1

FUNDAMENTAL AND
TECHNICAL ANALYSIS OF
BANKING AND FMCG
SECTOR

INTERNAL GUIDE BY:

PROF. ISHA DAVE

EXTERNAL GUIDE BY:

MR. RAHUL MOGHARIYA

PREPARED BY:

ISHAN MODI (1530)

201500615010028
GLS INSTITUTE OF COMPUTER TECHNOLOGY

Afflicted to GLS University

Academic Year 2015-2017

RESEARCH METHODOLOGY
3

LITERATURE REVIEW

Nayak & Mehta (2011)

Profitability of Indian banks had remained skewed.

Foreign banks are still more profitable than private
and public sector counterparts. During 2009-2010,
foreign banks accounted for close to 12 % of the
total net profit of the commercial banks in the
country.

Problem Statement:

To do fundamental & technical analysis of the banking and FMCG

sector.

Objectives:

To have an overview about the Banking and FMCG sector of

India.

To do fundamental analysis of the banks and FMCG

To study and analysis internal system of the FMCG and derive

a forecast and profit from future price movements.

To know the process of technical analysis of Banking and

FMCG sector.

Scope:

In this study, 3 banks of Indian banking sector

and 3 FMCG companies will be selected for
fundamental and technical analysis

Research Design:

This study will use the descriptive type of

research.

SAMPLING
Sampling size :

Data Collection Method

3 Banks and 3 FMCG company

Sampling Units :

Secondary

Balance

sheets

of

Banking Sector

FMCG Sector

FMCG companies and

ICICI Bank

banks

State Bank of India

Axis Bank

Hindustan Unilever Limited

Procter & Gamble

Imperial Tobacco company

Newspapers / Articles

Internet Bank
FMCG website

and
7

Beneficiaries of study

Limitation of the study

To Study analyze the performance

of the three banks for the last five

Researcher

Investors

years and comparison is made for

their performance in the different
years.

The other major constraint was the

time period.

BANKING SECTOR IN INDIA

9

INTRODUCTION TO TOPIC
10

Fundamental Analysis

FUNDAMENTAL ANALYSIS

Fundamental Analysis (FA) is a holistic approach to study a

business.

Fundamental analysis is the examination of the underlying forces

that affect the well-being of the economy, industry group and
companies.

At

the

company

level,

fundamental

analysis

may

involve

examination of financial data, management, business concept and

competition.

At the industry level, there might be an examination of supply and

demand forces of the product.

For the national economy, fundamental analysis might focus on

economic data to assess the present and future growth of the
economy.

11

COMPANY ANALYSIS

At the company level, fundamental analysis may

involve examination of financial data, management,
business concept and competition.

RATIOS

Ratios are relationships from a companys financial

information and used for comparison purposes.

12

TYPES OF RATIOS

Net profit margin

Formula: net income / net sales

expenses) /Total interest income

Return on Assets

Interest income / Total Assets (%)

Formula: Net interest income earned / Total

assets

Non-interest income / Total Assets (%)

Formula: Other income / Total Assets

(Operating

income-

Operating expenses)/Total Assets

EPS

Formula: Net profit / Total number

of outstanding shares

Formula: Net income / Total Asset

Operating profit / Total Assets (%)

Formula:

Operating profit margin

Formula: (Net interest income (NII)-operating

Return on equity / net worth

Formula: Net income / shareholders

equity

13

TECHNICAL ANALYSIS

Technical Analysis is the forecasting of future financial price

movements based on an examination of past price movements.

Line

ADX

Charts

RSI

Japanes
e
Candles
ticks

14

FUNDAMENTAL ANALYSIS
15

Banking Sector

ICICI BANK

ICICI

(Industrial

Corporation

Credit
of

and

Investment

India)

is

anIndianmultinationalbanking and financial

servicescompany

headquartered

in

Mumbai,Maharashtra,India. ICICI Bank is one

of theBig Four banks of India.

