLE

 TECHNICAL ANALYSIS

SYMMETRICAL TRIANGLE ASCENDING TRIANGLE

TECHNICAL ANALYSIS

ROUNDING BOTTOM
GROWTH ENHANCER FUND
 CONCUSION

SENSEX AND NAV COMARISION

 RECOMMENDATION

 Invest for long - term

 Invest in Private sector banks stocks
 Do not rely on Intra – Day trading
 To Invest in Mutual Fund is the best option