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Essay: Fundamental analysis on selected Indian banks

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Investment is putting money into something with the expectation of profit. More specifically, investment is the commitment of money or capital to the purchase of financial instruments or other assets so as to gain profitable returns in the form of interest, dividend capital gain sends, or appreciation of the value of the instrument (capital gains). An investment involves the choice by an individual or an organization, such as a pension fund, after some analysis or thought, to place or lend money in a vehicle, instrument or asset, such as property, commodity, stock, bond, financial derivatives (e.g. futures or options), or the foreign asset denominated in foreign currency, that has certain level of risk and provides the possibility capital gainsay of generating returns over a period of time. Investment comes with the risk of the loss of the principal sum. The investment that has not been thoroughly analyzed can be highly risky with respect to the investment owner because the possibility of losing money is not within the owner’s control. The difference between speculation and investment can be subtle. It depends on the investment owner’s mind whether the purpose is for lending the resource to someone else for economic purpose or not.In the view of fundamental analysis, stock valuation based on fundamentals aims to give an estimate of their intrinsic value of the stock, based on predictions of the future cash flows and profitability of the business. The development of any economy depends on the development of the financial sector of that economy. The Banking industry is the key component of the financial system which provides financial assistance not only to the industrial sector but also to the agriculture and household sectors. Banks are the credit creators. The Indian Banking industry has contributed to the economic growth of the country. This sector has undergone significant developments and investments in the recent past. Reserve Bank of India is the central bank of the country; it regulates the banking industry in India and ensures monetary stability in the economy. Banks are segregated into different groups such as scheduled and unscheduled commercial banks, public sector banks, private banks, foreign banks and cooperative banks. The Banking industry is a valuable contributor to the GDP, works under a regulated environment and has government support. Technological advancements have changed the way banking is done. A wide network of financial services increases the welfare and productivity in the economy. It provides the opportunity to the public to build savings, make investments, avail credit and provides safety against income shocks and emergencies.
However, the Indian Banking industry is facing formidable challenges. Increasing competition, increasing level of Non-Performing Assets (NPAs) and deteriorating asset quality have become major areas of concern for the entire banking industry, and by extension, the Indian economy. The vicious cycle of economic slowdown, corporate earnings slowdown, increase in NPAs, increase in the proportion of restructured assets and depressed profitability of the Banking sector, has led to a situation where banks, particularly Public Sector Banks (PSBs), will be severely challenged to raise the required capital to comply with the Basel III requirements. For long, banks were comfortable that competition would only come from similar entities and that the Reserve Bank of India was ensuring the least number of banks entered the market to compete with them. But as it happens in any business, technological innovation and the regulator’s delay in waking up to developments have allowed a new set of companies to play the role of financial intermediaries with a different name

Banks can issue long term bonds, without maintaining statutory reserves as per RBI’s decision, to raise funds for infrastructure and for affordable housing which will enhance their ability to lend money, thereby enabling them to mitigate the asset-liability mismatch. (Dun & Bradstreet)

This paper deals with public sector and private sector banks in India. Because of increasing competition in the banking sector, private sector and foreign banks are trying their best to improve their performance. So there is a need to study the fundamentals and efficiency of public sector banks.

Fundamental analysis will examine the key financial ratios of banks and help in identifying the value of stocks of these banks to identify investment opportunities.

Fundamental analysis may be replaced or augmented by market criteria. An approach to invest analysis, technical analysis is radically different from fundamental analysis. Technical analysis doesn’t evaluate a large number of fundamental factors relating to the company the industry and the economy, instead they analyses market generated data like price and volume to determine the future direction of price movement. The word “investment” can be defined in many ways according to different theories and principles. It is a term that can be used in a number of contexts. However, the different meanings of “investment” are more alike than dissimilar. Generally, investment is the application of money for earning more money. Investment also means savings or savings made through delayed consumption. According to economics, investment is an amount deposited into a bank or machinery that is purchased in anticipation of earning income in the long run is both examples of investments. Although there is a general broad definition to the term investment, it carries slightly different meanings to different industrial sectors. On the other hand, finance professionals define an investment as money utilized for buying financial assets, for example stocks, bonds, bullion, real properties, and precious items.

Utilization of resources in order to increase income or production output in the future. According to finance, the practice of investment refers to the buying of a financial product or any valued item with anticipation that positive returns will be received in the future. The most important feature of financial investments is that they carry high market liquidity. The method used for evaluating the value of a financial investment is known as valuation.


