INTRODUCTION

India is a developing country. Nowadays many people are interested to invest in financial markets especially on equities to get high returns, and to save tax in honest way. Equities are playing a major role in contribution of capital to the business from the beginning. Since the introduction of shares concept, large numbers of investors are showing interest to invest in stock market. In an industry plagued with skepticism and a stock market increasingly difficult to predict and contend with, if one looks hard enough there may still be a genuine aid for the Day Trader and Short Term Investor. The price of a security represents a consensus. It is the price at which one person agrees to buy and another agrees to sell. The price at which an investor is willing to buy or sell depends primarily on his expectations. If he expects the security's price to rise, he will buy it; if the investor expects the price to fall, he will sell it. These simple statements are the cause of a major challenge in forecasting security prices, because they refer to human expectations. As we all know firsthand, humans expectations are neither easily quantifiable nor predictable. If prices are based on investor expectations, then knowing what a security should sell for (i.e., fundamental analysis) becomes less important than knowing what other investors expect it to sell for. That's not to say that knowing what a security should sell for isn't important--it is. But there is usually a fairly strong consensus of a stock's future earnings that the average investor cannot disprove Fundamental analysis and technical analysis can co-exist in peace and complement each other. Since all the investors in the stock market want to make the maximum profits possible, they just cannot afford to ignore either fundamental or technical analysis.

Equity/Share Total equity capital of a company is divided into equal units of small Denominations, each called a share. For example, in a company the total Equity capital of Rs 2,00,00,000 is divided into 20,00,000 units of Rs 10 Each. Each such unit of Rs 10 is called a Share. Thus, the company then is said to have 20,00,000 equity shares of Rs 10 each. The holders of such shares are members of the company and have voting rights. Equity Investment When a person buys a share of a company you become a shareholder in that company. Shares are also known. Equities have the potential to increase in value over time. Research studies have proved that the equity returns have outperformed the returns of most other forms of investments in the long term. Investors buy equity shares or equity based mutual funds because: Equities are considered the most rewarding, when compared to other investment options if held over a long duration. Research studies have proved that investments in some shares with a longer tenure of investment have yielded far superior returns than any other investment. Equity analysis Professional investor will make more money & less loss than, who let their heart rule. Their head eliminate all emotions for decision making. Be ruthless & calculating, you are out to make money. Decision should be based on actual movement of share price measured both in money & percentage term & nothing else. Greed must be avoided patience may be a virtue, but impatience can frequently be profitable. In Equity Analysis anticipated growth, calculations are based on considered FACTS & not on HOPE. Equity analysis is basically a combination of two independent analyses, namely fundamental analysis & Technical analysis. The subject of Equity analysis, i.e. the attempt to determine future share price movement & its reliability by

references to historical data is a vast one, covering many aspect from the calculating various FINANCIAL RATIOS, plotting of CHARTS to extremely sophisticated indicators. A general investor can apply the principles by using the simplest of tools: pocket calculator, pencil, ruler, chart paper & your cautious mind, watchful attention. It should be pointed out that, this equity analysis does not discuss how to buy & sell shares, but does discuss a method which enables the investor to arrive at buying & selling decision. The financial analysts always need yardsticks to evaluate the efficiency & performances of any business unit at the time of investment. Fundamental analysis is useful in long term investment decision. In Fundamental analysis company s goodwill, its performances, liquidity, leverage, turnover, profitability & financial health was checked & analysis with the help of ratio analysis for the purpose of long term successful investment. Technical analysis refers to the study of market generated data like prices & volume to determine the future direction of prices movements. Technical analysis mainly seeks to predict the short term price travels. The focus of technical analysis is mainly on the internal market data, i.e. prices & volume data. It appeals mainly to short term traders. It is the oldest approach to equity investment dating back to the late 19th century. Assumptions for the Equity Analysis 1. Works only in normal share-market conditions with great reliability, it also works in abnormal share-market conditions, but with low reliability. 2. Equity analysis is purely based on the INVESTMENT PHILOSOPHY, so the investment object has vital importance associated to return along with risk. 3. Cash management gets the magnitude role, because the scenario of equity analysis is revolving around the term money 4. Portfolio management, risk management was up to the investor s knowledge.

