A Study on Valuation of 3 Mid-Size

“A Study on Valuation of 3 Mid-Size Public Sector Banks(Andhra Bank, Syndicate Bank, Bank of

Maharashtra)using Relative Valuation Techniques.”at

ByB JOHNSON(128904)

Objectives of Study

• To Study the growing trends of Indian Banking Sector.

• To Study the Valuation of Financial Institutions particularly Public Sector Banks.

• To Evaluate and Compare the Performance of 3 Mid-Size PSB’s in Indian Stock Market with respect to its Financial Performance.

• To Study and Understand the Financial Ratios which are used to analyze the Banking Scrips.

Company Overview

• Vision: “To be the Most Respected and Investor-Friendly Financial Powerhouses serving investor through various markets across the Nation.”

• Mission: “To Power Your Investments through superior information, Technology and Services, in order to help maximize you‟re Wealth Generation.”

• 340,1100+Terminals

PCS Securities Limited offers various products

• Power Trade • Power Comm • Power Access • Power Watch • Power Alerts • Power Funds • Power Wealth • Power Net • Power Money • Power KIT

S W O T Analysis of PCS Securities Ltd

Strengths:• Growth in investment appetite• Generational transfer of wealth• Acceptance & awareness of stocks as asset• Internet Accessibility and Mobile trading• Wealth management • Rising popularity of exchange traded funds (ETF)• Rising Commodity prices specially gold and silver• Investment in commodities via national Spot exchange

Weakness:• Origin regional biased, More number of branches in Andhra

Pradesh• Less Advertising and marketing Opportunities:• Foray into insurance broking• Mobile trading platform in equities• Online IPO applications• Exclusive institutional desk and research• Exclusive NRI Cell• Margin Funding of E-Precious Metals• Branch Expansion Organic & Inorganic

Threats:• Equity Market Volatiles in recent times• Sudden Change in SEBI rules and regulations

for Broking firms• Technological changes

Indian Banking Sector Business Model

Research Methodology & Design

• Data Collection- secondary data such as. Respective Public Sector Bank Websites, blogs and also many research reports.

• Analytical tools- Ratio Analysis; different

Ratios

• Net interest margin • Operating profit margins • Cost to income ratio• Credit to deposit ratio • Capital adequacy ratio • NPA ratio• Provision coverage ratio• ROA

Relative Valuation of 3-Mid Size BanksEPS

Q1FY13 Q2FY13 Q3FY13 Q4FY13 -

2.00

4.00

6.00

8.00

10.00

12.00 Andhra Bank Bank Of Maharastra Syndicate Bank

ROA


0.20

0.40

0.60

0.80

1.00

1.20

1.40

Andhra BankBank Of MaharastraSyndicate Bank

ROE


5.00

10.00

15.00

20.00

25.00


NIMS


0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00


GNPA


0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00


NNPA


0.50

1.00

1.50

2.00

2.50

3.00


Suggestions and RecommendationsCompany CMP

As on (17/7/13)

Target(according with multiplication with Book value and weightage of particular Company as per given in Market)

Rankings Recommendation

Andhra Bank 77.7 95 3 Buy

Syndicate Bank 111.25 105 1 Neutral

Bank of Maharashtra 49.5 49.2 2 Neutral

Limitations of Report

• Time Constrain• Inadequacies of Data• figures and data tables• Future Uncertainties• The information available on the internet,

journals, magazines, brochures was limited.

Learning Outcome

Augmentation of Soft Skills:• opportunity to work in office• learning about the work place, the culture at

different organizations, useful management tools, personal relations skills, quantitative skills.

• enhancing my analytical skills.• build interpersonal relationships &work on time.

• Role of Banking Sector in Indian Financial Market.• Various parameters to be viewed by the Equity analyst are very much clear

now, how the good news and bad news affect the stock markets is also learning.

• How to correlate the various macroeconomic parameters was the important of all learning at the Industry. (PCS Securities)

• I have come to know how an analyst analyzes data on the analysis of scrip or stock particularly banking sector.

• I learned how to format the huge sheets of data in a presentable form. I have also learned the use of various tools available for presenting the data in the word processing software Microsoft Excel 2007. Inputting the various formulas and calculating the estimations.

• Analyzing the stock market is a very vast task to do research upon. Still there are many avenues for one to study deeply.

Thank You

Documents

A Study on Valuation of 3 Mid-Size