Several studies have been carried out to apply fundamental analysis in practice in various financial markets. A few of them are quoted below:

  • Kavajecz and Odders-White (2004) show that support and resistance levels coincide with peaks in depth on the limit order book 1 and moving average forecasts reveal information about the relative position of depth on the book. They also show that these relationships stem from technical rules locating depth already in place on the limit order book.
  • Practitioners’ reliance on analysis is well documented. Frankel and Froot (1990) noted that market professionals tend to include technical analysis in forecasting the market. The guiding principle of technical analysis is to identify and go along with the trend. When there is a trend, whether started by random or fundamental factors, technical methods will tend to generate signals in the same direction. This reinforces the original trend, especially when many investors rely on the technical indicators. Thus, even if the original trend were a random occurrence, the subsequent prediction made by the technical indicator could be self-fulfilling. This self-fulfilling nature leads to the formation of speculative bubbles (see, for example, Froot et al., 1992). Conrad and Kaul (1988) found that weekly returns were positively auto correlated, particularly for portfolios of small stocks.
  • Lui and Mole (1998) report the results of a questionnaire survey conducted in February 1995 on the use by foreign exchange dealers in Hong Kong of fundamental and technical analyses. They found that over 85% of respondents rely on both methods and, again, technical analysis was more popular at shorter time horizons. This paper aims at carrying out Technical Analysis of the securities of the selected companies in Indian stock market.
  • Dr. Virender Koundal (2012) concludes that commercial banks in India get favourable effects because of the various reforms. Even though the overall profitability has also improved, the major benefit is taken by the private sector banks and foreign banks whereas public sector banks are still laggingbehind on various financial parameters.
  • Seema Malik (2014) has analyzed the effect of technology on transformation of banking in India and also studied the benefits and challenges of changing banking trends. Technology and financial innovations have led to tremendous improvement in banking services and operations over the past decade. Survival, growth and profitability of banks depend upon the organizational effectiveness and operational efficiency in today’s competitive scenario where customers’ needs are changing every day and technology is touching new highs.
  • Sana Samreen (2014) has analysed the overall banking industry with the help of Porter’s five forces model. The study also concentrated on the various developments, challenges and opportunities in the banking industry. The author emphasized upon the need to act both decisively and quickly to build an enabling, rather than a limiting, banking sector in India.
  • Malaya Ranjan Mohapatra, AvizeetLenka, Subrat Kumar Pradhan (2015) have analyzed the operational efficiency of commercial banks in India and challenges faced by public sector banks. The parameters considered for study are labour productivity, branch expansion and profitability ratios. The study concluded that internal management and employee efficiency of foreign banks are far better than other sectors of commercial banks. Public sector banks are lagging behind in various financial parameters.


  • To examine the performance of four selected banks using fundamental analysis.
  • To analyze the best among these four banks.


The study is entitled to assess the performance of four banks. The study is conducted also to find out the direction and scale of banking industry. The analysis of the past performance will help to forecast the future behaviour of the scrip. This study may assist the investors to take decisions regarding investments. The study also helps the trends in economic market. The key is to take each approach into account while formulating an overall opinion of the stock.


The study attempts to evaluate the performance of selected banks in India. It examines and compares the various aspects of performance of selected banks.

To analyze the fundamentals of the banks, four banks have been taken as samples.The variables are studied over a period of five years starting from 2012-13 to 2016-17.

Research Design:

The research design used here is the descriptive and analytical research design. Descriptive studies aim at portraying accurately the characteristics of a particular group or situation, and the analytical approach helps me to conduct fundamental analysis.

Research sources

Secondary Source:

The data will be collected from various sources such as statistical tables relating to banks in India, trends and progress of banks in India and annual reports of banks.

Sampling method:

Convenience sampling was used to select four banks.

4 banks are selected.




Axis Bank is the third largest private sector bank in India. The Bank offers the entire spectrum of financial services to customer segments covering Large and Mid-Corporates, MSME, Agriculture and Retail Businesses.

The bank has a large footprint of3,304 domestic branches (including extension counters) and 14,163 ATMs across the country as on 31st March 2017. The overseas operations of the Bank are spread over nine international offices with branches at Singapore, Hong Kong, Dubai (at the DIFC), Colombo and Shanghai; representative offices at Dhaka, Dubai, Abu Dhabi and an overseas subsidiary at London, UK. The international offices focus on corporate lending, trade finance, syndication, and investment banking and liability businesses.

