Project Report

On

“A Study on job satisfaction at TCS, Nagpur ”

Submitted to

Rashtrasant Tukadoji Maharaj

Nagpur University, Nagpur

In partial Fulfillment of the requirement

“ Bachelor of Business Management ”

Submitted by

Anurag Koppala

Guidance by

Ruchi chowdhari

Dr. Ambedkar Institute of Management

Studies and Research,

Deekshabhoomi, NAGPUR
– 440022

(2022-2023)

1
 CERTIFICATE

This is to certify that Anurag Koppala as

satisfactorily completed the project work entitled “A
Study on Job Satisfaction at TCS Nagpur” in not less
than one academic session.

This is also certify that this project work is the result

of candidate’s own work and is of sufficiently high
standard to warrant its presentation for the BBA
program.

To the best of my knowledge this project or its part

has not been submitted to this university for any
Degree/Diploma.

Guide Name

Internal Examiner
External Examinor

Place : Nagpur

DATE :
Director

 
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 ACKNOWLEDGEMENT

“Words have never expressed human sentiment. This

is only an attempt to express our deep gratitude
which comes from my heart”

It is a great pleasure for me to express my deep

feeling of gratitude to my respected guide prof. ruchi
chowdhary, assistant professor, DAIMSR, for her
great encouragement and constant support which
provided desired moral and confidence to carry on
my

I am grateful to the Dr. Sudhir Fulzele, Director, Dr.

Ambedkar Institute of Management Studies and
Research, Nagpur work for making all facilities
available for my work.

I am grateful to the Dr. Nirzar Kulkarni, Associate

Director, Dr. Ambedkar Institute of Management
Studies and Research, Nagpur for making all
facilities available for my work.

I am grateful to my parents for their lovable support.

Last but not the least I am thankful to my friends and
other faculty members for their direct and indirect
help for completion of this work.

DECLARATION

I Anurag Koppala hearby declare that the project

entitled “ A Study on Job Satisfaction At TCS,
Nagpur ” is the outcome of my own research work
based on personel study during academic session
2022 – 2023 and has not been submitted previously
for award of any degree or diploma to this university
3
or any other university.

Anurag Koppala 

4
 Executive Summary

The purpose of study of A study of Creation and Analysis of Portfolio is to identify how much
portfolio management can help an investor to increase in profits and minimize the risk. This study is
also beneficiary to know the financial markets, types of indexes in India. It gives us the idea of
various markets available for investment for short term as well as long term.

In this Project, A comparison between HDFC Bank and ICICI Bank is shown with the help
of Balancesheets and P&L and Ratio Analysis to understand the Financial positions of these
two leading banks in their respective sector.

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 TABLE OF CONTENTS

Sr. No. Title Page No.

1.1 Objectives 08
1.2 Introduction 09
1.3 Scope of the Study 20
1.4 Limitations 21

2 Review of Literature 22

3 Research methodology 24

4.1 Asset Allocation 26

4.2 Risk v/s Reward 27
4.3 Market behavior 29
4.4 Overview Of Hdfc Bank And Icici Bank 32
4.5 Data Analysis & Interpretation Of Data 33

5 Findings 53
6 Recommendations 56
5 Conclusion 57
8 Reference/Bibliography 58

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 CHAPTER 1
1.1 Objectives :

 To understand what is Portfolio Management

 To learn about Portfolio Management Services.
 To learn about Risk vs Reward.
 To Compare HDFC Bank and ICICI Bank wih the help of Balancesheets and P&L
statements and analyse their growth with the help of Ratio Analysis.

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1.2 Introduction

Portfolio Management:

Portfolio management is the art and science of managing a group of investments that meet the
short term and long-term financial objectives and risk tolerance of a client, a company, or an
institution.

Portfolio management involves building and overseeing a selection of investments that will meet
the short term and long-term financial goals and risk tolerance of an investor.

Portfolio managers on behalf of clients, while individuals may choose to build and manage their
own portfolios. The portfolio manager's ultimate goal is to maximize the investments' expected
return within an appropriate level of risk exposure.

Portfolio management requires the ability to weigh strengths and weaknesses, opportunities and
threats of investments. The choices involve trade-offs, from debt versus equity to domestic versus
international and growth versus safety.

There are two types of nature of Portfolio management:

 Passive management is a set-it-and-forget-it long-term strategy. It may involve

investing in one or more exchange-traded (ETF) index funds. This is commonly
referred to as indexing or index investing. Those who build Indexed portfolios may use
modern portfolio theory (MPT) to help optimize the mix.

 Active management involves attempting to beat the performance of an index by

actively buying and selling individual stocks and other assets. Closed-end funds are
generally actively managed. Active managers may use any of a wide range of
quantitative or qualitative models to aid in their evaluations of potential investments.

 Passive management is a set-it-and-forget-it long-term strategy. Often referred to as

indexing or index investing, it aims to duplicate the return of a particular market index
or benchmark and may involve investing in one or more exchange-traded (ETF) index
funds. Active management involves attempting to beat the performance of an index by

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 actively buying and selling individual stocks and other assets. Closed-end funds are
generally actively managed.

Overviews Of Portfolio Management Services Companies

When investors invest in the stock market on their own or are about to invest a large sum of money,
they need for guidance that can help to take decisions about how to invest in the stock market so
that you can improve your returns while ensuring don’t take more risk than necessary.

Portfolio Management Service (PMS) is the best place to go to in such situations. A portfolio is a
group of various asset classes like stocks, mutual funds, bonds, real estate, and even commodities.
These services by reputed and registered intermediaries not only help you decide what to do with
your money smartly but also manage your portfolio for a fee.

List of the Top PMS in India

Ranking parameters include a combination of returns, number of clients, charges, support and
goodwill. Here are selected five that make it to the list of best PMS services in India.

 Porinju Veliyath Equity Intelligence PMS

 Motilal Oswal Next Trillion-Dollar Opportunity PMS (NTDO)

 Kotak Pharma Fund

 ICICI Prudential PMS

 ValueQuest PMS

Importance of Portfolio Management services

 Better Investment Planning

A look at your past investments will help you frame a better investment strategy in the
near future. You can also plan holistically while taking into consideration the age factor,
propensity of risk, income, and budget. Finally, making an informed and sensible decision
will help in reducing the chances of loss.

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 Minimizes the Risk: Portfolio management helps in reducing the risk of the investment
strategy to the extent that cannot be ignored. Therefore, it increases the chances of
making profits.

 Though risk is minimized, portfolio managers also consider uncertainties such critical
illness, permanent disability, or even death. To assure the risk factor, it is always
advisable to invest in risk assessment financial tools like term insurance, insurance
riders etc.

 Customizable Solution

With portfolio management, you get the opportunity to plan and account for the
specific goals that you have in mind and customize your strategies, expected returns,
and risks according to your preference.

 Tax Planning

Taxes usually drain your income; thus, people try to avoid any excess tax payments.
However, a sound and well-managed investment plan can go a long way.

 Reduces Cost and Saves Time

Some investors may not have a sound financial background, while some may find it
challenging to manage their finances, and yet others find it hard to track the factors
impacting their investments. Therefore, trying to manage personal finances and not
doing it the right way can be a costly expense. This is why availing portfolio
management services come with a cost and go a long way in protecting an individual’s
finances.

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Types of Financial investments

 Mutual Funds
 Fixed Deposits
 Bonds
 Stock
 Equities
 Real Estate (Residential/Commercial Property)
 Gold /Silver
 Precious stones

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Introduction to Stock Exchange

A stock exchange brings companies and investors together. A stock exchange helps companies
raise capital or money by issuing equity shares to be sold to investors. The companies invest those
funds back into their business, and investors, ideally, earn a profit from their investment in those
companies.

