PROJECT PROPOSAL

A STUDY TO ANALYZE THE FINANCIAL

PERFORMANCE OF AXIS AND KOTAK MAHINDRA
BANK

SUBMITTED TO THE IGNOU UNIVERSITY FOR THE AWARD OF THE

MASTER OF BUSINESS ADMINISTRATION

BY

SCHOOL OF MANAGEMENT STUDIES

INDIRA GANDHI NATIONAL OPEN UNIVERSITY
MAIDAN GARHI, NEW DELHI- 110068
 INTRODUCTION

The Financial Statements are mirror that reflects the financial position and strengths or weakness

of the concern. The Banking sector has been witnessed intense competition from domestic banks

and international banks. Every business needs to view the financial performance analysis.

They provide information on how the firm has performed in the past and what is its current

financial position. Financial analysis is the process of describing the financial strengths and

weakness of the firm from the available accounting data and financial statements. The analysis is

done by establishing relationship between the different items of financial statements.

The stress of financial analysis is on fundamental figures in the financial statements and the

substantial relationship that exists between them. The analysis of financial statements is a

process of assessing relationship between components of financial statements to get a better

understanding of the firm’s position and performance.

The first job of financial analyst is to select the information relevant to the decision under

consideration from the total information contained in the financial statement. The second job

involved in financial analysis is to arrange the information in a way to foreground significant

relationships. The final job is interpretation and drawing of inferences and conclusions. In brief,

financial analysis is the process of selection, relation, and evaluation.

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Following are the important tools that are commonly used for analyzing and interpreting

financial statements:

 Comparative financial statements

 Common size statements

 Trend analysis

 Ratio analysis

 Funds flow analysis

 Cash flow analysis

 Comparative financial statements

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 FINANCIAL PERFORMANCE OF BANKS

A sound financial system is essential for an unavoidable and vibrant economy. As the

performance of any economy to a large extent is dependent on the performance of the banking

sector while it being the paramount component of the financial service industry. The Indian

banking sector went through structural changes since independence. It is due to the financial

linkages with the rest of the economy and to meet the social and economic objectives of

development. Consequently, the sector was initially following strict controls on interest rates, as

well as stringent regulations relating to branch licensing, directed credit programs, and mergers.

However, the closed and strict regulated environment started showing adverse affect on the

sector, resulting in under-performance of the banks over the years. As a result, Indian banking

sector underwent a sea changes through its liberalization policy in early 1990s with

implementation of a series of reforms with an objective to make the banking sector more

productive and efficient by limiting the state intervention and enhancing the role of market

forces. Like most developing countries, the banking sector in India is characterized by the co-

existence of different ownership groups, public and private, and within private, domestic and

foreign.

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 NEED OF THE STUDY

The studies on effectiveness of operational and financial performance of selected banks are

conducted to measure the overall performance of bank. The financial analysis strengths the firms

to make their best use, and to be able to spot out financial weakness of the firm to state suitable

corrective actions.

STATEMENT OF THE PROBLEM

The statement of the problem is “A STUDY TO ANALYZE THE FINANCIAL

PERFORMANCE OF AXIS AND KOTAK MAHINDRA BANK”

OBJECTIVES OF THE STUDY

The following objectives are formulated for the present study: -

 To analyze the Financial Performance of AXIS and Mahindra Bank.

 To compare the Financial Performance of AXIS and Mahindra Bank.

 To offer suggestions for the improvement of efficiency in AXIS and Mahindra Bank.

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 RESEARCH METHODOLOGY

Research methodology is a way to systematically investigate the research problem. It gives

various steps in conducting the research in a systematic and a logical way. It is essential to define

the problem, state objectives and hypothesis clearly. The research design provides the details

regarding what, where, when, how much and by what means enquiry is initiated. Every piece of

research must be planned and designed carefully so that the researcher precedes a head without

getting confused at the subsequent steps of research. The researcher must have an objective

understanding of what is to be done, what data is needed, what data collecting tools are to be

employed and how the data is to be statistically analyzed and interpreted. There are a number of

approaches to the design of studies and research projects all of which may be equally valid.

Research is a systematic attempt to obtain answers to meaningful questions about phenomenon

or events through the application of scientific procedures. It an objective, impartial, empirical

and logical analysis and recording of controlled observation that may led to the development of

generalizations, principles or theories, resulting to some extent in prediction and control of

events that may be consequences or causes of specific phenomenon. Research is a systematic and

refined technique of thinking, employing specialized tools, instruments and procedures in order

to obtain a more adequate solution of a problem than would be possible under ordinary mean.

