Oct 30, 2015
1 | P a g e S u b m i t t e d B y : R i c h a K a l r a j s a j s
1 Comparative Analysis of Indian Private Banks
A
Research Project
ON
Comparative Analysis of Indian Private Banks (HDFC , ICICI , Axis Bank)
on the basis of Operating Profit, Profit after Tax ,EPS ,Capital Adequacy
Ratio and seeing their Impact on Stock Prices for the last 3years (2008-2010)
Submitted To
SCDL, Pune
In the partial fulfillment of the Post Graduate Diploma in Business
Administration
Under the Guidance of: Submitted by:
Mr. Tejinder Wadhera Richa Kalra
Manager, ICICI Bank Univ.Regd : 200624826
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2 Comparative Analysis of Indian Private Banks
DECLARATION
I, Richa Kalra, Reg No 200624826-M.B.A. of SCDL, PUNE hereby declare that my that my project on
Comparative Analysis of Indian Private Banks (HDFC , ICICI , Axis Bank) on the Basis of
(Operating profit, Profit after Tax ,EPS ,Capital Adequacy Ratio) And seeing their Impact on
Stock Prices for the last 3years (2008-2010) for the award of degree in M.B.A. is an authentic
work. This Project report is an original work and my part of this project report has not been
submitted elsewhere for any degree elsewhere in any form.
Richa Kalra
Reg No : 200624826
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3 Comparative Analysis of Indian Private Banks
ACKNOWLEDGEMENT
A Project usually falls short of its expectation unless guided by the right person at the right time.
Success of a project is an outcome of sincere efforts, channeled in the right direction, efficient
supervision and the most valuable professional guidance.
This project would not have been completed without the direct and indirect help and guidance of
such luminaries. They provided me with the necessary recourses and atmosphere conductive for
healthy learning and training.
Researcher is also thankful to the respondents, all my friends and also to various Banking
experts for their kind and valuable guidance, whom Researcher consulted for this present work.
(Richa)
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4 Comparative Analysis of Indian Private Banks
EXECUTIVE SUMMARY
One of the fastest growing sectors in the country, BANKING has been zooming up the growth
curve at a feverish pace in fast few years. In fact, it is the sector that is increasingly contributing
to the high growth rate recorded in the country.
Under this project, Researcher have tried to study the Banking sector basically focusing on
financial & operating analysis of 3 banks (HDFC, AXIS, ICICI BANKS)
This project report is divided into various sections. The first section comprises of a brief
introduction of the banking industry & then getting concentrated on the five major players of
banking sector.
The second section includes Objectives of the study, Justification of the study and Literature
Review of the study. The third and most essential part comprises of Research Methodology &
Analytical tools, Sampling & sampling Design used in study regarding analytical tools.
Researcher have used analytical tools (CAMEL Model) & Statistical tools
Then it includes the sources of data collection & hypothesis testing (t-test) used in preparation of
the study. Last but not the least, Researcher have analyzed the various financial aspects of the
two companies & then came out with the findings with which Researcher then concluded the
report.
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5 Comparative Analysis of Indian Private Banks
TABLE OF CONTENTS
1. Introduction
a) Profile of the Industry
b) Profile of the Organizations
c) Topic of the study
2. Research objectives
3. Theoretical framework
a) Constructs
b) Independent and Dependent variables
4. Literature Review
5. Research Methodology
a) Research design
1. Type of research design
2. Time Horizon
3. Study Setting
4. Measurement and Scaling
5. Flowchart for selection of statistical tools
b) Hypothesis Development and testing
c) Sample and Sampling Design
d) Data Collection
e) Analytical Tools
f) Statistical Tools
g) Limitations of the Study
6. Results & Findings
7. Recommendations/Suggestions
8. Bibliography
9. Annexure
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6 Comparative Analysis of Indian Private Banks
INDUSTRY PROFILE
Major constituents of the Indian financial sector are banks, financial institutions, and markets,
which mobilize the resources from the surplus sector and channelize the same to the different
needy sectors in the economy. In fact, the Indian financial system is characterized by its two
major segments - an organized sector and a traditional sector that is also known as informal
credit market. Financial intermediation in the organized sector is conducted by a large number of
banks and financial institutions. Financial institutions are further classified based on their
mandate and activities, which may be term lending, specialized, and investment institutions.
Banks are further classified into public and private sector banks, cooperative banks, and regional
rural banks.
A bank is a financial intermediary that accepts deposits and channels those deposits into lending
activities, either directly or through capital markets. A bank connects customers with capital
deficits to customers with capital surpluses.
Banking is generally a highly regulated industry, and government restrictions on financial
activities by banks have varied over time and location. The current set of global bank capital
standards are called Basel II
The banking system is, by far, the most dominant segment of the financial sector, accounting for
over 60% of the funds flowing through the financial sector. The Government has also set up two
separate regulatory bodies, viz., Insurance Regulatory Development Authority (IRDA) of India
for the insurance sector, and the Securities and Exchange Board of India (SEBI) for the capital
market.
The Indian financial sector today is significantly different from what it used to be in the 1970s
and 1980s. The financial sector prior to the 1990s was characterized by segmented and
underdeveloped financial markets coupled with paucity of instruments. For maintaining spreads
of banking sector, regulation of both deposit and lending rates resulted not only in distorting the
interest rate mechanism, but also adversely affected the viability and profitability of banks. The
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7 Comparative Analysis of Indian Private Banks
low level of recognition of the importance of transparency, accountability and prudential norms
in the operations of the banking system also led to a rising burden of non-performing assets.
Channels
Banks offer many different channels to access their banking and other services:
ATM is a machine that dispenses cash and sometimes takes deposits without the need for
a human bank teller. Some ATMs provide additional services.
A branch is a retail location
Call center
Mail: most banks accept check deposits via mail and use mail to communicate to their
customers, e.g. by sending out statements
Mobile banking is a method of using one's mobile phone to conduct banking
transactions
Online banking is a term used for performing transactions, payments etc. over the
Internet
Relationship Managers, mostly for private banking or business banking, often visiting
customers at their homes or businesses
Telephone banking is a service which allows its customers to perform transactions over
the telephone without speaking to a human
Video banking is a term used for performing banking transactions or professional
banking consultations via a remote video and audio connection. Video banking can be
performed via purpose built banking transaction machines (similar to an Automated teller
machine), or via a videoconference enabled bank branch.
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BANKS PROFILE
HDFC BANK
ICICI BANK
AXIS BANK
HDFC BANK[34]
:
The Housing Development Finance Corporation Limited (HDFC) was amongst the first to
receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the
private sector, as part of the RBI's liberalization of the Indian Banking Industry in 1994. The
bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its registered
office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank
in January 1995.
HDFC Bank is headquartered in Mumbai. The Bank at present has network of over 531 branches
spread over 228 cities across India. All branches are linked on an online real-time basis.
Customers in over 120 locations are also serviced through Telephone Banking. The Bank's
expansion plans take into account the need to have a presence in all major industrial and
commercial centers where its corporate customers are located as well as the need to build a
strong retail customer base for both deposits and loan products. Being a clearing/settlement bank
to various leading stock exchanges, the Bank has branches in the centre where the NSE/BSE has
a strong and active member base.
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Facilities Provided By the Bank
HDFC bank provides following facilities to its customer
The time norms for various banking transactions.
Interest payments
The process followed for redressed of grievance
Secrecy of customers
State deposit lockers
Account opening and operations of deposit account
Addition and deletion of the names of joint a/c holders
Pension accounts
Vision Statement
To Be a dominant Player in the Indian Mutual Fund Space Recognized for its high levels of
ethical and professional conduct and a commitment towards enhancing Investors.