Axis Bank is one of the first new generation private sector banks to have begun operations in 1994. The Bank was promoted in 1993, jointly by Specified Undertaking of Unit Trust of India (SUUTI) (then known as Unit Trust of India), Life Insurance Corporation of India (LIC), General Insurance Corporation of India (GIC), National Insurance Company Ltd., The New India Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India Insurance Company Ltd. The share holding of Unit Trust of India was subsequently transferred to SUUTI, an entity established in 2003. Remaining 69.19% shares are owned by Mutual Funds Institutions, FIIs, Financial Institutions (banks), Insurance companies, corporate bodies & individual investors among others.

With a balance sheet size of Rs. 6,01,468 crores as on 31st March 2017, Axis Bank has achieved consistent growth and with a 5 year CAGR (2011-12 to 2016-17) of 16% in Total Assets, 13% in Total Deposits, 17% in Total Advances. The bank employs over 55,000 people and had a market capitalization of 1.28 trillion (US$20 billion) (as on March 31, 2017).


The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an ‘in principle’ approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of RBI’s liberalisation of the Indian Banking Industry in 1994. The bank was incorporated in August 1994 in the name of ‘HDFC Bank Limited’, with its registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995.

HDFC is India’s premier housing finance company and enjoys an impeccable track record in India as well as in international markets. Since its inception in 1977, the Corporation has maintained a consistent and healthy growth in its operations to remain the market leader in mortgages. Its outstanding loan portfolio covers well over a million dwelling units. HDFC has developed significant expertise in retail mortgage loans to different market segments and also has a large corporate client base for its housing related credit facilities. With its experience in the financial markets, strong market reputation, large shareholder base and unique consumer franchise, HDFC was ideally positioned to promote a bank in the Indian environment.

HDFC Bank’s mission is to be a World Class Indian Bank. The objective is to build sound customer franchises across distinct businesses so as to be the preferred provider of banking services for target retail and wholesale customer segments, and to achieve healthy growth in profitability, consistent with the bank’s risk appetite. The bank is committed to maintain the highest level of ethical standards, professional integrity, corporate governance and regulatory compliance. HDFC Bank’s business philosophy is based on five core values: Operational Excellence, Customer Focus, Product Leadership, People and Sustainability.

HDFC (Housing Development Financial Corporation) Bank Limited is an Indian banking and financial services company headquartered in Mumbai, Maharashtra. It has 84,325 employees and has a presence in Bahrain, Hong Kong and Dubai. HDFC Bank is India’s largest private sector lender by assets. It is the largest bank in India by market capitalization as of February 2016.It was ranked 69th in 2016 BrandZ Top 100 Most Valuable Global Brands.


YES BANK, India’s fifth largest private sector Bank, is an outcome of the professional entrepreneurship of its Founder Rana Kapoor and his highly competent top management team, to establish a high quality, customer centric, service driven, bank catering to the “Sunrise Sector of India”. YES BANK is the only Greenfield Bank license awarded by the RBI in the last two decades, associated with the finest pedigree investors. YES, BANK, a “Full Service Commercial Bank”, has steadily built a Corporate, Retail & SME Banking franchise, with a comprehensive product suite of Financial Markets, Investment Banking, Corporate Finance, Branch Banking, Business and Transaction Banking, and Wealth Management business lines across the country.

YES, BANK has been recognized amongst the Top and Fastest Growing Banks in various Indian Banking League Tables by prestigious media houses and Global Advisory Firms, and has received several national and international honours for our various Businesses including Corporate Investment Banking, Treasury, Transaction Banking, and Sustainable practices through Responsible Banking. YES BANK is steadily evolving as the Professionals’ Bank of India with the long term mission of “Building the Finest Quality Bank of the World in India” by 2020.

YES BANK provides you an all-inclusive banking experience through an extensive branch banking network of over 1000 Branches and 1,800 ATMs. YES BANK strives to expand its branch presence in line with its strategy of building the highest quality branch banking network. This network will be covering major cities and towns across India to service your needs at any location in the country.


ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was its wholly-owned subsidiary. ICICI’s shareholding in ICICI Bank was reduced to 46% through a public offering of shares in India in fiscal 1998, an equity offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank’s acquisition of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001, and secondary market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at the initiative of the World Bank, the Government of India and representatives of Indian industry. The principal objective was to create a development financial institution for providing medium-term and long-term project financing to Indian businesses.