A stock exchange is where different financial instruments are traded, including

equities, commodities, and bonds. Exchanges bring corporations and governments, together with
investors. Exchanges help provide liquidity in the market, meaning there are enough buyers and
sellers so that trades can be processed efficiently without delays.

Exchanges also ensure that trading occurs in an orderly and fair manner so important financial
information can be transmitted to investors and financial professionals.

Stocks first become available on an exchange after a company conducts its initial public
offering (IPO). A company sells shares to an initial set of public shareholders in an IPO known as
the primary market. After the IPO floats shares into the hands of public shareholders, these shares
can be sold and purchased on an exchange or the secondary market.

The exchange tracks the flow of orders for each stock, and it's the flow of supply and demand that
establishes a stock's price. Depending on the type of brokerage account, you may be able to view
this flow of price action.

Major International Stock Exchanges

In addition to the Bombay Stock Exchange (BSE), other major international stock exchanges are:

The New York Stock Exchange (NYSE)

The New York Stock Exchange (NYSE) is considered the largest equities-based exchange in the
world, based on the total market capitalization of its listed securities. NYSE was formerly a private
organization but became public in 2005 .

Nasdaq
Nasdaq is a global electronic marketplace and the benchmark index for U.S. technology stocks.
National Association of Securities Dealers (NASD) created Nasdaq in 1971 to enable investors to
trade securities on a rapid, computerized, and transparent system. Today “Nasdaq” also refers to
the Nasdaq Composite, an index of more than 3,000 listed technology companies including Apple,
Google, Microsoft, Oracle, Amazon, Intel, and Amgen.
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London Stock Exchange (LSE)
The London Stock Exchange (LSE) is the primary U.K. stock exchange and largest in Europe. The
LSE developed after several regional exchanges merged in 1973. LSE was first called the Stock
Exchange of Great Britain and Ireland

Other major international stock exchanges in Asia include the Tokyo Stock Exchange (TSE) and
the Shanghai Stock Exchange.

The National Stock Exchange of India Limited (NSE)

The National Stock Exchange of India Limited (NSE) is India's largest financial market.
Incorporated in 1992, the NSE has developed into a sophisticated, electronic market, which ranked
fourth in the world by equity trading volume. Trading commenced in 1994 with the launch of the
wholesale debt market and a cash market segment shortly thereafter.

the National Stock Exchange of India Limited (NSE) conducts transactions in the wholesale debt,
equity, and derivative markets. One of the more popular offerings is the NIFTY 50 Index, which
tracks the largest assets in the Indian equity market. US investors can access the index
with exchange-traded funds (ETF).

The National Stock Exchange of India Limited was the first exchange in India to provide modern,
fully automated electronic trading. It was set up by a group of Indian financial institutions with the
goal of bringing greater transparency to the Indian capital market.

As of June 2020, the National Stock Exchange had accumulated $2.27 trillion in total market
capitalization, making it one of the world's largest stock exchange. The flagship index, the NIFTY
50, represents the majority of total market capitalization listed on the exchange.

The total traded value of stocks listed on the index makes up almost half of the traded value of all
stocks on the NSE for the last six months. The index covers 12 sectors of the Indian economy
across 50 stocks. Besides the NIFTY 50 Index, the National Stock Exchange maintains market
indices that track various market capitalizations, volatility, specific sectors, and factor strategies.

The National Stock Exchange is a premier marketplace for companies preparing to list on a major
exchange. The sheer volume of trading activity and application of automated systems
promotes greater transparency in trade matching and the settlement process.

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This in itself can boost visibility in the market and lift investor confidence. Using cutting-edge
technology also allows orders to be filled more efficiently, resulting in greater liquidity and
accurate prices.

The Bombay Stock Exchange (BSE)

The Bombay Stock Exchange (BSE) is the first and largest securities market in India and was
established in 1875 as the Native Share and Stock Brokers' Association. Based in Mumbai, India,
the BSE lists close to 6,000 companies and is one of the largest exchanges in the world, along with
the New York Stock Exchange (NYSE), Nasdaq, London Stock Exchange Group, Japan Exchange
Group, and Shanghai Stock Exchange.

The BSE has helped develop India's capital markets, including the retail debt market, and has
helped grow the Indian corporate sector. The BSE is Asia's first stock exchange and also includes
an equities trading platform for small-and-medium enterprises (SME). BSE has diversified into
providing other capital market services including clearing, settlement, and risk management.

The BSE's overall performance is measured by the Sensex, a benchmark index of 30 of the BSE's
largest and most actively traded stocks covering 12 sectors. Debuting in 1986, the Sensex is India's
oldest stock index. Also called the "BSE 30," the index broadly represents the composition of
India's entire market.

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Regulation Authority

Securities and Exchange Board of India (Sebi)

SEBI is a statutory body and a market regulator, which controls the securities market in India. The
basic functions of Sebi is to protect the interests of investors in securities and to promote and
regulate the securities market. Sebi is run by its board of members. The board consists of a
Chairman and several other whole time and part time members. The chairman is nominated by the
union government. The others include two members from the finance ministry, one member from
Reserve Bank of India and five other members are also nominated by the Centre. The headquarters
of Sebi is situated in Mumbai and the regional offices are located in Ahmedabad, Kolkata, Chennai
and Delhi.

Before Sebi came into existence, Controller of Capital Issues was the regulatory authority; it
derived authority from the Capital Issues (Control) Act, 1947. In 1988, Sebi was constituted as the
regulator of capital markets in India. Initially, Sebi was a non-statutory body without any statutory
power. Following the passage of the Sebi Act by Parliament in 1992, it was given autonomous and
statutory powers.

Sebi controls activities of stock exchanges, safeguards the rights of shareholders and also
guarantees the security of their investment. It also aims to check fraudulence by harmonising its
statutory regulations and self-regulating business. The regulator also enables a competitive
professional market for intermediaries.

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Apart from the above functions, Sebi provides a marketplace in which the issuers can increase
finance properly. It also ensures safety and supply of precise and accurate information from the
investors. Sebi analyses the trading of stocks and safes the security market from the malpractices. It
controls the stockbrokers and sub- stockbrokers. It provides education regarding the market to the
investors to enhance their knowledge.

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Introduction to Ratio Analysis:
Corporate finance ratios are quantitative measures that are used to assess businesses. These ratios
are used by financial analysts, equity research analysts, investors, and asset managers to evaluate
the overall financial health of businesses, with the end goal of making better investment decisions.
Corporate finance ratios are also heavily used by financial managers and C-suite officers to get a
better understanding of how their businesses are performing.

Uses Ratio Analysis:-

Ratio analysis is a great way to compare two companies that are different in size operations and
management style. It also is a great way to quantify how efficient a company’s operations are and
how profitable the business is set up to be. Solvency ratios, for example, can be used to analyse how
well a company will be able to meet their financial obligations.

Types of Ratios:-
Corporate finance ratios can be broken down into four categories that measure different types of
financial metrics for a business: liquidity ratios, operational risk ratios, profitability ratios, and
efficiency ratios.

Fundamental Analysis:
Fundamental analysis (FA) measures a security's intrinsic value by examining related economic and
financial factors. Intrinsic value is the value of an investment based on the issuing company's
financial situation and current market and economic conditions.