Objective
To Achieve Capital Appreciation by Investing Primarily in equity oriented
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ICICI BANK
Industrial Credit and Investment Corporation of India) is India's largest private sector bank by
market capitalization and second largest overall in terms of assets. total assets of Rs. 3,562.28
billion (US$ 77 billion) at December 31, 2009 and profit after tax Rs. 30.19 billion (US$ 648.8
million) for the nine months ended December 31, 2009 The Bank also has a network of 1,640+
branches (as on February 11, 2010) and about 4,721 ATMs in India and presence in 18 countries,
as well as some 24 million customers (at the end of July 2007). ICICI Bank offers a wide range
of banking products and financial services to corporate and retail customers through a variety of
delivery channels and specialized subsidiaries and affiliates in the areas of investment banking,
life and non-life insurance, venture capital and asset management. (These data are dynamic.)
Vision:
To be the leading provider of financial services in India and a major global bank.
Mission:
We will leverage our people, technology, speed and financial capital to:
be the banker of first choice for our customers by delivering high quality, world-class
products and services.
expand the frontiers of our business globally.
play a proactive role in the full realisation of Indias potential.
maintain a healthy financial profile and diversify our earnings across businesses and
geographies.
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11 Comparative Analysis of Indian Private Banks
maintain high standards of governance and ethics.
contribute positively to the various countries and markets in which we operate.
create value for our stakeholders.
Code of Commitment
ICICI Bank follows a voluntary Code, which sets minimum standards of banking practices when
they are dealing with individual customer.
Code of Conduct and Business Ethics
ICICI Group expects all its employees, officers and directors to act in accordance with high
professional and ethical standards.
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12 Comparative Analysis of Indian Private Banks
AXIS BANK
Axis Bank
Axis Bank, formerly UTI Bank, is a financial services firm that had begun operations in 1994,
after the Government of India allowed new private banks to be established. The Bank was
promoted jointly by the Administrator of the Specified Undertaking of the Unit Trust of India
(UTI-I), Life Insurance Corporation of India (LIC), General Insurance Corporation Ltd.,
National Insurance Company Ltd., The New India Assurance Company, The Oriental Insurance
Corporation and United India Insurance Company UTI-I holds a special position in the Indian
capital markets and has promoted many leading financial institutions in the country. As on the
year ended 31 March 2009 the Bank had a total income of 13,745.04 crore (US$ 3.12 billion)
and a net profit of 1,812.93 crore (US$ 411.54 million).
Mission
Customer Service and Product Innovation tuned to diverse needs of individual and
corporate clientele.
Continuous technology up gradation while maintaining human values.
Progressive globalization and achieving international standards.
Efficiency and effectiveness built on ethical practices.
Core Values of Axis
Customer Satisfaction by providing quality service effectively and efficiently
Customer Satisfaction by Periodic Customer Service Audits
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13 Comparative Analysis of Indian Private Banks
Maximizations of Stakeholder value
Success through Teamwork, Integrity and People
Growth Prospects of Axis
Over the last five years, the CAGR for loan growth for the banking industry has been
25-26 per cent; for Axis Bank it has been above 40 per cent.
Nonetheless, the bank is still expected to grow its loan portfolio at 1.5-1.7x the
industry average.
In FY09 its advances grew at the rate of 37.5 per cent.
In FY10 they are expected to grow at the rate of 27-28 per cent and in FY11 at 25 per
cent.
For the banking industry as a whole, the loan book is expected to grow at 18 per cent
in FY10 and 16 per cent in FY11.
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14 Comparative Analysis of Indian Private Banks
THEORETICAL FRAMEWORK
CONSTRUCT:-
Study the Impact of Operating Profit, Profit after Tax (PAT), Earning per share (EPS) And
Capital adequacy ratio on Stock price
VARIABLE:
Dependent Variable:
Stock Price
Independent Variable:
Operating Profit
Profit after Tax
EPS
Capital adequacy ratio
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15 Comparative Analysis of Indian Private Banks
LITERATURE REVIEW
BOOKS
Sekran Uma,[1] (4th edition), Business Research Methodology
(Researcher choose this book for studied, for Knowledge about research process.)
Ciaran Walsh[2], Key Management Ratios
(The book is selected to get analysis of ratio.)
Kothari C.R. [3] (2th edition), Research methodology methods & techniques,
(Knowledge about the hypothesis development like null and alternate hypothesis and
hypothesis testing)
.Cooper R. Donald[4] (Edition-8th) Business Research Methods.
(The various type of research design and the other concepts of research methodology are
studied from this book.)
Sheridan J Coakes, Lyndall Steed, Peta Dzidic[5] SPSS VERSION 13.0
forWindows
(This book has been used for applying the various statistical, tools and tests on the
study )
Gupta S.P[6] (2008) Statistical Methods.
(This book reveals information regarding the statistical tools and their limitations in
different fields the research is given in this section. This section explains the use of
regression analysis techniques.)
Beri G.C.,[7] (2nd edition), Marketing Research,
(This book will help Researcher in understanding the different research designs and sources of
data collection and methods of data collection are given in this section.)
Jain T.R. and Aggarwal S.C[8] (Edition-3rd) Statistics for MBA.
(This gives information about how to find the values of Correlations, Regression,
Hypothesis and Trend analysis.)
L.M Bhole [9] (Edition-5th) Financial Institution and Market.
(This books include the information about the banks.)
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16 Comparative Analysis of Indian Private Banks
Goel D.K[10] (2008), Management Accounting And Financial Management:
(The book was selected to get the types of ratios like profitability, liquidity etc)
Kothari C.R.[11] (2th edition), Research methodology methods & techniques,
(Knowledge about the hypothesis development like null and alternate hypothesis and
hypothesis testing)
Sekran Uma[12], (Edition 4th) Research Methods for Business:
(Research Process Topic will be taken from this book.)
Machiraju H. R. [13], (Edition-3rd) Indian Financial System.
(Commercial Banking Topic will be taken from this book)
Varshaney P.N. & Mittal D.K.[14], (Revised Edition-10th) Indian Financial System.
(Securitization and Assets Reconstruction Companies Topic will be taken from this
book.)
Gupta S.P. & Gupta M.P. [15], (Edition 15th) Business Statistics.
(Correlation Topic will be taken from this book)
JOURNALS:
Usha Arora[16] (vol xxi no. 1, March 2007), Finance India.
(This article include the information about the operational and productivity efficiency of
the private sectors banks).
A. Amarender Reddy[17] (vol xix ,no3 ,September 2005), Finance India.
(The researcher would likely to take the information about the banking productivity.)
Sanjiv Joshi[18] (vol xxi no. 4,december 2007), Finance India.
(This article include the information about the central banking in a liberalising economy)
Meena Sharma[19] (vol. Xix ,No-3 ,sept. 2005), Finance India.
(This article include the information about the NPAs and Impact NPAs performance of
the banks)
Thorsten Beck, Ross Levine, Alexey Levkov[20] ( Vol lxv ,No.5 ,October 2010), The
Journal of finance .
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17 Comparative Analysis of Indian Private Banks
(This article include the information about the removed restrictions on intrastate
branching and competition and improved performance.)
C.S. Balasubramaniam[21] (Vol.xix, No.4, December 2005), Finance India.
(This article include the information about the how the Indian banking system improve
due to the liberalisation.)
D.M.N. Raju [22] ( Vol xxiii, No.3, sept. 2005), Finance India.
