PROJECT REPORT

A STUDY ON

“Risk & Return Analysis in Banking Sector”

(2012-2017)

Submitted in fulfillment of the requirement of

ALL INDIA MANAGEMENT ASSOCIATION

For the Award of

POST GRADUATE DIPLOMA IN MANAGEMENT

BY

AKHIL KHANNA
(B21610053)

Under the guidance of

Dr. Anurag Agnihotri

 DECLARATION
I hereby declare that the project title “Risk and Return in Banking
Sector is an original piece of research work carried out by me under
guidance and supervision of Dr. Anurag Agnihotri. The information
has been collected from genuine & authentic sources. The work has been
submitted in fulfillment of requirement of POST GRADUATION
DEPLOMA IN MANAGEMENT to All India Management Association
(AIMA).

Place : Delhi

Date : 25th Jan 2018 Signature

 ACKNOWLEDGEMENT

I take immense pleasure in completing this project and submitting the

final report of project. This project has provided me a platform to
acquire a deep understanding of one of the analysis of equity share
performance in banking sector.

I express my sincere thanks to my project guide Dr. Anurag Agnihotri

for guiding me though my project. He helped me with all the resources
and information required for the project.

I am grateful to my parents and friends for their consistent support and

encouragement throughout my work.
Last but not the least, I express my gratitude towards all those people
who directly or indirectly helped me to complete this project.

Akhil Khanna
B21610053
 Table of Contents

INTRODUCTION....................................................................................7
Risk........................................................................................................................8
Return...................................................................................................................9
Risk Preferences..................................................................................................12
Objective of Project............................................................................................13
OVERVIEW OF BANKING SECTOR.................................................15
Market Size.........................................................................................................16
Investments/developments................................................................................17
Government Initiatives.......................................................................................17
Road Ahead.........................................................................................................18
RESEARCH DESIGN & METHODOLOGY........................................20
Research:............................................................................................................ 20
Research Methodology:......................................................................................21
Research Instrument:..........................................................................................21
Define Problem:..................................................................................................21
Research Design:.................................................................................................21
Sample Size:........................................................................................................22
REVIEW OF LITERATURE.................................................................23
INTRODUCTION...................................................................................................23
Observations.......................................................................................................25
THEORETICAL BACKGROUND........................................................32
 Concept...............................................................................................................32
Advantages of Equity Shares:...........................................................................33
Disadvantages of Equity Shares:......................................................................34
Introduction of NSE:............................................................................................34
NSE Products.......................................................................................................35
NSE Academy......................................................................................................36
NSE ACADEMY’S Certification in Financial Markets (NCFM)...............................36
Introduction of Nifty 50 or simply Nifty..............................................................37
NIFTY BANK.........................................................................................................37
Concept of Risk and Return of Equity shares......................................................41
Return:.............................................................................................................41
Risk...................................................................................................................45
Techniques of measuring Risk..........................................................................53
DATA ANALYSIS & INTERPRETATION.........................................61
Data collection and analysis................................................................................62
Axis Bank Ltd.,..................................................................................................62
Bank of Baroda,................................................................................................65
Canara Bank,....................................................................................................68
Federal Bank Ltd.,............................................................................................71
HDFC Bank Ltd.,...............................................................................................74
ICICI Bank Ltd.,.................................................................................................77
IDFC Bank Ltd.,.................................................................................................80
IndusInd Bank Ltd.,..........................................................................................83
Kotak Mahindra Bank Ltd.,...............................................................................86
Punjab National Bank,......................................................................................89
State Bank of India,..........................................................................................93
Yes Bank Ltd.....................................................................................................96
 Comparative Technical Study..............................................................................99
ANALYSIS FINDINGS.......................................................................116
CONCLUSION/SUGGESSION & RECOMENDATIONS................121
LIMITATIONS/ SCOPE OF STUDY..................................................124
REFERENCE.......................................................................................126
Reference..........................................................................................................127
Books................................................................................................................ 128
Newspaper/Journals.........................................................................................129
ANNEXURE........................................................................................130
ANNEXURE 1. Project Synopsis.........................................................................131
ANNEXURE 2. Guide CV.....................................................................................138
 CHAPTER – 1

INTRODUCTION
The Risk and Return are the two faces of the coin. The ultimate goal of any
investment is to maximize returns and minimize risk. The attitude of investors is
they wanted to earn maximum return but they are not willing to take risk. But
practically risk and return goes hand in hand. Higher the risk, higher the expected
return and vice versa. Risk in inherent in every investment decision; even safe
investments like treasury bills, government securities and post office deposits are
not free from risk. The risk is more in certain investments like equity stock.

The risk and return analysis is main function of this project. The meaning of risk
and return is as follows:

Risk

It means earning less than what you expected from a given Investment or
losing part of what you invested. In other words Risk means “variability of
returns”. It is the probability of having adverse or low returns as compared to the
expected returns.

Risk can be broadly classified into systematic risk (Market risk) and unsystematic
risk (company risk). Systematic risk is that portion of total variability which is
attributed to economy wide factors like Interest rate, Inflation, GDP growth rate,
Business cycles, Balance of payment positions, exchange rate of currency,
Government policies etc. The unsystematic risk is that portion of total risk which
is attributed to Industry or company specific factors like inefficient management,
low quality product, new product failure, emergence of competitor, labor strike etc.
The unsystematic risk can be eliminated through proper diversification of
investment. But systematic risk is non-diversifiable in nature. It has to be borne by
all the investors. As it affect all the company’s stocks to a greater or lesser extent.
That’s why it is said that equity investments are subjected to market risk.
In Finance literature Beta is considered as the main measurement statistic of
systematic risk. Beta is the stock’s sensitivity to the market index movement. In
simple words Beta shows how an investment return changes with respect to
movement in stock index. The market has a beta of 1. Individual investment risk is
measured through their Beta values. Beta measurement shows changes in the
investment returns due to change in the returns of market index (Market portfolio).
For example, if beta of a security is 1.25, then it means for every 1% change in the
returns of index, returns of this security will change by 1.25%.
A stock that swings more than the market over a time has beta above 1.0, they are
known as aggressive stocks. If a stock moves less than the market, the stock’s beta
is less than 1.0, they are known as defensive stocks. High beta stocks are
comparatively more risky than low beta stocks. Beta is calculated as follows
Βi = covariance i,m
σm 2
Βi= Beta of the security
i= Individual security
m = Market index or market portfolio
σm 2= Variance of market portfolio

Return
 The change in the value of a portfolio over an evaluation period, including
any distributions made from the portfolio during that period. A return is the gain or
loss of a security in a particular period. The return consists of the income and the
capital gains relative on an investment, and it is usually quoted as a percentage.
The general rule is that the more risk you take, the greater the potential for higher
returns and losses.
Your return is the profit or loss you have on your investments, including income
and change in value. Return can be expressed as a percentage and is calculated by
adding the income and the change in value and then dividing by the initial
principal or investment amount. You can find the annualized return by dividing the
percentage return by the number of years you have held the investment.
For example, if you bought a stock that paid no dividends at ₹25 a share and sold it
for ₹30 a share, your return would be ₹5. If you bought on January 3, and sold it
the following January 4, that would be a 20% annual percentage return, or the ₹5
return divided by your ₹25 investment.
But if you held the stock for five years before selling for ₹30 a share, your
annualized return would be 4%, because the 20% gain is divided by five years
rather than one year.
Percentage return and annual percentage return allow you to compare the return
provided by different investments or investments you have held for different
periods of time.

In this project risk and return is calculated using various techniques. The
return on equity share investment is not fixed. The rate of equity shares investment
in particular company and bank changes every time. The equity share holders
either can earn profit or can take risk. This situation is not fixed and hence, here
need of risk and return analysis is required.
In this project Nifty Bank (sectorial indices) selected for analysis, available at
National stock exchange (NSE). NSE is the third ranked in the world located at
Mumbai. Bank Nifty is one type of indices of NSE.
Nifty Bank Index is an index comprised of the most liquid and large capitalized
Indian Banking stocks. It provides investors and market intermediaries with a
benchmark that captures the capital market performance of Indian Banks. The
index has 12 stocks from the banking sector which trade on the National Stock
Exchange. Banks listed in Nifty Bank is considered as Axis Bank Ltd., Bank of
Baroda, Canara Bank, Federal Bank Ltd., HDFC Bank Ltd., ICICI Bank Ltd.,
IDFC Bank Ltd., IndusInd Bank Ltd., Kotak Mahindra Bank Ltd., Punjab National
Bank, State Bank of India, Yes Bank Ltd.
Market Representation: The Nifty Bank Index represent about 15.6% of the free
float market capitalization of the stocks listed on NSE and 93.3% of the free float
market capitalization of the stocks forming part of the Banking sector universe as
on March 31, 2016.
The total traded value for the last six months ending March 2016 of all the Index
constituents is approximately 12.5% of the traded value of all stocks on the NSE
and 88.1% of the traded value of the stocks forming part of the Banking sector
universe.
Post liberalization of Indian economy, the financial arena of banking sector has led
to a great transformation of over the past two decades. Asset quality and
profitability have improved significantly. Banking industry plays a vital role in the
economic growth of a country. It is the backbone of country’s economy. Making
investment in equity stocks of banking sector is very common among investors.
But the recent global financial crisis has proved that the banking and financial
sector stocks tend to be more volatile than ever. In this present situation risk
analysis of selected banking stocks in India is felt highly relevant.
The risk and return relationship is a fundamental concept in not only financial
analysis, but in every aspect of life. If a decision has to lead to benefit
maximization, it is necessary that individuals/institutions consider the combined
influence on expected (future) return or benefit as well as on risk/cost. The
requirement that expected return/benefit is commensurate with risk/ cost is known
as the “risk return trade-off” in finance.

The risk and return trade off says that the potential return rises with an increase in
risk. It is important for an investor to decide on a balance between the desire for
the lowest possible risk and highest possible return.
Any rational investor, before investing his or her investible wealth in the stock,
analyses the risk associated with the particular stock. The actual return he receives
from a stock may vary from his expected return and the risk is expressed in terms
of variability of return.

Acceptable Levels of Risk Depend Upon the Individual Investor

• Risk-averse describes an investor who requires greater return in exchange
for greater risk
• Risk-indifferent describes an investor who does not require a change in
return as compensation for greater risk
 • Risk-seeking describes an investor who will accept a lower return in
exchange for greater risk

Risk Preferences

Steps in the Decision Process: Combining Return and Risk

• Estimate the expected return using present value methods and
historical/projected return rates
• Assess the risk of the investment by looking at historical/projected returns
using standard deviation or coefficient of variation of returns
• Evaluate the risk-return of each investment alternative to make sure the
return is reasonable given the level of risk
• Select the investments that offer the highest expected returns associated with
the level of risk you are willing to accept
Objective of Project
Saving money is not enough. Each of us also need to invest one’s savings
intelligently in order to have enough money available for funding the higher
education of one’s children, for buying a house, or for one’s own golden years. But
the rapidly growing number of investment avenues often led to create confusion.
Objectives of the study are to provide information to investor as well as corporate
investors regarding their risk, and choosing the best investment options to match
their goals and attitude to risk.

The risk and return analysis of equity share project is helpful to equity shares
holder or investors. Equity share holder is an actual owner of the bank or company.

The Objective of this project is:

1. To analysis Risk and Return in Banking Sector.
2. To analyze the Market Risk of selected banking stocks in terms of Beta.
3. To study the bank’s stock movement with respect to Bank Nifty.
4. To study volatility of banks in comparison with the market.
5. To find out weight of various banks in banking sector.
6. This study serves the purpose to complete my PGDM program by
submitting project report.
7. To analyze the nifty movement behavior towards the banking stocks.
 CHAPTER – 2

OVERVIEW OF BANKING
SECTOR
As per the Reserve Bank of India (RBI), India’s banking sector is sufficiently
capitalized and well-regulated. The financial and economic conditions in the
country are far superior to any other country in the world. Credit, market and
liquidity risk studies suggest that Indian banks are generally resilient and have
withstood the global downturn well.

Indian banking industry has recently witnessed the roll out of innovative banking
models like payments and small finance banks. RBI’s new measures may go a long
way in helping the restructuring of the domestic banking industry.

The digital payments system in India has evolved the most among 25 countries
with India’s Immediate Payment Service (IMPS) being the only system at level 5
in the Faster Payments Innovation Index (FPII).*

In August 2017, Global rating agency Moody's announced that its outlook for the
Indian banking system was stable. In November 2017, Global rating agency
Moody's upgraded four Indian banks from Baa3 to Baa2.

Market Size
The Indian banking system consists of 27 public sector banks, 26 private sector
banks, 46 foreign banks, 56 regional rural banks, 1,574 urban cooperative banks
and 93,913 rural cooperative banks, in addition to cooperative credit institutions.
Public-sector banks control more than 70 per cent of the banking system assets,
thereby leaving a comparatively smaller share for its private peers. Banks are also
encouraging their customers to manage their finances using mobile phones.
As the Reserve Bank of India (RBI) allows more features such as unlimited fund
transfers between wallets and bank accounts, mobile wallets are expected to
become strong players in the financial ecosystem.
The un-organized retail sector in India has huge untapped potential for adopting
digital mode of payments, as 63 per cent of the retailers are interested in using
digital payments like mobile and card payments, as per a report by Centre for
Digital Financial Inclusion (CDFI).
ICRA estimates that credit growth in India’s banking sector would be at 7-8 per
cent in FY 2017-18.

Investments/developments
Key investments and developments in India’s banking industry include:
The bank recapitalization plan by Government of India is expected to push credit
growth in the country to 15 per cent and as a result help the GDP grow by 7 per
cent in FY19. ^
Public sector banks are lining up to raise funds via qualified institutional
placements (QIP), backed by better investor sentiment after the Government of
India's bank recapitalization plan and an upgrade in India's sovereign rating by
Moody's Investor Service.
The RBI amends statutes thereby allowing lenders to invest in real estate
investment trusts (REITs) and infrastructure investment trusts (InvITs) not
exceeding 10 per cent of the unit capital of such instruments.
Government Initiatives
The Government of India is planning to introduce a two percentage point discount
in the Goods and Services Tax (GST) on business-to-consumer (B2C) transactions
made via digital payments.
A new portal named 'Udyami Mitra' has been launched by the Small Industries
Development Bank of India (SIDBI) with the aim of improving credit availability
to Micro, Small and Medium Enterprises' (MSMEs) in the country.
Mr Arun Jaitley, Minister of Finance, Government of India, introduced 'The
Banking Regulation (Amendment) Bill,2017', which will replace the Banking
Regulation (Amendment) Ordinance, 2017, to allow the Reserve Bank of India
(RBI) to guide banks for resolving the problems of stressed assets.
The government and the regulator have undertaken several measures to strengthen
the Indian banking sector.

 A two-year plan to strengthen the public sector banks through reforms and
capital infusion of Rs 2.11 lakh crore (US$ 32.5 billion), has been unveiled
by the Government of India that will enable these banks to play a much
larger role in the financial system and give a boost to the MSME sector. In
this regard, the Lok Sabha has approved recapitalization bonds worth Rs
80,000 crore (US$ 12.62 billion) for public sector banks, which will be
accompanied by a series of reforms, according to Mr Arun Jaitley, Minister
of Finance, Government of India.

 The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017 Bill

has been passed by Rajya Sabha and is expected to strengthen the banking
sector.
Road Ahead

Enhanced spending on infrastructure, speedy implementation of projects and

continuation of reforms are expected to provide further impetus to growth. All
these factors suggest that India’s banking sector is also poised for robust growth as
the rapidly growing business would turn to banks for their credit needs.

Also, the advancements in technology have brought the mobile and internet
banking services to the fore. The banking sector is laying greater emphasis on
providing improved services to their clients and also upgrading their technology
infrastructure, in order to enhance the customer’s overall experience as well as give
banks a competitive edge.

Many banks, including HDFC, ICICI and AXIS are exploring the option to launch
contact-less credit and debit cards in the market shortly. The cards, which use near
field communication (NFC) mechanism, will allow customers to transact without
having to insert or swipe.

Mr Bill Gates, Co-founder of Microsoft Corp, has stated that India will move quite
rapidly to a digital payments economy in as little as seven years, based on the
introduction of digital payment banks combined with other things like direct
benefit transfers, universal payments interface and Aadhaar.

Exchange Rate Used: INR 1 = US$ 0.015 as on January 4, 2018.

Notes: ^ - according to a report by Ambit Capita,* - according to an FIS report
 CHAPTER – 3

RESEARCH DESIGN &

METHODOLOGY
Research:
Research is a careful investigation or inquiry especially through search for
new facts in any branch of knowledge. Once can also define research as a scientific
and systematic search for pertinent information on a specific topic.

Research Methodology:
Research methodology us a collective term for the structured process of
conducting research. There are many different methodology used in various type of
research and the term is usually considered to include research design, data
gathering and data analysis.

Research Instrument:

The study was based on secondary data which was taken from NSE website. The
data was analysed with the help MS-Excel and SYS Stata. Various statistical tools
were used to analysed the data.

Define Problem:

In the current economic scenario interest rates are falling and fluctuation in the
capital market has put investors in confusion. One finds it difficult to take decision
on investment. This is primarily, because of investment are risky in nature and
investors have to consider carious factors before investing in investment avenues.
These factors include risk, return, volatility of shares price and liquidity.
Research Design:

Project is totally based on descriptive and diagnostic research. It is prepared

on structured way to find out problem under such descriptive/diagnostic research. I
have gone through secondary data for technical analysis, calculative study of risk
and return on equity shares in banking sector.

Sample Size:
Six year (2012-2017) data is collected for analysis, of banks listed in Nifty
bank at NSE.

The index has 12 stocks from the banking sector which trade on the National Stock
Exchange. Banks listed in Nifty Bank is considered as Axis Bank Ltd., Bank of
Baroda, Canara Bank, Federal Bank Ltd., HDFC Bank Ltd., ICICI Bank Ltd.,
IDFC Bank Ltd., IndusInd Bank Ltd., Kotak Mahindra Bank Ltd., Punjab National
Bank, State Bank of India, Yes Bank Ltd.
 CHAPTER – 4

REVIEW OF LITERATURE
INTRODUCTION

The Indian capital market has changed dramatically over the last few years,
especially since 1990. Changes have also been taking place in government
regulations and technology. The expectations of the investors are also changing.
The only inherent feature of the capital market, which has not changed is the 'risk'
involved in investing in corporate securities. Managing the risk is emerging as an
important function of both large scale and small-scale investors. Risk management
of investing in corporate securities is under active and extensive discussion among
academicians and capital market operators. Surveys and research analyses have
been conducted by institutions and academicians on risk management. The mutual
fund companies in India have conducted specific studies on the 'risk element' of
investing in corporate securities.

In the area of risk and return analysis two well-known economist made
effort to study the relation between risk and return and they are the people who
quantified the risk and return aspects of an instrument. They are Harry Markowitz
and William Sharpe.

Very broadly the investment process consists of two tasks.

• The first task is security analysis which focuses on assessing the risk and return
characteristics of the available investment alternatives.
• The second task is portfolio selection which involves choosing the best possible
portfolio from the set of feasible portfolio.

Portfolio theory, originally proposed by Harry Markowitz in the 1950’s was the
first formal attempt to quantify the risk of portfolio and develop a methodology for
determining the optimal portfolio. Prior to the development of portfolio theory,
investors dealt with the concept of return and risk somewhat loosely. Harry
Markowitz was the first person to show quantitatively why and how diversification
reduce risk .in recognition of his seminal contribution in this field he was awarded
the Nobel prize in economics in 1990. Harry Markowitz developed an approach
that helps the investors to achieve his optimal portfolio position.