Fundamental analysts study anything that can affect the security's value, from macroeconomic
factors such as the state of the economy and industry conditions to microeconomic factors like the
effectiveness of the company's management. The end goal is to determine a number that an investor
can compare with a security's current price to see whether the security is undervalued or overvalued
by other investors.

Understanding Fundamental Analysis

Fundamental analysis is usually done from a macro to micro perspective to identify securities that
are not correctly priced by the market.

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Analysts typically study, in order:
 The overall state of the economy
 The strength of the specific industry
 The financial performance of the company issuing the stock
 This ensures they arrive at a fair market value for the stock.

Technical Analysis
Technical analysis is a trading discipline employed to evaluate investments and identify trading
opportunities by analysing statistical trends gathered from trading activity, such as price movement
and volume.
Unlike fundamental analysis, which attempts to evaluate a security's value based on business results
such as sales and earnings, technical analysis focuses on the study of price and volume.

Understanding Technical Analysis

Technical analysis tools are used to scrutinize the ways supply and demand for a security will affect
changes in price, volume, and implied volatility. It operates from the assumption that past trading
activity and price changes of a security can be valuable indicators of the security's future price
movements when paired with appropriate investing or trading rules.

It is often used to generate short-term trading signals from various charting tools, but can also help
improve the evaluation of a security's strength or weakness relative to the broader market or one of
its sectors. This information helps analysts improve their overall valuation estimate.Technical
analysis can be applied to any security with historical trading data. This includes
stocks, futures, commodities, fixed-income, currencies, and other securities.

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1.3 Scope of study

The study helps the to understand various aspects of the portfolio management and services and the
various terminologies related to the market.

The study is based on the Financial Statements of HDFC Bank and ICICI Bank. It focuses on the
Ratio Analysis .The project is based on the last 5 years of financial statement i.e. balance sheet
and profit &loss account starting from 2017-18 to 2021-22.

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1.4 Limitations of the study

The study of portfolio management is vast topic and their various terms and conditions that need to
be studied and analysed to get a profound conclusion.

Investing can be largely affected due to the unawareness of the market, half knowledge about the
company or the situation of the company, psychological factors of the people like taking decisions
based on the emotions.

For the comoparison between the two banks :

The Data i.e. financial statement collected for the study are taken from official website of
the respective companies, the data is limited for the 5 years period only,

Some ratios have their own advantage and limitation will differ from companies to companies.

The Accuracy of the Analysis depends on the accuracy of the financial statements provided by the
companies.

Sometimes the ratio may not meet the standard ratio because of the sectorial difference of the
company.

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 CHAPTER 2

Review of Literature

1. Risk disclosure in IPO advertisement and the quality of the firm

Authors :Supriya Katti ,Edward R.Lawrence , MehulRaithatha.

320, Department of IME Building Indian Institute of Technology, Kanpur, India, RB 239A,
Department of Finance College of Business Administration Florida International University,
Miami, FL, 33199, USA,Finance and Accounting Area Indian Institute of Management, Indore,
Indi

 There is a significantly higher subscription from institutional investors for the risk-
disclosing firms.
 Difference in subscription from retail investors for the firms that disclose risk and those
that do not is insignificant.
 The firms that disclose risk in their ads have superior performance in the post IPO period.

2. Investor sentiment, style investing, and momentum

Authors :SamarAshour ,Grace QingHao ,AdamHarper

Department of Accounting and Finance, University of Alabama at Birmingham, Birmingham, AL,

35233, USA, Department of Finance and Real Estate, University of Texas at Arlington, Arlington,
TX, 76019, USA,Department of Economics, Finance, and Real Estate, University of South
Alabama, Mobile, AL, 36688, USA

 Investor sentiment is an important condition for style investing in affecting asset

price predictability.
 Style returns have predictive power for future stock returns during high sentiment
periods, but not during low sentiment periods.
 The correlation between past style returns and future stock returns can explain the
variation in momentum profits during high sentiment periods, but not during low sentiment
periods.
 Sentiment has an interaction effect with style returns, but not market returns.
 While positive style returns can predict future stock returns under the high sentiment,
negative style returns cannot.

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 The effect of investor sentiment on style investing is independent of prior market returns.

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3. Should Equity Factors Be Betting on Industries?

Authors : Krishna Vyas and Michael van Baren

The Journal of Portfolio Management November 2021, 48 (1) 73-92; DOI:

https://doi.org/10.3905/jpm.2021.1.297

 Asset managers are increasingly using non-traditional equity factors to select stocks. Many
of these factors have biases toward and away from certain industries.

 Some equity factors are rewarded for industry exposure; for others, this is an
unrewarded risk. We assess industry allocation efficacy for 21 equity factors.

 Industry allocation efficacy differs significantly across equity factors, even among
factors associated with the same investment style.

4. A study on portfolio evaluation and investment decisions with reference to

banking industry in India
The Stock exchange provides not only free transferability of shares but also makes incessant
evaluation of securities traded in the market. The present study is deliberate to examine the Risk &
Return Analysis of Selected Stocks in India.

Risk may be defined as the chance of variations in actual return. Return is defined as the gain in the
value of investment. The return on an investment portfolio helps an investor to evaluate the
financial performance of the investment.

Banking sector is treated as to be in the back bone of the Indian Economy. The task of
banking industry is particularly vital as one of the leading and mostly essential service sector.

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 CHAPTER 3

Research Methodology
Method of Study

The various articles and journals were studied for information of capital markets, types of
indexes in India and the Financial statements of the banks.

Data collection

The required data for the study are basically SECONDARY in nature and the data are collected
from the AUDITED Reports of the company. Secondary data is collected from FINANCIAL
STATEMENTS of the companies..

Secondary data collection method:

Secondary data collection method was used by referring to company records, research papers,
files, and journals, broachers various websites, books, magazines, and daily newspapers for
collecting information regarding project under study.

Methods Of Data Analysis:

The data collected were edited, classified and tabulated for analysis. The analytical tools used in the
study.

Analytical tools applied:

 Ratio analysis of HDFC Bank and ICICI Bank.

 Standalone balance sheet of HDFC Bank and ICICI Bank .
 Standalone profit and loss account of HDFC Bank and ICICI Bank.

Analysis & Interpretation:

Collected data is analysed and interpreted with the help of accounting and statistical tools and
techniques which are as follows-

 Ratio analysis of HDFC Bank and ICICI Bank.

 Standalone balance sheet of HDFC Bank and ICICI Bank .
 Standalone profit and loss account of HDFC Bank and ICICI Bank.

Sample Size 2 (i.e., HDFC Bank and ICICI Bank)

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Time Period Of The Study:

The research study is based on the 5 years of financial data starting from 2018 to 2022 of the
company data.

Sources Of Data:

The data used for the ratio are taken from the financial statement i.e. balance sheet and profit
and loss account of the company.

Hypothesis:

A hypothesis states predictions about what your research will find. It is a tentative answer to
your research question that has not yet been tested. For some research projects, you might have to
write several hypotheses that address different aspects of your research question.

For this project, hypothesis has been made based on the values and the current share price of both
the companies’ i.e HDFC Bank and ICICI Bank belong to the same industry.

H0- There is no difference in the performance of both the

companies. H1- There is difference in the performance of both the

companies.

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 CHAPTER 4

4.1 Asset Allocation

Asset allocation involves dividing your investments among different assets, such as stocks, bonds,
and cash. The asset allocation decision is a personal one. The allocation that works best for you
changes at different times in your life, depending on how long you have to invest and your ability to
tolerate risk.