(This article include the information about the NPAs and how these im333pact on the
performance of the sbi bank.)
Jyoti Saluja[23] (Vol 4, april 2010), Global Review. (This article include Camel approach which is helpul to be used as analytical tool)
Dr. N Bharati [24](Vol 4, march 2010), Indian journal of finance.[18]
Magazines:
P K Kulkarni [25] (SEPT.- DEC. 2007), ICFAI Reader
(This magazine include the information about the financial institutions)
G S Rathore[26] (November 2007), ICFAI Reader.
(This magazine include the information about the financial indicators that effect the
efficiency of the banks.)
V P Shetty [27](October 2006), Chartered financial Analyst
(This magazine include the information about the globalisation of the Indian banks due
to which the competition is increased and effective management in Indian banks is
necessary.)
B Sambamurthy[28] (November 2006), Chartered financial Analyst
(This magazine include the information about the Indian banking and their operations.)
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18 Comparative Analysis of Indian Private Banks
Steve Payne[29] (October 2010), The analyst.
(This magazine include the information about the camel model.)
Natasha khakhar Patel[30] (jan 28- jul 11,2010), Capital Market
(This magazine include the information about the data about the NPAs of the Indian
public sector banks.)
Websites
http://www.experiment-resources.com/research-designs.html[31] - To know about the reseach design.
http://www.socialresearchmethods.net/kb/stat_t.php[32] - To know about the t test.
http://en.wikipedia.org/wiki/Bank[33] - To know about the banking sector
http://in.jobstreet.com/jobs/2008/5/h/60/1321591.htm?fr=J[34]
- To have information
about HDFC bank.
http://www.icicigroupcompanies.com/corporate_governance.html[35] - To get brief description
about ICICI bank.
http://www.axisbank.com/aboutus/ourmissionandvalues/Our-Mission-And-Values.asp[36] - To
know the mission and values of axis bank.
http://www.hsbc.com.tr/eng/about_HSBC/our_vision_and_values/ [37] - To Know about HSBC
Bank.
http://www.samples-help.org.uk/mission-statements/bank-of-america-mission-statement.htm[38] -
To get detail of core values of Bank of america
http://en.wikipedia.org/wiki/Research[39] - To know how to apply research Methodolgy.
http://www.investopedia.com/terms/r/ratioanalysis.asp[40] - To Apply Ratio analysis.
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19 Comparative Analysis of Indian Private Banks
RESEARCH OBJECTIVES
Primary objectives
To make Comparative analysis of Operating profits, EPS, Profit after Tax, and Capital
adequacy ratio of Indian Banks (HDFC , ICICI , AXIS)
Secondary objectives
To Study the Impact of Operating Profit on stock price
To Study the Impact of EPS[a] on stock Price
To Study the Impact of PAT[b] on Stock Price
To Study the Impact of Capital Adequacy Ratio on Stock Price
[a] Earning Per Share
[b] Profit after Tax
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20 Comparative Analysis of Indian Private Banks
RESEARCH METHODOLOGY[1] [3]
Research is a systematic and continuous method of defining a problem, collecting the facts and
analyzing them, reaching conclusion forming generalizations.
Research methodology is a way to systematically solve the problem. It may be understood as a
science of studying how research is done scientifically. In it we study the various stEPS that are
generally adopted by a researcher in studying his research problem along with the logic behind
them.
The scope of research methodology is wider than that of research method. Thus when we talk of
research methodology we not only talk of research methods but also consider the logic behind
the method we use in the context of our research study and explain why we are using a particular
method2.
So we should consider the following steps in research methodology:
Meaning of research
Problem statement
Research design
Sample design
Data collection
Analysis and Interpretation of data
Meaning of Research[4]
Research is defined as a scientific & systematic search for pertinent information on a
specific topic. Research is an art of scientific investigation. Research is a systemized effort to
gain new knowledge. It is a careful inquiry especially through search for new facts in any branch
of knowledge. The search for knowledge through objective and systematic method of finding
solution to a problem is a research.
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21 Comparative Analysis of Indian Private Banks
THE RESEARCH PROCESS:
Problem Statement
The research problems, in general refers to sum difficulty with a researcher experience in the
contest of either a particular a theoretical situation and want to obtain a salutation for same.
Research Design
A research is the arrangement of the conditions for the collections and analysis of the data in a
manner that aims to combine relevance to the research purpose with economy in procedure. In
fact, the research is design is the conceptual structure within which research is conducted; it
constitutes the blue print of the collection, measurement and analysis of the data. As search the
design includes an outline of what the researcher will do from writing the hypothesis and its
operational implication to the final analysis of data11
.
2
PRELIMINARY
DATA
GATHERING
Interviewing
Literature Survey
3
PROBLEM
DEFINITION
Research
Problem
Delineated
4
THEORETICAL
FRAMEWORK
Variables clearly
identified and
labelled
5
GENERATION
OF
HYPOTHESES
6
SCIENTIFI
C
RESEARCH
DESIGN
7
DATA
COLLECTION,
ANALYSIS AND
INTERPRETATION
8
DEDUCTION
Hypotheses substantiated?
Research
question
answered?
9
Report
writing
10
Report Presentat
ion
11
Manager
ial decision
making
Yes NO
1
OBSERVATION
Broad area of
research interest
identified
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22 Comparative Analysis of Indian Private Banks
The design is such studies must be rigid and not flexible and most focus attention on the
following;
o What is the study about?
o Why is the study being made?
o Where will the study be carried out?
o What type of data is required?
o Where can be required data be found?
o What period of time will the study include?
o What will be sample design?
o What techniques of data collection will be used?
o How will the data be analyzed?
o In what style will the report be prepared?14
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23 Comparative Analysis of Indian Private Banks
RESEARCH DESIGN[7]
Research Design can be categorized as:
EXPLORATORY RESEARCH DESIGN
Exploratory research design is termed as formulating research studies. The main purpose of
study is that of formulating a problem. The major emphasis in such study is on discovery of new
ideas and insights. As such the research design appropriate for such studies must be flexible
enough to provide opportunity for considering different aspects of problem.
DESCRIPTIVE AND DIAGNOSTIC RESEARCH DESIGN
Descriptive research design are those design which are concerned with describing the
characteristics of particular individual or of the group Whereas diagnostic research studies
determine the frequency with which something occurs or its association with some else. In
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descriptive and diagnostic study the researcher must be able to define clearly what he wants to
measure and must find adequate method for measuring it.
EXPERIMENTAL RESEARCH DESIGN
These are those studies where the researcher tests the hypothesis of casual relationship between
variables. Such study requires procedure that will not only reduce biasness and increase
reliability but will permit drawing.
Research design adopted by researcher will be Descriptive because in this design all the
information gather is related to the problem which is predefined and all the data collected
is descriptive in nature.
TYPES OF INVESTIGATION
CAUSAL STUDY
CORRELATIONAL STUDY
A Researcher should determine whether a Causal & Co relational Study to find an Answer to
the issue at hand. The former is done when it is necessary to establish Cause-Effect Relationship.
However, if all that the researcher wants is mere the identification of the important factors
associated with the problem then, then Co relational study.
In this study, Co relational Study is to be done, because Researcher will be interested in
delineating the important associated variables.
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TIME HORIZON4
CROSS-SECTIONAL STUDIES
LONGITUDINAL STUDIES
A study can be done in which data are gathered just once, perhaps a period of days or weeks or
month, in order to answer a research question. Such studies are called one shot or Cross-
Sectional Studies.