In this context William Sharpe and others tried to find out an answer for the
question; what is the relationship between risk and return and they developed
capital asset pricing theory. The CAPM predicts the relationship between the risk
of an asset and its expected return. This relationship is very useful in two important
ways.

 First, it produces a benchmark for evaluating various instruments.

 Second, it helps us to make an informal guess about the return that can be
expected from an asset that has not yet been traded in the market.

Observations
Raghavan. R. S (2000) commented on the risk perceptions and the risk measure
parameters. He opined that risk measures are related to the return measurements.
While risks can only be contained and cannot be eliminated altogether, there is no
doubt that some risks have to be taken to get adequate returns. Returns can be
increased or made quicker by taking more financial and operating risks. But the
environmental risks typically do not increase returns but serve as constraints on
return and risk decisions. He concluded that the process of retaining the levels of
risks within the desirable levels must be practiced in the daily operations.
Vijay Soodd (2000) revealed the risks faced by banks and financial institutions
and the degree of risk faced by them. According to him, risk management is
gathering momentum at a time when there is increasing pressure on banks and
financial institutions to better manage their assets and improve their balance sheet.
He opined that the greater the volatility of expected returns, the higher is the risk.
The essence of risk management is to reduce the volatility.

Grewal S.S and Navjot Grewall (1984) revealed some basic investment rules and
rules for selling shares. They warned the investors not to buy unlisted shares, as
Stock Exchanges do not permit trading in unlisted shares. Another rule that they
specify is not to buy inactive shares, .i.e., shares in which transactions take place
rarely. The main reason why shares are inactive is because there are no buyers for
them. They are mostly shares of companies, which are not doing well.
A third rule according to them is not to buy shares in closely-held companies
because these shares tend to be less active than those of widely held ones since
they have a fewer number of shareholders. They caution not to hold the shares for
a long period, expecting a high price, but to sell whenever one earns a reasonable
reward.

Preethi Singh (1986) disclosed the basic rules for selecting the company to invest
in. She opined that understanding and measuring return & risk is fundamental to
the investment process. According to her, most investors are 'risk averse'. To have
a higher return the investor has to face greater risks. She concludes that risk is
fundamental to the process of investment. Every investor should have an
understanding of the various pitfalls of investments. The investor should carefully
analyses the financial statements with special reference to solvency, profitability,
EPS, and efficiency of the company.

David.L.Scott and William Edward (1990) reviewed the important risks of

owning common stocks and the ways to minimize these risks. They commented
that the severity of financial risk depends on how heavily a business relies on debt.
Financial risk is relatively easy to minimize if an investor sticks to the common
stocks of companies that employ small amounts of debt. They suggested that a
relatively easy way to ensure some degree of liquidity is to restrict investment in
stocks having a history of adequate trading volume. Investors concerned about
business risk can reduce it by selecting common stocks of firms that are diversified
in several unrelated industries.

Nabhi Kumar Jain (1992) specified certain tips for buying shares for holding and
also for selling shares. He advised the investors to buy shares of a growing
company of a growing industry. Buy shares by diversifying in a number of growth
companies operating in a different but equally fast growing sector of the economy.
He suggested selling the shares the moment company has or almost reached the
peak of its growth. Also, sell the shares the moment you realise you have made a
mistake in the initial selection of the shares. The only option to decide when to buy
and sell high priced shares is to identify the individual merit or demerit of each of
the shares in the portfolio and arrive at a decision.

L.C.Gupta (1992) revealed the findings of his study that there is existence of wild
speculation in the Indian stock market. The over speculative character of the Indian
stock market is reflected in extremely high concentration of the market activity in a
handful of shares to the neglect of the remaining shares and absolutely high trading
velocities of the speculative counters. He opined that, short- term speculation, if
excessive, could lead to "artificial price". An artificial price is one which is not
justified by prospective earnings, dividends, financial strength and assets or which
is brought about by speculators through rumors, manipulations, etc. He concluded
that such artificial prices are bound to crash sometime or other as history has
repeated and proved.

Yasaswy J.N." (1993) evaluated the quantum of risks involved in different types
of stocks. Defensive stocks are low risk stocks and hence the returns are relatively
low but steady. Cyclical stocks involve higher risks and hence the rewards are
higher when compared to the growth stocks. Growth stocks belong to the medium
risk category and they offer medium returns which are much better than defensive
stocks, but less than the cyclical stocks. The market price of growth stocks does
fluctuate, sometimes even violently during short periods of boom and bust. He
emphasized the financial and organizational strength of growth stocks, which
recover soon, though they may hit bad patches once in a way.

Donald E Fischer and Ronald J. Jordan (1994) analyzed the relation between
risk, investor preferences and investor behavior. The risk return measures on
portfolios are the main determinants of an investor's attitude towards them. Most
investors seek more return for additional risk assumed. The conservative investor
requires large increase in return for assuming small increases in risk. The more
aggressive investor will accept smaller increases in return for large increases in
risk. They concluded that the psychology of the stock market is based on how
investors form judgments about uncertain future events and how they react to these
judgments.

S.Rajagopal. (1996) commented on risk management in relation to banks. He

opined that good risk management is good banking. A professional approach to
Risk Management will safeguard the interests of the banking institution in the long
run. He described risk identification as an art of combining intuition with formal
information and risk measurement is the estimation of the size, probability and
timing of a potential loss under various scenarios.

Charles.P.Jones (1996) reviewed how to estimate security return and risk. To

estimate returns, the investors must estimate cash flows the securities are likely to
provide. Also, investors must be able to quantify and measure risk using variance
or standard deviation. Variance or standard deviation is the accepted measure of
variability for both realized returns and expected returns. He suggested that the
investors should use it as the situation dictates. He revealed that over the past 12
years, returns in stocks, bonds, etc. have been normal. Blue chip stocks have
returned an average of more than 16% per year. He warned that the investors, who
believe that these rates will continue in the future also, will be in trouble. He also
warned the investors not to allow themselves to become victimized by "investment
gurus".

Aswath Damodaran (1996) reviewed the ingredients for a good risk and return
model. According to him a good risk and return model should
a. Come up with a measure for risk that is universal
b. Specify what types of risks are rewarded and what types are not.
c. Standardize risk measures, to enable analysis and comparison.
d. Translate the risk measure into an expected return.

He opined that a risk measure, to be useful, has to apply to all investments whether
stocks or bonds or real estate. He also stated that one of the objectives of
measuring risk is to come up with an estimate of an expected return for an
investment. This expected return would help to decide whether the investment is a
'good' or 'bad' one.

Soumya Guhadeb & Sagarika Misra (2011) found that there was evidence of
instability of betas especially in the shorter time period and the instability was
reduced when the beta estimation period increased. In addition to that the extreme
betas showed the higher stability than the intermediate range of betas
The study of above research papers helped in understanding the various
angles of risk and return relationship. It explains that risk is an inseparable
component in security investments and how developing a diverse portfolio of
security can help an investor in reducing it .The researches gave various
inferences; some of them are as follows:
a) A study indicated that alpha varied over both bull and bear market
conditions but beta showed the variance under one condition and showed the
stability in the other condition.
b) Beta values don’t remain stationary over the period of time
c) The investors may accept risks inherent in equity, but they may not be
willing to reconcile to the risk of fraud.
d) There is a strong relationship between scrip return and market return by
ensuring high power of R square and the coefficient of beta value was significant.
e) Beta coefficient is the most important parameter to estimate the expected
rate of return under Capital Asset Pricing Model (CAPM), it becomes vital to
estimate the beta co-efficient and its stability in Indian context because Indian
Stock Market is emerged as one of the best market in the world.

Kapil Chowdhry (2010) tested the validity of CAPM for the Indian stock market.
The study took 278 companies of BSE 500 from January 1996 to December 2009.
In this study, it was found that there was no support evidence in proving the
relationship between higher risk and higher return. The study explored the reason
for portfolio combination to mitigate the firm specific part of risk and thereby
diversification helped to reduce the unsystematic risk. The result obtained by the
study proved to certain extent that CAPM equation could be regarded as
explanatory equation of security returns. As far as CAPM is concerned, the
intercept should approach very close to zero and the slope should provide excess
return on market portfolio.

Juan H Pujadas (1999) commented on the models of measuring risks. He opined

that the models of measuring risk are only as good as the assumptions underlying
them. They are not realities, but models. Commenting on default risk in India, he
stated that many defaults are not reported. He is of the opinion that default risks are
not handled properly.

Avijit Banerjee (1998) reviewed Fundamental Analysis and Technical Analysis to

analyses the worthiness of the individual securities needed to be acquired for
portfolio construction. The Fundamental Analysis aims to compare the Intrinsic
Value (I..V) with the prevailing market price (M.P) and to take decisions whether
to buy, sell or hold the investments. The fundamentals of the economy, industry
and company determine the value of a security. If the I.V is greater than the M.P.,
the stock is underpriced and should be purchased. He observed that the
Fundamental Analysis could never forecast the M.P. of a stock at any particular
point of time. Technical Analysis removes this weakness. Technical Analysis
detects the most appropriate time to buy or sell the stock. It aims to avoid the
pitfalls of wrong timing in the investment decisions. He also stated that the modern
portfolio literature suggests 'beta' value p as the most acceptable measure of risk of
scrip. The securities having low Price should be selected for constructing a
portfolio in order to minimize the risks.
Summary of this chapter in 4 to 5 lines

CHAPTER – 5

THEORETICAL
BACKGROUND
Concept

Equity shares were earlier known as ordinary shares. The holders of these
shares are the real owners of the company. They have a voting right in the
meetings of holders of the company. They have a control over the working of the
company. Equity shareholders are paid dividend after paying it to the preference
shareholders.

The rate of dividend on these shares depends upon the profits of the company/
bank. They may be paid a higher rate of dividend or they may not get anything.
These shareholders take more risk as compared to preference shareholders.

Equity capital is paid after meeting all other claims including that of preference
shareholders. They take risk both regarding dividend and return of capital. Equity
share capital cannot be redeemed during the life time of the company.

Advantages of Equity Shares:

1. Equity shares do not create any obligation to pay a fixed rate of dividend.

2. Equity shares can be issued without creating any charge over the assets of the
company.

3. It is a permanent source of capital and the company has to repay it except under
liquidation.
4. Equity shareholders are the real owners of the company who have the voting
rights.

5. In case of profits, equity shareholders are the real gainers by way of increased
dividends and appreciation in the value of shares.

Disadvantages of Equity Shares:

1. If only equity shares are issued, the company cannot take the advantage of
trading on equity.

2. As equity capital cannot be redeemed, there is a danger of over capitalization.

3. Equity shareholders can put obstacles for management by manipulation and

organizing themselves.

4. During prosperous periods higher dividends have to be paid leading to increase

in the value of shares in the market and it leads to speculation.

5. Investors who desire to invest in safe securities with a fixed income have no
attraction for such shares.

Introduction of NSE:
The National Stock Exchange (NSE) is the leading stock exchange in India
and the fourth largest in the world by equity trading volume in 2015, according to
World Federation of Exchanges (WFE).It began operations in 1994 and is ranked
as the largest stock exchange in India in terms of total and average daily turnover
for equity shares every year since 1995, based on annual reports of SEBI.
NSE launched electronic screen-based trading in 1994, derivatives trading (in the
form of index futures) and internet trading in 2000, which were each the first of its
kind in India.

NSE has a fully-integrated business model comprising our exchange listings,

trading services, clearing and settlement services, indices, market data feeds,
technology solutions and financial education offerings. NSE also oversees
compliance by trading and clearing members and listed companies with the rules
and regulations of the exchange.

NSE is a pioneer in technology and ensures the reliability and performance of its
systems through a culture of innovation and investment in technology. NSE
believes that the scale and breadth of its products and services, sustained leadership
positions across multiple asset classes in India and globally enable it to be highly
reactive to market demands and changes and deliver innovation in both trading and
non-trading businesses to provide high-quality data and services to market
participants and clients.

Mr. Ashok Chawla is the Chairman of the Board of Directors of NSE and Mr.
Vikram Limaye is the Managing Director and CEO of NSE.

NSE Products
 Equity & Equity Linked Products
o Cash Market (Equities)
o Indices
o Mutual Funds
o Exchange Traded Funds
o Initial Public Offerings
o Offer for Sale
o Institutional Placement Program
 o Security Lending and Borrowing Scheme
o Sovereign Gold Bonds Scheme
o Derivatives

 Equity Derivatives
o Currency Derivatives
o NSE Bond Futures

 Debt

o Debt Market
o Corporate Bonds
o Electronic Debt Bidding Platform (NSE-EBP)

NSE Academy
NSE conducts financial education workshops through NSE Academy to
develop a new generation investors.
To introduce more first-time investors to the Indian markets and attract them
to our exchange, our outreach, advertising and expansion initiatives seek to
transform India’s strong culture of saving into an “equity culture”. NSE plan to
intensify our outreach and advertising programs directed at younger Indians
through our wholly-owned Subsidiary, NSE Academy, which promotes financial
literacy as a necessary life skill. NSE Academy’s initiatives, including partnerships
with state and national school boards and schools, interactive courses on personal
finance and certification programs, teach school children, homemakers and other
non-finance professionals the value of investing, provide an introduction to the
Indian capital markets and help to develop new market professionals.
NSE ACADEMY’S Certification in Financial Markets
(NCFM)

A critical element of the financial sector reforms is the development of a

pool of human resources having right skills and expertise in each segment of the
industry to provide quality intermediation to market participants.
In 2016, NSE consolidated our education business under NSE Academy, our
wholly-owned Subsidiary. Our educational programs business is administered by
our wholly-owned Subsidiary, NSE Academy Limited, or NSE Academy, and
offers programs in various aspects of banking, financial services, financial markets
and financial literacy.
Our NSE Academy Certification in Financial Markets, or NCFM, program is
an online testing and certification program that tests the practical knowledge and
skills required to operate in the financial markets. The NCFM program operates on
our intranet and is administered through our designated test centers located across
India.

Introduction of Nifty 50 or simply Nifty

The NIFTY 50 is a diversified 50 stock index accounting for 12 sectors of
the economy. It is used for a variety of purposes such as benchmarking fund
portfolios, index based derivatives and index funds.
Nifty is for NSE similarly SENSEX is for BSE. NIFTY 50 is owned and
managed by India Index Services and Products Ltd. (IISL). IISL is India's
specialized company focused upon the index as a core product.
 The NIFTY 50 Index represents about 62.9% of the free float market
capitalization of the stocks listed on NSE as on March 31, 2017.
 The total traded value of NIFTY 50 index constituents for the last six months
ending March 2017 is approximately 43.8% of the traded value of all stocks on
the NSE.
 Impact cost of the NIFTY 50 for a portfolio size of rs.50 lakhs is 0.02% for the
month March 2017.
 NIFTY 50 is ideal for derivatives trading.

NIFTY BANK

The Bank Index commonly known as "NIFTY BANK" was launched by

India Index Service and Product Limited (IISL) in the year 2000. The index has 12
most liquid and large capitalized stocks from the banking sector which trade on the
National Stock Exchange (NSE). It provides investors and market intermediaries a
benchmark that captures the capital market performance of Indian Banking sector.
Constituents of Nifty Bank Index

Company Name Industry Symbol

Axis Bank Ltd. FINANCIAL AXISBANK
Bank of Baroda SERVICES BANKBARODA
Canara Bank CANBK
Federal Bank Ltd. FEDERALBNK
HDFC Bank Ltd. HDFCBANK
ICICI Bank Ltd. ICICIBANK
IDFC Bank Ltd. IDFCBANK
IndusInd Bank Ltd. INDUSINDBK
Kotak Mahindra Bank Ltd. KOTAKBANK
Punjab National Bank PNB
State Bank of India SBIN
Yes Bank Ltd. YESBANK
Calculation frequency of bank nifty is six seconds and calculated by India Index
Services & Product Ltd. (IISL).
Calculation of methodology
The index is a free float market capitalization weighted index with base year of Jan
1, 2000. Indexed to a base value of 1000.

Bank Nifty = ((Sum of free flow market cap of 12 major stocks of NSE) * Index
Value in 2000) / Market cap value in 2000.

Market Capitalization and free float market capital is needed for calculation of
bank nifty. Market Capitalization is total worth of all outstanding (issued) shares of
a company. It represents the total worth of a company.
Market capitalization = No of shares outstanding * market price of share free float
market

Free Float market capital:

Capitalization free float concept is an index construction methodology which
makes use of free float shares in the market. Free float market capitalization is the
total worth of all shares of a company which is available for trading in the open
market. These shares are called free float shares and are available for trading by
anyone.Example:
Company X issued 1000 shares, out of which 200 shares are held by
government, 500 shares by directors of the company and remaining 300 shares are
available in the open market for trading. Market prices of share us rs 10.
Here
Total market capitalization of company is 1000 shares * rs 10 = rs 10,000 and, Free
Float market capitalization of company is 300 shares * rs 10 = rs 3000.
According to the rules of NSE, shares which don’t fall under the following
categories are considered as free float (open market) shares.
 Government holding shares as promoters
 Holding by Director/ Founders
 Holding through the FDI route
 Stakes held by private corporate bodies or individuals
 Any cross holding .i.e. equity held by associate or group companies
 Equity held by employee welfare trust.
Calculation of the free float factors periodically, every listed company has to
submit holding information .i.e. who all are holding the shares of the company, to
the exchange. Bases on this these free factors for each company is calculated.

Free Float factor = Number of shares available for trading in the open market/
Total number of outstanding shares of the company

Free float factor of each company has to be rounded off to the higher multiple of 5
and company is considered among one of the free float range. Free float ranges to
calculate NSE Bank Nifty.

Bank Nifty = ((Sum of free flow market cap of 12 major stocks of NSE) * Index
Value in 2000) / Market cap value in 2000.
For Example
Suppose, NSE index (Bank Nifty) consist of only two stocks such as A and
B. company A has 1000 outstanding shares out of which only 500 are available for
trading in open market. Market price of share is rs 100. Company B has 2000
outstanding shares out of which 1000 shares are held by promoters and remaining
1000 shares are free float shares (open market shares). Market price of shares is rs
50.
Calculation of market capitalization:

Company A => 1000 shares * rs 100 = 100,000

Company B => 2000 shares * rs 50 = 100,000

Calculation of float market capitalization:

Company A => 500 shares * rs 100 = 500,000

Company B => 1000 shares * rs 50 = 500,000
Here,
Sum of free float market cap of company A and B is rs 100,000. Assume
market cap during FY 1978-79 is 25000.
Now applying formula: (100,000 * 100)/25000 = 400.

Concept of Risk and Return of Equity shares

Introduction of Risk and Return analysis of equity share – Two sides of the
investment coin.

Return:

Return is primary motivating force that drives investment. It represents the

reward for undertaking investment. Since the game of investing is about return
(after allowing the risk), measurement of realized (historical) return (ex post facto)
is necessary to access how well the investment manager has done. In addition,
historical returns are often used as an important input as estimating future
(prospective) return.
 The amount of net income returned as a percentage of shareholders equity.
Return on equity measures a corporation’s profitability by revealing how much
profit a company generates with the money shareholders have invested.
The future is uncertain. Investors do not know with certainty whether the
economy will be rowing rapidly or be in recession. Investors do not know what
rate of return their investment will yield. Therefore, they base their decision on
their expectations concerning the future. The expected rate of return on stock
represents the mean of a probability distribution of possible future returns on the
stock.
The objective of the investor is to maximize expected returns from his
investment, subject to various constraints, primary risk. Return is a motivating
force, inspiring the investor in the form of reward, for undertaking the investment.
The importance of return on investment decision can be traced to the following
factors:
 It enables investor to compute alternative investment in terms of what
they have to offer the investor.
 Measurement of historical return enables the investors to access how
well they have done.
 Measurement of historical return also helps in estimation of future
returns.