In the 1990s, ICICI transformed its business from a development financial institution offering only project finance to a diversified financial services group offering a wide variety of products and services, both directly and through a number of subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE.After consideration of various corporate structuring alternatives in the context of the emerging competitive scenario in the Indian banking industry, and the move towards universal banking, the managements of ICICI and ICICI Bank formed the view that the merger of ICICI with ICICI Bank would be the optimal strategic alternative for both entities, and would create the optimal legal structure for the ICICI group’s universal banking strategy. The merger would enhance value for ICICI shareholders through the merged entity’s access to low-cost deposits, greater opportunities for earning fee-based income and the ability to participate in the payments system and provide transaction-banking services. The merger would enhance value for ICICI Bank shareholders through a large capital base and scale of operations, seamless access to ICICI’s strong corporate relationships built up over five decades, entry into new business segments, higher market share in various business segments, particularly fee-based services, and access to the vast talent pool of ICICI and its subsidiaries.

In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. The merger was approved by shareholders of ICICI and ICICI Bank in January 2002, by the High Court of Gujarat at Ahmedabad in March 2002, and by the High Court of Judicature at Mumbai and the Reserve Bank of India in April 2002. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its group companies.ICICI Bank’s Board members include eminent individuals with a wealth of experience in international business, management consulting, banking and financial services.

ICICI Bank is India’s largest private sector bank with total consolidated assets of Rs. 9,860.43 billion (US$ 152.0 billion) at March 31, 2017 and profit after tax of Rs. 98.01 billion (US$ 1.5 billion) for the year ended March 31, 2017. ICICI Bank currently has a network of 4,850 Branches and 14,164 ATM’s across India.


1. Net profit margin (%)

Year 2016-17 2015-16 2014-15 2013-14 2012-13
Axis bank 8.26 20.06 20.73 20.29 19.05
HDFC bank 20.81 20.26 21.09 20.54 19.15
Yes bank 20.27 18.76 17.32 16.2 15.68
ICICI bank 18.09 18.44 22.76 22.2 20.77

(Table 1.1)


The above graph shows that in 2012-13, 2013-14 and in 2014-15 ICICI bank had the highest net profit margin as compared to other banks while in 2015-16 and 2016-17 HDFC bank has shown the highest net profit margin.

2. Dividend payout ratio

Year 2016-17 2015-16 2014-15 2013-14 2012-13
Axis bank 32.54 14.48 14.78 15.11 16.29
HDFC bank 0.16 22.76 22.73 22.05 22.3
Yes bank – 16.55 18.74 17.83 16.54
ICICI bank 2.3 34 27.65 27.83 28.12

(Table 1.2)


The above graph states that, dividend payout ratio of Axis bank was highest in 2016-17 as compared to other banks. While in 2015-16 and earlier ICICI bank has the highest dividend payout ratio.

3. Earning retention ratio

Year 2016-17 2015-16 2014-15 2013-14 2012-13
Axis bank 67.46 85.52 85.22 84.89 83.71
HDFC bank 99.91 87.88 88 88.7 89.09
Yes bank 100 83.45 81.26 82.17 83.46
ICICI bank 100 70.11 74.07 72.93 72.29

(Table 1.3)


The above graph shows that the Earning retention ratio was highest in 2016-17 for ICICI and Yes bank i.e. 100 where as in was least for Axis bank in the same year. If compared for the rest of the years we can see that HDFC bank had comparatively higher ERR.

4. Return on equity (%)

Year 2016-17 2015-16 2014-15 2013-14 2012-13
Axis bank 6.76 16.81 17.75 17.43 18.53
HDFC bank 17.95 18.26 19.37 21.28 20.34
Yes bank 18.58 19.94 21.33 25.02 24.81
ICICI bank 10.66 11.63 14.55 14.02 13.1

(Table 1.4)


The above graph interprets that the Return on equity for Axis bank was least in 2016-17 and highest in 2012-13.Also comparing with other banks ROE was highest in 2013-14 for Yes bank followed by 2012-13.

5. Earning per share

Year 2016-17 2015-16 2014-15 2013-14 2012-13
Axis bank 15.36 34.51 31.04 132.34 110.68
HDFC bank 56.78 48.64 40.76 35.34 28.27
Yes bank 72.95 60.39 48.01 44.86 36.2
ICICI bank 16.83 16.73 19.28 84.94 72.17

(Table 1.5)


In above graph, we can see that EPS was highest in 2012-13 for Axis bank i.ei 110.68 as I lowered down to 15.36 in 2016-17.Also Yes bank and HDFC bank has seen a gradual increase in its EPS while ICICI bank has seen a downfall in past 5 years.