Important factors to consider are:

 Time Horizon:Time horizon is the number of months, years, or decades one needs to invest
to achieve financial goal. Investors with a longer time horizon may feel comfortable taking
on riskier or more volatile investments. Those with a shorter time horizon may prefer to
take on less risk.

 Risk Tolerance :

Risk tolerance is ability and willingness to lose some or all of investors original investment in
exchange for potentially greater returns.

Risk is defined in financial terms as the chance that an outcome or investment's actual gains will
differ from an expected outcome or return. Risk includes the possibility of losing some or all of an
original investment.

To manage investing risks by understanding the basics of risk and how it is measured. Learning the
risks that can apply to different scenarios and some of the ways to manage them holistically will
help all types of investors and business managers to avoid unnecessary and costly losses.

Each investor has a unique risk profile that determines their willingness and ability to withstand
risk. In general, as investment risks rise, investors expect higher returns to compensate for taking
those risks.

The greater the amount of risk an investor is willing to take, the greater the potential return. Risks
can come in various ways and investors need to be compensated for taking on additional risk.

Individuals, financial advisors, and companies can all develop risk management strategies to help
manage risks associated with their investments and business activities. Academically, there are
26
several theories, metrics, and strategies that have been identified to measure, analyze, and manage
risks. Some of these include: standard deviation, beta, Value at Risk (VaR), and the Capital Asset
Pricing Model (CAPM). Measuring and quantifying risk often allows investors, traders, and
business managers to hedge some risks away by using various strategies including diversification
and derivative positions.

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4.2 Risk vs. Reward
The risk-return tradeoff is the balance between the desire for the lowest possible risk and the
highest possible returns. Low levels of risk are associated with low potential returns and high
levels of risk are associated with high potential returns. Each investor must decide how much risk
they’re willing and able to accept for a desired return. This will be based on factors such as age,
income, investment goals, liquidity needs, time horizon, and personality.

The following chart shows a visual representation of the risk/return tradeoff for investing, where a
higher standard deviation means a higher level or risk—as well as a higher potential return.

Risk and Diversification

The most basic and effective strategy for minimizing risk is diversification. Diversification is based
heavily on the concepts of correlation and risk. A well-diversified portfolio will consist of different
types of securities from diverse industries that have varying degrees of risk and correlation with
each other’s returns.

The diversification can’t guarantee against a loss, it is the most important component to helping an
investor reach long-range financial goals, while minimizing risk.

28
There are several ways to plan for and ensure adequate diversification including:

1. Spreading portfolio among many different investment vehicles: including cash, stocks,
bonds, mutual funds, ETFs and other funds. Assets whose returns haven’t historically
moved in the same direction and to the same degree. if part of portfolio is declining, the
rest may still be growing.

2. Stay diversified within each type of investment. Include securities that vary
by sector, industry, region, and market capitalization. It’s also a good to mix styles too, such
as growth, income, and value. The same goes for bonds: consider varying maturities and
credit qualities.

Include securities that vary in risk. You're not restricted to picking only blue-chip stocks. In fact,
the opposite is true. Picking different investments with different rates of return will ensure that
large gains offset losses in other areas. Diversification is a strategy that can be neatly summed up as
“Don’t put all your eggs in one basket.”

Rebalancing

Rebalancing is what investors do to bring their portfolio back to its original asset allocation mix.
Rebalancing is needed because over time, some investments will grow faster than others. This
may push your holdings out of alignment with your investment goals. By rebalancing, you will
ensure that your portfolio does not overweight a particular asset category, and you’ll return your
portfolio to a comfortable level of risk.

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4.3 Market Behavior

Bull Market vs. Bear Market

A bull market is a market that is on the rise and where the conditions of the economy are generally
favorable. A bear market exists in an economy that is receding and where most stocks are
declining in value. Because the financial markets are greatly influenced by investors' attitudes,
these terms also denote how investors feel about the market and the ensuing economic trends.

A bull market is typified by a sustained increase in prices. In the case of equity markets, a bull
market denotes a rise in the prices of companies' shares. In such times, investors often have faith
that the uptrend will continue over the long term. In this scenario, the country's economy is
typically strong and employment levels are high.

By contrast, a bear market is one that is in decline. A market is usually not considered a true "bear"
market unless it has fallen 20% or more from recent highs. In a bear market, share prices are
continuously dropping. This results in a downward trend that investors believe will continue; this
belief, in turn, perpetuates the downward spiral. During a bear market, the economy slows down
and unemployment rises as companies begin laying off workers.

Characteristics of Bull and Bear Markets

Although a bull market or a bear market condition is marked by the direction of stock prices, there
are some accompanying characteristics that investors should be aware of.

Supply and Demand for Securities

In a bull market, there is strong demand and weak supply for securities. In other words, many
investors wish to buy securities but few are willing to sell them. As a result, share prices will rise
as investors compete to obtain available equity.

In a bear market, the opposite is true: more people are looking to sell than buy. The demand is
significantly lower than supply and, as a result, share prices drop.

Investor Psychology
Because the market's behavior is impacted and determined by how individuals perceive and react
to its behavior, investor psychology and sentiment affect whether the market will rise or fall. Stock
market performance and investor psychology are mutually dependent. In a bull market,
investors willingly participate in the hope of obtaining a profit.
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During a bear market, market sentiment is negative; investors begin to move their money out of
equities and into fixed-income securities as they wait for a positive move in the stock market. In
sum, the decline in stock market prices shakes investor confidence. This causes investors to keep
their money out of the market, which, in turn, causes a general price decline as outflow increases.

Change in Economic Activity

Because the businesses whose stocks are trading on the exchanges are participants in the greater
economy, the stock market and the economy are strongly linked.

A bear market is associated with a weak economy. Most businesses are unable to record huge
profits because consumers are not spending nearly enough. This decline in profits directly affects
the way the market values stocks.

In a bull market, the reverse occurs. People have more money to spend and are willing to spend it.
This drives and strengthens the economy.

Gauging Market Changes

The key determinant of whether the market is bull or bear is not just the market's knee-jerk
reaction to a particular event, but how it's performing over the long term. Small movements only
represent a short-term trend or a market correction. Whether or not there is going to be a bull
market or a bear market can only be determined over a longer time period.

However, not all long movements in the market can be characterized as bull or bear. Sometimes a
market may go through a period of stagnation as it tries to find direction. In this case, a series of
upward and downward movements would actually cancel-out gains and losses resulting in a flat
market trend.

What to Do in Each Market?

In a bull market, the ideal thing for an investor to do is to take advantage of rising prices by buying
stocks early in the trend (if possible) and then selling them when they have reached their peak.

During the bull market, any losses should be minor and temporary; an investor can typically
actively and confidently invest in more equity with a higher probability of making a return.

In a bear market, however, the chance of losses is greater because prices are continually losing
value and the end is often not in sight. Even if you do decide to invest with the hope of an upturn,
31
you are likely to take a loss before any turnaround occurs. Thus, most of the profitability can be
found in short selling or safer investments, such as fixed-income securities.

An investor may also turn to defensive stocks, whose performance is only minimally impacted by
changing trends in the market. Therefore, defensive stocks are stable in both economic gloom and
boom cycles. These are industries such as utilities, which are often owned by the government.
They are necessities that people buy regardless of economic conditions.

In addition, investors may benefit from taking a short position in a bear market and profiting from
falling prices. There are several ways to achieve this including short selling, buying inverse
exchange-traded funds (ETFs), or buying put options.