Types of Return

Types of return

Realized return Expected return

Realized return
This is ex-post (after the return) or return that was or could have been
earned.
For example-
A deposit of rs 1000 in bank account on Jan 1, at stated annual interest rate
of 10% will be worth rs 1100 exactly a year later. The historical or realized return
in this case is 10%.

Expected return
This is return from an asset that investor anticipate or expected to earn over
future some period. The expected return is subject to uncertainty, or risk, and may
or may not occur. The investor compensated for the uncertainty in return and the
timing of those returns by requiring an expected return that is sufficient high to
offset the risk or uncertainty.
Expected return is the amount of profit or loss an investor anticipates on an
investment that has various known or expected rates of return. It is calculated by
multiplying potential outcomes by the chances of them occurring, and summing
these results. For example, if an investment has a 50% chance of gaining 20% and
a 50% change of losing 10%, the expected return is (50% x 20% + 50% x -10%),
or 5%. Expected return is usually based on historical data and is not guaranteed.
The expected return doesn't just apply to single investments. It can also be
analyzed for a portfolio containing many investments. If the expected return for
each investment is known, the portfolio's overall expected return is simply a
weighted average of the expected returns of its components. For example, assume
the following portfolio of stocks:
Stock A: ₹500,000 invested and an expected return of 15%
Stock B: ₹200,000 invested and an expected return of 6%
Stock C: ₹300,000 invested and an expected return of 9%

With a total portfolio value of ₹1,000,000, the weights of Stock A, B and C are
50%, 20% and 30%. Thus, the expected return of the total portfolio is:
Expected return of portfolio = (50% x 15%) + (20% x 6%) + (30% x 9%) = 7.5% +
1.2% + 2.7% = 11.4%

Components of return

Components of return

Current/ Yield return Capital return

Current/ Yield return

Periodic cash flow (income) such as dividend or interest which is generated
by the investment in various instruments. Current return is measured as the
periodic income in relation to the beginning price of the investment.

Current/ yield return = Current Income/ Beginning Price

Capital gain
 Capital gain means earn income from particular asset-like equity stock. It is
simply measured as price appreciation or depreciation died by beginning price of
the particular security. The capital return can be positive or zero or negative.
The periodic (the period may be one month, one week) rate of return on
equity shares price is calculated as follow.

Capital return/ Capital Gain/ Loss yield = (Ending minus beginning prices)
Beginning Price
= (Pt – P0)
P0

Total Return: the sum of the income and the capital gain (or loss) earned on an
investment over a specified period of time

Risk

Risk is, “the variability of return around the expected average is thus a
quantitative description of risk”. - FISCHER and JORDON

Risk is uncertainty, and in uncertainty lies opportunity - Lorayne Fiorillo

Risk involves the chance an investment's actual return will differ from the
expected return. Risk includes the possibility of losing some or all of the original
investment. Different versions of risk are usually measured by calculating the
standard deviation of the historical returns or average returns of a specific
investment.
Risk as uncertainties resulting in adverse outcome, adverse in relation to
planned objective or expressions. Uncertainties associated with risk element
impact the net cash flow or any business or investment. Under the impact of
uncertainties, variation in net cash flow takes place. This could be favorable as
well as unfavorable.
A high standard deviation indicates a high degree of risk. Many companies
allocate large amounts of money and time in developing risk management
strategies to help manage risks associated with their business and investment
dealings. A key component of the risk management process is risk assessment,
which involves the determination of the risks surrounding a business or
investment.
A fundamental idea in finance is the relationship between risk and return.
The greater the amount of risk an investor is willing to take, the greater the
potential return. Investors need to be compensated for taking on additional risk.
For example, an Indian Treasury bond is considered one of the safest, or risk-free,
investments and when compared to a corporate bond, provides a lower rate of
return. A corporation is much more likely to go bankrupt than the Indian
government. Because the risk of investing in a corporate bond is higher, investors
are offered a higher rate of return.
Classification of Risk

The meaning of systematic and unsystematic risk in finance:

 Systematic risk is uncontrollable by an organization and macro in nature.

 Unsystematic risk is controllable by an organization and micro in nature.

A. Systematic Risk
Systematic risk is due to the influence of external factors on an organization. Such
factors are normally uncontrollable from an organization's point of view.

It is a macro in nature as it affects a large number of organizations operating under

a similar stream or same domain. It cannot be planned by the organization.

The types of systematic risk are depicted and listed below.

 Interest rate risk,

 Market risk and

 Purchasing power or inflationary risk.

1. Interest rate risk

Interest-rate risk arises due to variability in the interest rates from time to time. It
particularly affects debt securities as they carry the fixed rate of interest.

The types of interest-rate risk are depicted and listed below.

 Price risk and

 Reinvestment rate risk.

The meaning of price and reinvestment rate risk is as follows:

Price risk arises due to the possibility that the price of the shares, commodity,
investment, etc. may decline or fall in the future.
Reinvestment rate risk results from fact that the interest or dividend earned from an
investment can't be reinvested with the same rate of return as it was acquiring
earlier.

2. Market risk

Market risk is associated with consistent fluctuations seen in the trading price of
any particular shares or securities. That is, it arises due to rise or fall in the trading
price of listed shares or securities in the stock market.

The types of market risk are depicted and listed below.

 Absolute risk,

 Relative risk,

 Directional risk,

 Non-directional risk,

 Basis risk and

 Volatility risk.

The meaning of different types of market risk is as follows:

Absolute risk is without any content. For e.g., if a coin is tossed, there is
fifty percentage chance of getting a head and vice-versa.

Relative risk is the assessment or evaluation of risk at different levels of

business functions. For e.g. a relative-risk from a foreign exchange fluctuation may
be higher if the maximum sales accounted by an organization are of export sales.
 Directional risks are those risks where the loss arises from an exposure to the
particular assets of a market. For e.g. an investor holding some shares experience a
loss when the market price of those shares falls down.
Non-Directional risk arises where the method of trading is not consistently
followed by the trader. For e.g. the dealer will buy and sell the share
simultaneously to mitigate the risk
Basis risk is due to the possibility of loss arising from imperfectly matched
risks. For e.g. the risks which are in offsetting positions in two related but non-
identical markets.
Volatility risk is of a change in the price of securities as a result of changes
in the volatility of a risk-factor. For e.g. it applies to the portfolios of derivative
instruments, where the volatility of its underlying is a major influence of prices.

3. Purchasing power or inflationary risk

Purchasing power risk is also known as inflation risk. It is so, since it emanates
(originates) from the fact that it affects a purchasing power adversely. It is not
desirable to invest in securities during an inflationary period.

The types of power or inflationary risk are depicted and listed below.
 Demand inflation risk and

 Cost inflation risk.

The meaning of demand and cost inflation risk is as follows:

Demand inflation risk arises due to increase in price, which result from an
excess of demand over supply. It occurs when supply fails to cope with the demand
and hence cannot expand anymore. In other words, demand inflation occurs when
production factors are under maximum utilization.
Cost inflation risk arises due to sustained increase in the prices of goods and
services. It is actually caused by higher production cost. A high cost of production
inflates the final price of finished goods consumed by people.

B. Unsystematic Risk

Unsystematic risk is due to the influence of internal factors prevailing within an

organization. Such factors are normally controllable from an organization's point of
view.
It is a micro in nature as it affects only a particular organization. It can be planned,
so that necessary actions can be taken by the organization to mitigate (reduce the
effect of) the risk.

The types of unsystematic risk are depicted and listed below.

 Business or liquidity risk,

 Financial or credit risk and

 Operational risk.

Now let's discuss each risk classified under this group.

1. Business risk

Business risk is also known as liquidity risk. It is so, since it emanates (originates)
from the sale and purchase of securities affected by business cycles, technological
changes, etc.
The types of business or liquidity risk are depicted and listed below.
  Asset liquidity risk and

 Funding liquidity risk.

The meaning of asset and funding liquidity risk is as follows:

Asset liquidity risk is due to losses arising from an inability to sell or pledge
assets at, or near, their carrying value when needed. For e.g. assets sold at a lesser
value than their book value.
Funding liquidity risk exists for not having an access to the sufficient-funds
to make a payment on time. For e.g. when commitments made to customers are not
fulfilled as discussed in the SLA (service level agreements).

2. Financial risk

Financial risk is also known as credit risk. It arises due to change in the capital
structure of the organization. The capital structure mainly comprises of three ways
by which funds are sourced for the projects. These are as follows:
 Owned funds. For e.g. share capital.

 Borrowed funds. For e.g. loan funds.

 Retained earnings. For e.g. reserve and surplus.

The types of financial or credit risk are depicted and listed below.
 Exchange rate risk,

 Recovery rate risk,

 Credit event risk,

 Non-Directional risk,
  Sovereign risk and

 Settlement risk.

The meaning of types of financial or credit risk is as follows:

Exchange rate risk is also called as exposure rate risk. It is a form of
financial risk that arises from a potential change seen in the exchange rate of one
country's currency in relation to another country's currency and vice-versa. For e.g.
investors or businesses face it either when they have assets or operations across
national borders, or if they have loans or borrowings in a foreign currency.
Recovery rate risk is an often neglected aspect of a credit-risk analysis. The
recovery rate is normally needed to be evaluated. For e.g. the expected recovery
rate of the funds tendered (given) as a loan to the customers by banks, non-banking
financial companies (NBFC), etc.
Sovereign risk is associated with the government. Here, a government is
unable to meet its loan obligations, reneging (to break a promise) on loans it
guarantees, etc.
Settlement risk exists when counterparty does not deliver a security or its
value in cash as per the agreement of trade or business.

3. Operational risk
Operational risks are the business process risks failing due to human errors.
This risk will change from industry to industry. It occurs due to breakdowns in the
internal procedures, people, policies and systems.
The types of operational risk are depicted and listed below.
 Model risk,

 People risk,

 Legal risk and

  Political risk.

The meaning of types of operational risk is as follows:

Model risk is involved in using various models to value financial securities.
It is due to probability of loss resulting from the weaknesses in the financial-model
used in assessing and managing a risk.
People risk arises when people do not follow the organization’s procedures,
practices and/or rules. That is, they deviate from their expected behavior.
Legal risk arises when parties are not lawfully competent to enter an agreement
among them. Furthermore, this relates to the regulatory-risk, where a transaction
could conflict with a government policy or particular legislation (law) might be
amended in the future with retrospective effect.
Political risk occurs due to changes in government policies. Such changes
may have an unfavorable impact on an investor. It is especially prevalent in the
third-world countries.

Techniques of measuring Risk

Alpha and beta are both risk ratios that investors use as a tool to calculate,
compare, and predict returns. You are most likely to see alpha and beta
referenced with mutual funds. Both measurements utilize benchmark indexes,
such as the S&P 500, and compare them against the individual security to
highlight a particular performance tendency.
Alpha and beta are two of the five standard technical risk calculations, the
other three being the standard deviation, R-squared, and Sharpe ratio.

Alpha
Alpha is perceived as a measurement of a portfolio manager's performance.
For example, an 8% return on a growth mutual fund is impressive when
equity markets as a whole are returning 4%, but it is far less impressive when
other equities are earning 15%. In the first case, the portfolio manager would
have a relatively high alpha, while that would not be true in the second.

If a capital asset pricing model (CAPM) analysis indicates that the portfolio
should have earned 5% (based on risk, economic conditions and other
factors), but instead earned only 3%, then the alpha of the portfolio would be
-2%. In CAPM, alpha is the rate of return that exceeds what the model
predicted. Investors generally prefer an investment with a high alpha.

The technical formula for calculating alpha is: (end price + distribution per
share - start price) / (start price).

Beta

Beta (sometimes referred to as the "beta coefficient") is supposed to gauge

the volatility of a specific security by comparing it to the performance of a
related benchmark over a period of time. In short, investors are looking to see
how much downside capture they can expect from an investment. CAPM
analysis can also use to calculate beta.

The baseline number for alpha is zero (investment performed exactly to

market expectations), but the baseline number for beta is one. A beta of one
is an indication that the security's price moves exactly as the market moves. If
the beta is less than one, the security experiences less simple price swings
than the market. Conversely, a beta above one means that the security's price
is more volatile than the market as a whole.

While a positive alpha is always more desirable than a negative one,

evaluating beta is not so black and white. Many investors – being risk-averse
– prefer to have a lower beta; however, some investors are willing to target a
higher beta, hoping to capture higher returns and cash in on the higher
volatility.

The formula for beta is: Covariance of the asset's return with the market's
return ÷ Variance of the market's return
Or
Beta of the security is calculated with the help of the following formula:

σi
β i= r
σ m

Here, r = correlation between individual security return and market return. σ i =

standard deviation of individual security and σ m = standard deviation of market

return.
Beta measures the amount of systematic risk a security has relative to the
whole market. The market has a beta of 1, and it can be used to gauge the risk
of a security. If a security's beta is equal to 1, the security's price moves in
time step with the market. A security with a beta greater than 1 indicates that
it is more volatile than the market. Conversely, if a security's beta is less than
1, it indicates that the security is less volatile than the market. For example,
suppose a security's beta is 1.5. In theory, the security is 50% more volatile
than the market.

Variance
The Variance (VaR) is a statistical measure used to assess the level of
risk associated with a portfolio or company. The VaR measures the
maximum potential loss with a degree of confidence for a specified period.
For example, suppose a portfolio of investments has a one-year 10% VaR of
₹5 million. Therefore, the portfolio has a 10% chance of losing more than ₹5
million over a one-year period.

Standard deviation

Standard deviation measures the dispersion of data from its expected value.
The standard deviation is used in making an investment decision to measure
the amount of historical volatility, or risk, associated with an investment
relative to its annual rate of return. It indicates how much the current return is
deviating from its expected historical normal returns. For example, a stock
that has a high standard deviation experiences higher volatility, and therefore,
a higher level of risk is associated with the stock.

The standard deviation can be represented as thus:

σ = √∑ n (Ri - R)2 x Pri

i=1

Where:
Ri = Return for the ith possible outcome
R = mean of the returns ( Pri and n as given above)
Example: Let us calculate the standard deviation for the returns of assets X &
Y. (data as given above)

(Ri - R)2 Pri

I Ri R Ri - R {A} X{B}
{A} {B}
1 13% 15% (-2)% 4% 0.30 1.20%
2 15% 15% 0 0 0.30 0
3 17% 15% 2% 4% 0.40 1.60%
Total (x) 2.80%
1 7% 14% (-7)% 49% 0.30 14.7%
2 14% 14% 0 0 0.30 0
3 21% 14% 7% 49% 0.40 19.6%
Total (Y) 34.3%

Standard deviation of Asset X = √2.80 = 1.67%

Standard deviation of Asset Y = √34.3 = 5.86%

If the standard deviation is greater, the variability and thus risk is also greater
and vice versa. According to this measure, Asset Y is riskier than Asset X.

Coefficient of variation

It is a measure of relative dispersion or a measure of risk per unit of expected

return. It converts standard deviation of expected values into relative units
and thus facilitates comparison of risks associated with assets having
different expected values. It is calculated by dividing the standard deviation
of an asset by its expected value.

Coefficient of Variation = Standard Deviation / Expected Return

Example: Let us calculate the coefficient of variations for the assets X and
Y(data as given above).
CV of asset X => 1.67 / 15 => 0.111
CV of asset Y => 5.86 / 14 => 0.419

If the coefficient of variation is greater, the risk is greater and vice versa.
According to this measure, Asset Y is riskier than Asset X. As this measure
considers the expected value of assets, it is considered the best method for
comparing risks.

• Standard deviation is a statistic used to measure the dispersion (variation) of

returns around an asset’s average or expected return
• Coefficient of variation is a statistic used to measure the relative dispersion
of an asset’s returns; it is useful in comparing the risk of assets with
differing average or expected returns
• Higher values for both indicate higher risk

Actual Return

Actual returns for each company have been computed for the study period as
under:

P 1−P0
Ri = ¿
Palignl ¿ 0 ¿ ¿
Where, R i is return on individual security, P 1 is Market price (closing of security)
and P 0 is Market price of security on day (t+1).
Comparatively, the actual returns for the market are also computed as:

P1−P0
Rm = ¿
Palignl¿ 0 ¿ ¿
Where, R m is return on market, P 1 is closing market return and P 0 market return in
the beginning.

In the next step, average actual returns of individual stocks and market return is
computed.

CAPM Return

CAPM return is calculated by applying the following formula:

R1 =R f +β i ( R m−Rf )
Where,

R f = Risk free rate, R m = return on market, β i = beta of individual security and R 1

is return on individual security.

Abnormal Returns (Alpha)

Abnormal return is the excess of the actual return over the expected return.

It is calculated as under:

Abnormal Return = Actual Return – CAPM Return

Then, companies have been ranked according to actual, CAPM and abnormal
returns.
Systematic Risk

Systematic Risk is calculated with the help of the following equation:

β 2σ
i m2

Unsystematic Risk

Unsystematic Risk is computed as under:

σ 2− β 2 σ
i i m2

Total Risk = systematic risk plus unsystematic risk, which will be equal to σi2.

CHAPTER – 5
 DATA ANALYSIS &
INTERPRETATION

Data collection and analysis

For risk and return analysis, Banks listed on NSE under Nifty Bank are used.

Axis Bank Ltd.,

Introduction
Axis Bank Limited (the Bank) provides a suite of corporate and retail
banking products. The Bank's segments include Treasury, Retail Banking,
Corporate/Wholesale Banking and Other Banking Business. Its Treasury
operations include investments in sovereign and corporate debt, equity and
mutual funds, trading operations, derivative trading and foreign exchange
operations on the proprietary account and for customers. Its Retail Banking
constitutes lending to individuals/small businesses and activities include
liability products, card services, Internet banking, mobile banking and
financial advisory services, among others. Its Corporate/Wholesale Banking
includes corporate relationships not included under Retail Banking,
corporate advisory services, placements and syndication, project appraisals,
capital market related services and cash management services. Its Other
Banking Business includes Para banking activities, such as third-party
product distribution and other banking transactions.

Axis Bank Ltd., incorporated in the year 1993, is a banking company

(having a market cap of Rs 151355.93 Crore).

Axis Bank Ltd. key Products/Revenue Segments include Interest & Discount
on Advances & Bills which contributed Rs 33124.96 Crore to Sales Value
(74.36 % of Total Sales), Income From Investment which contributed Rs
9622.82 Crore to Sales Value (21.60 % of Total Sales), Interest which
contributed Rs 1290.54 Crore to Sales Value (2.89 % of Total Sales) and
Interest On Balances with RBI and Other Inter-Bank Funds which
contributed Rs 503.84 Crore to Sales Value (1.13 % of Total Sales)for the
year ending 31-Mar-2017.

The Bank has reported a Gross Non Performing Assets (Gross NPAs) of Rs
27402.32 Crore (5.90 % of total assets) and Net Non Performing Assets (Net
NPAs) of Rs 14052.34 Crore (3.12% of total assets).
 For the quarter ended 30-09-2017, the company has reported a Standalone
Interest Income of Rs 8406.31 Crore, up 2.38 % from last quarter Interest
Income of Rs 8210.58 Crore and up .24 % from last year same quarter
Interest Income of Rs 8386.18 Crore. The bank has reported net profit after
tax of Rs 432.38 Crore in latest quarter.

Yearly performance

Items Mar 2017 Mar 2016 Mar 2015 Mar 2014 Mar 2013 Mar 2012
Gross NPA (in Cr.) 21,280.48 6,087.51 4,110.19 3,146.41 2,393.42 1,806.30
Gross NPA (%) 5 2 1 1 1 1
Net NPA (in Cr.) 8,626.60 2,522.14 1,316.71 1,024.62 704.13 1,186.74
Net NPA (%) 2 1 0 0 0 0
Net NPA To Advances (%) 2 1 0 0 0 0
Diluted EPS (Rs.) 15.34 34.4 30.85 132.23 118.85 102.2
Dividend/Share (Rs.) 5 5 4.6 20 18 16
Net Profit/Share (Rs.) 15.36 34.51 31.04 132.33 110.68 102.67

 Gross & Net NPA (Non-performing assets) of AXIS bank increased drastically
after Mar 2016. Moreover, Its Net NPA to Advance percentage also
increases twice.

