A

SYNOPSIS ON

“COMPARATIVE EQUITY ANALYSIS OF IT & BANK STOCKS”

AT

“INDIA BULLS SECURITIES LIMITED”

Submitted in partial fulfillment of the requirement for the award of the

MASTER OF BUSINESS ADMINISTRATION

BY

KODAKANDLA RAKESH

H.T NO: 1422-21-672-021

Department of management studies

CSI INSTITUTE FOR P.G. STUDIES

(Affiliated to Osmania University)

EAST MARREDPALLY, SECUNDERABAD, TELENGANA

2021-2023
 INTRODUCTION

India is a developing country. Nowadays many people are interested to invest in

financial markets especially on equities to get high returns, and to save tax in honest

way. Equities are playing a major role in contribution of capital to the business from

the beginning. Since the introduction of shares concept, large numbers of investors

are showing interest to invest in stock market.

In an industry plagued with skepticism and a stock market increasingly difficult to

predict and contend with, if one looks hard enough there may still be a genuine aid

for the Day Trader and Short-Term Investor.

The price of a security represents a consensus. It is the price at which one person

agrees to buy and another agrees to sell. The price at which an investor is willing to

buy or sell depends primarily on his expectations. If he expects the security's price

to rise, he will buy it; if the investor expects the price to fall, he will sell it. These

simple statements are the cause of a major challenge in forecasting security prices,

because they refer to human expectations. As we all know firsthand, human

expectations are neither easily quantifiable nor predictable. If prices are based on

investor expectations, then knowing what a security should sell for (i.e.,

fundamental analysis) becomes less important than knowing what other investors

expect it to sell for. That's not to say that knowing what a security should sell for

isn't important--it is. But there is usually a fairly strong consensus of a stock's future

earnings that the average investor cannot disprove.

The process of analyzing sectors and companies, to give advice to professional fund

managers and private clients on which shares to buy. Sell-side analysts work for

brokers who sell shares to the investors (mainly fund management firms and private
clients). Buy-side analysts work for fund management firms. To start any business

capital plays major role. Capital can be acquired in two ways by issuing shares or by

taking debt from financial institutions or borrowing money from financial

institutions. The owners of the company have to pay regular interest and principal

amount at the end. Stock/shares play a major role in acquiring capital to the business

in return investors are paid dividends to the shares they own. The more shares you

own the more dividends you receive.

Fundamental analysis and technical analysis can co-exist in peace and complement

each other. Since all the investors in the stock market want to make the maximum

profits possible, they just cannot afford to ignore either fundamental or technical

analysis

Decisions like whether you should buy or sell when trading in the share market is a

difficult task to do. It requires split-hair analysis of the market. To do so one also

needs to have excellent understanding of the market. Equity analysis forms an

integral part of the share trading experience. Equity analysis decides the stance one

would take in the share trading industry. Finding out the highs and lows in the

market and analyzing the equity is of utmost importance before making any sort of

investment. Technical analysis and fundamental analysis form part of the equity

analysis.

Indian capital market has been increasing tremendously during last few years. With

the reforms of economy, reforms of industrial policy, reforms of public sector and

reforms of financial sector. The economy has been opened up and many

developments have been taking place in the Indian money market and capital

market. Researches say that out of all the investment opportunities available in the
market, equity investment is one which gives highest returns when compared to

others.

It‘s a market where debt or equity securities are traded or any market in which

securities are traded. Capital markets include the stock and bond markets.

Companies and governments use capital markets to raise funds for their operations;

for example, a company may issue an IPO(Initial Public Offer). Some of the

companies that have recently gone for IPO‘s are…,,

While a government may issue a bond in order to conduct new or expand ongoing

activities. Investors purchase securities in the capital markets in order to extract a

return and earn profit on the securities. Capital markets include primary markets,

such as IPOs that are placed with investors through underwriters, and secondary

markets, where all subsequent trading takes place, such as the New York Stock

Exchange. Government agencies in different countries regulate local capital

markets, though some, especially exchanges, play some role in regulating

themselves.
NEED FOR THE STUDY

Stock market is an important part of the economy of a country. The stock market plays a

pivotal role in the growth of the industry and commerce of the country that eventually affects

the economy of the country to a great extent. That is reason that the government, industry and

even the central banks of the country keep a close watch on the happenings of the stock

market. The stock market is important from both the industry‘s point of view as well as the

investor‘s point of view. This project helps in understanding the stock market and Risk-return

characteristics of stocks of different companies.

SCOPE OF THE STUDY

The study is confined to stocks of only six (Banking& IT) companies, namely, ICICI, HDFC,

AXIS. The time period for the study is limited to two years i.e., from April 2021- March

2022.

OBJECTIVES OF THE STUDY

To develop insight knowledge about equity market.

Observe the share price movements of the selected companies.

Observe the selected companies capital structure.

To evaluate the performance of stocks of select Banking & IT companies.

To perform the risk-return analysis of stocks of select Banking & IT companies.

TO evaluate the performance of selected companies by employing different tools and

techniques like Alpha, Beta, Sharpe ratio, Trey nor ratio etc..,

To provide the guidelines to investors to take investment decisions based on the findings.
METHODOLOGY OF THE STUDY

The data collection methods include both primary and secondary collection methods.

Primary method: This method includes the data collected from the personal interaction with

authorized members of INDIA BULLS SECURITIES LIMITED and from day to day Online

Trading.

Secondary method: The secondary data collection method includes:

The lecturers delivered by the superintendents of respective departments.

The brochures and material provided by INDIA BULLS SECURITIES LIMITED.

The data collected from the magazines of the NSE, economic times, etc.

Various books relating to the investments, capital market and other related topics.

Tools and Techniques:

The following tools are used for analyzing the data:

 Returns

 Standard Deviation

 Beta

 Sharpe Ratio

 Alpha

 Treynor‘s Ratio

Sampling Size:

Sampling Method: Non-probability Sampling (Convenience Sampling)

Sample Size: Stocks of 6 (Banking &IT) Companies has been taken as sample.

Sample Design: Convenience sampling is one of the non-probability sampling methods, which is

based on the convenience of researcher who selects the sample.

 The study is confined to Equity Analysis of the company only without considering the

other sources of rising capital.

 Since some of the data is collected from the secondary sources, all the limitations

pertaining to figures are carrying forwarded.

 The time taken for the study is limited.

 Recommendation of study are only personal optional. Hence judgment may not be

considered as ultimate and standard solutions.