16

Net profit margin

19.27%

Mar-12

20.77%

22.20%

22.76%
18.44%

Mar-13

Mar-14

Mar-15

Mar-16

17

Return on asset
1.72

1.64

1.55
1.36

Mar-12

1.34

Mar-13

Mar-14

Mar-15

Mar-16

Return on equity
13.89
12.48

13.39

11.19

10.7

Mar-12

Mar-13

Mar-14

Mar-15

Mar-16

18

Operating expenses / Total asset

1.77
1.75
1.73

1.67
1.65

Mar-12

Mar-13

Mar-14

Mar-15

Mar-16

EPS
12

9.64

10
8

7.22

8.36

8.49

5.61
4
2

19

0
40969

41334

41699

42064

42430

Axis Bank Limitedis the third largest private

sector bank in India.

The bank offers financial services to customer

segments

covering

Corporate,

MSME,

Large

and

Agriculture

Mid-Sized
and

Retail

Businesses.
20

Net profit margin

22.35

20.73
20.29
19.28

Mar-12

Mar-13

19.05

Mar-14

Mar-15

Mar-16

Opearting profit margin

14.15

7.74
5.76
4.05
2.52
Mar-12

21
Mar-13

Mar-14

Mar-15

Mar-16

Return on asset
1.62
1.59
1.52
1.48
1.39

Mar-12

Mar-13

Mar-14

Mar-15

Mar-16

Interest income / Total asset

7.7

7.98

7.99

7.68

6.24

Mar-12

Mar-13

Mar-14

Mar-15

Mar-16

22

Operating expenses / Total asset

2.1
2.06
2.03
1.99
1.96

Mar-12

Mar-13

Mar-14

Mar-15

Mar-16

EPS
102.94

119.67

132.56

82.95

31.18
Mar-12

Mar-13

Mar-14

Mar-15

Mar-16

23

SBI

State Bank of India(SBI) is an Indian

multinational,sectorbank

in

Indianfinancial

services company.

It is agovernment-owned corporation. State

Bank of India is a banking behemoth and has
20% market share in deposits and loans among
Indian commercial banks
24

Net profit margin

10.99

11.78
8.59

7.98

Mar-12

Mar-13

6.07

Mar-14

Mar-15

Mar-16

Operating profit margin

Mar-12

Mar-13
-1.61

Mar-14

Mar-15

Mar-16

-2.48

-5.61

-6.21

-11.12

25

Return on equity / Networth

14.26

13.94

10.2

9.2

6.89

Mar-12

Mar-13

Mar-14

Mar-15

Mar-16

Interest income / Total asset

7.97
7.63

7.6
7.44
7.24

Mar-12

mar-13

mar-14

mar-15

mar-16

26

Operating profit / Total asset

Operating expenses / Total asset

1.36
1.99
1.03

1.95
0.83

0.74
0.53

Mar-12

Mar-13

Mar-14

Mar-15

1.88

1.86

Mar-16

Mar-12

Mar-13

1.84

Mar-14

Mar-15

Mar-16

EPS
184.31

210.06
156.76

17.55
Mar-12

Mar-13

Mar-14

Mar-15

12.98
Mar-16

27

FUNDAMENTAL ANALYSIS
28

FMCG Sector

Hindustan

Unilever

Limited

is

an

Indian

consumer goods company based in Mumbai,

Maharashtra.

It

is

owned

by

Anglo-Dutch

Company Unilever which owns a 67% controlling

share in HUL as of March 2015 and is the
holding company of HUL.

29

Ratios

Mar-16

Mar-15

Mar-14

Mar-13

Liquidity Ratio

Current Ratio
Quick Ratio

1.03

1.05

1.03

0.99

1.21

0.75

0.76

0.71

0.66

0.82

Activity Ratio (in % )

Total Asset turnover Ratio

225.78

225.94

215.55

224.19

Leverage Ratio

Debt-Equity Ratio

Return on Equity
Earnings Per share

201.82

0.36

0.3

0.34

0.44

Profitability Ratio (in % )

Net profit Ratio

Mar-12

0.28

12.76

14

13.8

14.7

12.16

110.73

115.87

118.04

142.01

76.62

18.87

19.95

17.88

17.56

12.46

30

Current Ratios
1.4
1.21
1.2
0.99

1.03

1.05

1.03

0.8
0.6
0.4
0.2
0

DEBT-EQUITY RATIO
0.5
0.45

0.44

0.4
0.35
0.28
0.3

0.36

0.34
0.3

0.25
0.2
0.15
0.1
0.05
0

31

NET PROFIT RATIO

16.00%

14.70%
13.80%

14.00%
12.16%
12.00%

14.00%
12.76%

10.00%
8.00%
6.00%
4.00%
2.00%
0.00%

Basic EPS (Rs.)