The Bottom Line

Both bear and bull markets will have a large influence on your investments, so it's a good idea
to take some time to determine what the market is doing when making an investment decision.
Remember that over the long term, the stock market has always posted a positive return.

32
4.4 Overview Of Hdfc Bank And Icici Bank

Banks are known as the backbone of an economy because they have a direct bearing on financial
and economic development. They also provide people a platform to park their surplus cash as well
as borrow when they fall short.According to the RBI, the cumulative credit of Indian banks stood at
Rs
122.3 tn at the end of March 2022.However, India is still an underpenetrated market in terms of
banking services, primarily due to the low level of financial literacy in the country. As a result, the
total credit outstanding is just 15% of the total value of all goods and services produced in the
country.

Private sector banks and public sector banks (PSBs) together make up the Indian banking industry.
For the last two decades, private banks have outperformed PSBs, largely due to better
management.Banks run on a very simple business model. The basic premise of a bank comprises
two major operations - accepting deposits and lending to borrowers.

HDFC BANK

HDFC Bank is one of India’s leading private banks and was among the first to receive approval
from the Reserve Bank of India (RBI) to set up a private sector bank in 1994.
Today, HDFC Bank has a banking network of 6,499 branches and 18,868 ATM's in 3,226
cities/towns.

HDFC Bank provides a number of products and services including wholesale banking, retail
banking, treasury, auto loans, two-wheeler loans, personal loans, loans against property, consumer
durable loan, lifestyle loan and credit cards.

HDFC Bank merged with Times Bank in February 2000. This was the first merger of two private
banks in the New Generation private sector banks category. Times Bank was established by
Bennett, Coleman and Co. Ltd., commonly known as The Times Group, India's largest media
33
conglomerate.[19]

34
In 2008, Centurion Bank of Punjab (CBoP) was acquired by HDFC Bank. HDFC Bank's board
approved the acquisition of CBoP for ₹95.1 billion in one of the largest mergers in the financial
sector in India. In 2021, the bank acquired a 9.99% stake in FERBINE, an entity promoted by Tata
Group, to operate a Pan-India umbrella entity for retail payment systems, similar to National
Payments Corporation of India. In September 2021, the bank partnered with Paytm to launch a
range of credit cards powered by the global card network Visa. On April 4, 2022, HDFC Bank
announced merger with HDFC Limited.

The equity shares of HDFC Bank are listed on the Bombay Stock Exchange and the National Stock
Exchange of India. Its American depositary receipts are listed on the NYSE issued through JP
Morgan Chase Bank.

ICICI Bank

ICICI Bank Limited is an Indian Private bank. It is headquartered at Mumbai. It offers a wide range
of banking products and financial services for corporate and retail customers through a variety of
delivery channels and specialized subsidiaries in the areas of investment banking, life, non-life
insurance, venture capital and asset management.

This development finance institution has a network of 5,275 branches and 15,589 ATMs
across India and has a presence in 17 countries.

The Industrial Credit and Investment Corporation of India (ICICI) was established on 5 January
1955 and Sir Arcot Ramasamy Mudaliar was elected as the first Chairman of ICICI Ltd. It was
structured as a joint-venture of the World Bank, India's public-sector banks and public-sector
insurance companies to provide project financing to Indian industry. ICICI Bank was established by
ICICI, as a wholly owned subsidiary in 1994 in Vadodara.

35
The bank was founded as the Industrial Credit and Investment Corporation of India Bank, before it
changed its name to ICICI Bank. The parent company was later merged with the bank.ICICI Bank
offers products and services such as online money transfers, tracking services, current accounts,
savings accounts, time deposits, recurring deposits, mortgages, loans, automated lockers, credit
cards, prepaid cards, debit cards and digital wallets called ICICI pocket.

ICICI bank launched 'ICICIStack' which provides online services such as payment options, digital
accounts, instant car loans, insurance, investments, loans etc.[

36
4.5 Data Analysis & Interpretation Of Data

Balance Sheet Of Hdfc Bank

BALANCE SHEET Mar-22 Mar-21 Mar-20 Mar-19 Mar-18
OF HDFC
BANK (in Rs. Cr.)
EQUITIES AND
LIABILITIES
Equity Share Capital 554.55 551.28 548.33 544.66 519.02
TOTAL SHARE 554.55 551.28 548.33 544.66 519.02
CAPITAL
Revaluation Reserve 0 0 0 0 0
Reserves and Surplus 2,39,538.38 2,03,169.55 1,70,437.70 1,48,661.69 1,05,775.98
Total Reserves and 2,39,538.38 2,03,169.55 1,70,437.70 1,48,661.69 1,05,775.98
Surplus
TOTAL 2,40,092.94 2,03,720.83 1,70,986.03 1,49,206.35 1,06,295.00
SHAREHOLDERS
FUNDS
Deposits 15,59,217.44 13,35,060.22 11,47,502.29 9,23,140.93 7,88,770.64
Borrowings 1,84,817.21 1,35,487.32 1,44,628.54 1,17,085.12 1,23,104.97
Other Liabilities and 84,407.46 72,602.15 67,394.40 55,108.29 45,763.72
Provisions
TOTAL CAPITAL 20,68,535.05 17,46,870.52 15,30,511.26 12,44,540.69 10,63,934.32
AND LIABILITIES
ASSETS
Cash and Balances 1,29,995.64 97,340.74 72,205.12 46,763.62 1,04,670.47
with Reserve Bank
of India
Balances with Banks 22,331.29 22,129.66 14,413.60 34,584.02 18,244.61
Money at Call and
Short Notice
Investments 4,55,535.69 4,43,728.29 3,91,826.66 2,90,587.88 2,42,200.24
Advances 13,68,820.93 11,32,836.63 9,93,702.88 8,19,401.22 6,58,333.09
Fixed Assets 6,083.67 4,909.32 4,431.92 4,030.00 3,607.20

37
Other Assets 85,767.83 45,925.89 53,931.09 49,173.95 36,878.70
TOTAL ASSETS 20,68,535.05 17,46,870.52 15,30,511.26 12,44,540.69 10,63,934.32
OTHER
ADDITIONAL
INFORMATION
Number of Branches 6,342.00 5,608.00 5,416.00 5,103.00 4,787.00
Number of 1,41,579.00 1,20,093.00 1,16,971.00 98,061.00 88,253.00
Employees
CONTINGENT
LIABILITIES,
COMMITMENTS
Bills for Collection 56,968.05 44,748.14 51,584.90 49,952.80 42,753.83
Contingent 13,95,442.30 9,71,097.60 11,28,953.40 10,24,715.12 8,75,488.23
Liabilities