 EPS of company reduced from ₹ 132 (in Mar 2014) to ₹ 15 (In Mar 2017). Its
Dividend/ Share also reduced accordingly.

MOVEMENT OF NON-PERFORMING ASSETS (NPAs)

(Amount in ` Million)
As on March 31
Gross NPAs Net NPAs
As on As on As on
Addition Reduction Write-off As on Mar
Mar 31 Mar 31 Mar 31
Year Bank during the during the during 31 (Curr.
( Prev. ( Prev. (Curr.
year year year Yr.)
yr.) yr.) Yr.)
1 2 3 4 5 6 7
2017 AXIS BANK 60875 217818 43667 22221 212805 25221 86266
2016 AXIS BANK 41102 73446 20447 33225 60875 13167 25221
2015 AXIS BANK 31464 28544 6725 12181 41102 10246 13167
2014 AXIS BANK 23934 25476 8745 9202 31464 7041 10246
2013 AXIS BANK 18063 20234 5843 8520 23934 4726 7041
2012 AXIS BANK 15994 18419 9692 6659 18063 4104 4726

 Gross NPA in comparison of Gross advance is increasing year by year and

the same is not good for investment. It implies bank is not controlling its
defaulter’s practices. It increases risk.

 On the other side, Bank Deposits are increasing. In comparison of year 2017,
deposits become twice of year 2012. It’s a good sign shows bank operations.

Bank of Baroda,

Introduction
Bank of Baroda is engaged in providing various services, such as personal
banking, corporate banking, international banking, small and medium
enterprise (SME) banking, rural banking, non-resident Indian (NRI) services
and treasury services. The Bank's segments include Treasury,
Corporate/Wholesale Banking, Retail Banking and Other Banking
Operations. The Bank offers personal banking services, such as deposits,
loans, mobile banking and wealth management services; business banking
services, such as Baroda Money Express, debit cards and collection services;
corporate banking services, such as appraisal and merchant banking, and
cash management and remittances; international banking services, such as
export, import and trade finance, and correspondent banking; rural banking
services, such as deposits, priority sector advances, financial inclusion and
lockers, and treasury services, such as domestic and forex operations. The
Bank operates a network of approximately 5,330 branches.

Bank of Baroda, incorporated in the year 1911, is a banking company

(having a market cap of Rs 38261.05 Crore).

Bank of Baroda key Products/Revenue Segments include Interest &

Discount on Advances & Bills which contributed Rs 27523.93 Crore to
Sales Value (65.22 % of Total Sales), Income From Investment which
contributed Rs 10596.33 Crore to Sales Value (25.10 % of Total Sales),
Interest which contributed Rs 2088.81 Crore to Sales Value (4.94 % of Total
Sales) and Interest On Balances with RBI and Other Inter-Bank Funds which
contributed Rs 1990.86 Crore to Sales Value (4.71 % of Total Sales)for the
year ending 31-Mar-2017.

The Bank has reported a Gross Non Performing Assets (Gross NPAs) of Rs
46306.83 Crore (11.16 % of total assets) and Net Non Performing Assets
(Net NPAs) of Rs 19572.62 Crore (5.05% of total assets).
 For the quarter ended 30-09-2017, the company has reported a Standalone
Interest Income of Rs 7145.75 Crore, up 3.05 % from last quarter Interest
Income of Rs 6934.50 Crore and up 4.47 % from last year same quarter
Interest Income of Rs 6839.74 Crore. The bank has reported net profit after
tax of Rs 355.36 Crore in latest quarter.

Yearly performance

Items Mar 2017 Mar 2016 Mar 2015 Mar 2014 Mar 2013 Mar 2012
Gross NPA (in Cr.) 42,719.00 40,521.04 16,261.44 11,875.90 7,982.58 4,464.75
Gross NPA (%) 10 10 4 3 2 2
Net NPA (in Cr.) 18,080.00 19,046.46 8,069.49 6,034.76 4,192.03 1,543.64
Net NPA (%) 5 5 2 2 1 1
Net NPA To Advances (%) 5 5 2 2 1 1
Diluted EPS (Rs.) 6 -23.89 15.83 107.38 108.84 127.84
Dividend/Share (Rs.) 1.2 0 3.2 21.5 21.5 17
Net Profit/Share (Rs.) 5.99 -23.35 15.32 105.44 106.05 121.41

 Gross NPA (Non-performing assets) of Bank of Baroda increased drastically

after Mar 2015. Moreover, Its Net NPA to Advance percentage also
increases twice. It is shows adverse response from investors.

 EPS of company reduced from ₹ 107.38 (in Mar 2014) to ₹ 6 (In Mar 2017).
Its Dividend/ Share also reduced accordingly. It is not attractive for
investment.

MOVEMENT OF NON-PERFORMING ASSETS (NPAs) (Amt in Million)

Gross NPAs Net NPAs
As on As on As on
Additio Reduction Write-off As on Mar
Yea Mar 31 Mar 31 Mar 31
Bank n during during the during 31 (Curr.
r ( Prev. ( Prev. (Curr.
the year year year Yr.)
yr.) yr.) Yr.)
1 2 3 4 5 6 7

2017 BANK OF BARODA 405210 133116 65984 45156 427187 194065 180802
2016 BANK OF BARODA 162614 278284 20146 15542 405210 80695 194065

2015 BANK OF BARODA 118759 85153 25512 15786 162614 60348 80695

2014 BANK OF BARODA 79826 68339 29406 - 118759 41920 60348

2013 BANK OF BARODA 44648 68438 33260 - 79826 15436 41920

2012 BANK OF BARODA 31525 34433 21311 - 44648 7909 15436

Bank of Baroda Deposits are not increasing to knock-off its increasing NPS
burden. Its NPA is increasing and become maximum in Mar 17. Bank needs to
control its NPA performance and strengthen credit management policy.

Canara Bank,
Introduction

Canara Bank Ltd. is an India-based bank. The Bank's segments include

Treasury Operations, Retail Banking Operations, Wholesale Banking
Operations and Other Banking Operations. The Bank provides personal
banking, corporate banking, non-resident Indians banking, Internet banking,
and micro, small and medium enterprises (MSME) banking services. Its
retail lending operations include education loans and vehicle loans. Its other
services include merchant banking; depository services; executor, trustee
and taxation services, and online payment services. It handles various
government business products consisting of direct and indirect tax
collections; payment of pensions of Central Government and State
Government; handling of postal transactions and State Government treasury
transactions; public provident fund scheme and senior citizens' saving
scheme, and issue of inflation indexed bonds of Reserve Bank of India. It
has approximately 5,850 branches, including over eight overseas branches.

Canara Bank is in the Banks - Public Sector sector. The current market
capitalization stands at Rs 21,606.97 crore.

It is listed on the BSE with a BSE Code of 532483 and the NSE with an
NSE Code of CANBK.

Year on year Canara Bank Ltd had relatively flat revenues (491.71bn to
493.09bn), though the company grew net income from a loss of 26.07bn to a
gain of 13.58bn.

Canara Bank's Shareholding Pattern is Promoters have 67.72%, Individuals

have 4.74%, Institutions have 10.98%, FII have 14.49%, Others have 2.07%.

Yearly performance
 Items Mar 2017 Mar 2016 Mar 2015 Mar 2014 Mar 2013 Mar 2012
Gross NPA (in Cr.) 34,202.04 31,637.83 13,039.96 7,570.21 6,260.16 4,031.75
Gross NPA (%) 10 9 4 2 3 2
Net NPA (in Cr.) 21,648.98 20,832.91 8,740.09 5,965.46 5,278.07 3,386.31
Net NPA (%) 6 6 3 2 2 1
Net NPA To Advances (%) 6 6 3 2 2 1
Diluted EPS (Rs.) 20.63 -53.61 58.59 54.48 64.83 74.1
Dividend/Share (Rs.) 1 0 10.5 11 13 11
Net Profit/Share (Rs.) 18.78 -51.8 56.87 52.86 64.83 74.1
 Gross and Net NPA (Non-performing assets) of Canara Bank increased
drastically after Mar 2015. Moreover, Its Net NPA to Advance percentage
also increases twice. It is shows adverse response from investors.

 EPS of company reduced from ₹ 74 (in Mar 2012) to ₹ 20 (In Mar 2017). Its
Dividend/ Share also reduced accordingly. It is not attractive for
investment.

MOVEMENT OF NON-PERFORMING ASSETS (NPAs) (Amt in Million)

Gross NPAs Net NPAs
As on As on As on
Addition Reduction Write-off As on Mar
Mar 31 Mar 31 Mar 31
Year Bank during the during the during 31 (Curr.
( Prev. ( Prev. (Curr.
year year year Yr.)
yr.) yr.) Yr.)
1 2 3 4 5 6 7
CANARA
2017 316378 116521 35431 55448 342020 208329 216490
BANK
CANARA
2016 130400 247241 27392 33870 316378 87401 208329
BANK
CANARA
2015 75702 108695 39276 14722 130400 59655 87401
BANK
CANARA
2014 62602 84436 71336 - 75702 52781 59655
BANK
CANARA
2013 40318 58193 35909 - 62602 33863 52781
BANK
CANARA
2012 31374 45898 36955 - 40318 23299 33863
BANK
Bank is facing high level of NPA problem and also facing lower growth in
deposits. This situation is not healthy for bank. Bank needs to reduce its NPA and
strengthen its credit policy with high level of analysis.

Federal Bank Ltd.,

Introduction

The Federal Bank Limited is a banking company. The Company operates

through four segments: Treasury, Corporate or Wholesale Banking, Retail
Banking and other banking operations. The Treasury operations include
trading and investments in government and corporate debt instruments,
equity and mutual funds, derivative trading and foreign exchange operations
on account and for customers. The Corporate/Wholesale Banking segment
provides loans and other banking services to corporate and other clients. The
Retail banking segment provides lending and other banking services to
individuals/small business customers, other than corporate/wholesale
banking customers. The Other Banking Operations segment includes para
banking activities, such as third party product distribution and other banking
transactions. It offers various accounts and deposits; loans; cards; banking
services, and insurance and investments. It operates over 1,250 branches and
over 1,520 automatic teller machines (ATMs).

Federal Bank Ltd., incorporated in the year 1931, is a banking company

(having a market cap of Rs 20290.14 Crore).

Federal Bank Ltd. key Products/Revenue Segments include Interest &

Discount on Advances & Bills which contributed Rs 6545.68 Crore to Sales
Value (75.43 % of Total Sales), Income From Investment which contributed
Rs 1801.40 Crore to Sales Value (20.75 % of Total Sales), Interest which
contributed Rs 231.38 Crore to Sales Value (2.66 % of Total Sales) and
Interest On Balances with RBI and Other Inter-Bank Funds which
contributed Rs 98.93 Crore to Sales Value (1.14 % of Total Sales)for the
year ending 31-Mar-2017.

The Bank has reported a Gross Non Performing Assets (Gross NPAs) of Rs
2161.19 Crore (2.52 % of total assets) and Net Non Performing Assets (Net
NPAs) of Rs 1156.68 Crore (1.36% of total assets).

For the quarter ended 31-12-2017, the company has reported a Standalone
Interest Income of Rs 1940.97 Crore, up 4.41 % from last quarter Interest
Income of Rs 1859.00 Crore and up 13.10 % from last year same quarter
 Interest Income of Rs 1716.22 Crore. The bank has reported net profit after
tax of Rs 260.01 Crore in latest quarter.

Year on year Federal Bank Ltd grew revenues 14.27% from 86.35bn to
98.67bn while net income improved 78.21% from 4.86bn to 8.67bn.

Yearly performance

Items Mar 2017 Mar 2016 Mar 2015 Mar 2014 Mar 2013 Mar 2012
Gross NPA (in Cr.) 1,727.05 1,667.77 1,057.73 1,087.41 1,554.01 1,300.83
Gross NPA (%) 2 3 2 2 3 3
Net NPA (in Cr.) 941.2 950.01 373.27 321.56 431.94 199
Net NPA (%) 1 2 1 1 1 1
Net NPA To Advances (%) 1 2 1 1 1 1
Diluted EPS (Rs.) 4.76 2.75 11.75 9.81 49 45.41
Dividend/Share (Rs.) 0.9 0.7 2.2 2 9 9
Net Profit/Share (Rs.) 4.82 2.77 11.74 9.81 49 45.41
 Gross and Net NPA (Non-performing assets) of Federal Bank increased
drastically after Mar 2015. Moreover, Its Net NPA to Advance percentage
also increases twice, but its Mar 2017 results shows favorable situation via
increase in advances.

 EPS of company reduced from ₹ 49 (in Mar 2013) to ₹ 4.76 (In Mar 2017).
Its Dividend/ Share also reduced accordingly. It is not attractive for
investment.

MOVEMENT OF NON-PERFORMING ASSETS (NPAs) (Amt in Million)

Gross NPAs Net NPAs
As on As on As on
Addition Reduction Write-off As on Mar
Mar 31 Mar 31 Mar 31
Year Bank during the during the during 31 (Curr.
( Prev. ( Prev. (Curr.
year year year Yr.)
yr.) yr.) Yr.)
1 2 3 4 5 6 7
FEDERAL
2017 16678 10750 7793 2364 17271 9500 9412
BANK
FEDERAL
2016 10577 18954 8333 4521 16678 3733 9500
BANK
FEDERAL
2015 10874 8141 6103 2335 10577 3216 3733
BANK
 FEDERAL
2014 15540 6842 6794 4714 10874 4319 3216
BANK
FEDERAL
2013 13008 8070 5424 115 15540 1990 4319
BANK
FEDERAL
2012 11483 6953 4345 1084 13008 1907 1990
BANK

Federal Bank shows favorable results via reduction in Gross NPA to Gross
Advance ratio (%), on the other side its deposit increased more than 25% in Mar
2017 against Mar 2016.

HDFC Bank Ltd.,

Introduction
Housing Development Finance Corporation Limited is a holding company.
The Company is engaged in financing by way of loans for the purchase or
construction of residential houses, commercial real estate and certain other
purposes, in India. The Company's segments include loans, life insurance,
general insurance, asset management and others. It offers insurance
products, such as motor, health, travel, home and personal accident in the
retail division, and customized products, such as property, marine, aviation
and liability insurance in the corporate division. It also provides portfolio
management, mutual fund, property investment management, project
management, investment consultancy and property related services. Its
distribution network includes over 4,520 branches and approximately 12,000
automated teller machines in over 2,590 locations. Its subsidiaries include
HDFC Developers Ltd., HDFC Investments Ltd., HDFC Trustee Co. Ltd.
and HDFC Asset Management Co. Ltd., among others.

HDFC Bank Ltd., incorporated in the year 1994, is a banking company

(having a market cap of Rs 505384.92 Crore).

HDFC Bank Ltd. key Products/Revenue Segments include Interest &

Discount on Advances & Bills which contributed Rs 52055.26 Crore to
Sales Value (75.10 % of Total Sales), Income From Investment which
contributed Rs 15944.34 Crore to Sales Value (23.00 % of Total Sales),
Interest which contributed Rs 774.34 Crore to Sales Value (1.11 % of Total
Sales) and Interest On Balances with RBI and Other Inter-Bank Funds which
contributed Rs 532.02 Crore to Sales Value (0.76 % of Total Sales)for the
year ending 31-Mar-2017.

The Bank has reported a Gross Non Performing Assets (Gross NPAs) of Rs
8234.88 Crore (1.29 % of total assets) and Net Non Performing Assets (Net
NPAs) of Rs 2773.66 Crore (.44% of total assets).
 For the quarter ended 31-12-2017, the company has reported a Standalone
Interest Income of Rs 16156.61 Crore, up 5.22 % from last quarter Interest
Income of Rs 15355.75 Crore and up 22.62 % from last year same quarter
Interest Income of Rs 13175.64 Crore. The bank has reported net profit after
tax of Rs 4642.60 Crore in latest quarter.

Year on year Housing Development Finance Corporation Ltd grew revenues

15.99% from 516.06bn to 598.57bn while net income improved 8.45% from
101.90bn to 110.51bn.

Yearly performance

Items Mar 2017 Mar 2016 Mar 2015 Mar 2014 Mar 2013 Mar 2012
Gross NPA (in Cr.) 5,885.66 4,392.83 3,438.38 2,989.28 2,334.64 1,999.39
Gross NPA (%) 1 1 1 1 1 1
Net NPA (in Cr.) 1,843.99 1,320.37 896.28 820.03 468.95 352.33
Net NPA (%) 0.00 0.00 0.00 0.00 0.00 0.00
Net NPA To Advances (%) 0.00 0.00 0.00 0.00 0.00 0.00
Diluted EPS (Rs.) 56.43 48.26 41.67 35.21 28.18 21.91
Dividend/Share (Rs.) 11 9.5 8 6.85 5.5 4.3
Net Profit/Share (Rs.) 56.78 48.64 40.76 35.34 28.27 22.02
 Gross and Net NPA (Non-performing assets) of HDFC increased after Mar
2013.

 Its Net NPA to Advance (%) shows negligible change. It shows good position
of bank.

 EPS of company increased from ₹ 21.91 (in Mar 2012) to ₹ 56.43 (In Mar
2017). Its Dividend/ Share also increased accordingly. It is attractive for
investment.

MOVEMENT OF NON-PERFORMING ASSETS (NPAs) (Amt in Million)

Year Bank Gross NPAs Net NPAs
As on Addition Reduction Write-off As on Mar As on As on
Mar 31 during the during the during 31 (Curr. Mar 31 Mar 31
( Prev. year year year Yr.) ( Prev. (Curr.
yr.) yr.) Yr.)
 1 2 3 4 5 6 7
HDFC
2017 43928 71262 32474 23859 58857 13204 18440
BANK LTD.
HDFC
2016 34384 57126 28158 19424 43928 8963 13204
BANK LTD.
HDFC
2015 29893 47901 24897 18513 34384 8200 8963
BANK LTD.
HDFC
2014 23346 46218 24854 14817 29893 4690 8200
BANK LTD.
HDFC
2013 19994 31378 16506 11520 23346 3523 4690
BANK LTD.
HDFC
2012 16943 15749 3285 9413 19994 2964 3523
BANK LTD.

Bank is in good state if controlling Gross NPA and its Deposits are increasing
positively. This bank is good choice for investors.
ICICI Bank Ltd.,
Introduction
ICICI Bank Limited is a banking company. The Bank is engaged in
providing a range of banking and financial services, including commercial
banking, retail banking, project and corporate finance, working capital
finance, insurance, venture capital and private equity, investment banking,
broking and treasury products and services. The Bank's business segments
are Retail banking, Wholesale banking, Treasury, Other banking, Life
insurance, General insurance and Others. It has a network of approximately
18,210 branches and automated teller machines (ATMs). The Bank has
approximately 110 Touch Banking branches across over 30 cities. Its
international banking is focused on providing solutions for the international
banking requirements of its Indian corporate clients and leveraging
economic corridors between India and the rest of the world. The Bank caters
to the financial needs of women entrepreneurs through its Self-Help Group
(SHG) program as a part of its microfinance initiatives.

ICICI Bank Ltd., incorporated in the year 1994, is a banking company

(having a market cap of rs 227072.22 Crore).