6. Price earning ratio

Year 2016-17 2015-16 2014-15 2013-14 2012-13
Axis bank 31.95 12.88 18.05 2.21 2.35
HDFC bank 25.4 22.02 25.1 21.19 22.08
Yes bank 21.23 14.32 17.01 9.22 11.82
ICICI bank 14.97 12.86 16.36 2.93 2.9

(Table 1.6)


As seen in the graph above, the highest PE ratio was seen 2.35 for Axis bank as it increased to that of 31.95 in 2016-17.Also other banks have seen a gradual increase in its PE Ratio for the past 5 years.

7. Current ratio

Year 2016-17 2015-16 2014-15 2013-14 2012-13
Axis bank 0.31 0.37 0.36 0.4 0.45
HDFC bank 0.06 0.07 0.04 0.06 0.06
Yes bank 0.35 0.44 0.47 0.55 0.64
ICICI bank 1.83 1.66 0.78 0.94 0.9

(Table 1.7)


The above graph states that the current ratio is highest for ICICI bank in 2016-17 i.e. 1.83, while other banks have their current ratios lower than ICICI bank.

8. Debt-equity ratio

Year 2016-17 2015-16 2014-15 2013-14 2012-13
Axis bank 0.07 0.06 0.06 0.06 0.06
HDFC bank 8.02 8.25 8 9.36 9.09
Yes bank 8.23 10.4 10.05 13.41 15.13
ICICI bank 6.58 6.86 6.64 6.65 6.57

(Table 1.8)


The debt equity ratio is seen to be lowest for Axis bank and highest for Yes bank in the past 5 years.

9. Book Value (Rs.cr)

Year 2016-17 2015-16 2014-15 2013-14 2012-13
Axis bank 232.83 223.12 188.47 813.47 707.5
HDFC bank 349.12 287.47 247.39 181.23 152.2
Yes bank 483.13 327.84 279.6 197.48 161.94
ICICI bank 166.37 149.47 138.72 634.6 578.65

(Table 1.9)


The book value of Axis, HDFC and Yes bank have seen a sudden rise in the past five years while ICICI bank seem to be facing decrease in its book value year on year.

10. Dividend per share(Rs)

Year 2016-17 2015-16 2014-15 2013-14 2012-13
Axis bank 5 5 4.6 20 18
HDFC bank 11 9.5 8 6.85 5.5
Yes bank 12 10 9 8 6
ICICI bank 2.5 5 5 23 20

(Table 1.10)


The DPS for HDFC and Yes bank seem to have an increase while Axis bank and ICICI bank faces a downfall in its DPS.

11. Return on assets (%)

Year 2016-17 2015-16 2014-15 2013-14 2012-13
Axis bank 0.64 1.64 1.74 1.72 1.65
HDFC bank 1.81 1.85 1.89 1.9 1.82
Yes bank 1.75 1.68 1.64 1.55 1.51
ICICI bank 1.31 1.42 1.8 1.73 1.62

(Table 1.11)


HDFC bank seems to have the highest ROA for the past five years as compared to other banks. Axis bank seems to have a downfall in its ROA for the past 5 years.

12. Non-Performing Assets

Year 2016-17 2015-16 2014-15 2013-14 2012-13
Axis bank 8626.55 2522.14 1316.71 1024.62 704.13
HDFC bank 2773.66 2596.83 2528.21 1843.99 1564.32
Yes bank 1072.27 284.47 87.72 26.07 6.99
ICICI bank 25451.03 13296.75 6255.53 3297.96 2230.56

(Table 1.12)


The NPA for all the banks has increased drastically year on year due to increase in number of bad loans.

13. Cost per employee

Year 2016-17 2015-16 2014-15 2013-14 2012-13
Axis bank 4742.1 4019.34 3615.69 2973.05 2675.37
HDFC bank 1691.26 1715.77 1657.51 1552.65 1688.63
Yes bank 1805.04 1296.8 979.66 784.4 655.54
ICICI bank 5733.71 5002.35 4749.88 4220.11 3893.29

(Table 1.13)


Cost per employee for HDFC bank seem to be fluctuating while for the rest the cost per employee seem to increase year on year.