38
 Profit and Loss Account of HDFC Bank
PROFIT & LOSS Mar-22 Mar-21 Mar-20 Mar-19 Mar-18
ACCOUNT OF
HDFC BANK (in
Rs. Cr.)
INCOME
Interest / Discount 98,512.02 94,834.54 91,787.88 77,544.19 62,661.79
on Advances / Bills
Income from 26,046.13 23,214.27 20,633.32 19,997.46 16,222.37
Investments
Interest on Balance 2,552.37 2,341.25 1,828.93 635.7 523.88
with RBI and
Other Inter-Bank
funds
Others 642.59 468.17 562.52 794.7 833.31
TOTAL 1,27,753.12 1,20,858.23 1,14,812.65 98,972.05 80,241.36
INTEREST
EARNED
Other Income 29,509.90 25,204.89 23,260.82 17,625.88 15,220.30
TOTAL INCOME 1,57,263.02 1,46,063.12 1,38,073.47 1,16,597.94 95,461.66
EXPENDITURE
Interest Expended 55,743.53 55,978.66 58,626.40 50,728.83 40,146.49
Payments to and 12,031.69 10,364.79 9,525.67 7,761.76 6,805.74
Provisions for
Employees
Depreciation 1,599.80 1,302.41 1,195.85 1,140.10 906.34
Operating Expenses 23,810.70 21,055.42 19,976.01 17,217.51 14,978.30
(excludes Employee
Cost &
Depreciation)
TOTAL 37,442.19 32,722.63 30,697.53 26,119.37 22,690.38
OPERATING
EXPENSES
Provision Towards 13,346.03 11,644.77 9,833.15 12,129.61 10,107.25
Income Tax
39
Provision Towards -1,291.91 -1,102.31 516.69 -1,008.12 -896.68
Deferred Tax
Other Provisions and 15,061.83 15,702.85 12,142.39 7,550.08 5,927.49
Contingencies
TOTAL 27,115.95 26,245.31 22,492.23 18,671.57 15,138.06
PROVISIONS
AND
CONTINGENCIES
TOTAL 1,20,301.66 1,14,946.59 1,11,816.15 95,519.77 77,974.93
EXPENDITURE
NET PROFIT / 36,961.36 31,116.53 26,257.32 21,078.17 17,486.73
LOSS FOR THE
YEAR

40
 Balance sheet Of ICICI Bank
BALANCE Mar-22 Mar-21 Mar-20 Mar-19 Mar-18
SHEET OF ICICI
BANK (in Rs. Cr.)
EQUITIES AND
LIABILITIES
Equity Share Capital 1,389.97 1,383.41 1,294.76 1,289.46 1,285.81
TOTAL SHARE 1,389.97 1,383.41 1,294.76 1,289.46 1,285.81
CAPITAL
Revaluation Reserve 3,195.66 3,093.59 3,114.87 3,044.51 3,003.19
Reserves and 1,65,659.93 1,43,029.08 1,12,091.29 1,04,029.40 1,00,864.37
Surplus
Total Reserves and 1,68,855.59 1,46,122.67 1,15,206.16 1,07,073.91 1,03,867.56
Surplus
TOTAL 1,70,511.97 1,47,509.19 1,16,504.41 1,08,368.04 1,05,158.94
SHAREHOLDERS
FUNDS
Deposits 10,64,571.61 9,32,522.16 7,70,968.99 6,52,919.67 5,60,975.21
Borrowings 1,07,231.36 91,630.96 1,62,896.76 1,65,319.97 1,82,858.62
Other Liabilities and 68,982.79 58,770.37 47,994.99 37,851.46 30,196.40
Provisions
TOTAL CAPITAL 14,11,297.74 12,30,432.68 10,98,365.15 9,64,459.15 8,79,189.16
AND
LIABILITIES
ASSETS
Cash and Balances 60,120.82 46,031.19 35,283.96 37,858.01 33,102.38
with Reserve Bank
of India
Balances with 1,07,701.54 87,097.06 83,871.78 42,438.27 51,067.00
Banks Money at
Call and Short
Notice
Investments 3,10,241.00 2,81,286.54 2,49,531.48 2,07,732.68 2,02,994.18
Advances 8,59,020.44 7,33,729.09 6,45,289.97 5,86,646.58 5,12,395.29

41
Fixed Assets 9,373.82 8,877.58 8,410.29 7,931.43 7,903.51
Other Assets 64,840.12 73,411.21 75,977.67 81,852.17 71,726.80
TOTAL ASSETS 14,11,297.74 12,30,432.68 10,98,365.15 9,64,459.15 8,79,189.16
OTHER
ADDITIONAL
INFORMATION
Number of Branches 5,418.00 5,266.00 5,324.00 4,874.00 4,867.00
Number of 1,05,844.00 98,750.00 99,319.00 86,763.00 82,724.00
Employees
CONTINGENT
LIABILITIES,
COMMITMENTS
Bills for Collection 75,150.83 54,643.42 48,216.24 49,391.99 28,588.36
Contingent 38,67,675.87 26,48,640.67 25,23,825.80 19,22,038.29 12,89,244.00
Liabilities

42
 Profit and Loss Account of ICICI Bank
PROFIT & LOSS Mar-22 Mar-21 Mar-20 Mar-19 Mar-18
ACCOUNT OF
ICICI BANK (in
Rs. Cr.)
INCOME
Interest / Discount 63,833.56 57,288.81 57,551.11 47,942.62 40,866.21
on Advances / Bills

Income from 16,409.27 16,539.78 14,673.21 12,796.88 11,568.17

Investments
Interest on Balance 1,560.83 1,631.91 682.15 736.09 663.38
with RBI and Other
Inter-Bank funds

Others 4,570.89 3,657.77 1,891.85 1,925.60 1,868.14

TOTAL 86,374.55 79,118.27 74,798.32 63,401.19 54,965.89
INTEREST
EARNED
Other Income 18,517.53 18,968.53 16,448.62 14,512.16 17,419.63
TOTAL INCOME 1,04,892.08 98,086.80 91,246.94 77,913.36 72,385.52

EXPENDITURE
Interest Expended 38,908.45 40,128.84 41,531.25 36,386.40 31,940.05
Payments to and 9,672.75 8,091.78 8,271.24 6,808.24 5,913.95
Provisions for
Employees
Depreciation 1,152.31 1,058.40 947.12 776.91 780.74
Operating Expenses 15,889.47 12,397.26 12,394.63 10,503.91 9,009.25
(excludes Employee
Cost &
Depreciation)

TOTAL 26,733.32 21,560.83 21,614.41 18,089.06 15,703.94

OPERATING
EXPENSES
Provision Towards 6,297.68 4,665.66 3,746.03 3,360.60 2,661.85
Income Tax

Provision Towards 971.72 -675.62 2,371.20 -2,947.14 -2,004.72

Deferred Tax

Other Provisions and 8,641.42 16,214.40 14,053.23 19,661.14 17,306.98

Contingencies

43
TOTAL 15,910.82 20,204.44 20,170.46 20,074.60 17,964.11
PROVISIONS
AND
CONTINGENCIES

TOTAL 81,552.58 81,894.11 83,316.13 74,550.05 65,608.10

EXPENDITURE
NET PROFIT / 23,339.49 16,192.68 7,930.81 3,363.30 6,777.42
LOSS FOR THE
YEAR
NET PROFIT / 23,339.49 16,192.68 7,930.81 3,363.30 6,777.42
LOSS AFTER EI
& PRIOR YEAR
ITEMS

44
RATIO ANALYSIS OF HDFC Bank and ICICI Bank

1. Net Profit Margin

Net profit margin measures how much net income is generated as a percentage of revenues
received.Net profit margin helps investors assess if a company's management is generating enough
profit from its sales and whether operating costs and overhead costs are under control.

NET PROFIT MARGIN= NET INCOME/REVENUE * 100

Net Profit
Margin Mar-18 Mar-19 Mar-20 Mar-21 Mar-22
HDFC 21.79 21.29 22.86 25.74 28.93
ICICI 12.33 5.3 10.6 20.46 27.02

35 Net Proft Margin %

30

25

20 Jan-18 Jan-19HDFCICICI
Jan-20 Jan-21 Jan-22

15

10

Interpretation

HDFC is leading ICICI Bank over years in Net Profit Margin, In 2019, we can see that ICICI has
shown downfall, but since then it is giving better profits every year.