ICICI Bank Ltd. key Products/Revenue Segments include Interest &

Discount on Advances & Bills which contributed rs 39603.39 Crore to Sales
Value (73.12 % of Total Sales), Income From Investment which contributed
rs 11377.07 Crore to Sales Value (21.00 % of Total Sales), Interest which
contributed rs 2680.35 Crore to Sales Value (4.94 % of Total Sales) and
Interest On Balances with RBI and Other Inter-Bank Funds which
contributed rs 495.46 Crore to Sales Value (0.91 % of Total Sales)for the
year ending 31-Mar-2017.
 The Bank has reported a Gross Non Performing Assets (Gross NPAs) of
rs .00 Crore (.00 % of total assets) and Net Non Performing Assets (Net
NPAs) of rs .00 Crore (.00% of total assets).

For the quarter ended 31-03-2017, the company has reported a Consolidated
Interest Income of rs 10585.33 Crore, up 1.12 % from last quarter Interest
Income of rs 10467.73 Crore and down -1.13 % from last year same quarter
Interest Income of rs 10706.35 Crore. The bank has reported net profit after
tax of rs 2398.04 Crore in latest quarter.

Year on year ICICI Bank Ltd had little change in net income (from 101.80bn
to 101.88bn) despite revenues that grew 11.84% from 1.01tn to 1.13tn.

Yearly performance

Items Mar 2017 Mar 2016 Mar 2015 Mar 2014 Mar 2013 Mar 2012
Gross NPA (in Cr.) 42,159.38 26,221.25 15,094.69 10,505.84 9,607.75 9,475.33
Gross NPA (%) 9 6 4 0 0 0.00
Net NPA (in Cr.) 25,216.81 12,963.08 6,255.53 3,297.96 2,230.56 1,860.84
Net NPA (%) 5 3 2 1 1 1.00
Net NPA To Advances (%) 5 3 2 1 1 1.00
Diluted EPS (Rs.) 16.77 16.65 19.13 84.65 71.93 55.95
Dividend/Share (Rs.) 2.5 5 5 23 20 16.5
Net Profit/Share (Rs.) 16.82 16.72 19.27 84.94 72.17 56.08
 Gross NPA (Non-performing assets) of ICICI bank increased drastically after
Mar 2014. Moreover, Its Net NPA to Advance percentage also increases
twice. It is shows adverse response from investors.

 EPS of company reduced from ₹ 84.65 (in Mar 2014) to ₹ 16.77 (In Mar
2017). Its Dividend/ Share also reduced accordingly. It is not attractive for
investment.

MOVEMENT OF NON-PERFORMING ASSETS (NPAs) (Amt in Million)

Year Bank Gross NPAs Net NPAs
 As on As on As on
Addition Reduction Write-off As on Mar
Mar 31 Mar 31 Mar 31
during the during the during 31 (Curr.
( Prev. ( Prev. (Curr.
year year year Yr.)
yr.) yr.) Yr.)
1 2 3 4 5 6 7
2017 ICICI BANK 262213 335466 54166 121919 421594 129631 252168
2016 ICICI BANK 150947 167109 26290 29553 262213 62555 129631
2015 ICICI BANK 105058 79674 16824 16961 150947 32980 62555
2014 ICICI BANK 96078 45314 14564 21770 105058 22306 32980
2013 ICICI BANK 94753 35871 18088 16459 96078 18608 22306
2012 ICICI BANK 100343 29861 23616 11835 94753 24074 18608

From 2012 to 2014, bank was facing reduction in Gross NPA but after that its
Gross NPA was increased drastically. On the other side in same period its deposits
were not increased.
IDFC Bank Ltd.,
Introduction
IDFC Limited is a holding company. The Company is a non-banking finance
company, which is engaged in investing business. Its segments include
Financing, which includes Banking Business, and Others, which includes
asset management, investment banking and institutional broking. The
Company is involved in holding investment in IDFC Financial Holding
Company Limited, which in turn, holds investments in IDFC Bank Limited
(IDFC Bank), IDFC Alternatives Limited, IDFC Asset Management
Company Limited, IDFC Securities Limited and IDFC Infra Debt Fund
Limited. The Company, through its subsidiaries, is engaged in businesses,
including Banking business, Public Markets Asset Management,
Institutional Broking, Infrastructure Debt Fund and Alternative Asset
Management. IDFC Bank's businesses are split into three parts: Commercial
& Wholesale Banking, Bharat Banking and Consumer Banking. Its
Commercial Banking business comprises the Middle Market Group, and the
Small & Medium Enterprises Group.

IDFC Bank Ltd., incorporated in the year 2014, is a banking company

(having a market cap of Rs 19940.58 Crore).

IDFC Bank Ltd. key Products/Revenue Segments include Interest &

Discount on Advances & Bills which contributed Rs 5088.42 Crore to Sales
Value (59.63 % of Total Sales), Income From Investment which contributed
Rs 3288.78 Crore to Sales Value (38.54 % of Total Sales), Interest which
contributed Rs 98.30 Crore to Sales Value (1.15 % of Total Sales) and
Interest On Balances with RBI and Other Inter-Bank Funds which
contributed Rs 57.21 Crore to Sales Value (0.67 % of Total Sales)for the
year ending 31-Mar-2017.
 The Bank has reported a Gross Non Performing Assets (Gross NPAs) of Rs
2776.67 Crore (5.62 % of total assets) and Net Non Performing Assets (Net
NPAs) of Rs 1206.28 Crore (2.52% of total assets).

For the quarter ended 31-12-2017, the company has reported a Standalone
Interest Income of Rs 1222.93 Crore, up .97 % from last quarter Interest
Income of Rs 1211.15 Crore and down -5.09 % from last year same quarter
Interest Income of Rs 1288.46 Crore. The bank has reported net profit after
tax of Rs 146.11 Crore in latest quarter.

Year on year IDFC Ltd grew revenues 16.95% from 89.42bn to 104.58bn
while net income improved from a loss of 9.35bn to a gain of 6.99bn.

Yearly performance

Items Mar 2017 Mar 2016 Mar 2015

Gross NPA (in Cr.) 1,542.10 3,058.30 0
Gross NPA (%) 3 6 0
Net NPA (in Cr.) 576.47 1,139.04 0
Net NPA (%) 1 2 0
Net NPA To Advances (%) 1 2 0
Diluted EPS (Rs.) 2.98 2.34 -1,164.79
Dividend/Share (Rs.) 0.75 0.25 0
Net Profit/Share (Rs.) 3 1.38 -516.98
 Gross NPA (Non-performing assets) of Bank of Baroda reduced after Mar
2016. Moreover, Its Net NPA to Advance percentage also reduced. It is
shows favorable response from investors.

 EPS of company increased from ₹ 2.34 (in Mar 2016) to ₹ 2.98 (In Mar
2017). Its Dividend/ Share also increased accordingly. It is attractive for
investment.

MOVEMENT OF NON-PERFORMING ASSETS (NPAs) (Amt in Million)

Year Bank Gross NPAs Net NPAs
 As on As on As on
Addition Reduction Write-off As on Mar
Mar 31 Mar 31 Mar 31
during the during the during 31 (Curr.
( Prev. ( Prev. (Curr.
year year year Yr.)
yr.) yr.) Yr.)
1 2 3 4 5 6 7
IDFC BANK
2017 30583 9807 24969 0 15421 11390 5765
LIMITED
IDFC BANK
2016 - 34249 3666 - 30583 - 11390
LIMITED

Bank is showing good sign in Gross NPS reduction and its Deposits enhancement
in last 3 years. Bank is controlling its defaulter’s ratio.

IndusInd Bank Ltd.,

Introduction
IndusInd Bank Limited (the Bank) is engaged in banking and para-banking
services. The Bank is involved in accepting deposits, such as savings
accounts, current accounts and fixed deposits, and banking solutions. The
Bank is engaged in granting loans to various segments, such as industries
and businesses, and retail loans; financing a range of vehicles or equipment
to individuals, and priority sector lending. The Bank's segments include
Treasury, Corporate/Wholesale Banking, Retail Banking and Other Banking
Operations. The Treasury segment includes investment portfolios, profit or
loss on sale of investments, profit or loss on foreign exchange transactions,
equities, income from derivatives and money market operations. The
Corporate/Wholesale Banking segment includes lending to and deposits
from corporate customers. The Retail Banking segment includes lending to
and deposits from retail customers. The Bank operates approximately 1,000
branches. The Company has operations in India.

IndusInd Bank Ltd., incorporated in the year 1994, is a banking company

(having a market cap of Rs 100957.21 Crore).

IndusInd Bank Ltd. key Products/Revenue Segments include Interest &

Discount on Advances & Bills which contributed Rs 11479.11 Crore to
Sales Value (79.68 % of Total Sales), Income From Investment which
contributed Rs 2466.89 Crore to Sales Value (17.12 % of Total Sales),
Interest On Balances with RBI and Other Inter-Bank Funds which
contributed Rs 330.83 Crore to Sales Value (2.29 % of Total Sales) and
Interest which contributed Rs 128.84 Crore to Sales Value (0.89 % of Total
Sales)for the year ending 31-Mar-2017.

The Bank has reported a Gross Non Performing Assets (Gross NPAs) of Rs
1498.70 Crore (1.16 % of total assets) and Net Non Performing Assets (Net
NPAs) of Rs 592.20 Crore (.46% of total assets).
 For the quarter ended 31-12-2017, the company has reported a Standalone
Interest Income of Rs 3469.61 Crore, up 6.08 % from last quarter Interest
Income of Rs 3270.70 Crore and up 16.02 % from last year same quarter
Interest Income of Rs 2990.45 Crore. The bank has reported net profit after
tax of Rs 936.25 Crore in latest quarter.

Year on year Indusind Bank Ltd grew revenues 22.47% from 151.69bn to
185.77bn while net income improved 25.43% from 22.87bn to 28.68bn.

Yearly performance
Items Mar 2017 Mar 2016 Mar 2015 Mar 2014 Mar 2013 Mar 2012
Gross NPA (in Cr.) 1,054.87 776.82 562.92 620.79 457.78 347.08
Gross NPA (%) 1 1 1 1 1 1
Net NPA (in Cr.) 438.9 321.75 210.48 184.05 136.76 94.67
Net NPA (%) 0 0 0 0 0 0
Net NPA To Advances (%) 0 0 0 0 0 0
Diluted EPS (Rs.) 47.56 39.26 33.41 26.41 21.4 16.86
Dividend/Share (Rs.) 6 4.5 4 3.5 3 2.2
Net Profit/Share (Rs.) 47.95 38.43 33.88 26.79 20.3 17.16

 Gross NPA (Non-performing assets) of IndusInd bank increasing after Mar

2015 in high degree. Although, it’s Net NPA to Advance percentage shows
favorable results.

 EPS of company increase from ₹ 16.86 (in Mar 2012) to ₹ 47.56 (In Mar
2017). Its Dividend/ Share also increased accordingly. It is attractive for
investment.

MOVEMENT OF NON-PERFORMING ASSETS (NPAs) (Amt in Million)

Gross NPAs Net NPAs
As on As on As on
Addition Reduction Write-off As on Mar
Mar 31 Mar 31 Mar 31
Year Bank during the during the during 31 (Curr.
( Prev. ( Prev. (Curr.
year year year Yr.)
yr.) yr.) Yr.)
1 2 3 4 5 6 7
 INDUSIND
2017 7768 14293 6857 4655 10549 3218 4389
BANK LTD
INDUSIND
2016 5629 8487 3541 2807 7768 2105 3218
BANK LTD
INDUSIND
2015 6208 8873 3427 6025 5629 1841 2105
BANK LTD
INDUSIND
2014 4578 6242 2804 1808 6208 1368 1841
BANK LTD
INDUSIND
2013 3471 5278 2731 1440 4578 947 1368
BANK LTD
INDUSIND
2012 2659 2865 1342 710 3471 728 947
BANK LTD

Bank is in good position of controlling its Gross NPA to gross Advance ratio
(%). Moreover its Deposits are also increasing. As compared to Mar 2012, in
2017 deposits increased 3 fold.
Kotak Mahindra Bank Ltd.,
Introduction
Kotak Mahindra Bank Limited is a bank. The Bank's segments include
Treasury, BMU and Corporate centre, which includes dealing in debt,
equity, money market, forex market, derivatives and investments and
primary dealership of Government securities and Balance Sheet
Management unit (BMU); Retail Banking, which includes lending and credit
cards; Corporate/Wholesale Banking, which includes wholesale borrowings
and lending, and other related services; Vehicle Financing, which includes
retail vehicle finance and wholesale trade finance; Other Lending Activities,
which includes financing against securities and other loans; Broking, which
is engaged in market transactions done on behalf of clients; Advisory and
Transactional Services, which provide financial advisory and transactional
services; Asset Management, which manages investments on behalf of
clients and funds, and Insurance, which provides life insurance and general
insurance.

Kotak Mahindra Bank Ltd., incorporated in the year 1985, is a banking

company (having a market cap of Rs 201917.72 Crore).

Kotak Mahindra Bank Ltd. key Products/Revenue Segments include Interest

& Discount on Advances & Bills which contributed Rs 13402.10 Crore to
Sales Value (75.72 % of Total Sales), Income From Investment which
contributed Rs 3681.04 Crore to Sales Value (20.79 % of Total Sales),
Interest which contributed Rs 397.47 Crore to Sales Value (2.24 % of Total
Sales) and Interest On Balances with RBI and Other Inter-Bank Funds which
contributed Rs 218.32 Crore to Sales Value (1.23 % of Total Sales)for the
year ending 31-Mar-2017.
 The Bank has reported a Gross Non Performing Assets (Gross NPAs) of Rs
3979.06 Crore (.00 % of total assets) and Net Non Performing Assets (Net
NPAs) of Rs 1846.86 Crore (.00% of total assets).

For the quarter ended 31-12-2017, the company has reported a Consolidated
Interest Income of Rs 4712.93 Crore, up 5.87 % from last quarter Interest
Income of Rs 4451.44 Crore and up 11.46 % from last year same quarter
Interest Income of Rs 4228.47 Crore. The bank has reported net profit after
tax of Rs 1618.06 Crore in latest quarter.

Year on year Kotak Mahindra Bank Ltd grew revenues 21.23% from
280.32bn to 339.84bn while net income improved 42.83% from 34.59bn to
49.40bn.

Yearly performance
Items Mar 2017 Mar 2016 Mar 2015 Mar 2014 Mar 2013 Mar 2012
Gross NPA (in Cr.) 3,578.60 2,838.11 1,237.23 1,059.44 758.11 614.19
Gross NPA (%) 3 2 2 2 1 1
Net NPA (in Cr.) 1,718.10 1,261.96 609.08 573.56 311.41 237.38
Net NPA (%) 1 1 1 1 1 1
Net NPA To Advances (%) 1 1 1 1 1 1
Diluted EPS (Rs.) 18.55 11.4 24.14 19.59 18.24 14.61
Dividend/Share (Rs.) 0.6 0.5 0.9 0.8 0.7 0.6
Net Profit/Share (Rs.) 18.53 11.39 24.16 19.51 18.23 14.65
 Gross NPA (Non-performing assets) of Kotak bank increasing after Mar
2015 in high degree. Although, it’s Net NPA to Advance percentage shows
favorable results.

 EPS of company reduce from ₹ 24.14 (in Mar 2015) to ₹ 18.55 (In Mar
2017). Its Dividend/ Share also reduced accordingly.

MOVEMENT OF NON-PERFORMING ASSETS (NPAs) (Amt in Million)

Gross NPAs Net NPAs
Year Bank As on Addition Reduction Write-off As on As on As on
Mar 31 during the during the during Mar 31 Mar 31 Mar 31
 ( Prev. ( Prev. (Curr.
year year year (Curr. Yr.)
yr.) yr.) Yr.)
1 2 3 4 5 6 7
KOTAK
2017 MAHINDRA 28381 17971 6344 4223 35786 12620 17181
BANK LTD
KOTAK
2016 MAHINDRA 12372 28661 9761 2891 28381 6091 12620
BANK LTD
KOTAK
2015 MAHINDRA 10594 7535 4769 988 12372 5736 6091
BANK LTD
KOTAK
2014 MAHINDRA 7581 9342 4268 2061 10594 3114 5736
BANK LTD
KOTAK
2013 MAHINDRA 6142 4643 1870 1334 7581 2374 3114
BANK LTD
KOTAK
2012 MAHINDRA 6035 3036 1939 990 6142 2112 2374
BANK LTD
Bank Gross NPA is increasing which is not good. Bank is not able to balance
between its NPA addition and reduction. Bank needs to reduce its NPA. Its
deposits are increasing with good percentage.

Punjab National Bank,

Introduction
Punjab National Bank (PNB or the Bank) is a public sector bank. The Bank
provides various banking services, such as digital banking, personal
banking, social banking, micro, small and medium enterprises (MSME)
banking, agricultural banking, corporate banking, international banking or
non-resident Indian (NRI), and financial services. The Bank operates
through four segments: Treasury, Corporate/Wholesale banking, Retail
banking and Other banking operations. The Banks digital banking services
include PNB Retail Internet Banking, PNB Corporate Internet Banking,
PNB Mobile Banking and PNB SMS Banking. Its personal banking services
include savings fund account, fixed deposit schemes and cards. Its social
banking services include financial inclusion and priority sector. Its corporate
banking services include loan against future lease rentals and cash
management services. Its financial services include insurance business,
merchant banking, mutual funds and wealth management services.

Punjab National Bank, incorporated in the year 1969, is a banking company

(having a market cap of Rs 42799.49 Crore).

Punjab National Bank key Products/Revenue Segments include Interest &

Discount on Advances & Bills which contributed Rs 32958.82 Crore to
Sales Value (69.71 % of Total Sales), Income From Investment which
contributed Rs 12577.17 Crore to Sales Value (26.60 % of Total Sales),
Interest On Balances with RBI and Other Inter-Bank Funds which
 contributed Rs 1354.20 Crore to Sales Value (2.86 % of Total Sales) and
Interest which contributed Rs 385.80 Crore to Sales Value (0.81 % of Total
Sales)for the year ending 31-Mar-2017.

The Bank has reported a Gross Non Performing Assets (Gross NPAs) of Rs
57630.11 Crore (13.31 % of total assets) and Net Non Performing Assets
(Net NPAs) of Rs 34570.15 Crore (8.44% of total assets).

For the quarter ended 30-09-2017, the company has reported a Standalone
Interest Income of Rs 8058.19 Crore, down -1.06 % from last quarter
Interest Income of Rs 8144.81 Crore and down -4.83 % from last year same
quarter Interest Income of Rs 8467.29 Crore. The bank has reported net
profit after tax of Rs 560.58 Crore in latest quarter.

Year on year Punjab National Bank had relatively flat revenues (569.04bn to
572.26bn), though the company grew net income from a loss of 36.90bn to a
gain of 11.87bn.

Yearly performance
Items Mar 2017 Mar 2016 Mar 2015 Mar 2014 Mar 2013 Mar 2012
Gross NPA (in Cr.) 55,370.45 55,818.33 25,694.86 18,880.06 13,465.79 8,719.62
Gross NPA (%) 13 13 7 5 4 3.00
Net NPA (in Cr.) 32,702.10 35,422.56 15,396.50 9,916.99 7,236.50 4,454.23
Net NPA (%) 8 9 4 3 2 2.00
Net NPA To Advances (%) 8 9 4 3 2 2.00
Diluted EPS (Rs.) 6.45 -20.82 16.91 93.91 139.52 154.02
Dividend/Share (Rs.) 0 0 3.3 10 27 22
Net Profit/Share (Rs.) 6.23 -20.24 16.51 92.32 134.31 144
 Gross NPA (Non-performing assets) of PNB bank increasing drastically after
Mar 2015 in high degree. Although, it’s Net NPA to Advance percentage
shows adverse results.