5. Capital market trend is always a friend, whether it is short run or long run. 6. You are buying stock & not companies, so don t be curious or panic to do post mortem of companies performances. 7. History repeats: investors & speculators react the same way to the same types of events homogeneously. 8. Capital market has a typical market psychology along with other issues like; perceptions, the crowd Vc the individual, tradition s & trust. 9. An individual perceptions about the investment return & associated risk may differ from individual to individual. 10. Although the equity analysis is art as well as sciences so, it also has some exceptions. NEED OF THE STUDY To start any business capital plays major role. Capital can be acquired in two ways by issuing shares or by taking debt from financial institutions or borrowing money from financial institutions. The owners of the company have to pay regular interest and principal amount at the end. Equity research involves carrying out critical analysis to evaluate the fair value of stocks owned by a particular company. On a broader role, it is also used to signify the possibility of growth or decline in share price of the company. It is a known fact that growth or decline in the share price is driven by the probable operational and financial performance of the company in a few years and this forms the analytical backbone on which research analysts take decisions. Also since equity analysts meet the management of companies they know the real picture of affairs in the company and they are also in regular informal briefings with other research analysts which helps them to be in a position to prudently recommend a position of the company. So, there is a need for the study of equity analysis to know the performance of the companies.

OBJECTIVES OF THE STUDY The objective of this project is to deeply analyze the public sector and private sector banks for investment purpose by monitoring the growth rate and performance on the basis of historical data. The main objectives of the Project study are: 1. To know about the banking sector in India and its recent trends and strategies. 2. To make the industry and company analysis. 3. To study the comparison between the private and public banks. 4. To help the investor for decision making in equity investment. 5. To about the price movements of securities in private and public sectors. SCOPE OF THE STUDY The scope of this project is limited to only one sector i.e. Banking sector. This project is concerned with only one sector of companies in the stock market. The project does not extend its scope to any other sector of companies. Also, the project is concerned with only five banks among the major players in the Banking sector i.e ICICI bank, State Bank India bank, YES bank, HDFC Bank, Axis Bank. The scope of the study is identified after and during the study is conducted. The project is based on tools like fundamental analysis and ratio analysis. Further, the study is based on information of last five years i.e, from 2009 to 2013. METHODOLOGY Research design or research methodology is the procedure of collecting, analyzing and interpreting the data to diagnose the problem and react to the opportunity in such a way where the costs can be minimized and the desired level of accuracy can be achieved to arrive at a particular conclusion.

The methodology used in the study for the completion of the project and the fulfillment of the project objectives. The sample of the stocks for the purpose of collecting secondary data has been selected on the basis of Random Sampling. The stocks are chosen in an unbiased manner and each stock is chosen independent of the other stocks chosen. The stocks are chosen from the automobile sector. DATA SOURCES: The proposed study is carried with the help of both primary and secondary sources of data. PRIMARY DATA: Relevant primary data would be collected with the help of the interview method. SECONDARY DATA: All the secondary data used for the study would be extracted from the annual reports, manuals, websites and other published materials of the company. FUNDAMENTAL ANALYSIS TOOLS USED: These are the most popular tools of fundamental analysis. They focus on earnings, growth, and value in the market. They can be studied with ratios. 1. Dividend per share 2. Return on long term fund 3. Return on networth 4. Return on assets excluding revaluations 5. Total assets turnover ratio 6. Total debt to owners fund 7. Current ratio 8. Dividend payout ratio net profit 9. Earnings per share

LIMITATIONS OF STUDY This study is limited to only to some selected banks (Public and Private). This study has been conducted purely to understand Equity analysis for investors. The study is restricted to five banks based on Fundamental analysis. The study is limited to the banks having equities. Detailed study of the topic was not possible due to limited size of the project. There was a constraint with regard to time allocation for the research study i.e. for a period of 45 days.