25
20

Axis Title

19.95
17.56

17.88

18.87

15
12.46
10
5
0

32

ITC Limited or ITC is an Indian conglomerate

headquartered in Kolkata, West Bengal. Its
diversified business includes five segments: FastMoving Consumer Goods, Hotels, Paperboards &
Packaging, Agriculture Business & Information
Technology.

33

Ratios

Mar-16

Mar-15

Mar-14

Mar-13

Liquidity ratio

Current Ratio
Quick Ratio

2.05

1.82

1.7

1.59

1.54

1.38

1.18

1.06

0.97

0.92

Activity Ratio

19.88

Total Asset turnover Ratio

21.73

22.39

21.8

Leverage Ratio
0.06

0.058

0.56

0.063

Profitability Ratio (in % )

0.057

26.31

Net profit Ratio

Earnings Per share

21.27

Debt-Equity Ratio

Return on Equity

Mar-12

31.31

26.43
33.51

12.05

24.8
33.36

11.09

24.47
32.88

9.45

23.24
31.36

7.93

6.45

34

2.5
2.05
2
1.54
1.5

1.59

1.7

1.82

Current Ratio

0.5

0
0.06
0.06
0.06

0.06

NP Margin

0.06

0.06
0.06
0.06
0.06
0.06
0.06

0.06
0.06

0.06
0.05
0.05

35

EPS (Rs.)
14
12.05

12

11.09

10
8

9.45
7.93

6.45
6
4
2
0

36

Procter & Gamble Co., also known as P&G, is an

American

multinational

consumer

goods

company headquartered in downtown Cincinnati,

Ohio, United States, founded by William Procter
and James Gamble, both from the United
Kingdom.
37

Ratios

Mar-16

Mar-15

Mar-14

Mar-13

Liquidity ratio
Current Ratio
Quick Ratio

1.9

2.02

2.16

1.93

2.19

1.73

1.78

1.85

1.7

1.95

Activity Ratio
Total Asset turnover Ratio

17.77

20.02

16.96

16.5

Leverage Ratio
Debt-Equity Ratio

Return on Equity
Earnings Per share

17.19

0.001

0.003

0.003

0.004

Profitability Ratio (in % )

Net profit Ratio

Mar-12

0.009

14.83

14.72

12.04

13.97

15.04

28.17

30.11

25.23

26

25.11

106.63

93.04

62.61

55.85

46.48

38

Current Ratio (X)

2.25
2.19
2.2

2.16

2.15
2.1
2.05

2.02

2
1.95

1.93
1.9

1.9
1.85
1.8
1.75

Quick Ratio (X)

2
1.95
1.95
1.9

1.85

1.85

1.78

1.8
1.75
1.7

1.7

1.73

1.65
1.6
1.55

39

Net Profit Margin (%)

16
15.04
14

14.83

14.72

13.97
12.05

12
10
8
6
4
2
0

Return on Networth / Equity (%)

31

30.11

30
29

28.17

28
27
26
25.11
25

26
25.23

24
23
22

40

EPS (Rs.)
120
100.63

100

93.04

80
62.61
60

55.85

45.48
40

20

41

TECHNICAL ANALYSIS
42

Technical analysisis a securityanalysismethodology

for forecasting the direction of prices through the study
of past market data, primarily price and volume

ICICI BANK

CANDLETICK CHART

43

RSI CHART

ADX CHART

44

AXIS BANK

CANDLETICK CHART
45

RSI CHART

ADX CHART

46

SBI

CANDLETICK CHART
47

RSI CHART

ADX CHART

48

HUL

CANDLETICK CHART
Moving Average: - It is also trading above 200 DMA
which is considered important for long term investing.