 EPS of company reduce from ₹ 139.52 (in Mar 2013) to ₹ 6.45 (In Mar
2017).
 MOVEMENT OF NON-PERFORMING ASSETS (NPAs) (Amt in Million)
Gross NPAs Net NPAs
As on As on As on
Addition Reduction Write-off As on
Mar 31 Mar 31 Mar 31
Year Bank during the during the during Mar 31
( Prev. ( Prev. (Curr.
year year year (Curr. Yr.)
yr.) yr.) Yr.)
1 2 3 4 5 6 7
PUNJAB
2017 NATIONAL 558183 224146 136573 92051 553705 354226 327021
BANK
PUNJAB
2016 NATIONAL 256949 422518 56435 64848 558183 153965 354226
BANK
PUNJAB
2015 NATIONAL 188801 166596 39251 59197 256949 99170 153965
BANK
PUNJAB
2014 NATIONAL 134658 108100 53957 - 188801 72365 99170
BANK
PUNJAB
2013 NATIONAL 87196 86470 39009 - 134658 44542 72365
BANK
PUNJAB
2012 NATIONAL 43794 66716 23314 - 87196 20386 44542
BANK
 NPA of Bank is creased tremendously in 2015-16 as compared to its growth
rate of 2012 – 2015. Bank needs to review on its credit policies and strengthen
it. In last 3 years bank is facing adverse balance in its NPA reduction. Deposits
of bank are increasing at average pace.

State Bank of India,

Introduction
State Bank of India provides a range of products and services to personal,
commercial enterprises, large corporates, public bodies and institutional
customers. Its segments include Treasury, which includes the entire
investment portfolio and trading in foreign exchange contracts and
derivative contracts; Corporate/Wholesale Banking, which comprises the
lending activities of Corporate Accounts Group, Mid Corporate Accounts
Group and Stressed Assets Management Group; Retail Banking, which
comprises branches in National Banking Group, which primarily includes
Personal Banking activities, including lending activities to corporate
customers having banking relations with branches in the National Banking
Group, and Other Banking Business, which includes the operations of all the
Non-Banking Subsidiaries/Joint Ventures other than SBI Life Insurance Co.
 Ltd. and SBI General Insurance Co. Ltd. The Company had approximately
22,500 branches and 58,000 ATMs.

State Bank of India, incorporated in the year 1955, is a banking company

(having a market cap of Rs 266773.62 Crore).

State Bank of India key Products/Revenue Segments include Interest &

Discount on Advances & Bills which contributed Rs 119510.00 Crore to
Sales Value (68.08 % of Total Sales), Income From Investment which
contributed Rs 48205.31 Crore to Sales Value (27.46 % of Total Sales),
Interest which contributed Rs 6049.46 Crore to Sales Value (3.44 % of Total
Sales) and Interest On Balances with RBI and Other Inter-Bank Funds which
contributed Rs 1753.47 Crore to Sales Value (0.99 % of Total Sales)for the
year ending 31-Mar-2017.

For the quarter ended 30-09-2017, the company has reported a Consolidated
Interest Income of Rs 36707.51 Crore, down -.66 % from last quarter
Interest Income of Rs 36949.98 Crore and down -7.44 % from last year same
quarter Interest Income of Rs 39656.09 Crore. The bank has reported net
profit after tax of Rs 1952.30 Crore in latest quarter.

Year on year State Bank of India had net income fall -98.03% from
122.25bn to 2.41bn despite a 9.21% increase in revenues from 2.73tn to
2.99tn.

Yearly performance
Items Mar 2017 Mar 2016 Mar 2015 Mar 2014 Mar 2013 Mar 2012
Gross NPA (in Cr.) 112,342.99 98,172.80 56,725.00 61,605.00 51,189.39 39,676.46
Gross NPA (%) 7 7 4 5 5 5
Net NPA (in Cr.) 58,277.38 55,807.02 0 0 21,956.48 15,818.85
Net NPA (%) 4 4 2 3 2 2
Net NPA To Advances (%) 4 4 2 3 2 2
Diluted EPS (Rs.) 13.43 12.98 18 156.76 210.06 184.31
Dividend/Share (Rs.) 2.6 2.6 3.5 30 41.5 35
Net Profit/Share (Rs.) 13.15 12.82 17.55 145.88 206.2 174.46
 Gross NPA (Non-performing assets) of State bank increasing after Mar 2015
in high degree. Moreover, its Net NPA to Advance percentage shows
adverse results.

 EPS of company reduce from ₹ 210.06 (in Mar 2013) to ₹ 13.43 (In Mar
2017). Its Dividend/ Share also reduced accordingly.

MOVEMENT OF NON-PERFORMING ASSETS (NPAs) (Amt in Million)

Gross NPAs Net NPAs
As on As on As on
Addition Reduction Write-off As on Mar
Mar 31 Mar 31 Mar 31
Year Bank during the during the during 31 (Curr.
( Prev. ( Prev. (Curr.
year year year Yr.)
yr.) yr.) Yr.)
1 2 3 4 5 6 7
STATE
2017 BANK OF 981728 390714 43314 205698 1123430 558070 582774
INDIA
STATE
2016 BANK OF 567253 641985 69878 157633 981728 275906 558070
INDIA
STATE
2015 BANK OF 616054 294350 130116 213035 567253 310961 275906
INDIA
STATE
2014 BANK OF 511894 412167 179182 128825 616054 219565 310961
INDIA
STATE
2013 BANK OF 396765 319934 148857 55948 511894 158189 219565
INDIA
STATE
2012 BANK OF 253263 247122 96177 7443 396765 123469 158189
INDIA
Deposits of bank are increasing at growing rate since 2012. Bank is facing good
deposits in last year. But its NPA (gross) is also showing increate after Mar 2015.
Being a biggest bank in India, it has to control its Defaults vigilantly.

Yes Bank Ltd.

Introduction
YES BANK Limited is a private sector bank. The Bank is engaged in
providing banking services, including corporate and institutional banking,
financial markets, investment banking, corporate finance, branch banking,
business and transaction banking, and wealth management. The Company's
segments include Treasury, Corporate/Wholesale Banking, Retail Banking
and Other Banking Operations. Its Treasury segment includes investments
and financial markets activities undertaken on behalf of the Bank's
customers, trading, maintenance of reserve requirements and resource
 mobilization. The Corporate/Wholesale Banking includes lending, deposit
taking and other services offered to corporate customers. The Retail Banking
includes lending, deposit taking and other services offered to retail
customers. The Other Banking Operations segment includes para banking
activities, such as third party product distribution and merchant banking,
among others.

Yes Bank is in the Banks - Private Sector sector. The current market
capitalization stands at Rs 15,899.40 crore.

It is listed on the BSE with a BSE Code of 532648 and the NSE with an
NSE Code of YESBANK.

Year on year Yes Bank Ltd grew revenues 26.93% from 162.63bn to
206.43bn while net income improved 32.03% from 25.30bn to 33.40bn.

Yearly performance
Items Mar 2017 Mar 2016 Mar 2015 Mar 2014 Mar 2013 Mar 2012
Gross NPA (in Cr.) 2,018.56 748.98 313.4 174.93 94.32 83.86
Gross NPA (%) 2 1 0 0 0 0
Net NPA (in Cr.) 1,072.27 284.47 0 26.07 6.99 17.46
Net NPA (%) 1 0 0 0 0 0
Net NPA To Advances (%) 1 0 0 0 0 0
Diluted EPS (Rs.) 76.77 59.31 48.01 44.35 35.55 27.13
Dividend/Share (Rs.) 12 10 9 8 6 4
Net Profit/Share (Rs.) 72.95 60.39 48.01 44.86 36.27 27.68
 Gross and Net NPA (Non-performing assets) of Yes bank increasing after
Mar 2016 in high degree. Moreover, its Net NPA to Advance percentage
shows adverse results.

 EPS of company increasing from ₹ 27.13 (in Mar 2012) to ₹ 76.77 (In Mar
2017). Its Dividend/ Share also increasing accordingly.

MOVEMENT OF NON-PERFORMING ASSETS (NPAs) (Amt in Million)

 Gross NPAs Net NPAs
As on As on As on
Addition Reduction Write-off As on Mar
Mar 31 Mar 31 Mar 31
Year Bank during the during the during 31 (Curr.
( Prev. ( Prev. (Curr.
year year year Yr.)
yr.) yr.) Yr.)
1 2 3 4 5 6 7
YES BANK
2017 7490 26323 12207 1421 20186 2845 10723
LTD.
YES BANK
2016 3134 9111 2172 2583 7490 877 2845
LTD.
YES BANK
2015 1749 3875 1960 530 3134 261 877
LTD.
YES BANK
2014 943 3987 2438 743 1749 70 261
LTD.
YES BANK
2013 839 2437 1259 1074 943 175 70
LTD.
YES BANK
2012 805 644 346 264 839 92 175
LTD.

Bank NPA (gross) against gross advances is showing negative relation. Deposits of
bank increasing in last 4 years with good hike.
Comparative Technical Study

Table 1

Rank of companies according to Actual, CAPM and Abnormal returns

Banks Actual Rank CAPM Rank Abnormal Rank

return Return Return
(Alpha)
AXISBANK 254.77 5 9.36 2 245.41 5
BANKBARODA 20.21 9 9.21 3 11.00 9
CANBK 1.18 11 9.03 4 -7.85 11
FEDERALBNK 221.91 6 7.91 11 214.00 6
HDFCBANK 338.66 4 8.20 10 330.45 4
ICICIBANK 147.94 7 9.09 5 138.85 7
 IDFCBANK -10.92 12 7.23 12 -18.15 12
INDUSINDBK 628.15 1 8.59 7 619.56 1
KOTAKBANK 379.05 3 8.29 9 370.76 3
PNB 11.84 10 8.45 8 3.40 10
SBIN 90.40 8 8.86 6 81.54 8
YesBANK 579.64 2 10.08 1 569.56 2
*Bond market Rate (India) dated 29-dec-2017 i.e. 0.071318 is been taken as risk
free rate of return for CAPM
Graphical Representation Actual Return, Market Return, CAPM Return and Abnormal Return (Fig. 1.1)

650.00

550.00

450.00

350.00

250.00

150.00

50.00

AXISBANK BANKBAR CANBK FEDER- HDFCBANK ICICIBANK IDFCBANK IN- KOTAK- PNB SBIN YesBANK
-50.00 ODA ALBNK DUSINDBK BANK
Actual 254.77477 20.211011 1.1830866 221.91067 338.65526 147.93715 - 628.15193 379.05157 11.843389 90.397195 579.64201
return 8035836 0761075 2913355 6640814 4772328 3016791 10.919543 015878 6526378 233279 8983639 163774
1553516

Aver- 120.98714 120.98714 120.98714 120.98714 120.98714 120.98714 120.98714 120.98714 120.98714 120.98714 120.98714 120.98714
age 9306968 9306968 9306968 9306968 9306968 9306968 9306968 9306968 9306968 9306968 9306968 9306968
Market
Return
CAPM 9.3626574 9.2110551 9.0308564 7.9098367 8.2037214 9.0897075 7.2261023 8.5936346 8.2937670 8.4480843 8.8605621 10.080345
Return 349388 2740141 1145088 0925209 1999586 7323716 4161994 8777944 1365328 4617843 7468646 6804777

Ab- 245.41212 10.999955 - 214.00083 330.45154 138.84744 - 619.55829 370.75780 3.3953048 81.536633 569.56166
normal 0600898 9487061 7.8477697 9931562 3352333 5443554 18.145645 5471001 9512725 8710052 7236774 5957262
Return 8231733 4969716
Theoretical analysis of above table (1) and graph (Fig. 1.1):

 In terms of Actual Return IndusInd Bank is ranked highest with a return of 628.15% over the six year period whereas
Yes Bank is ranked second and Kotak Bank is ranked third with 579.64% and 379.05% respectively. IDFC bank has
negative return -10.92% and is ranked the least.

 In terms of CAPM returns Yes Bank is ranked highest with a return 10.08% over the six year period followed by Axis
Bank and Bank of Baroda. IDFC Bank is ranked the least with a return of 7.23%

 In terms of Abnormal Return (Alpha) IndusInd Bank is ranked the highest with a return of 619.56% followed by Yes
bank and Kotak Bank. IDFC Bank is ranked the least with a negative return of -18.15%

Thus IndusInd Bank (First), Yes bank (Second) and Kotak Bank (Third) are the best investment(as per mentioned
priority) if looked in terms of returns only whereas IDFC Bank is least worthy for an investment.
 Table 2

Rank of Companies according to Systematic, Unsystematic and Total Risk

Banks Systematic risk Rank Unsystematic Rank Total Risk Rank

risk

AXISBANK 0.000002419878 11 0.003145 12 0.003147 12

BANKBARODA 0.000002074335 10 0.001992 9 0.001994 9
CANBK 0.000001698221 8 0.000717 4 0.000719 4
FEDERALBNK 0.000000202748 2 0.002485 11 0.002485 11
HDFCBANK 0.000000454095 3 0.000161 1 0.000161 1
ICICIBANK 0.000001816923 9 0.000393 3 0.000395 3
IDFCBANK 0.000000004888 1 0.002415 10 0.002415 10
INDUSINDBK 0.000000941900 6 0.000342 2 0.000343 2
KOTAKBANK 0.000000551118 4 0.000939 5 0.00094 5
PNB 0.000000739221 5 0.001326 8 0.001327 8
SBIN 0.000001377329 7 0.001103 6 0.001105 6
YesBANK 0.000004416807 12 0.001261 7 0.001266 7
 Graphical Representation of Systematic Risk, Unsystematic Risk and Total Risk (Fig. 1.2)

0.00325000

0.00275000

0.00225000

0.00175000

0.00125000

0.00075000

0.00025000

AXISBANK BANKBAR CANBK FEDER- HD- ICICIBANK IDFCBANK IN- KOTAK- PNB SBIN YesBANK
ODA ALBNK FCBANK DUSINDBK BANK

Sys- 2.419877 2.074334 1.698221 2.027477 4.540949 1.816922 4.888337 9.419003 5.511180 7.392205 1.377328 4.416806
tematic 8439568E 8005758E 15390568 9023623E 0216248E 54685674 93999E- 7916249E 0040051E 8037091E 98382823 58659371
risk -06 -06 E-06 -07 -07 E-06 09 -07 -07 -07 E-06 E-06
Unsys- 0.003144 0.001992 0.000716 0.002484 0.000160 0.000392 0.002414 0.000342 0.000939 0.001326 0.001103 0.001261
tematic 76599075 40243905 84466505 63692308 73479009 81879847 64610131 39756481 05873373 48327434 33339624 42680308
risk 332 048 5491 972 0953 741 224 9221 8059 448 131 199
Total 0.003147 0.001994 0.000718 0.002484 0.000161 0.000394 0.002414 0.000343 0.000939 0.001327 0.001104 0.001265
risk 18586859 47677385 54288620 83967087 18888499 63572102 65098965 33946519 60985173 22249492 71072522 84360966
728 105 9397 996 3115 4267 018 8383 846 485 514 858

Theoretical analysis of above table (2) and graph (Fig. 1.2):

 HDFC Bank shows the least level of Total risk (0.000161) as well as both systematic risk (0.000000454095) and
unsystematic risk (0.000161) and hence being ranked first followed by Indusland Bank and ICICI Bank.
 Axis Bank is ranked the lowest with total risk of (.0003147), systematic risk (0.000002419878) and unsystematic risk
(0.003145).

A comparison of Table 1 and Table 2 shows that the securities with lowest risk give high returns example – IndusInd
Bank is the lesser risky and is ranked first in terms of returns.

Yes Bank which is giving second highest return has significant total risk as shown in Table 1 and Table 2.

Kotak Bank which is giving third highest return has lesser total risk as compared to Yes Bank as shown in Table 1 and
Table 2.

IDFC Bank which is giving lowest return has high total risk as shown in Table 1 and Table 2.

On the other hand the securities with low risk have low returns example – ICICI Bank and CANARA Bank are ranked
the least risky and they are ranked seventh and eleventh respectively in terms of returns.

But there are some inconsistent cases too example – IDFC Bank has a high risk with a ranking of 10 out of 12 stocks and
is having negative returns.

Thus, a high risk stock can give you a high return outcome but it does not guarantee it. Hence from the above phenomenon
we can infer that high risk can give to high returns as well as heavy losses.

Next we take a look at some of the most common variables of study in Risk and Return Analysis. These variables are
Beta, Standard deviation, Coefficient of Variation and Coefficient of correlation.
These variables are essential to the study of Risk and Return Analysis without an overview of them and investor may not
be able to make a sound and confident investment decision.

Table 3

Statistical variables studied under companies Risk and Return Analysis

Banks Beta with Beta with Standard Coefficient of Coefficient of

respect to respect to Deviation Variation Correlation
Nifty50 Nifty Bank
AXISBANK 0.017988 0.006891 0.056100 0.0002202 0.027729
BANKBARODA 0.016654 0.017838 0.044660 0.0022097 0.032250
CANBK 0.015069 0.011563 0.026806 0.0226574 0.048615
FEDERALBNK 0.005207 0.004149 0.049848 0.0002246 0.009033
HDFCBANK 0.007792 0.006221 0.012696 0.0000375 0.053077
ICICIBANK 0.015587 0.010664 0.019865 0.0001343 0.067853
IDFCBANK -0.000808 0.003140 0.049139 -0.0045001 -0.001048
INDUSINDBK 0.011222 0.005058 0.018529 0.0000295 0.052377
KOTAKBANK 0.008584 0.003434 0.030653 0.0000809 0.024219
PNB 0.009942 0.013130 0.036431 0.0030761 0.023600
SBIN 0.013571 0.010126 0.033237 0.0003677 0.035310
YesBANK 0.024302 0.014455 0.035579 0.0000614 0.059070

0.086480
Market STD 616
0.007478
Market Variance 897
Beta (sometimes referred to as the "beta coefficient") is supposed to gauge the volatility of a specific security by
comparing it to the performance of a related benchmark over a period of time. In short, investors are looking to see how
much downside capture they can expect from an investment.

Graph representing Beta (Fig. 1.3)

 0.030000

0.025000 0.024302

0.017988
0.020000 0.017838
0.015069 0.015587
0.013571 0.014455
0.013130
0.015000
0.016654 0.011222
0.008584
0.010000 0.007792
0.011563 0.005207 0.010664 0.010126
0.006891 0.003140 0.005058 0.009942
0.005000
0.006221 0.003434
0.004149
0.000000
-0.000808

-0.005000

Beta with respect to Nifty50 Beta with respect to Nifty Bank

A beta of one is an indication that the security's price moves exactly as the market moves. If the beta is less than
one, the security experiences less severe price swings than the market. Conversely, a beta above one means that the
security's price is more volatile than the market as a whole.

For example, suppose a security's beta is 1.5. In theory, the security is 50% more volatile than the market.
In table 3 and graph (Fig. 1.3), Yes Bank has the highest Beta with respect to Nifty 50 (Market) whereas Bank of Baroda
has the highest Beta with respect to Nifty Bank stocks. IDFC Bank has the least Beta with respect to Nifty 50 as well as
Nifty Bank.