Thus, research always starts from question. There are three objectives of research factual,

practical and theoretical, which gives rise to three types of research: historical, experimental and

descriptive.

Research design has been defined by different social scientists in a number of ways. All these

definitions emphasize systematic methodology in collecting accurate information for

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interpretation. Selltize et al. (1962) expressed their views as, “Research designs are closely

linked to investigator’s objectives. They specify that research designs are either descriptive or

experimental in nature.” Research design tells us how to plan various phases and procedures

related to the formulation of research effort (Ackoff Russell, 1961). Miller (1989) has defined

research design, “as the planned sequence of the entire process involved in conducting a research

study.”

Kothari (1990) observes, “Research design stands for advance planning of the method to be

adapted for collecting the relevant data and the techniques to be used in their research and

availability of staff, time and money.” In this way selecting a particular design is based on the

purpose of the piece of the research to be conducted. The design deals with selection of subjects,

selection of data gathering devices, the procedure of making observations and the type of

statistical analysis to be employed in interpreting data relationship”.

The study is a case method of Research analysis in nature. The study will used only secondary

data that will be collected from research articles, books related and thesis works already done on

the topic and particularly from annual reports of AXIS and Mahindra Bank. AXIS and

MAHINDRA BANK are selected as sample banks for the study, as they are top banks in the

domain of private and public sectors.

The total time period of the study will be 5 years, i.e. 2017-18 to 2021-22

The following parameters will be studied in this proposed study;

1. Dividend per Share

2. Operating Profit per Share

3. Net Operating Profit per Share

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 4. Adjusted Cash Margin

5. Net Profit Margin

6. Return on Net worth (RONW)

7. Adjusted Return on Net Worth

8. Credit Deposit Ratio

9. Investment Deposit Ratio

10. Cash Deposit Ratio

11. Operating Expense / Total Income

12. Capital Adequacy Ratio (CAR)

13. Advances/Loan Funds

LIMITATIONS OF THE STUDY

The limitations of the study are:

 The study will be based on the secondary data and the limitation of using secondary data

may affect the results.

 The secondary data will be taken from the annual reports of the AXIS and Mahindra

Bank. It may be possible that the data shown in the annual reports may be window

dressed which does not show the actual position of the banks.

SUGGESTIONS FOR FURTHER RESEARCH

The study will pave the way for other researchers to conduct similar studies from any bank in

any states and any countries to bring to analyze their financial performance.

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 CHAPTERIZATION

CHAPTER 1: INTRODUCTION

CHAPTER 2: FINANCIAL ANALYSIS — AN OVERVIEW

CHAPTER 3: PROFILE OF AXIS AND MAHINDRA BANK

CHAPTER 4: ANALYSIS AND INTERPRETATIONS

CHAPTER 5: CONCLUSIONS & SUGGESTIONS

BIBLIOGRAPHY

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 BIBLIOGRAPHY

 Almazari, Ahmed Arif, Apr 2012, Financial Performance of Jordanian Arab Bank by

using the Du Pont system of Financial Analysis, International Journal of Economics and

Finance, Vol. 4 Issue 4,p86-94,9p.

 Dr. K. Sriharsha Reddy, March 2012, Relative performance of Commercial banks in

India using Camel approach, International Journal of Multidisciplinary Research, Vol. 2,

Issue.

 Amitava Mandal, Santanu Kumar Ghosh, 2012, Intellectual Capital and Financial

Performance of Indian Banks, Journal of Intellectual Capital, Vol. 13 Issue 4.

 George, Sajeev Abraham, Chattopadhyay, 2012, An Investigative Study of Operational

Performance and Service Quality of Indian Public Sector Banks, International Journal of

Business Performance Management, Vol. 13 Issue ¾,p408-425,18p.

 P K Mishra, S K Mishra, 2010, Growth of Indian Economy and Performance of Public

and Private Sector Banks in India, International Journal of Management Prudence, Vol. 1,

Issue 2.

 Uddin, S M Sohrab, Suzuki, Yasushi, July 2011, Financial Reform, Ownership and

Performance in Banking Industry: The case of Bangladesh, International Journal of

Business and Management, Vol. 6 Issue 7, p28-39,12p.

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