A COMPREHENSIVE STUDY ON FINANCIAL ANALYSIS

Presented By: Abhishek Sharma MBA 4th Sem. International School of Informatics and Management

Objectives of the Study

Understanding the financial Analysis of HDFC bank. To determine the performance of HDFC over the past years. To understand the software used for financial analysis in the bank. To guide the company in right direction by the results of the analysis. To inform the various investors of HDFC about the various investment avenues of the bank.

About HDFC Bank Ltd.

HDFC Bank Ltd. was incorporated as a Public Limited Company in August, 1944.
With its registered office in Mumbai, India, HDFC Bank commenced operations as scheduled commercial bank in January 1995. Since its inception in 1997, the corporation has maintained a consistent and healthy growth in its operations to remain a market leader in mortgage. Times bank limited (another new private sector bank promoted by Bennett, Coleman & Co. times group) was merged with HDFC bank ltd., effective February 26, 2000. The bank at present has an enviable network of 535branches spread over 312 cities across the country.

 The first stock exchange was setup in Bombay in 1875. Since then over 23 stock exchanges have been listed including NSE. In Both BSE and NSE, about 2000 companies are listed with total market capitalization of Rs.5466750 Crore. For the smooth running of the stock market, SEBI was established in 1988 and enacted in 1992.

A Brief about the Indian Stock Market

 Fundamental Analysis: It involves researching and evaluating the characteristic of a company including financial statement. Technical analysis: It is method of predicting price movements and market trends by studying the charts of historical data.

Methods of Analyzing the Stock Market

 Price: It measure profit, loss, sell and buy of shares in technical analysis only by price. Volume: Volume includes accumulation and distribution, market breadth, open interest, and trade count. Time: It Includes cycles, seasonality, and relationships between patterns and trends from a duration point of view. Sentiments: It is a subjective area of technical analysis.

The Pillars of The Technical Analysis

 SUPPORT: Indicates a specific price level at which a currency will have inability to cross below. RESISTANCE: It indicates a specific price level at which a currency will have inability to cross above. TRENDS: It is simply, the overall direction prices moving up, down or flat. CHANNELS: When prices trend between two parallel trend lines. they form a Channel. When hit low its indicate buy and at high it indicate sales.

Required background for technical analysis

Support Level of Nifty

Resistance Level of Nifty

Trend Level of Nifty

Channel Level of Nifty

Indicators of Technical Analysis

Moving Average: A moving average perform a mathematical function in which selected period is averaged and moves as new data included and old data is removed. 1. Simple moving average 2. Moving average weight 3. Moving average exponential Bollinger Band: These are charted by calculating a simple moving average of price, then creating two bands, a specified no. of standard deviations above and below the moving average. It is used to identify Over Bought and Over sold markets.

Research Methodology
The type of research done is exploratory and is done on secondary data. The data has been taken from NSE and prowess software. The sampling method used is cluster sampling. The sample size is of 210 companies( 21 sectors and 10 companies from each). The scope of the study is confined to NSE.

Simple Moving Average Chart of Maruti Suzuki Ltd.

Bollinger Band Chart of Maruti Suzuki Ltd.

Simple Moving Average Chart ICICI Bank Ltd.

Bollinger Band Chart of ICICI Bank Ltd.

 IT sector looks very good and attractive. Consumer durable sector is in buy and hold category. FMCG, Media, metal, textile and transport sectors are looking good and should be at hold. Power, Oil and Gas are at high so these should be avoided. Telecom sector should be avoided but shares like Bharti Airtel can be bought. Banking, Automobile and Real Estate are in wait and watch category. Moving average chart helps in identifying the trends in security. Bollinger band helps in studying the volatility of the security.

Facts and Findings

Conclusion
The historical relationships between certain price averages and market indicators can be used to predict the future trends. Despite the past data, no exact future prediction can be done because stock market depends on human Psychology. Also for working in the stock market for short term, these technical indicators are very helpful.

Bibliography
www.nseindia.com www.bseindia.com www.metastock.com www.moneycontrol.com www.hdfcsec.com