2. Operating Profit Margin % :

The operating margin measures how much profit a company makes on a dollar of sales after
paying for variable costs of production, such as wages and raw materials, but before paying
interest or tax. It is calculated by dividing a company’s operating income by its net sales. Higher

45
ratios are generally better, illustrating the company is efficient in its operations and is good at
turning sales into profits.

OPERATING MARGIN = OPERATING EARNINGS / REVENUE

Mar-18 Mar-19 Mar-20 Mar-21 Mar-22

HDFC 2.82 3.48 2.6 4.89 5.83
ICICI -19.36 -17.58 -11.38 -3.5 5.58

10 Operating profit margin %

5 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22
-5

0
-10

-15 HDFCICICI

-20

-25

Interpretation

The HDFC bank is efficient in its operations and is good at turning sales into profits and has been
stable growth whereas ICICI is growth is faster.

3. Earning Per Share (Eps)

This ratio is calculated to assess the availability of total profits per share.

EPS = (NPAT- PREF.DIVIDEND) /NO. OF EQUITY SHARE

EPS Mar-18 Mar-19 Mar-20 Mar-21 Mar-22

HDFC 67.76 78.65 48.01 56.58 66.8
ICICI 10.56 5.23 12.28 24.01 33.66

46
 EPS
90
80
70
60
50
40
30
20
10
0

Jan-18 Jan-19 Jan-20 Jan-21 Jan-22

HDFC ICICI

Interpretation:

EPS throws light on the overall profitability and helps in determining the market price of equity
shares. It reflects upon the capacity of the business concern to pay dividend to its equity
shareholders.

In this case, the EPS of HDFC is showing fluctuations over years whereas ICICI is growing, even
though HDFC is leading ICICI Bank.

4. Return On Equity

Return on equity (ROE) tells an investor how much profit a company generates on shareholders
capital. It is expressed in terms of percentage.

ROE=NET INCOME/SHAREHOLDERS’ FUND

Mar-18 Mar-19 Mar-20 Mar-21 Mar-22

HDFC 16.45 14.12 15.35 15.27 15.39
ICICI 6.63 3.19 6.99 11.21 13.94

47
 Chart Title
18
16
14
12
10
8
6
4
2
0

Jan-18 Jan-19 Jan-20 Jan-21 Jan-22

HDFC ICICI

Interpretation

We can see that HDFC is leading in Terms of ROE while ICICI is growing in 3 years.

5. Return on Assets

Return on assets (ROA) tells an investor how much profit a company generates on total assets the
company owns.
Important point to note is loans are assets for banks and ROA is calculated as a ratio of net income
to its total performing (generating interest income) assets. For banks, ROA of 1% is a benchmark
and anything beyond that is considered excellent.

Mar-18 Mar-19 Mar-20 Mar-21 Mar-22

HDFC 1.64 1.69 1.71 1.78 1.78
ICICI 0.77 0.34 0.72 1.31 1.65

ROA=NET INCOME/TOTAL ASSETS

48
 Return on Assets%
2
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0

Jan-18 Jan-19 Jan-20 Jan-21 Jan-22

HDFC ICICI

Interpretation

In terms of ROA, HDFC Bank is again leading, A higher ROA means a company is more efficient
and productive at managing its balance sheet to generate profits while a lower ROA indicates there
is room for improvement, which shows that ICICI is improving gradually.

6. Price to Book Value

Price to book value (P/BV) indicates the price an investor is willing to pay for each rupee of
a company's book value.On the other hand, price to earnings indicates how much an investor
is willing to pay for each rupee of a company's earnings.

Mar-18 Mar-19 Mar-20 Mar-21 Mar-22

HDFC 4.23 1.69 4.23 4.04 3.4
ICICI 2.44 0.34 2.44 2.78 3.03

49
 Price to Book Value
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0

Jan-18 Jan-19 Jan-20 Jan-21 Jan-22

HDFC ICICI

Interpretation

HDFC Bank trades at a higher P/BV than ICICI Bank primarily because the market is giving higher
value to HDFC Bank's consistent performance.In terms of P/E both the banks are trading in the
similar range with a slight gap in valuation.

7. Return On Capital Employed

Return on capital ratio is compared by dividing the net income or profit before interest and tax by
capital employed. It measures the success of a business in generating satisfactory profit on capital
invested. The ratio is expressed in percentage.

RETURN ON CAPITAL EMPLOYEED = (PBIT / CAPITAL EMPLOYED)*100

ROCE Mar-18 Mar-19 Mar-20 Mar-21 Mar-22

HDFC 3.2 3.34 3.33 3.42 3.22
ICICI 2.91 2.52 2.67 2.67 2.92

50
 ROCE
4

3.5

2.5

1.5

0.5
Jan-18 Jan-19 Jan-20 Jan-21 Jan-22
0
HDFC ICICI

Interpretation

Return on capital employed ratio measures the efficiency with which the investment made by
shareholders and creditors is used in the business. It is a overall profitability and a higher ratio is
better. In this case, HDFC bank has higher ratio than the ICICI bank which means the HDFC bank
has higher profit compare to ICICI bank. But now from last years we can see that the gap between
HDFC and IICI bank is same and has gone down this year i.e. 2022.

8. Deposits:
Deposits are the primary source of funds for a bank without which it cannot operate. This is because
the bank uses the money it receives from deposits to lend to borrowers.

2018 2019 2020 2021 2022

Deposit (in
Rs m )

HDFC Bank 78,83,751 92,25,027 1,14,62,071 1,33,37,209 1,55,80,030

ICICI Bank 58,57,961 68,13,169 80,07,845 95,99,400 1,09,13,658

Deposit
Growth (%)

51
 2018 2019 2020 2021 2022

HDFC Bank 17.0% 24.2% 16.4% 16.8%

ICICI Bank 16.3% 17.5% 19.9% 13.7%

There are different types of deposits that contribute to the overall deposit base of a bank. These
include deposits from current accounts and savings accounts (CASA), time deposits (certificate of
deposits), fixed deposits, etc.Deposit base of HDFC Bank and ICICI Bank and how it has grown
over the last five years. Here, HDFC Bank has a higher deposit base than ICICI Bank. Also, the
former has been growing its deposit base at a faster rate than the latter.

9. Advances:

Banks use their deposits to disburse loans or advances as they call it in banking parlance. The
growth of advances should keep up with the growth of a bank's deposits.The following table
compares the advances of HDFC Bank and ICICI Bank.

2018 2019 2020 2021 2022

Advances
(in Rs m )

HDFC Bank 70,00,338 86,92,227 1,04,36,709 1,18,52,835 1,42,09,423

ICICI Bank 56,68,542 64,69,617 70,62,461 79,18,014 92,03,081

Advances
Growth (%)

HDFC Bank 24.2% 20.1% 13.6% 19.9%

ICICI Bank 14.1% 9.2% 12.1% 16.2%

Even here, HDFC Bank's advances have grown faster than that of ICICI Bank. For the financial
year 2022, HDFC Bank's advances were 91.2% of its total deposits. ICICI Bank's total advances
stood at

52
84.3% of total deposits.Clearly, HDFC Bank is more efficient than ICICI Bank in terms of utilising
its deposit base.

HDFC Bank vs ICICI Bank Advances to Deposits (2018-2022)

Advances to deposits (%) 2018 2019 2020 2021 2022

HDFC Bank 88.8% 94.2% 91.1% 88.9% 91.2%

ICICI Bank 96.8% 95.0% 88.2% 82.5% 84.3%

10. Net Interest Margin

Net interest margin (NIM) is basically net interest income divided by the total amount of loan
disbursed by a bank. It is one of the measures of a bank's profitability. Therefore, the higher the
NIM the better it is for banks.