On the other hand, when the researcher tries to collect Data at more than one point of time it is
known as longitudinal studies.
Here, in this study Cross-Sectional Design will be used as data for study will be gathered just
once.
STUDY SETTING
CONTRIVED
NONCONTRIVED
As we know that Research can be done in the natural environment where work proceeds
normally or in artificial settings.
A Contrived Setting with researcher interference to an excessive degree.
Whereas, A Non contrived Setting with researcher interference with minimal degree or
moderate extent.
In this Study, the study setting will be Contrived Setting due to high degree of interference of
researcher & influences by a no. of variables.
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FLOWCHART FOR SELECTON OF STATISTICAL TOOL
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27 Comparative Analysis of Indian Private Banks
HYPOTHESIS DEVELOPMENT
There are two types of hypothesis:
Null hypothesis
Alternative hypothesis
Null hypothesis (H0): In test of hypothesis we always begin with an assumption or hypothesis
this is called null hypothesis. The null hypothesis asserts that there is no significant difference
between the sample static and the population parameter and whatever the observed difference is
there, is merely due to fluctuations in sampling from same population.
Alternative hypothesis (H1): Any hypothesis different then the null hypothesis is called an
alternative hypothesis. The two hypothesis H0 & H1 are such that if one is accepted, the other is
rejected.
HYPOTHESIS OF THE STUDY
NULL Hypothesis (H0): There is no Significant Impact of Operating Profit on Stock Price
ALTERNATE Hypothesis (H1): There is Significant Impact of Operating Profit on Stock Price
HDFC
One-Sample Statistics
N Mean Std. Deviation Std. Error Mean
OperatingProfit 3 2.1842E3 852.97573 492.46577
StockPrice 3 1.6795E3 671.69391 387.80266
One-Sample Test
Test Value = 0
T df Sig. (2-tailed) Mean Difference
95% Confidence Interval of the
Difference
Lower Upper
OperatingProfit 4.435 2 .047 2184.23333 65.3241 4303.1425
StockPrice 4.331 2 .049 1679.50000 10.9198 3348.0802
INTERPRETATION
Here T value is 4.331, which is more than significant value. So thats why alternate hypothesis
will be accepted.
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28 Comparative Analysis of Indian Private Banks
ICICI
One-Sample Statistics
N Mean Std. Deviation Std. Error Mean
OperatingProfit 3 5.3162E3 189.99652 109.69454
StockPrice 3 8.2223E2 352.20695 203.34678
One-Sample Test
Test Value = 0
t df Sig. (2-tailed) Mean Difference
95% Confidence Interval of the
Difference
Lower Upper
OperatingProfit 48.464 2 .000 5316.20000 4844.2225 5788.1775
StockPrice 4.044 2 .056 822.23333 -52.6972 1697.1639
INTERPRETATION
Here T value is 4.044, which is more than significant value. So thats why alternate hypothesis
will be accepted.
29 | P a g e S u b m i t t e d B y : R i c h a K a l r a j s a j s
29 Comparative Analysis of Indian Private Banks
AXIS
One-Sample Statistics
N Mean Std. Deviation Std. Error Mean
OperatingProfit 3 7.4179E2 108.49922 62.64205
StockPrice 3 9.4762E2 423.92070 244.75073
One-Sample Test
Test Value = 0
T df Sig. (2-tailed) Mean Difference
95% Confidence Interval of the
Difference
Lower Upper
OperatingProfit 11.842 2 .007 741.79333 472.2663 1011.3203
StockPrice 3.872 2 .051 947.61667 -105.4607 2000.6941
INTERPRETATION
Here T value is 3.872, which is more than significant value. So thats why alternate hypothesis
will be accepted
30 | P a g e S u b m i t t e d B y : R i c h a K a l r a j s a j s
30 Comparative Analysis of Indian Private Banks
NULL Hypothesis (H0): There is no Significant Impact of EPS on Stock Price
ALTERNATE Hypothesis (H1): There is Significant Impact of EPS on Stock Price
HDFC
One-Sample Statistics
N Mean Std. Deviation Std. Error Mean
EPS 3 52.3100 9.56450 5.52207
StockPrice 3 1.6802E3 670.59776 387.16980
One-Sample Test
Test Value = 0
T df Sig. (1-tailed) Mean Difference
95% Confidence Interval of the
Difference
Lower Upper
EPS 9.473 2 .011 52.31000 28.5505 76.0695
StockPrice 4.340 2 .049 1680.22000 14.3628 3346.0772
INTERPRETATION
Here T value is 4.340, which is more than significant value. So thats why alternate hypothesis will be accepted.
31 | P a g e S u b m i t t e d B y : R i c h a K a l r a j s a j s
31 Comparative Analysis of Indian Private Banks
ICICI
One-Sample Statistics
N Mean Std. Deviation Std. Error Mean
EPS 3 34.3533 1.83075 1.05698
StockPrice 3 8.2223E2 352.20695 203.34678
One-Sample Test
Test Value = 0
T df Sig. (2-tailed) Mean Difference
95% Confidence Interval of the
Difference
Lower Upper
EPS 32.501 2 .001 34.35333 29.8055 38.9012
StockPrice 4.044 2 .036 822.23333 -52.6972 1697.1639
INTERPRETATION
Here T value is 4.044, which is more than significant value. So thats why alternate hypothesis will be accepted.
32 | P a g e S u b m i t t e d B y : R i c h a K a l r a j s a j s
32 Comparative Analysis of Indian Private Banks
AXIS
One-Sample Statistics
N Mean Std. Deviation Std. Error Mean
EPS 3 34.3533 1.83075 1.05698
StockPrice 3 9.4762E2 423.92070 244.75073
One-Sample Test
Test Value = 0
T df Sig. (2-tailed) Mean Difference
95% Confidence Interval of the
Difference
Lower Upper
EPS 32.501 2 .001 34.35333 29.8055 38.9012
StockPrice 3.872 2 .041 947.61667 -105.4607 2000.6941
INTERPRETATION
Here T value is 3.872, which is more than significant value. So thats why alternate hypothesis
will be accepted.
33 | P a g e S u b m i t t e d B y : R i c h a K a l r a j s a j s
33 Comparative Analysis of Indian Private Banks
HDFC Bank
H0: There is no Significant Impact of Profit after Tax on Stock Price
H1: There is Significant Impact of Profit after Tax on Stock Price
INTERPRETATION
Here T value is 4.331, which is more than significant value. So thats why alternate hypothesis
will be accepted.
One-Sample Statistics
N Mean Std. Deviation Std. Error Mean
PAT 3 2.2613E3 679.39739 392.25026
SharePrice 3 1.6795E3 671.69391 387.80266
One-Sample Test
Test Value = 0
T df Sig. (1-tailed) Mean Difference
95% Confidence Interval of the
Difference
Lower Upper
PAT 5.765 2 .029 2261.28000 573.5633 3948.9967
SharePrice 4.331 2 .049 1679.50000 10.9198 3348.0802
34 | P a g e S u b m i t t e d B y : R i c h a K a l r a j s a j s
34 Comparative Analysis of Indian Private Banks
ICICI
One-Sample Statistics
N Mean Std. Deviation Std. Error Mean
PAT 3 3.9803E3 203.51562 117.49980
StockPrice 3 8.2223E2 352.20695 203.34678
One-Sample Test
Test Value = 0
T df Sig. (1-tailed) Mean Difference
95% Confidence Interval of the
Difference
Lower Upper
PAT 33.875 2 .001 3980.28000 3474.7192 4485.8408
StockPrice 4.044 2 .056 822.23333 -52.6972 1697.1639
INTERPRETATION
Here T value is 4.044, which is more than significant value. So thats why alternate hypothesis
will be accepted.