INTRODUCTION TO THE INDIAN STOCK MARKET

Indian markets have recently thrown open a new avenue for retail investors and traders to participate in: commodity derivatives. For those who want to diversify their portfolios beyond shares, bonds and real estate, commodities are the best option. Till some months ago, this wouldn't have made sense. For retail investors could have done very little to actually invest in commodities such as gold and silver or oilseeds in the futures market. This was nearly impossible in commodities except for gold and silver as there was practically no retail avenue for punting in commodities. Whatever it may be , with the setting up of three multi-commodity exchanges in the country, retail investors can now trade in commodity futures without having any physical stocks Commodities actually offer immense potential to become a separate asset class for market-savvy investors, arbitrageurs and speculators. Retail investors, who claim to understand the equity markets may find commodities an unfathomable market. But commodities are easy to understand as far as fundamentals of demand and supply are concerned. Retail investors should understand the risks and advantages of trading in commodities futures before taking a leap. Historically, pricing in commodities futures has been less volatile compared with equity and bonds, thus providing an efficient portfolio diversification option. Like any other market, the one for commodity futures plays a valuable role in information pooling and risk sharing. The market mediates between buyers and sellers of commodities, and facilitates decisions related to storage and consumption of commodities. In the process, they make the underlying market more liquid The trading of commodities consists of direct physical trading and derivatives trading. The commodities markets have seen an upturn in the volume of trading in recent years. In the five year up to 2010, the value of global physical exports of commodities increased by 17% while the notional value outstanding of commodity OTC(over the counter) derivatives increased more than 500% and commodity derivative trading on exchanges more than 200%.

The notional value outstanding of banks OTC commodities derivatives contacts increased 27% in 2010 to $9.0 trillion. OTC trading accounts for the majority of trading in gold and silver. Overall, precious metal accounted for 8% of OTC commodities derivatives trading in 2010, down from their 55% share a decade earlier as trading in energy derivatives rose. Global physical and derivatives trading of commodities on exchanges increased more than a third in 2010 to reach 1,684 million contacts. Agricultural contracts trading grew by 32% in 2010, energy 29% and industrial metals by 30%. Precious metals trading grew by 3% with higher volume in New York being partially offset by declining volume in Tokyo. Over 40% of quarter in China. Trading on exchanges in China and India has gained in importance in recent years due to their emergence as significant commodities consumers and producers. Present scenario Todays commodity market is a global market place not only for agricultural products, but also currencies and financial instruments such as Treasury bonds and securities futures. Its a diverse marketplace of farmers, exporter, importers, manufacturers and speculators. Modern technology has transformed commodities into a global marketplace where a Kansas farmer can match a bid from a buyer in Europe. The 2008 global boom in commodity prices- for everything from coal to corn was fueled by heated demand from the likes of China and India, plus unbridled speculation in forward markets. The bubble popped in the closing months of 2008 across the board. As a result, farmers are expected to face a sharp drop in crop prices, after years of record revenue. Other commodities, such as steel, are also expected to tumble due to lower demand. This will be a rare positive for manufacturing industries, which will experience a drop in some input costs, partly offsetting the decline in downstream demand. The Indian broking industry is one of the oldest trading industries that have been around even before the establishment of BSE in 1875.

Inception- The roots of a stock market in India began in the 1860s during the American Civil War that led to a sudden surge in the demand for cotton from India resulting in setting up of a number of joint stock companies that issued securities to raise finance.

Bubble burst- The early stock market saw a boom till 1865, and then in Jul 1865, what was then used to be called the share mania ended with burst of the stock market bubble. In the aftermath of the crash, banks, on whose building steps share brokers used to gather to seek stock tips and share news, disallowed them to gather there, thus forcing them to find a place of their own, which later turned into the Dalal Street. A group of about 300 brokers formed the stock exchange in Jul 1875, which led to the formation of a trust in 1887 known as the Native Share and Stock Brokers Association

Beginning of a new phase- A new phase in the Indian stock markets began in the 1970s, with the introduction of Foreign Exchange Regulation Act (FERA) that led to divestment of foreign equity by the multinational companies, which created a surge in retail investing.

Growth supporting factors-The early 1980s witnessed another surge in stock markets when major companies such as Reliance accessed equity markets for resource mobilization that evinced huge interest from retail investors. A new set of economic and financial sector reforms that began in the early 1990s gave further impetus to the growth of the stock markets in India.