In table 3, Federal Bank and HDFC Bank are in good position to maintain Beta with respect to Nifty 50 and Nifty Bank.
In opposite to it Bank of Baroda has highest beta with respect to Nifty 50 and Nifty Bank

Many investors – being risk-averse – prefer to have a lower beta; however, some investors are willing to target a higher
beta, hoping to capture higher returns and cash in on the higher volatility. Investor must analysis stocks with market beta
before investing.
Graph representing Standard Deviation (Fig. 1.4) Graph representing Coefficient of correlation (Fig. 1.5)

Standard Deviation 0.080000 Coefficient of Correlation

0.060000 0.056100 0.070000
0.049848 0.067853
0.050000 0.049139 0.060000 0.059070
0.035579 0.050000 0.053077 0.052377
0.040000 0.036431 0.048615
0.044660 0.040000
0.030000 0.019865 0.035310
0.033237 0.030000 0.032250
0.020000 0.030653 0.027729
0.026806 0.023600
0.020000
0.010000 0.018529 0.024219
0.012696 0.010000 0.009033
0.000000 -0.001048
0.000000
-0.010000

Standard Deviation Coefficient of Correlation

Graph representing Coefficient of Variance (Fig. 1.6)

Coefficient of Variation
0.0226574

0.0022097 0.0000375 0.0030761

0.0002202 0.0002246 0.0000809 0.0003677
0.0001343 0.0000295 0.0000614
AXISBANK BANKBARODA CANBK FEDERALBNK HDFCBANK ICICIBANK IDFCBANK INDUSINDBK KOTAKBANK PNB SBIN YesBANK

Coefficient of Variation

-0.0045001
Standard deviation is a statistical measurement; when applied to the rate of return of an investment, it sheds light
on the historical volatility of that investment. Standard deviation is a statistic used to measure the dispersion
(variation) of returns around an asset’s average or expected return. The greater the standard deviation of a
security, the greater the variance between each price and the mean, indicating a larger price range. For example, a
stock that has a high standard deviation experiences higher volatility, and therefore, a higher level of risk is associated
with the stock.

Standard deviation of Asset X = 1.67%

Standard deviation of Asset Y = 5.86%

If the standard deviation is greater, the variability and thus risk is also greater and vice versa. According to this measure,
Asset Y is riskier than Asset X.

In table 3 and graph (Fig. 1.4), Axis Bank has the highest standard deviation whereas HDFC Bank the least. Moreover,
IndusInd bank also has preferable lower Standard Deviation.

The coefficient of variation (COV) can determine the volatility of an investment. The COV is a ratio between the
standard deviation of a data set to the expected mean. When used in the stock market, it helps to determine the
amount of volatility in comparison to the expected return rate of an investment.
It is a measure of relative dispersion or a measure of risk per unit of expected return. It converts standard deviation of
expected values into relative units and thus facilitates comparison of risks associated with assets having different expected
values.
Example: Let us calculate the coefficient of variations for the assets X and Y (data as given above).
CV of asset X => 1.67 / 15 => 0.111
CV of asset Y => 5.86 / 14 => 0.419

If the coefficient of variation is greater, the risk is greater and vice versa. According to this measure, Asset Y is riskier
than Asset X. As this measure considers the expected value of assets, it is considered the best method for comparing risks.

• Standard deviation is a statistic used to measure the dispersion (variation) of returns around an asset’s average or
expected return
• Coefficient of variation is a statistic used to measure the relative dispersion of an asset’s returns; it is useful in
comparing the risk of assets with differing average or expected returns
• Higher values for both indicate higher risk

In table 3 and graph (Fig. 1.6), Canara Bank has the highest COV whereas IDFC bank has the least. In table 3 and graph
(Fig. 1.4), Canara Bank has fourth ranked (least) Standard Deviation which balanced its level of risk in comparison
between Standard Derivation and Coefficient of variation.
The correlation coefficient is a measure that determines the degree to which two variables' movements are
associated. The range of values for the correlation coefficient is -1.0 to 1.0.

In table 3 and graph (Fig. 1.5), ICICI Bank has highest degree of coefficient of correlation as 0.067853 which implies that
ICICI Bank and Nifty 50 price variables movement are highly associated. IDFC bank has negative or least correlation.
 Table 4 - BANK WISE NPA, EPS, Div./Share, Net Profit/Share
Net NPA
Gross Net Gross Net
Net NPA To Diluted EPS Dividend/
Bank Year NPA NPA NPA (in Profit/Shar
(in Cr.) Advances (Rs.) Share (Rs.)
(%) (%) Cr.) e (Rs.)
(%)
AXISBANK Mar 2017 5 2 21280.48 8626.6 2 15.34 5 15.36
AXISBANK Mar 2016 2 1 6087.51 2522.14 1 34.4 5 34.51
AXISBANK Mar 2015 1 0 4110.19 1316.71 0 30.85 4.6 31.04
AXISBANK Mar 2014 1 0 3146.41 1024.62 0 132.23 20 132.33
AXISBANK Mar 2013 1 0 2393.42 704.13 0 118.85 18 110.68
AXISBANK Mar 2012 1 0 1806.3 1186.74 0 102.2 16 102.67
BANKBAROD
A Mar 2017 10 5 42719 18080 5 6 1.2 5.99
BANKBAROD 19046.4
A Mar 2016 10 5 40521.04 6 5 -23.89 0 -23.35
BANKBAROD
A Mar 2015 4 2 16261.44 8069.49 2 15.83 3.2 15.32
BANKBAROD
A Mar 2014 3 2 11875.9 6034.76 2 107.38 21.5 105.44
BANKBAROD
A Mar 2013 2 1 7982.58 4192.03 1 108.84 21.5 106.05
BANKBAROD
A Mar 2012 2 1 4464.75 1543.64 1 127.84 17 121.41
21648.9
CANBK Mar 2017 10 6 34202.04 8 6 20.63 1 18.78
20832.9
CANBK Mar 2016 9 6 31637.83 1 6 -53.61 0 -51.8
CANBK Mar 2015 4 3 13039.96 8740.09 3 58.59 10.5 56.87
CANBK Mar 2014 2 2 7570.21 5965.46 2 54.48 11 52.86
CANBK Mar 2013 3 2 6260.16 5278.07 2 64.83 13 64.83
CANBK Mar 2012 2 1 4031.75 3386.31 1 74.1 11 74.1
FEDERALBNK Mar 2017 2 1 1727.05 941.2 1 4.76 0.9 4.82
FEDERALBNK Mar 2016 3 2 1667.77 950.01 2 2.75 0.7 2.77
FEDERALBNK Mar 2015 2 1 1057.73 373.27 1 11.75 2.2 11.74
FEDERALBNK Mar 2014 2 1 1087.41 321.56 1 9.81 2 9.81
FEDERALBNK Mar 2013 3 1 1554.01 431.94 1 49 9 49
FEDERALBNK Mar 2012 3 1 1300.83 199 1 45.41 9 45.41
HDFCBANK Mar 2017 1 0 5885.66 1843.99 0 56.43 11 56.78
Net NPA
Gross Net Gross Net
Net NPA To Diluted EPS Dividend/
Bank Year NPA NPA NPA (in Profit/Shar
(in Cr.) Advances (Rs.) Share (Rs.)
(%) (%) Cr.) e (Rs.)
(%)
HDFCBANK Mar 2016 1 0 4392.83 1320.37 0 48.26 9.5 48.64
HDFCBANK Mar 2015 1 0 3438.38 896.28 0 41.67 8 40.76
HDFCBANK Mar 2014 1 0 2989.28 820.03 0 35.21 6.85 35.34
HDFCBANK Mar 2013 1 0 2334.64 468.95 0 28.18 5.5 28.27
HDFCBANK Mar 2012 1 0 1999.39 352.33 0 21.91 4.3 22.02
25216.8
ICICIBANK Mar 2017 9 5 42159.38 1 5 16.77 2.5 16.82
12963.0
ICICIBANK Mar 2016 6 3 26221.25 8 3 16.65 5 16.72
ICICIBANK Mar 2015 4 2 15094.69 6255.53 2 19.13 5 19.27
ICICIBANK Mar 2014 0 1 10505.84 3297.96 1 84.65 23 84.94
ICICIBANK Mar 2013 0 1 9607.75 2230.56 1 71.93 20 72.17
ICICIBANK Mar 2012 0 1 9475.33 1860.84 1 55.95 16.5 56.08
IDFCBANK Mar 2017 3 1 1542.1 576.47 1 2.98 0.75 3
IDFCBANK Mar 2016 6 2 3058.3 1139.04 2 2.34 0.25 1.38
IDFCBANK Mar 2015 0 0 0 0 0 -1164.79 0 -516.98
INDUSINDBK Mar 2017 1 0 1054.87 438.9 0 47.56 6 47.95
INDUSINDBK Mar 2016 1 0 776.82 321.75 0 39.26 4.5 38.43
INDUSINDBK Mar 2015 1 0 562.92 210.48 0 33.41 4 33.88
INDUSINDBK Mar 2014 1 0 620.79 184.05 0 26.41 3.5 26.79
INDUSINDBK Mar 2013 1 0 457.78 136.76 0 21.4 3 20.3
INDUSINDBK Mar 2012 1 0 347.08 94.67 0 16.86 2.2 17.16
KOTAKBANK Mar 2017 3 1 3578.6 1718.1 1 18.55 0.6 18.53
KOTAKBANK Mar 2016 2 1 2838.11 1261.96 1 11.4 0.5 11.39
KOTAKBANK Mar 2015 2 1 1237.23 609.08 1 24.14 0.9 24.16
KOTAKBANK Mar 2014 2 1 1059.44 573.56 1 19.59 0.8 19.51
KOTAKBANK Mar 2013 1 1 758.11 311.41 1 18.24 0.7 18.23
Net NPA
Gross Net Gross Net
Net NPA To Diluted EPS Dividend/
Bank Year NPA NPA NPA (in Profit/Shar
(in Cr.) Advances (Rs.) Share (Rs.)
(%) (%) Cr.) e (Rs.)
(%)
KOTAKBANK Mar 2012 1 1 614.19 237.38 1 14.61 0.6 14.65
PNB Mar 2017 13 8 55370.45 32702.1 8 6.45 0 6.23
35422.5
PNB Mar 2016 13 9 55818.33 6 9 -20.82 0 -20.24
PNB Mar 2015 7 4 25694.86 15396.5 4 16.91 3.3 16.51
PNB Mar 2014 5 3 18880.06 9916.99 3 93.91 10 92.32
PNB Mar 2013 4 2 13465.79 7236.5 2 139.52 27 134.31
PNB Mar 2012 3 2 8719.62 4454.23 2 154.02 22 144
112342.9 58277.3
SBIN Mar 2017 7 4 9 8 4 13.43 2.6 13.15
55807.0
SBIN Mar 2016 7 4 98172.8 2 4 12.98 2.6 12.82
SBIN Mar 2015 4 2 56725 0 2 18 3.5 17.55
SBIN Mar 2014 5 3 61605 0 3 156.76 30 145.88
21956.4
SBIN Mar 2013 5 2 51189.39 8 2 210.06 41.5 206.2
15818.8
SBIN Mar 2012 5 2 39676.46 5 2 184.31 35 174.46
YesBANK Mar 2017 2 1 2018.56 1072.27 1 76.77 12 72.95
YesBANK Mar 2016 1 0 748.98 284.47 0 59.31 10 60.39
YesBANK Mar 2015 0 0 313.4 0 0 48.01 9 48.01
YesBANK Mar 2014 0 0 174.93 26.07 0 44.35 8 44.86
 YesBANK Mar 2013 0 0 94.32 6.99 0 35.55 6 36.27
YesBANK Mar 2012 0 0 83.86 17.46 0 27.13 4 27.68

Table 4 shows movement in Gross NPA(%) , Net NPA(%), Gross NPA(in ₹), Net NPA(in ₹), Net NPA to Advance(%),
EPS, Dividend/Share(₹), Net Profit/ Share(₹), over a period of six year. For the same activity 31 st march data is taken for
analysis.
 In all banks, gross NPA (%) is increasing as comparison of last years except Federal bank, HDFC Bank, IDFC Bank,
IndusInd Bank, Yes Bank. Bank of Baroda, ICICI Bank, PNB, SBI banks are at highest level. These banks which are
in high level of NPA are concluding around 1/3 rd portion of total. Although various measures have been attempted
to address this issue with the IBC being the latest one where some of the larger NPAs have been identified for
speedy resolution.

 In all banks, Net NPA(%) is increasing as comparison of last years except Federal bank, HDFC Bank, IDFC Bank,
IndusInd Bank, Kotak Bank, Yes Bank.

 EPS of HDFC Bank, IndusInd Bank, Yes Bank, are increasing year on year basis.

 Dividend/ Share (₹) of HDFC Bank, IndusInd Bank, Yes Bank are increasing year on year basis.

 Net Profit/ Share (₹) of HDFC Bank, IndusInd Bank, Yes Bank are increasing year on year basis.

 IDFC Bank is also have incremental EPS, Dividend/ Share (₹) and Net profit/Share( ₹).
ANALYSIS FINDINGS
From the study following major findings are made:

 All the banks have a positive beta values according to which the stock
values move as per the movement of the market index.

 The stock of HDFC bank is less volatile in nature. This is mainly because
their beta values are comparatively lesser than the markets beta value.

 In terms of Actual Return IndusInd Bank is ranked highest with a return of

628.15% over the six year period whereas Yes Bank is ranked second and
Kotak Bank is ranked third with 579.64% and 379.05% respectively. IDFC
bank has negative return -10.92% and is ranked the least.

 In terms of CAPM returns Yes Bank is ranked highest with a return 10.08%
over the six year period followed by Axis Bank and Bank of Baroda. IDFC
Bank is ranked the least with a return of 7.23%

 In terms of Abnormal Return (Alpha) IndusInd Bank is ranked the highest

with a return of 619.56% followed by Yes bank and Kotak Bank. IDFC
Bank is ranked the least with a negative return of -18.15%

 HDFC Bank shows the least level of Total risk (0.000161) as well as both
systematic risk (0.000000454095) and unsystematic risk (0.000161) and
hence being ranked first followed by Indusland Bank and ICICI Bank.
 A comparison of Table 1 and Table 2 shows that the securities with lowest
risk give high returns example – IndusInd Bank is the lesser risky and is
ranked first in terms of returns.

 Yes Bank which is giving second highest return has significant total risk as
shown in Table 1 and Table 2.

 Kotak Bank which is giving third highest return has lesser total risk as
compared to Yes Bank as shown in Table 1 and Table 2.

 IDFC Bank which is giving lowest return has high total risk as shown in
Table 1 and Table 2.

 On the other hand the securities with low risk have low returns example –
ICICI Bank and CANARA Bank are ranked the least risky and they are
ranked seventh and eleventh respectively in terms of returns.

 But there are some inconsistent cases too example – IDFC Bank has a high
risk with a ranking of 10 out of 12 stocks and is having negative returns.

 In table 3 and graph (Fig. 1.3), Yes Bank has the highest Beta with respect to
Nifty 50 (Market) whereas Bank of Baroda has the highest Beta with
respect to Nifty Bank stocks. IDFC Bank has the least Beta with respect to
Nifty 50 as well as Nifty Bank.

 In table 3 and graph (Fig. 1.6), Canara Bank has the highest COV whereas
IDFC bank has the least. In table 3 and graph (Fig. 1.4), Canara Bank has
 fourth ranked (least) Standard Deviation which balanced its level of risk in
comparison between Standard Derivation and Coefficient of variation.

 In table 3 and graph (Fig. 1.5), ICICI Bank has highest degree of coefficient
of correlation as 0.067853 which implies that ICICI Bank and Nifty 50 price
variables movement are highly associated. IDFC bank has negative or least
correlation.

 In all banks, gross NPA (%) is increasing as comparison of last years except
Federal bank, HDFC Bank, IDFC Bank, IndusInd Bank, Yes Bank. Bank
of Baroda, ICICI Bank, PNB, SBI banks are at highest level. These banks
which are in high level of NPA are concluding around 1/3 rd portion of total.
Although various measures have been attempted to address this issue with
the IBC being the latest one where some of the larger NPAs have been
identified for speedy resolution.

 In all banks, Net NPA(%) is increasing as comparison of last years except

Federal bank, HDFC Bank, IDFC Bank, IndusInd Bank, Kotak Bank,
Yes Bank.

 EPS of HDFC Bank, IndusInd Bank, Yes Bank, are increasing year on
year basis.

 Dividend/ Share (₹) of HDFC Bank, IndusInd Bank, Yes Bank are
increasing year on year basis.

 Net Profit/ Share (₹) of HDFC Bank, IndusInd Bank, Yes Bank are
increasing year on year basis.

 IDFC Bank is also have incremental EPS, Dividend/ Share ( ₹) and Net
profit/Share(₹).
  The stocks with high volatility have earned higher returns even though the
alpha value is positive.

From the findings of the study, the Investor is suggested the following:

 If the Investor wants to invest in the stocks with lower risks and positive
returns, he is suggested to invest in those securities whose Beta is less than
+1.00. Stocks having a Beta of less than +1.00 would be considered as more
conservative investments.

 From the study it is suggested that investment in IndusInd bank, Yes bank,
Kotak Bank, HDFC bank, Axis Bank would be feasible because they have a
positive highest returns compared to others who have lesser or negative
returns.
 CHAPTER – 7

CONCLUSION/SUGGESSION
& RECOMENDATIONS
As a whole the stock market is sometimes highly volatile. It depends

upon the investors how he can make use of this in order to get the money

which he has put in the market. An investor should be in a position to

analyze the various investment options available to him and thus

minimize the risk and maximize the returns. Beta is useful for

comparing the relative systematic risk of different stocks & in practice;

it is used by investors to judge a stock’s riskiness. The investor should

keep the risk associated with the return proportional as risk is directly

correlated with return. It is generally believed that higher the risk, the

greater the reward but seeking excessive risk does not ensure excessive

return. At a given level of return, each security has a different degree of

risk. Based on the calculations the investor can come to a conclusion that

investors should analyze the market on a continuous basis which will

help them to pick the right companies to invest their funds.

The study does not suggest the universal best or worst stocks for

investment, because ratings of the stocks must be based on the type of

investment and the type of investor. An investor who is ready to bear

high risk but expect high return will go such stocks where risk and

returns are high. Whereas an investor with less risk bearing capacity will

go for those stocks where the risk and return are low.

To get a handsome return, an investor must analysis market before

investing and vigilantly monitor its investment time-to-time. There is no

shortcut to earn money from market, but there are technical tools which

can be used to understand market trends in positive manner.

 CHAPTER – 8

LIMITATIONS/ SCOPE OF
STUDY

Every research has its own limitations. The following are limitations of study:
1. The study covers market risk analysis of selected nationalized banks in the
Indian context.
2. The Bank’s stock prices and Bank Nifty movements for a period of last six
year has been considered.
3. Study cover only twelve companies/ banks listed on NSE.
 REFERENCE

Reference
Websites:-
 www.financial-dictionary.thefreedictionary.com/

 www.nseindia.com/

 www.economictimes.indiatimes.com/

 www.moneycontrol.com/

 www.in.finance.yahoo.com/

 www.efinancemanagement.com/

 www.yourarticlelibrary.com/

 www.getsmarteraboutmoney.ca/

 www.ibef.org/

 www.rbi.org.in/

 www.shodhganga.inflibnet.ac.in/

 www.ijsrme.rdmodernresearch.com/

 www.shodhganga.inflibnet.ac.in/

 www.onlinesbi.com/

 www.axisbank.com/

 www.bankofbaroda.co.in/

 www.canarabank.in/

 www.federalbank.co.in/

 www.indusind.com/

 www.kotak.com/

 www.yesbank.in/

 www.pnbindia.in/

 www.icicibank.com/
  www.hdfcbank.com/

 www.idfcbank.com/

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india, Monthly Review, VoI. XXXV, No.11, November 1996, p.555.

 Aswath Damodaran, Investment Valuation Tools and techniques, John

Wiley & Sons Inc. New York 1996.

 Huan A Pujadas, "PWC and the art of Measuring Risk, The Economic Times,
Vol. 39, No. 53, March 17,1999, p.20.

 Avijith Banerjee, "A Glimpse of Portfolio Management", The Management

Accounting, Monthly Vol. 39, No.10, October 1998, p.774.