35 | P a g e S u b m i t t e d B y : R i c h a K a l r a j s a j s
35 Comparative Analysis of Indian Private Banks
AXIS
One-Sample Statistics
N Mean Std. Deviation Std. Error Mean
PAT 3 1.8003E3 721.86773 416.77053
StockPrice 3 9.4762E2 423.92070 244.75073
One-Sample Test
Test Value = 0
t df Sig. (1-tailed) Mean Difference
95% Confidence Interval of the
Difference
Lower Upper
PAT 4.320 2 .050 1800.30667 7.0878 3593.5255
StockPrice 3.872 2 .061 947.61667 -105.4607 2000.6941
INTERPRETATION
Here T value is 3.872, which is more than significant value. So thats why alternate hypothesis
will be accepted.
36 | P a g e S u b m i t t e d B y : R i c h a K a l r a j s a j s
36 Comparative Analysis of Indian Private Banks
NULL Hypothesis (H0):There is no Significant Impact of Capital Adequacy Ratio on Stock
Price
ALTERNATE Hypothesis (H1): There is Significant Impact of Capital Adequacy Ratio on
Stock Price
One-Sample Statistics
N Mean Std. Deviation Std. Error Mean
CapitalAdequacy 3 2.1254E4 5372.22551 3101.65584
StockPrice 3 1.6795E3 671.69391 387.80266
One-Sample Test
Test Value = 0
t df Sig. (1-tailed) Mean Difference
95% Confidence Interval of the
Difference
Lower Upper
CapitalAdequacy 6.852 2 .021 21253.79667 7908.4487 34599.1446
StockPrice 4.331 2 .049 1679.50000 10.9198 3348.0802
INTERPRETATION
Here T value is 4.331, which is more than significant value. So thats why alternate hypothesis will be accepted.
37 | P a g e S u b m i t t e d B y : R i c h a K a l r a j s a j s
37 Comparative Analysis of Indian Private Banks
SAMPLE & SAMPLING DESIGN
A sample design is a definite plan for obtaining a sample from the sampling frame. It refers to
the technique or the procedure that is adopted in selecting the sampling units from which
inferences about the population is drawn. Sampling design is determined before the collection of
the data.
Several decisions have to be taken in context to the decision about the appropriate sample
selection so that accurate data is obtained and efficient results are drawn.
Following questions have to be considered while sampling design-
What is the relevant population?
What is the parameter of interest?
What is the sampling frame?
What is the type of sample?
What sample size is needed?
How much will it cost?
The sample size of past Three years will be taken for present study.
38 | P a g e S u b m i t t e d B y : R i c h a K a l r a j s a j s
38 Comparative Analysis of Indian Private Banks
DATA COLLECTION
After the research problem has been identified and selected the next step is to gather the requisite
data. While deciding about the method of data collection to be used for the researcher should
keep in mind two types of data VIZ. primary and secondary.
PRIMARY DATA
The primary data are those, which are collected afresh and for the first time, and thus happened
to be original in character. We can obtain primary data either through observation or through
direct communication with respondent in one form or another or through personal interview
39 | P a g e S u b m i t t e d B y : R i c h a K a l r a j s a j s
39 Comparative Analysis of Indian Private Banks
SECONDARY DATA
The secondary data on the other hand, are those which have already been collected by someone
else and which have already been passed through the statistical processes. When the researcher
utilizes secondary data then he has to look into various sources from where he can obtain them.
For example, Books, magazines, newspapers, Internet, publications and reports etc.
In the present study Researcher will be made use of secondary data collected from their
website and from their records.
METHODS OF PRIMARY DATA
OBSERVATION
METHOD
QUESTIONNAI
RE METHOD
INTERVIEW
METHOD
SCHEDULE
METHOD
40 | P a g e S u b m i t t e d B y : R i c h a K a l r a j s a j s
40 Comparative Analysis of Indian Private Banks
ANALYTICAL TOOLS
RATIO ANALYSIS[40]
Meaning:
Absolute figures expressed in financial statements by themselves are meaningfulness. These
figures often do not convey much meaning unless expressed in relation to other figures. Thus, it
can be said that the relationship between two figures, expressed in arithmetical terms is called a
ratio.
According to R.N. Anthony
A ratio is simply one number expressed in terms of another. It is found by dividing one
number into the other.
Objects And Advantages Or Uses Of Ratio Analysis
Helpful in analysis of financial statements.
Simplification of accounting data.
Helpful in comparative study.
Helpful in locating the weak spots of the business.
Helpful in forecasting
Estimate about the trend of the business
Fixation of ideal standards
Effective control
Study of financial soundness.
41 | P a g e S u b m i t t e d B y : R i c h a K a l r a j s a j s
41 Comparative Analysis of Indian Private Banks
The Researcher has used following Ratios
Operating Profit Ratio
Earning Per Share
Capital adequacy ratio
Profit after Tax
Earnings Per share (EPS)
Interpretation-Both Axis and HDFC Banks have rise in their EPS in 2008-10 due to increasing
PAT more with shareholders funds.
But ICICI Bank comparatively decline in their EPS due to more variation in their PAT which is
not going in the same degree (Increasing/Decreasing).
2008 2009 2010
Axis 28.91 48.85 60.06
HDFC 43.42 51.08 62.43
ICICI 36.03 32.4 34.63
42 | P a g e S u b m i t t e d B y : R i c h a K a l r a j s a j s
42 Comparative Analysis of Indian Private Banks
Profit after Tax (PAT)
2008 2009 2010
Axis 1071.03 1815.36 2514.53
HDFC 1590.2 2244.94 2948.7
ICICI 4157.73 3758.13 4024.98
Interpretation-Both Axis and HDFC Banks have rise in their PAT
But ICICI Bank comparatively decline in their PAT which is not going in the same degree
(Increasing/Decreasing). But ICICI Bank has the maximum PAT between all the banks.
43 | P a g e S u b m i t t e d B y : R i c h a K a l r a j s a j s
43 Comparative Analysis of Indian Private Banks
Operating Profit Ratio
Operating Profit ratio=EBIT/Net Sales
2008 2009 2010
Axis 0.865 0.916 0.9
HDFC 0.708 0.747 0.746
ICICI 0.926 0.895 0.892
Interpretation- There is no fluctuation in operating profit ratio of the three banks in last two
years but there is fluctuation in comparison to year 2008.
44 | P a g e S u b m i t t e d B y : R i c h a K a l r a j s a j s
44 Comparative Analysis of Indian Private Banks
Capital Adequacy Ratio
2008 2009 2010
Axis 13.73 13.69 15.8
HDFC 13.6 15.69 17.44
ICICI 13.97 15.53 19.41
Interpretation-All Banks are consistently increasing their capital adequacy which is a good sign
for these banks as they will get saved from the risk weighted assets, if any risk arise then they
have sufficient capital in their banks to get out of that.
45 | P a g e S u b m i t t e d B y : R i c h a K a l r a j s a j s
45 Comparative Analysis of Indian Private Banks
CAMEL APPROACH[28]
Researcher has used camel approach .It is use for the purpose of ranking. Each Parameter of
Camel Capital adequacy , Asset Quality , Management Quality , Earning quality , Liquidity
Quality will be evaluated taking two ratios and finally composite index will be developed by the
researcher.