Setting up of SEBI- the Securities and Exchange Board of India (SEBI), which was set up in 1988 as an administrative arrangement, was given statutory powers with the enactment of the SEBI Act, 1992. The broad objectives of the SEBI includeo to protect the interests of the investors in securities o to promote the development of securities markets and to regulate the securities markets

Incorporation of NSE- NSE was incorporated in Nov 1992 as a tax paying company, the first of such stock exchanges in India, since stock exchanges earlier were trusts, being run on no-profit basis. NSE was recognized as a stock exchange under the Securities Contracts (Regulations) Act 1956 in Apr 1993. It commenced operations in wholesale debt segment in Jun 1994 and capital market segment (equities) in Nov 1994. The setting up of the National Stock Exchange brought to Indian capital markets several innovations and modern practices and procedures such as nationwide trading network, electronic trading, greater transparency in price discovery and process driven operations that had significant bearing on further growth of the stock markets in India. To speed the securities settlement process, The Depositories Act 1996 was passed that allowed for dematerialization (and dematerialization)

of securities in depositories and the transfer of securities through electronic book entry. The National Securities Depository Limited (NSDL) set up by leading financial institutions, commenced operations in Oct 1996. Despite passing through a number of changes in the post liberalization period, the industry has found its way towards sustainable growth. A stock Broker is a regulated professional who buys and sells shares and other securities through market makers or Agency Only Firms on behalf of investors. To work as a broker a certificate of registration from SEBI is mandatory after satisfying all the terms and conditions. FINANCIAL MARKETS The financial markets have been classified as Cash market (spot market) largest traded, the spot market or cash market is a commodities or securities market in which goods are sold for cash and delivered immediately. Derivatives market after cash market, the derivatives markets are the financial markets for derivatives. The market can be divided into two that for exchange traded derivatives and that for over-the-counter derivatives.

Debt market - The bond market (also known as the debt, credit, or fixed income market) is a financial market where participants buy and sell debt securities.

Commodities market after commodities market, Commodity markets are markets where raw or primary products are exchanged. These raw commodities are traded on regulated commodities exchanges, in which they are bought and sold in standardized contracts.

PARTICIPANTS IN FINANCIAL MARKET There are two basic financial market participant categories, Investor vs. Speculator and Institutional vs. Retail. Action in financial markets by central banks is usually regarded as intervention rather than participation. Supply side vs. demand side A market participant may either be coming from the Supply Side, hence supplying excess money (in the form of investments) in favor of the demand side; or coming from the Demand Side, hence demanding excess money (in the form of borrowed equity) in favor of the Supply Side. This equation originated from Keynesian Advocates. The theory explains that a given market may have excess cash; hence the supplier of funds may lend it; and those in need of cash may borrow the funds supplied. Hence, the equation: aggregate savings equals aggregate investments. The demand side consists of: those in need of cash flows (daily operational needs); those in need of interim financing (bridge financing); those in need of long-term funds for special projects (capital funds for venture financing). The supply side consists of: those who have aggregate savings (retirement funds, pension funds, insurance funds) that can be used in favor of demand side. The origin of the savings (funds) can be local savings or foreign savings. So much pensions or savings can be invested for school buildings; orphanages; (but not earning) or for road network (toll ways) or port development (capable of earnings). The earnings go to owner (Savers or Lenders) and the margin goes to the banks. When the principal and interest are added up, it will reflect the amount paid for the

user (borrower) of the funds. Thus, an interest percentage for the cost of using the funds. Investor vs. Speculator Investor An investor is any party that makes an Investment. However, the term has taken on a specific meaning in finance to describe the particular types of people and companies that regularly

purchase equity or debt securities for financial gain in exchange for funding an expanding company. Less frequently the term is applied to parties who purchase real estate, currency, commodity derivatives, personal property, or other assets. Speculation Speculation, in the narrow sense of financial speculation, involves the buying, holding, selling, and short-selling of stocks, bonds, commodities, currencies, collectibles, real estate, derivatives or any valuable financial instrument to profit from fluctuations in its price as opposed to buying it for use or for income via methods such as dividends or interest. Speculation or agiotage represents one of three market roles in western financial markets, distinct from hedging, long term investing and arbitrage. Speculators in an asset may have no intention to have long term exposure to that asset. Institutional vs. Retail Institutional investor An institutional investor is an investor, such as a bank, insurance company, retirement fund, hedge fund, or mutual fund, that is financially sophisticated and makes large investments, often held in very large portfolios of investments. Because of their sophistication, institutional investors may often participate in private placements of securities, in which certain aspects of the securities laws may be inapplicable.