Newspaper/Journals
 CARE Rating

 Economic Times

 Business Standard

 A STUDY ON COMPARATIVE ANALYSIS OF RISK AND RETURN WITH

REFERENCE TO STOCKS OF CNX BANK NIFTY, Shaini Naveen & T.
Mallikarjunappa

 Media Reports, Press releases, Reserve Bank of India, Press Information

Bureau, www.pmjdy.gov.in, Union Budget 2017-18

CHAPTER – 10
 ANNEXURE

ANNEXURE 1. Project Synopsis

PROJECT REPORT SYNOPSIS

 A STUDY ON

“Risk & Return Analysis in Banking Sector”

(2012-2016)

Submitted in fulfillment of the requirement of

ALL INDIA MANAGEMENT ASSOCIATION

For the Award of

POST GRADUATE DIPLOMA IN MANAGEMENT

BY

AKHIL KHANNA

Under the Guidance of

Dr. Anurag Agnihotri

NAME : Akhil Khanna

REGISTRATION NUMBER : B21610053 (PGDM)

ADDRESS for : C/o Mr. Alok Khanna
CORRESPONDENCE 54-A, Street No – 11, East Azad Nagar,
Krishna Nagar, Delhi- 110051.
NAME OF GUIDE : Dr. Anurag Agnihotri

TITLE OF THE PROJECT : Risk & Return Analysis in Banking

Sector

ABSTRACT
India is one of the emerging economies, which has witnessed significant
developments in the banking sector during the liberalization policy initiated by the
government. However, investing in banking sector include high risks which can be
guided but not controlled. Most of these risks affect the market or the economy and
require investors to adjust portfolios or ride out the storm.

Banking sector is key elementary part of financial structure of country’s economy.

Banking sector is the spine of country’s economy. This sector has given very good
return to the investors in the past. But due to government policies and global
financial impacts, has proved that the Banking stocks tend to be more volatile than
other stocks. Banks play an important role in supporting economic growth and
have proved to be more volatile than the pure diversified equity funds which make
some of them a high risk proposition. Reserve Bank of India (RBI) plays a
controller role in India’s banking sector.

 Introduction
The Risk and Return are the two faces of the coin. The ultimate goal of any
investment is to maximize returns and minimize risk. The attitude of investors is
they wanted to earn maximum return but they are not willing to take risk. But
practically risk and return goes hand in hand. Higher the risk, higher the expected
return and vice versa. Risk in inherent in every investment decision; even safe
investments like treasury bills, government securities and post office deposits are
not free from risk. The risk is more in certain investments like equity stock.

What is Risk? It means earning less than what you expected from a given
Investment or losing part of what you invested. In other words Risk means
“variability of returns”. It is the probability of having adverse or low returns as
compared to the expected returns.

Risk can be broadly classified into systematic risk (Market risk) and unsystematic
risk (company risk). Systematic risk is that portion of total variability which is
attributed to economy wide factors like Interest rate, Inflation, GDP growth rate,
Business cycles, Balance of payment positions, exchange rate of currency,
Government policies etc. The unsystematic risk is that portion of total risk which
is attributed to Industry or company specific factors like inefficient management,
low quality product, new product failure, emergence of competitor, labor strike etc.
The unsystematic risk can be eliminated through proper diversification of
investment. But systematic risk is non-diversifiable in nature. It has to be borne by
all the investors. As it affect all the company’s stocks to a greater or lesser extent.
That’s why it is said that equity investments are subjected to market risk.

In Finance literature Beta is considered as the main measurement statistic of

systematic risk. Beta is the stock’s sensitivity to the market index movement. In
simple words Beta shows how an investment return changes with respect to
movement in stock index. The market has a beta of 1. Individual investment risk is
measured through their Beta values. Beta measurement shows changes in the
investment returns due to change in the returns of market index (Market portfolio).
For example, if beta of a security is 1.25, then it means for every 1% change in the
returns of index, returns of this security will change by 1.25%.
A stock that swings more than the market over a time has beta above 1.0, they are
known as aggressive stocks. If a stock moves less than the market, the stock’s beta
is less than 1.0, they are known as defensive stocks. High beta stocks are
comparatively more risky than low beta stocks.
 STATEMENT OF PROBLEM
Post liberalization of Indian economy, the financial arena of banking sector has led
to a great transformation of over the past two decades. Asset quality and
profitability have improved significantly. Banking industry plays a vital role in the
economic growth of a country. It is the backbone of country’s economy. Making
investment in equity stocks of banking sector is very common among investors.
But the recent global financial crisis has proved that the banking and financial
sector stocks tend to be more volatile than ever. In this present situation risk
analysis of selected banking stocks in India is felt highly relevant.

 AIM/ OBJECTIVES
8. To analysis Risk and Return in Banking Sector.
9. To analyze the Market Risk of selected banking stocks in terms of Beta.
10.To study the bank’s stock movement with respect to Bank Nifty.
11.To study volatility of banks in comparison with the market.
12.This study serves the purpose to complete my PGDM program by
submitting project report.

 PURPOSE OF CHOOSING THE PROJECT

1. It belongs to my interest area
2. This topic is under the scope of Specialization chosen by me in PGDM.

 SCOPE OF STUDY
4. The study covers market risk analysis of selected nationalized banks in the
Indian context.
5. The Bank’s stock prices and Bank Nifty movements for a period of last five
year has been considered.
 RESEARCH METHODOLOGY
The risk and return relationship is a fundamental concept in not only financial
analysis, but in every aspect of life. If a decision has to lead to benefit
maximization, it is necessary that individuals/institutions consider the combined
influence on expected (future) return or benefit as well as on risk/cost. The
requirement that expected return/benefit is commensurate with risk/ cost is known
as the “risk return trade-off” in finance.

The risk and return trade off says that the potential return rises with an increase in
risk. It is important for an investor to decide on a balance between the desire for
the lowest possible risk and highest possible return.

Any rational investor, before investing his or her investible wealth in the stock,
analyses the risk associated with the particular stock. The actual return he receives
from a stock may vary from his expected return and the risk is expressed in terms
of variability of return.

The study was based on secondary data which was taken from NSE website

Research Instrument: The study was based on secondary data which was taken
from NSE website.

Sample Size: Last five year data is collected for analysis, of selected nationalized
banks in the Indian context..

 PROPOSED

1. Introduction.
2. Objective of Project
3. Research Design and Methodology
4. Theoretical Background
5. Data analysis and Interpretation
6. Analysis findings
7. Conclusion/ Suggestions and Recommendations
8. Limitation/ Scope of study
9. Reference
10.Annexure
11.Bibliography
ANNEXURE 2. Guide CV

Brief profile
Dr.Anurag Agnihotri (M.com, LLB, M. Phil, UGC –NET, Ph.d) Pub: 4 books, 58 research paper

 Accredited Management Teacher by AIMA

 Corporate Consultancy for some companies on Risk management and policy framework.
 Management development programme at various companies like CWC, CWRI, FCI, CIL, CCI, Dalmia
industries, GNFC, N-code solutions, HDFC life etc.
 Consultant to Requeza capital, Karki global fund
 Resource person for NSIC and NSDC for mangers development programme.
 Faculty mentor For FIC(CVS), ENACTUS(CVS), TEB(CVS), MERCADEO and Vociferous
 Started incubation center for TEB
 Got established the placement cell in CVS.
 Delivered lectures on vocational education in different forums like AIMA and AICTE
 Got financial support for students for their startups
 Interacted with management of various companies regarding the skill set they required from the students.
 Member of the subcommittee of the syllabus for MMI (BA Vocational studies) of Delhi University.
 Member of the subcommittee of the syllabus drafting MMRB (BA Vocational studies) of Delhi University.
 Member of the committee of syllabus for BMS (FYUP) of Delhi University.
 Member of the subcommittee of the syllabus for finance papers of for BBE, BBS, BFIA ( 3 year programme)
of Delhi University.
 Member of the committee of syllabus drafting for BBE, BBS, BFIA of Delhi University for Subjects related
to Taxation and Business laws papers.
 Publications : 58 research papers, 26 paper presentations, 4 books
 FDP AT IIM KHOZIKHODE IN SAPM & DERIVATIVE
 Ph. Guidance : 3 (1 awarded 2 perusing), PG Projects supervised 256

Dr. Anurag Agnihotri

 39/1336, III – Floor,
DDA Flats, Madangir
New Delhi 110062
9310155599, 9313342476
E. Mail: [email protected]
[email protected]

Accredited Management Teacher in Finance by AIMA

FDP AT IIM KHOZIKHODE IN SAPM
FDP AT IIM KHOZIKHODE IN DERIVATIVE
Working experience:
(a) Corporate Consultancy:
 Prepared Internal financial control manual for IST Limited.
 Prepared Internal financial control manual for Gurgaon Infospace Limited.
 Prepared Internal financial control manual for IST Steel and Power Limited.

 Conducted business risk overview for broking firms

 Research consultant to Requiza capital ltd.
 Corporate trainer for the HDFC Life For executives
 MDP for Corporate clients of AIMA
 MDP for executives of Dalmia Industries
 Consultant for the Karki Global fund
 Corporate trainer for GNFC ltd. and N. code solutions pvt. Ltd
 Training on Taxation and Financial management issues to the senior officers of NSIC.
 Advising my working students in their corporate projects
 Worked as the member interview panel for Public sector undertakings such as FCI, CIL,
STC, Container corporation, CRWAI, Central warehousing corporation etc.

(b) Academic Experience:

 Working as Asst. Professor in College of vocational studies, Delhi University since 18
July 2007 till date.
 Worked as Sr. lecturer in Delhi College of Advance Studies, GGSIP University from 15
Oct.2003 to 17 July 2007.
 Visiting Faculty at GGSIP University for MBA (week end)
 Visiting Faculty at Jamia Hamdard for MBA
 Visiting Faculty at Jamia Milia Islamia for MBA
 Visiting Faculty at AIMA at Delhi for MBA.
(c) Online classes:
 On line classes at AIMA for Security analysis and portfolio management.
 On line classes at AIMA for International financial management.
 On line classes at AIMA for Derivatives and other options.
 On line classes for IACM for C-Tel Portal for Financial Management.
 On line classes for IACM for C-Tel Portal for Security analysis and portfolio management.
 On line classes for IACM for C-Tel Portal for International financial management.
Qualifications:
 Graduation in Commerce from Kakatia University, Warangal A.P
 Post - Graduation in Commerce from CSJM University Kanpur.
 LLB from CSJM University Kanpur.
 M. Phil from Madurai Kamraj University.
 Ph .D from M.G.Kashi Vidyapeeth on “Managing Risk through options and futures – A case
Study of NSE.
 UGC- NET passed in June 2006.
 Diploma in Computer applications
Research and Publications:
Research:
 M. Phil dissertation “Use Of VSM and Knowledge Management in organizational
Development.”
 Ph.D research “Managing Risk through futures and option – A case Study of NSE.
Research paper /Articles:
 Study of various factors affecting return in Bond Market- A case of India, AIMA
Journal of Management & Research, May 2015, Volume 9 Issue 2/4, ISSN 0974 – 497 sl .no
10.
 Study of Factors Influencing the Stock Prices of Selected IT, Cement and
Pharmaceutical Companies in India (2011-2016), | GJEIS /April-June 2017 Print ISSN:
0975-153X | Online ISSN: 0975-1432| Vol 9 | Issue 2 |
 Role of Microfinance in removal of poverty – A Case of NCR, Research Chronicler:
International Multidisciplinary Peer-Reviewed Journal, ISSN: Print: 2347-5021, ISSN:
Online: 2347-503X, Volume V Issue III: May 2017
 Study of the influence of EPS, DIVIDEND and PE Ratio on Stock prices of selected
Auto and FMCG companies in India (2009-2014), dr amit, Anurag, dr sanjay kumar singh,
Commerce Today ISSN NO : 0975-7775 VOL: X, 2015. P: 147

 Econometric Study of Working Capital Management and Profitability of Firms- A Case

of Auto Industry in India, Anurag Agnihotri, Indraprastha Journal of Management , ISSN
2454-4175 , Vol 3, no 1 sl no 6 p 73.
 Empirical Study of Volatility Clustering in Stock Prices of IT Index, GLOBAL
JOURNAL OF ENTERPRISE INFORMATION SYSTEM, ISSN: IISSN: 0975-153X
(print) Volume 6 Issue 2, April-June 2014, Sl no. 5 page no 26
 Case study on KRIBHCO (KRISHAK BHARATI CO-OPERATIVE LIMITED) in
AIMA Journal of Management & Research, October 2015, Volume 9 Issue 3/4, ISSN 0974-
497
 Empirical Study of Indian Export and Exchange Rate Elasticity, Research Chronicler
International Multidisciplinary Research Journal, ISSN 2347–503X , Volume II Issue I:
January 2014. P 4
 Empirical Study of Lead and lag relationship in Nifty Future and Cash Market, Dr.
Anurag Agnihotri IJMSR ISSN: 2249-6718, sl 3 p 28
 Empirical Analysis of weak form of efficiency in Indian Stock Market – A case of Event
Studies, Dr. Anurag Agnihotri, Journal of business Studies, ISSN NO: 0975-0150/2015
SL NO. 4, P:32
 Behavioral Study of investor’s Psychology of wealth management in Delhi, Dr. Anurag
Agnihotri INTENSITY:IJASSR ISSN: 2319-8516/ 2012/ VOL 01
 An investigation of convergence of spot and future prices and arbitrage opportunity in
commodity market (with specific focus on MCX & NCDEX) BVIMR Management Edge
ISSN: 0976-431/SL.2/ 2010. SOLO
 Study of the Market Efficiency of Indian Commodity Market with Reference to
FutureMarket of Gold, TECNIA Journal of Management Studies, ISSN: 0975-7104/ Vol.
6, No. 1/2011 Anurag Agnihotri, Anand Sharma
 A Study of Relationship Between Cash and Derivative Segment in Indian Stock Market,
viewpoint • ISSN: 2229-3825/ Volume 2/2011 Dr. Anand Sharma, Dr. Namita Rajput and
Dr. Anurag Agnihotri
 STUDY OF CONVERGENCE OF SPOT AND FUTURE PRICES IN COMMODITY
MARKET (WITH REFERENCE TO ZEERA, CHANNA, ZINK AND NATURAL
GAS FOR 2005-2010) DR ANURAG AGNIHOTRI;** DR ANAND SHARMA ZENITH
International Journal of Multidisciplinary Research ISSN 2231-5780/Vol.1 Issue 2/ June
2011,.
 Study of impact of FDI on Indian automobile sector. DCAS Journal of management and
IT Applications /ISSN 2277-9728/2013/sl.12
 Study of board independence and management on firm performance of selected
companies at BSE. Educator –The FIMT Journal ISSN: -2277-9736/2013/p-113
 Empirical study of Exchange Rate Volatility and Impact on India - Us Trade. Research
revolution ISSN: 2319-300X/P.13 – 15/2013
 EMPIRICAL STUDY OF THE VOLATILITY OF SELECTED INDICES OF NSE
(NIFTY 50, DEFTY, SMALL CAP, MIDCAP) dr. ANURAG AGNIHOTRI*. AMP
Journal of Management: ISSN: 2278-9138/ p52/201
 Derivative as a tool of Risk management optimal positioning approach vis- a- vis
behavioral finance approach ISSN 2230-987X/ p-46/2011, LLDIM Journal
 Study of relationship of beta and growth in a diversified portfolio. BVIMR Edge ISSN:
0976-431/SL.12/ 2009. SOLO
Chapters in Books:
1. Role of Micro Finance in the Development of MSMEs in Delhi and NCR, Book
Emerging issues and Challenges in Finance (Published by department of Commerce, DU)
ISBN: 9789386184429 , SL No: 5, Page no: 103
2. An Empirical Study of Spot and Future Prices of Indian Commodity Market, Book
Indian Commodity Market (Derivatives and Risk Management) ISBN: 978-81-8387-383-
3 p. 527
 3. “Study of economic variables on Bombay stock exchange” in the book titled as
Emerging issue of corporate sector in India. ISBN: 978-81-923515-0-6/ P.153/2013
4. Empirical study of customer satisfaction of commercial banks- A case of SBI in
NCR. Managing innovations and talent in the highly competitive global business
environment ISBN: 978-93-81771-18-1/P-178/2013

Books:
 Elements of Business law (2007) Galgotia publishing Co.(Fourth Edition 2012)
 Corporate law (2014) Galgotia publishing Co.
 Business law- theory and practice (2008) Book age publications
 Business and Industrial Law (2010) Book age publications
 Economic regulation of domestic and Foreign exchange markets (2013) Book age
publications
 International financial management, sage publishing Co (In press)

Seminars and Conferences organised:

 Organized as team member of international seminar in Dubai 2012.
 Organized seminars in India for my college and other colleges.
 Organized a national seminar on MCA21and corporate governance on 17 mar 2007.
 52 papers presented in various national and international conferences.
Membership of professional bodies:
a) Indian commerce association
b) AIMA (All India Management association)
c) DMA (Delhi Management association)
d) PRIMA
e) Indian Accounting Association
f) Bar Council of Delhi
Areas/ Subjects of specilisation:
International financial management,
Security analysis and portfolio Management,
Derivative,
Financial Risk Management
Business and Industrial law
Company law

Committee member
 Member of the committee of syllabus drafting for BMS ( 4 year programme) of Delhi
University.
 Member of the subcommittee of the syllabus for finance papers of for BBE, BBS, BFIA (
3 year programme) of Delhi University.
 Member of the committee of syllabus drafting for BBE, BBS, BFIA (3 year programme)
of Delhi University For Subjects related to Taxation and Business laws papers.
 Member of the subcommittee of the syllabus drafting for MMI (BA Program) of Delhi
University.
 Member of the sub committee of the syllabus drafting for MMRB (BA Program) of
Delhi University.
 Member of the steering committee of PRIMA
 Member of Syllabus drafting committee for FM12 and FM11 for AIMA
On the Editorial boards of Various Journals
 Managing editor for “Educator-the FIMT Journal” bi-annual journal.
 Managing editor for “DCAS Journal of management and IT Applications” bi-annual
journal.
 Member of editorial board for “Kashi International Journal of Social sciences
Research” bi-annual journal.
 Member of editorial board for “IDS journal” bi-annual journal. Varanasi
 Member of editorial board for “AMP journal of management” bi-annual journal.
Research Supervised:
 Ph. D research supervised: 03 (2 Awarded ,1 perusing).
 MBA project Guided: 318 during the period of 2006 to 2016.
Acted as Resource person:
 Workshop on IPR at GIBS affiliated to GGSIP University.
 Workshop on strategic issues in finance at Pearl fashion academy, Narayana
 Seminar on financial market At MSI affiliated to GGSIP University.
 Seminar on Contemporary issues in Management at DIRD affiliated to GGSIP University.
 Seminar on Ethical issues in Business education at Fairfield institute of management
Technology affiliated to GGSIP University.
Other Activities:
(a) Observer for UGC –NET examination 2013 Dec and 2014 Jun
(b) Performed the duties of Pepper setter and evaluator in the Examination of Delhi
University.
(c) Performed the duties of Pepper setter and evaluator in the Examination of GGSIP
University.
(d) Performed the duties of Viva-voce examiner in the Examination of GGSIP University
and at different other university and colleges.
(e) Performed the duties of evaluator in the Examination of IGNOU University.
(f) Performed the duties of Pepper setter and evaluator representative in the various other
universities and institutes.
(g) Performed the duties of Pepper setter and evaluator in the Examination of AIMA and
various other institutes.
(h) Performed various other works such as course structure drafting, study material
preparations etc.
(i) Faculty mentor For FIC(CVS), ENACTUS(CVS), TEB(CVS), MERCADEO

Personal details:
Father’s Name : Shri Kamlesh Chandra Agnihotri
Date of birth : 05th July 1975
Martial Status : Married
Nationality : Indian
Languages known : Hindi, English

Dr. Anurag Agnihotri