Capital Adequacy Ratio (C)
BANK 2008 2009 2010 CAR(Avg) RANK
AXIS 13.73 13.69 15.8 14.41 3
HDFC 13.6 15.69 17.44 15.58 2
ICICI 13.97 15.53 19.41 16.30 1
Net NPA to Net Advances Ratio (A)
BANK 2008 2009 2010 (Avg) RANK
AXIS 0.37 0.4 0.4 0.39 2
HDFC 0.47 0.63 0.31 0.47 3
ICICI 0.35 0.31 0.29 0.32 1
Return on Net worth (M)
BANK 2008 2009 2010 CAR(Avg) RANK
AXIS 13.73 13.69 15.8 14.41 3
HDFC 13.6 15.69 17.44 15.58 2
ICICI 13.97 15.53 19.41 16.30 1
46 | P a g e S u b m i t t e d B y : R i c h a K a l r a j s a j s
46 Comparative Analysis of Indian Private Banks
Net Interest Income (E)
BANK 2008 2009 2010 (Avg) RANK
AXIS 2585.35 3686.21 5004.49 3758.68 3
HDFC 5227.9 7421.2 8386.6 7011.90 2
ICICI 7304.1 8366.61 8114.36 7928.36 1
Liquid Asset/Total Asset (L)
BANK 2008 2009 2010 (Avg) RANK
AXIS 0.11 0.1 0.08 0.10 2
HDFC 0.11 0.09 0.13 0.11 1
ICICI 0.09 0.07 0.1 0.09 3
CAMEL Model
BANK C RANK A RANK M RANK E RANK L RANK Group Avg RANK
AXIS 3 2 3 3 2 2.8 3
HDFC 2 3 2 2 1 2.4 2
ICICI 1 1 1 1 3 2.4 1
Interpretation- ICICI Bank has been given 1st Rank overall through this model. Because
ICICI Bank is having Capital Adequacy maximum In Asset Quality, ICICI have less NPA Ratio
which is a good sign. And also in Management Efficiency, Earning Quality and Liquidity, this
bank performed best out of these banks. So Rank 1 is assigned to this bank.
But HDFC and AXIS Bank could not perform well as compared to ICICI Bank so they are
Ranked 2nd
and 3rd
respectively.
47 | P a g e S u b m i t t e d B y : R i c h a K a l r a j s a j s
47 Comparative Analysis of Indian Private Banks
STATISTICAL TOOLS[5][8]
An educated citizen needs an understanding of basic statistical tool to function in a world that is
becoming increasingly dependant on quantitative information. Statistics means numerical
description to most people. In fact the term statistics is generally used to mean numerical facts
and figures such as agriculture production during a year, rate of inflation and so on. However as
a subject of study, statistics refers to the body of principles and procedures developed for the
collection, classification, summarization and interpretation of numerical data and for the use of
such data.
MEANING:-
Broadly speaking, the term statistics has been generally used in two senses:-
Plural Sense
Singular Sense
Plural sense refers to the numerical data. Singular Sense refers to a Science in which we deals
with the techniques of collecting, classifying, presenting, analyzing and interpreting the data, the
concept in its singular sense, refers to Statistical Method.
PURPOSE: Without the assistance of Statistical Method, an organization would find it
impossible to make sense of the huge data. The purpose of statistics is to:-
Analyze
Summarize
Investigate
Record
A wide variety of statistical tools are available and any of them can be used by any businessman
depending upon the nature of his trade.
Various statistical tools are:-
Correlation
Time Series
Index Numbers
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48 Comparative Analysis of Indian Private Banks
Probability Distribution
Principal Component Analysis(PCA)
Regression
Analysis of Variance(ANOVA)
Correlation
Some important definitions of correlation are given below:
Correlation analysis deals with the association between two or more variables- Simpson and
Kafka.
If two or more quantities vary in sympathy, so that movement in one tend to be accompanied by
corresponding movements in the other, then they are said to be correlated- Conner.
Correlation analysis attempts to determine the degree of relationship between variables.
Types of Correlation:-
Correlation is classified in several different ways. Three of the most important ways are:-
Positive and Negative Correlation:-
When two variable X and Y move in same direction is Positive Correlation and when both
variables move in opposite direction that is Negative Correlation.
Simple, Partial and Multiple Correlations:-
When we study the relationship between two variables only that is Simple Correlation. When
three or more variables are taken but relationship between any two of the variable is studied,
assuming other variables as constant that is Partial Correlation and when we study the
relationship among three or more variables that is Multiple Correlation.
Linear and Curvi-Linear Correlation:-
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49 Comparative Analysis of Indian Private Banks
When the ratio of change of two variables X and Y remains constant throughout, then they are
said to be Linear Correlated and when the ratio of change between the two variables is not
constant but changing, then correlation is said to be Curvi-Linear.
Degree Of Correlation:-
Sr. No. Degree of correlation Positive Negative
1 Perfect correlation +1 -1
2 High Degree of
correlation
Between +.75 to+1 Between -.75 to-1
3 Moderate Degree of
Correlation
Between +.25
to+.75
Between -.25 to-.75
4 Low Degree of
Correlation
Between 0 to+.25 Between 0 to-.25
5 Absence of Correlation 0 0
Karl Pearson's coefficient of correlation method:-
Karl Pearson's coefficient of correlation method is the main important method to calculate the
correlation between two variables.
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50 Comparative Analysis of Indian Private Banks
CORRELATION
HDFC
Between Operating Profit and Stock Price
Correlations
OperatingProfit StockPrice
OperatingProfit Pearson Correlation 1 .986
Sig. (1-tailed) .108
N 3 3
StockPrice Pearson Correlation .986 1
Sig. (1-tailed) .108
N 3 3
INTERPRETATION
There is High degree of correlation between Operating Profit and Share Price.
Between PAT and Share Price
Correlations
PAT SharePrice
PAT Pearson Correlation 1 .999*
Sig. (1-tailed) .030
N 3 3
SharePrice Pearson Correlation .999* 1
Sig. (1-tailed) .030
N 3 3
*. Correlation is significant at the 0.05 level (1-tailed).
INTERPRETATION
There is High degree of correlation between PAT and Share Price.
51 | P a g e S u b m i t t e d B y : R i c h a K a l r a j s a j s
51 Comparative Analysis of Indian Private Banks
BETWEEN EPS and Stock Price
Correlations
EPS StockPrice
EPS Pearson Correlation 1 .991
Sig. (1-tailed) .088
N 3 3
StockPrice Pearson Correlation .991 1
Sig. (1-tailed) .088
N 3 3
INTERPRETATION
There is High degree of correlation between EPS and Share Price.
BETWEEN Capital Adequacy and Stock Price
Correlations
CapitalAdequacy StockPrice
CapitalAdequacy Pearson Correlation 1 .983
Sig. (1-tailed) .116
N 3 3
StockPrice Pearson Correlation .983 1
Sig. (1-tailed) .116
N 3 3
INTERPRETATION
There is High degree of correlation between Capital Adequacy and Share Price.
52 | P a g e S u b m i t t e d B y : R i c h a K a l r a j s a j s
52 Comparative Analysis of Indian Private Banks
ICICI
BETWEEN Operating and Stock Price
Correlations
OperatingProfit StockPrice
OperatingProfit Pearson Correlation 1 .705
Sig. (1-tailed) .502
N 3 3
StockPrice Pearson Correlation .705 1
Sig. (1-tailed) .502
N 3 3
INTERPRETATION
There is Moderate degree of correlation between Operating Profit and Share Price.