Retail investor A retail investor is an individual investor possessing shares of a given security. Retail investors can be further divided into two categories of share ownership. 1. A Beneficial Shareholder is a retail investor who holds shares of their securities in the account of a bank or broker, also known as in Street Name. The broker is in possession of the securities on behalf of the underlying shareholder. 2. A Registered Shareholder is a retail investor who holds shares of their securities directly through the issuer or its transfer agent. Many registered shareholders have physical copies of their stock certificates. Meaning of broker/dealer A broker-dealer is a term used in United States financial services regulations. It is a natural person, a company or other organization that trades securities for its own account or on behalf of its customers. Although many broker-dealers are "independent" firms solely involved in brokerdealer services, many others are business units or subsidiaries of commercial banks, investment banks orinvestment companies. When executing trade orders on behalf of a customer, the institution is said to be acting as a broker. When executing trades for its own account, the institution is said to be acting as a dealer. Securities bought from clients or other firms in the capacity of dealer may be sold to clients or other firms acting again in the capacity of dealer, or they may become a part of the firm's holdings. Need of a broker A broker is a person or firm that facilitates trades between customers. It is advisable to conduct transactions through an intermediary. For example one needs to transact through a trading member of a stock exchange if they intend to buy or sell any security on stock exchanges. One needs to maintain an account with a depository if they intend to hold securities in demat form. You need to deposit money with a

banker to an issue if you are subscribing to public issues. One gets guidance if you are transacting through an intermediary. A broker acts as a go between and, in doing so, does not assume any risk for the trade. The broker does, however, charge a commission. A broking firm acts as an intermediary between NSE and Client. Stock Brokers come under the category of Market Players. The membership in the stock exchange can be granted as individual membership and corporate membership.

NSE

BROKER

CLIENT

The market intermediaries play an important role in the development of Securities Market by providing different types of services. There are two major stock-exchanges NSE (composition of 50 stocks) and BSE (Composition of 30 stocks).

COMPANY PROFILE KELLTON FINANCIAL SERVICES

Kellton is a professionally managed organization and is fast emerging as one of the most respected Stock Broking and Wealth Management Companies in India. The Kellton Group is a member of the National Stock Exchange (NSE),Bombay Stock Exchange (BSE) and the two leading Commodities Exchanges in the country MCX and NCDEX. Kellton is also registered as a Depository Participant with CDSL.

At Kellton, we offer you Broking and Wealth Management Services of world class standards with a personal touch. We thoroughly understand the value of relationships with our customers as opposed to just transactions at a business level. We are dedicated to provide services with a personal touch so that our customer gets customized solutions and attention. It is our earnest endeavor to enhance the trading experience of our customers through continuous improvement in our services. MISSION & VISION Our Mission is the foundation on which the organization is built. Our vision is our aspiration to continually improve and grow; to become the best. Our values guide us through our actions. MISSION To take financial services to the next level of personalization and customization with emphasis on value of interactions at a more personal level than just transactions at a business level. VISION To be a respected enterprise that provides best-of-breed financial solutions, with a personal touch. VALUES Commitment, dedication, integrity, team work, passion and attitude are the core values that guide us through our actions.

MANAGEMENT TEAM 1. Niranjan Chintam 2. Rajendrana Niwadekar 3. Krishna Chintam 4. John Linton 5. Mihir Shah 6. Srinivas Potluri SERVICES EQUITY Kellton offers you a strategic, meticulous and personalized approach to maximize your returns and reach your investment goals by trading effectively in equities. However, it can also be a very risky proposition due to high risk-return trade off prevalent in the stock market. Hence, it is more appropriate to take the help of an experienced and trustworthy expert who will guide you as to when, where and how to invest.