49

RSI CHART

ADX CHART

50

ITC

CANDLETICK CHART
Moving Average: - It is also trading above 200 DMA But in medium term
it is negative because it had trend reversal and shows the lower in low.

51

RSI CHART

ADX CHART

52

P&G

CANDLETICK CHART
Moving Average:- It is also trading above 200 DMA
which is considered important for long term investing.

53

RSI CHART

ADX CHART
ADX says that volatility is going to consolidate. ADX is positive.

54

KEY FINDINGS
55

SBI

Net Profit of the bank is continuously decreasing.

ICICI

In March, 2012 it was 10.99% and in March, 2016 it

effective lending practice

was around 6%.

and

Return on Equity & Return

stable

on Assets are also not up to the

mark, both are exactly half in

Net Interest Margin shows

efficiency

to

interest

earn

amount

every year.

The journey of EPS of

March, 2016 as compared with

ICICI Bank is still not up

March, 2012.

to the mark since March,

ADX is still showing negative

2014.

trend because of fluctuations.

RSI had shown buy signal

in 2014 and still having
bullish sentiment.

56

AXIS

Operating Profit of the bank is showing the hard core

efficiency over controlling the cost and also improves
the quality of lending practices.

Interest income of the bank is slowly and gradually

increases. Management of lending policy works
effectively in last 5 years.

The Candlestick chart of Axis Bank has broken out of

the symmetrical triangle pattern and is looking positive
now. It is also trading above its long term trend line.

57

HUL

ITC

Earnings

per

Share

of

the

company shows the positive trend for

hiked with 100%. In March, 2012 it

the

the

was around 6.45 bugs and in last

is

financial y ear it was @12 bugs which

shareholders.

journey

of

last

Because
5

years

it

shoes the perfect positive trend to

increasing by 6 bugs.

current as well as future investors.

Current and Quick ratio tells the

systematic

management

of

the

company

long term period.

that HUL is trading above Long

ratios
level.

faced

are

below

their

It

seems

that

many

hurdles

to

maintain these ratios up to the mark.

Net Profit margin is impressive in

recession time i.e.2014-15 & 2015-16.

term trend line and long term trend

is positive.

T/o

benchmark

Both are very stable throw-out the

The Candlestick Chart is showing

Current ratio, Quick ratio and Total

asset

inventories and other liquid assets.

Earnings Per share are suddenly

RSI is trading at 60 levels, so the

perfect position to buy the stock.

58

P&G

EPS is at its top most position for P&G. It is increasing rapidly

between 2012 to 2015. It was @ 47 in March, 2012, 62@ March,
2014 and it crossed the 100 bugs in last financial year.

Moving average is trading above 200 DMA which is considered

important for long term investing. Share price of P&G is also
positive to invest and Candlestick is also OHCH.

RSI is overbought in 2015 at 95.And in 2016 it is at 60. It means

there is too much fluctuation in the stock and should be
considered as sell signal.

ADX says that volatility is going to consolidate. ADX is positive.

59

RECOMMENDATIONS
60

From the analysis and interpretation I have found that

banking sector is very sensitive to the changing faces of
the economy.

Also banks lending practices, risk management practices,

liquidity plays an important role in determining increase
or decrease of share price of the bank.

The Net profit margin, Net interest margin, EPS and other
fundamentals as well as technical factors of the private
sector banks shows an overall positive picture.

FMCG is a market where cut- throat competition is

accrued. Every day they introduce a new product for
consumers.

61

CONCLUSION
62

A final decision or judgment : an opinion or decision

that is formed after a period of thought or research

From the above project I can conclude that

it is easy to know the fundamental situation of FMCG

sector and Banking sector and also do a forecast
about the future profits of the companies.

With the help of technical analysis I have found that,

the future price movements of both the sectors and
easy to compare among them. Fundamental and
technical analysis are the best solution if one wants
to invest into the stock market and make perfect
decisions to choose the right company at right time.

63

64