BETWEEN PAT and Stock Price
Correlations
PAT StockPrice
PAT Pearson Correlation 1 .448
Sig. (1-tailed) .705
N 3 3
StockPrice Pearson Correlation .448 1
Sig. (1-tailed) .705
N 3 3
INTERPRETATION
There is Moderate degree of correlation between PAT and Share Price.
53 | P a g e S u b m i t t e d B y : R i c h a K a l r a j s a j s
53 Comparative Analysis of Indian Private Banks
BETWEEN EPS and Stock Price
Correlations
EPS StockPrice
EPS Pearson Correlation 1 .501
Sig. (1-tailed) .666
N 3 3
StockPrice Pearson Correlation .501 1
Sig. (1-tailed) .666
N 3 3
INTERPRETATION
There is Moderate degree of correlation between EPS and Share Price.
AXIS BANK
BETWEEN Operating Profit and Stock Price
Correlations
OperatingProfit StockPrice
OperatingProfit Pearson Correlation 1 .990**
Sig. (1-tailed) .005
N 3 3
StockPrice Pearson Correlation .990** 1
Sig. (1-tailed) .005
N 3 3
**. Correlation is significant at the 0.01 level (1-tailed).
INTERPRETATION
There is High degree of correlation between Operating Profit and Share Price.
54 | P a g e S u b m i t t e d B y : R i c h a K a l r a j s a j s
54 Comparative Analysis of Indian Private Banks
BETWEEN PAT and Stock Price
Correlations
PAT StockPrice
PAT Pearson Correlation 1 .998*
Sig. (1-tailed) .021
N 3 3
StockPrice Pearson Correlation .998* 1
Sig. (1-tailed) .021
N 3 3
*. Correlation is significant at the 0.05 level (1-tailed).
INTERPRETATION
There is High degree of correlation between PAT and Share Price.
BETWEEN EPS and Stock Price
Correlations
EPS StockPrice
EPS Pearson Correlation 1 .459
Sig. (1-tailed) .348
N 3 3
StockPrice Pearson Correlation .459 1
Sig. (1-tailed) .348
N 3 3
INTERPRETATION
There is Moderate degree of correlation between Operating Profit and Share Price.
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55 Comparative Analysis of Indian Private Banks
Regression Analysis6
Regression is the study of the nature of relationship between the variables so that one may be
able to predict the unknown value of one variable for a known value of another value.
It is the measure of average relationship between two or more variables.
Types of regression analysis:-
Simple and multiple regression:- incase of simple regression, we study only tewo variables i.e.
one dependent and one independent. But in case of multiple regression we take more than two
variables i.e. one dependent and other independent.
Linear and Non-linear regression :- when one variable changes with another variable in some
fixed ratio, it is called as linear regression. But if this ratio is not constant, it is known as Non-
linear regression.
Partial and Total regression:- If from more than two variabless only two two variables are
taken into consideration. It is called as partial regression. But all variables are taken into
consideration at a single slank. It is called as total regression.
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56 Comparative Analysis of Indian Private Banks
HDFC
BETWEEN Operating Profit and Stock Price
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
1 .986a .972 .943 160.15318
a. Predictors: (Constant), OperatingProfit
INTERPRETATION
There is high Impact of Operating Profit on Share Price i.e by 98.6%
BETWEEN PAT and Stock Price
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
1 .999a .998 .995 45.36985
a. Predictors: (Constant), PAT
INTERPRETATION
There is high Impact of PAT on Share Price i.e by 99.9%
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57 Comparative Analysis of Indian Private Banks
BETWEEN EPS and Stock Price
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
1 .991a .981 .962 130.14677
a. Predictors: (Constant), EPS
I
NTERPRETATION
There is high Impact of EPS on Share Price i.e by 99.1%
BETWEEN Capital Adequacy and Stock Price
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
1 .983a .967 .934 172.02715
a. Predictors: (Constant), CapitalAdequacy
INTERPRETATION
There is high Impact of Capital Adequacy on Share Price i.e by 98.3%
ICICI
BETWEEN Operating and Stock Price
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
1 .705a .498 -.005 353.07945
a. Predictors: (Constant), OperatingProfit
INTERPRETATION
There is Moderate Impact of Operating Profit on Share Price i.e by 70.5%
58 | P a g e S u b m i t t e d B y : R i c h a K a l r a j s a j s
58 Comparative Analysis of Indian Private Banks
BETWEEN PAT and Stock Price
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
1 .448a .200 -.599 445.41679
a. Predictors: (Constant), PAT
INTERPRETATION
There is Low Impact of PAT on Share Price i.e by 44.8%
BETWEEN EPS and Stock Price
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
1 .448a .200 -.599 445.41679
a. Predictors: (Constant), PAT
INTERPRETATION
There is Low Impact of PAT on Share Price i.e by 44.8%
AXIS BANK
BETWEEN Operating Profit and Stock Price
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
1 .990a .990 .999 9.73358
a. Predictors: (Constant), OperatingProfit
INTERPRETATION
There is high Impact of Operating Profit on Share Price i.e by 99.0%
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59 Comparative Analysis of Indian Private Banks
BETWEEN PAT and Stock Price
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
1 .998a .996 .991 39.51967
a. Predictors: (Constant), PAT
INTERPRETATION
There is high Impact of PAT on Share Price i.e by 99.8%
BETWEEN EPS and Stock Price
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
1 .459a .210 -.579 532.76650
a. Predictors: (Constant), EPS
INTERPRETATION
There is Low Impact of EPS on Share Price i.e by 45.9%
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60 Comparative Analysis of Indian Private Banks
LIMITATION OF THE STUDY
In spite of best efforts of the investigator the study was subjected to following limitations:-
Less Time Period: The time period given to me for the completion of the project was
short in such a short span of time it is difficult to complete any project in detail.
Unavailability of primary data: Manager some time denied disclosing some important
financial matters, which can be helpful in this study.
Limited Area of Study: Researcher have studied only a single firm of the industry. So,
Researcher got knowledge about just a minor player in the team.
Some information related to the study, which had been collected from the company was rounded
off because of some influence.
Some data like Bank Statements were to be called from distant units and it was too bulk that
units refuse to deliver it and if deliver after delaying too much.
61 | P a g e S u b m i t t e d B y : R i c h a K a l r a j s a j s
61 Comparative Analysis of Indian Private Banks
RESULTS AND FINDINGS
Both Axis and HDFC Banks have rise in their EPS in 2008-10 due to increasing PAT
more with shareholders funds. But ICICI Bank comparatively decline in their EPS due to
more variation in their PAT which is not going in the same degree
Both Axis and HDFC Banks have rise in their PAT But ICICI Bank comparatively
decline in their PAT which is not going in the same degree (Increasing/Decreasing). But
ICICI Bank has the maximum PAT between all the banks.
All Banks are consistently increasing their capital adequacy which is a good sign for
these banks as they will get saved from the risk weighted assets, if any risk arise then
they have sufficient capital in their banks to get out of that.
ICICI Bank has been given 1st Rank overall through this model. Because ICICI Bank is
having Capital Adequacy maximum. In Asset Quality, ICICI have less NPA Ratio which
is a good sign. And also in Management Efficiency, Earning Quality and Liquidity, this
bank performed best out of these banks. So Rank 1 is assigned to this bank. But HDFC
and AXIS Bank could not perform well as compared to ICICI Bank so they are Ranked
2nd
and 3rd
respectively.