The following table shows the net interest margin of HDFC Bank and ICICI Bank.

Net interest margins (%) 2018 2019 2020 2021 2022

HDFC Bank 4.60% 4.40% 4.20% 4.30% 4.10%

ICICI Bank 3% 3.1% 3.5% 3.5% 5.90%

Despite having a higher interest income, HDFC Bank's net margin is lower in than ICICI Bank in
the last fiscal year. However, HDFC Bank's net interest income has been quite stable over the years
and averages at 4.3%. This is compared to ICICI Bank's average of 3.8%.

53
 CHAPTER 5

Findings

According to data from the National stock exchange (NSE), there are 1.2 crore active investors in
India, a country of 138 crore people, as of August 2021. Even though this number is rising and
better from the previous data, investing in stock markets still remains as a stigma for many. From
our generally conservative attitude to lack of proper knowledge about stock markets, reasons could
be many.

5 Reasons why most Indians do not invest in stocks

 Lack of proper financial literacy

One major factor that keeps Indians away from investing in stock markets is the lack of knowledge
about it. A lot of people have this assumption that stock market is something that is hard to crack.
That thought could be rooted from the basic fact that nobody has ever tried to make them
understand what the stock market is and how investing in it works.

Unlike in the past, a lot of stockbroker advertisements air on TV and social media these days and
that could be one reason why we are seeing a slight increase in penetration compared to the
previous years. Even then 98% of Indians are still steering clear of investing in stock markets.
Educating people about why should we invest in stock market is one way we can rectify this.

 Conservative attitude

Numbers don’t lie. In the middle of the Covid-19 scare last year, most Indians decided to park their
money in fixed deposits with more than 6 lakh crore new FD accounts opened in Q1 2020,
according to a report from The Times of India. This indicates the basic money attitude of Indians –
we like to save, not invest. They think - why should I invest in stock markets when banks give me
steady returns?

However, there is no reward without risk. There is risk associated with investing in stock markets,
but if you do it with proper research and understanding, there is a higher chance for you to reap
profits that will be far higher than a 5% interest your bank can give you per annum.

 Preferences towards physical assets like gold

India has the largest amount of privately held gold among all countries in the world. This could be
because gold gives you a physical receipt of the money you spent, unlike a stock market. Buying
gold is also closely related to our culture and we have even special days related to buying gold. It’s
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beyond doubt that Gold is where most of Indian’s investment goes. Since gold is closely related to
the varied cultures of India, we have developed a trust in it. But if you, again, look at numbers, we
can see that the investment is not that rewarding nowadays. Gold prices have dipped about 3% in
the last year, according to the price on November 17th, 2021. At the same time, Nifty has gained
about 40% during the same time period. In simple terms, if you have invested Rs.1 lakh in gold on
November 17th, 2020, you would have lost Rs.3000 by now. At the same time, if you had invested
in Nifty in the same time period, you would have made a profit of Rs. 40,000.

 Lack of trust

The lack of knowledge about the opportunities of stock markets directly leads to a lack of trust.
People will find it hard to trust something that they don’t fully understand. At the same time, people
will take into account the stories of scams and that could also scare them off.

 Lack of capital

This is another by-product of a lack of knowledge about the stock markets. Most people hear
success stories about the giants of the Indian stock market and think they need a huge amount of
money to start investing in stock markets. But this is absolutely wrong. You just start with an
amount as low as Rs. 500.

Reasons to invest in stock market

 Beat the Inflation

India’s see retail inflation of about 5% on average yearly. That means, your money has 5% less
purchasing power now compared to a year before. Stock markets allow you to beat this inflation
and grow your money. As said above, Nifty has grown more than 40% in the last year alone,
which is clearly indicative of that fact.

 It gives you an alternative source of Income

Whatever your full-time job is, investing in stock markets could be a really profitable side-
hustle. All it requires is proper understanding and research about stock markets.

 Investing is easy now

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Comparison Between HDFC and ICICI bank

A large part of India is still credit averse. A lot of people in India see loans and credit in a bad light.
As a result, India lags behind developed nations in terms of credit.India's total outstanding loans to
gross domestic product (GDP) is just 15% compared to 80-100% of its western counterparts.So
India has got a lot to cover, and there is a lot of headroom for growth for Indian banks.

If we compare the two banks on credit growth, then both banks are growing their loan book almost
at an equal rate across the interest cycle.However, if we compare them on the credit quality, HDFC
Bank is far ahead of ICICI Bank. HDFC Bank has reported consistently lower and stable NPAs
across the interest cycle whereas ICICI Bank's credit quality has fluctuated a lot and is relatively
unstable.On the net interest margin front, too, HDFC Bank scores better but ICICI Bank isn't far
behind.

In this 5 years there has been a drastic improvement in the ICICI bank's performance. It's reaching
closer to HDFC Bank in terms of financial performance and is one of the fastest growing companies
in India 2022.

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 CHAPTER 6

Recommendations

 Awareness among the people should be created about the investments in the stock
market, mutual funds etc , people should be encouraged to invest here.
 Portfolio should be diversified to minimise the risk and maximise the profit.
 Investors if are unable to invest on their own they use Portfolio management services.
 Before investing, proper market study or investor should have correct and adequate
amount of the knowledge how and where he/she is going to invest.
 In banking sector, we can see that HDFC Bank has been showing the stable growth
whereas ICICI bank is drastically growing, but the challenge that needs to overcome for the
banks is digital and financial literacy remains a big challenge. Banks have to tackle this
issue if they wish to leverage the untapped potential of the rural market

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 CHAPTER 7
Conclusion
The selection of the right investment policy for the individuals in terms of minimum risk and
maximum return is called as portfolio management.Portfolio management refers to managing an
individual’s investments in the form of bonds, shares, cash, mutual funds etc so that he earns the
maximum profits within the stipulated time frame.

Portfolio management presents the best investment plan to the individuals as per their income,
budget, age and ability to undertake risks.Portfolio management minimizes the risks involved in
investing and also increases the chance of making profits.

If one wants to invest in HDFC Bank or ICICI Bank we can say that HDFC bank has shown been
showing good performance over years and ICICI bank is Growing gradually. HDFC Bank and
ICICI Bank being fundamentally strong stocks and top players in the industry, and will remain to
grow as the overall industry grows.

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 CHAPTER 8

References

1. https://www.researchgate.net/publication/334883937_Title_A_STUDY_ON_PORTFOLIO_
EVALUATION_AND_INVESTMENT_DECISIONS_WITH_REFERENCE_TO_BANKI
NG_INDUSTRY_IN_INDIA
2. https://timesofindia.indiatimes.com/business/india-business/31-indians-to-invest-in-mutual-
funds-10-in-equities-in-2022-consumer-spending-outlook-report/articleshow/88680572.cms
3. https://ipocentral.in/best-pms-in-india-top-pms-services/#3-list-of-the-top-pms-in-india-
4. https://www.nseindia.com/
5. https://www.bseindia.com/
6. https://www.sebi.gov.in/about.html
7. https://www.sciencedirect.com/science/article
8. https://www.investor.gov/introduction-investing/investing-basics/investment-
products/mutual-funds-and-exchange-traded-
9. https://www.moneycontrol.com/india/stockpricequote/banks-private-sector/icicibank/ICI02
10. https://www.moneycontrol.com/india/stockpricequote/banks-private-
sector/hdfcbank/HDF01

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