At Kellton, we identify good opportunities to invest in and provide guidance in the dynamic world of stock markets with suitable trading solutions and value added tools to enhance your trading experience. Moreover our core theme of personalized services implies that you can reach our professionals to get complete understanding of the transactions at any phase of the process. Kellton is a trading member in the NSE Derivatives segment which offers a gateway to the exciting world of derivatives trading on Equities and Indices. The derivative market is a highly lucrative market that gives investors, arbitrageurs and speculators immense potential to earn returns. Over the years the Futures & Options segment has emerged as a popular medium for trading in the financial markets. COMMODITIES Commodities Derivatives market has emerged as a new avenue for investors to create wealth. Commodity derivatives that were initially developed for risk management purposes are now growing in popularity as an investment tool. Based on the

fundamentals for demand and supply, Commodities form a separate asset class offering investors, arbitrageurs and speculators immense potential to earn returns. At, Kellton we understand the shifts and swings of Commodities markets and will provide you with information about the volatility of the investible assets and when and how to diversify them during high volatility to stabilize your returns. We closely monitor and assess the performance of all classes of investments and will provide you with a customized solution into the proper use of commodities within the mix of other asset classes to maximize your returns and minimize risks. INVESTMENT BANKING MERGERS & ACQUISITIONS Kelltons extensive expertise extends to a wide range of M&A transactions customized to cater to the specific requirements of each of our client. Our relationships with many leading financial groups enables our clients to get access to the emerging pool of private equity financings. Assess, analyze and suggest financial & strategic alternatives. Identify target and assess potential acquirers and offer valuation analysis. Negotiating and closing transaction deals. Advise on asset purchases and dispositions, restructurings and reorganizations Advising on transaction structuring, timing, pricing and potential financing Our concern goes beyond immediate value and emphasizes enduring partnership based on symbiotic relationship. Sell-side Advisory As an advisor to selling stakeholders we analyze the options objectively and dispassionately keeping in view the long term benefit to both parties. Our expertise, experience and our network make us uniquely positioned to find an ideal partner for your company and assess the mutual benefits from this transaction. We perform the due diligence so as to avoid any surprises during value disclosure. Our active involvement in deal structuring and contract negotiations would help you understand the implications of the transaction from total perspective and be fully aware of all legalese involved.

Buy-side Advisory Our extensive network comes handy in searching & selecting a wide-range of suitable candidates. We help buyers identify the attributes of the target company including various parameters. Upon confirmation of interest of the target company, we examine various factors like financial data, brand image among stakeholders etc and perform a due diligence process to showcase the potential value of the transaction, value recommendation and comparative analysis. CORPORATE FINANCE We work with several companies in various stages of growth and help them to raise private capital through Venture Capital firms, private equity companies and other strategic business partners. We assess optimal capitalization and recognize the means to increase funds. After enlisting a group of potential target investors we position the company effectively to the investors. We take care of the necessary communication to investors and manage due diligence process. CAPITAL RESTRUCTURING Capital restructuring may involve refinancing at every at every level of capital structure which include securing asset-based loans & debt financing and achieving strategic partnership by identifying suitable prospects. Counseling on business agreements like Joint Ventures and sales of certain business units. Determining the right debt-equity ratio and gearing ratio for client Exploring refinancing alternatives of the clients Counsel on rehabilitation and turnaround management. Risk management Devising suitable strategies for fund raising

DEBT SYNDICATION We arrange finance from multiple banks/financial institutions to provide the borrower a credit facility using common debt documents. We help companies to leverage on debt as an instrument to raise capital through structured financial products for various needs. Workflow: We understand client needs thoroughly. We decide on the most effective debt funding strategy We approaching the prospective lenders and discuss & negotiate. We then narrow upon lenders based on certain parameters. Finalize on the optimum deal structure.

WEALTH MANAGEMENT Wealth Management helps you maximize your returns in asset management, investment management and portfolio management. Developing strategies and innovative models to build wealth from middle market business assets requires expertise and experience. Even a seasoned investor knows that effective timing of markets is not possible and therefore professional and expert advice is essential to generate superior returns from the market. At Kellton we offer your client advisory services with the objectives of superior returns, risk minimization and portfolio diversification. DEPOSITORY SERVICES We provide the dual benefits of trading and depository services at Kellton where you can experience efficient, risk free depository services. Kellton is a registered Depository participant with CDSL. ADVANTAGES OF DEMAT ACCOUNT AT KELLTON Automated pay-in facility without executing any physical instructions Demat Statements on demand Competitive transaction charges. Online access to Demat Statements

Reduced paper work Efficient pledge mechanism Faster settlement process resulting in increased liquidity for your securities No extra charges for Transactions and Holding Statements Speedy disbursements of non-cash benefits (Bonus & Rights)