There is High degree Positive correlation & High Degree Impact of Operating Profit,
EPS, PAT, Capital Adequacy ratio on stock Price of HDFC Bank
There is Moderate degree Positive correlation& High Degree Impact of Operating
Profit, EPS, PAT, Capital Adequacy ratio on stock Price of Axis Bank
There is High degree Positive correlation& High Degree Impact of Operating Profit,
EPS, PAT, Capital Adequacy ratio on stock Price of ICICI Bank
62 | P a g e S u b m i t t e d B y : R i c h a K a l r a j s a j s
62 Comparative Analysis of Indian Private Banks
RECOMMENDATIONS
Banks should focus on their NPA which is a major factor for checking the banks credit
quality. If NPA increases that means loan amount as well as interest amount is not
coming on time so banks have to take proper measures to decrease the NPA ratio.
Increases of NPA decreases the Net Interest Income as Interest received amount get less
from increasing of NPAs. So focus should be to decrease the NPA ratio to total assets.
Major focus should be to increase the PAT as shareholder funds are increasing, so PAT should be
increasing more in proportion of shareholders funds because it contributes to Return on Net
worth.
Liquidity is also the major issue that to be considered and to increase so that liquidity risk will not
arise in future.
Capital Adequacy plays an important role, the more the capital adequacy, more will be the
goodwill of Bank as this symbolizes that bank have adequate capital to meet out from risk
weighted assets. If some of the loans gets into NPAs then Bank have sufficient or have the
maximum capital with compared to all the banks that Customers will be more coming to banks.
63 | P a g e S u b m i t t e d B y : R i c h a K a l r a j s a j s
63 Comparative Analysis of Indian Private Banks
POLICY IMPLICATIONS
The researcher suggested various policies to organisation which he thinks that if they
implemented in the right manner can increase the earnings of the firm which in turn increase the
goodwill of the firm.
Implementation of policy on the related issues depends upon the result of discussion among the
top executives of an organisation for the flowing policies.
The various policies that should be applied in an organisation on the basis of the study of
financial analysis of organisation are as follows:-
Monitor your accounts receivable on an ongoing basis.
More investment in fixed assets.
Maintenance of Proper Records of those agents wherever it has been shown
as Old Outstanding/Closed Outstanding.
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64 Comparative Analysis of Indian Private Banks
BIBLIOGRAPHY
BOOKS
1. Sekran Uma, (4th edition), Business Research Methodology (Researcher choose this
book for studied, for Knowledge about research process.)
2. Ciaran Walsh, Key Management Ratios (The book is selected to get analysis of ratio.)
3. Kothari C.R. (2th edition), Research methodology methods & techniques, (Knowledge
about the hypothesis development like null and alternate hypothesis and hypothesis
testing)
4. .Cooper R. Donald (Edition-8th) Business Research Methods.- (The various type of
research design and the other concepts of research methodology are studied from this
book.)
5. Sheridan J Coakes, Lyndall Steed, Peta Dzidic SPSS VERSION 13.0 forWindows-
(This book has been used for applying the various statistical, tools and tests on the
study )
6. Gupta S.P (2008) Statistical Methods.- (This book reveals information regarding the
statistical tools and their limitations in different fields the research is given in this section.
This section explains the use of regression analysis techniques.)
7. Beri G.C., (2nd edition), Marketing Research,- (This book will help Researcher in
understanding the different research designs and sources of data collection and methods
of data collection are given in this section.)
8. Jain T.R. and Aggarwal S.C (Edition-3rd) Statistics for MBA.- (This gives
information about how to find the values of Correlations, Regression, Hypothesis and
Trend analysis.)
9. L.M Bhole (Edition-5th) Financial Institution and Market.- (This books include the
information about the banks.)
10. Goel D.K (2008), Management Accounting And Financial Management:- (The book
was selected to get the types of ratios like profitability, liquidity etc)
65 | P a g e S u b m i t t e d B y : R i c h a K a l r a j s a j s
65 Comparative Analysis of Indian Private Banks
11. Kothari C.R. (2th edition), Research methodology methods & techniques, - (Knowledge
about the hypothesis development like null and alternate hypothesis and hypothesis
testing)
12. P.N Varshaney (Edition-3rd) Indian Financial System.
(This books include the information about the commercial banks and their roles.)
13. Gupta.k.Shashi (Edition-13th) Financial Institution and Market.
(This book include the information about the history of bank industry.)
14. Varshaney P.N. & Mittal D.K.[14], (Revised Edition-10th) Indian Financial System.
(Information about Indian financial system has taken)
15. Gupta S.P. & Gupta M.P. [15], (Edition 15th) Business Statistics.
(Correlation Topic will be taken from this book)
JOURNALS:
16. Usha Arora (vol xxi no. 1, March 2007), An analysis of operational and productivity
efficiency of public sector banks, Finance India pp no. 167-176.
17. A. Amarender Reddy (vol xix ,no3 ,September 2005), Banking sector deregulation and
productivity change decomposition of Indian banks, Finance India. Pp no. 983-1001
18. Sanjiv Joshi (vol xxi no. 4,december 2007), Central banking in a liberalising
economy:Autonomy of the reserve bank of india, Finance India pp no. 1405-1442.
19. Meena Sharma (vol. Xix ,No-3 ,sept. 2005), problems of NPAs and its impact on
strategic banking variables, Finance India pp no. 953-967.
20. Thorsten Beck, Ross Levine, Alexey Levkov ( Vol lxv ,No.5 ,October 2010), Big bad
banks? The winners and looser from bank deregulation in the united states,The Journal
of finance pp no. 1637-1667.
66 | P a g e S u b m i t t e d B y : R i c h a K a l r a j s a j s
66 Comparative Analysis of Indian Private Banks
21. C.S. Balasubramaniam (Vol.xix, No.4, december 2005), Corporate governance and its
role in banking sector, Finance India pp no. 1393-1404.
22. D.M.N. Raju ( Vol xxiii, No.3, sept. 2005), Evaluation of the performance of the state
bank of india with special reference to the non performing assets, Finance India pp no.
985-989.
23. Jyoti Saluja (Vol 4, april 2010), Indian journal of finance.
24. Dr. N Bharati (Vol 4, march 2010), Indian journal of finance.
Magazine:
25. P K Kulkarni (SEPT.- DEC. 2007), ICFAI Reader
26. G S Rathore (November 2007), Impact of financial sector reforms on banking sector in
india, ICFAI Reader.
27. V P Shetty (October 2006), The changing Paradigm, Chartered financial Analyst
28. B Sambamurthy (November 2006), Indian banking future perfect, Chartered
financial Analyst
29. Steve Payne (October 2010), The analyst.
30. Natasha khakhar Patel (jan 28- jul 11,2010), Capital Market
31. Kaushik Chakaraborty (January 2007), Chartered financial Analyst
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67 Comparative Analysis of Indian Private Banks
Websites
32. http://www.experiment-resources.com/research-designs.html
33. http://www.socialresearchmethods.net/kb/stat_t.php
34. http://en.wikipedia.org/wiki/Bank
35. http://in.jobstreet.com/jobs/2008/5/h/60/1321591.htm?fr=J
36. http://www.icicigroupcompanies.com/corporate_governance.html
37. http://www.axisbank.com/aboutus/ourmissionandvalues/Our-Mission-And-Values.asp
38. http://www.hsbc.com.tr/eng/about_HSBC/our_vision_and_values/
39. http://www.samples-help.org.uk/mission-statements/bank-of-america-mission-statement.htm
40. http://en.wikipedia.org/wiki/Research
41. http://www.investopedia.com/terms/r/ratioanalysis.asp
42. http://en.wikipedia.org/wiki/eps