14. Net Interest Margin (%)

Year 2016-17 2015-16 2014-15 2013-14 2012-13
Axis bank 3.28 3.34 3.27 3.21 2.92
HDFC bank 3.94 3.98 3.85 3.79 3.96
Yes bank 2.87 2.94 2.76 2.65 2.36
ICICI bank 3.1 3.24 3.24 2.96 2.76

(Table 1.14)


NIM for all the banks seem to be fluctuating at the range between 2.5% to 3.5%.

15. Loans / Deposits

Year 2016-17 2015-16 2014-15 2013-14 2012-13
Axis bank 0.25 0.3 0.25 0.18 0.17
HDFC bank 0.12 0.16 0.1 0.11 0.11
Yes bank 0.27 0.28 0.29 0.29 0.31
ICICI bank 0.3 0.41 0.48 0.47 0.5

(Table 1.15)


Loans/Deposits ratio is highest for ICICI bank in the years 2014-15 and 2013-14.It is comparatively low for HDFC and Axis bank.

16. Cost To Income (%)

Year 2016-17 2015-16 2014-15 2013-14 2012-13
Axis bank 40.96 38.55 40.74 40.82 42.63
HDFC bank 38.09 36.95 36.9 36.66 38.14
Yes bank 41.36 40.89 41.28 39.43 38.39
ICICI bank 35.78 34.7 36.83 38.32 40.58

(Table 1.16)


The above graph shows higher cost to income for Yes bank and Axis bank as compared to HDFC and ICICI bank for the past 5 years.


Ratios/Banks Axis Bank HDFC bank Yes bank ICICI bank
Net profit margin (%) 
Dividend payout ratio 
Earning retention ratio 
Return on equity (%) 
Earnings per share 
Price Earnings ratio 
Current ratio 
Debt-equity ratio 
Book Value (Rs.cr)
Dividend per share (Rs.cr) 
Return on assets (%) 
Non-Performing Assets 
Cost per employee 
Net Interest Margin (%) 
Loans / Deposits 
Cost To Income (%) 


On comparing the averages of the ratios for 5 years it was found that ICICI bank has been found most efficient bank as compared to Axis, HDFC and Yes bank. The Net Profit Margin, Dividend payout ratio, Current ratio, Dividend per share & Cost to income were found to be efficient ratios for ICICI bank amongst all the other banks.

HDFC Bank:

Earning Retention Ratio, ROA, NIM & Loans/Deposits were found to be efficient ratios for HDFC bank amongst all the other banks.

Yes Bank:

Return on equity, Price earnings ratio, Non-performing Assets and Cost per Employee were found to be efficient ratios for Yes bank amongst all the other banks.

Axis Bank:

Earnings per share and debt equity ratio were found to be efficient ratios for Yes bank amongst all the other banks.


  • There must be numerous level of approval to sanction huge loans. Moreover, there should be transparent mechanism and proper disclosure regulation. Banks and sanctioning officials must be made accountable for the decision. Appropriate action and communication, proper legal system, cooperation and coordination between different authorities will reduce NPA.
  • The return on equity for private sector banks is less than that of public sector banks. So, private sector banks should improve their profitability. Thus, private sector banks are required to increase their profit after tax to gratify the shareholders with adequate return.
  • It is essential for banks to reduce their operating expenses and NPA to increase the profit. So, as they can increase earnings per share up to the mark.
  • It is necessary for the private sector banks to utilize their long term fund very effectively to create enough return. So, as they can compete to public sector banks.
  • In the case of higher debt, profitability will tend to decline. The reason behind this may be due to the high interest bearing securities engaged in the total debt.
  • Banks should be bothered much about internal sources of financing in order to increase their profitability.


The study is meant to do the analysis of various ratios for selected banking companies in India. The market is fluctuating very quickly. Through this study, we could find that these banking companies have grown well and if we invest in such companies it will be fruitful. The study has thrown more light on the strength of banking sector performance and as a tool for generating and distributing the wealth of nation. It can be concluded that fundamental analysis is always the proper method of arriving the results of the company or industry over its financial performance. If the company is fundamentally strong, that will help the investor to get a return in the long run. Hence, before making an investment decision the investor has to check the results of the fundamental analysis of the companies.

The fundamental analysis of banking sectors in India was a very relevant topic on account of the increased investor interest in markets and there for rational investment behaviour.

There is always a need to study and analyse share before investing in to the share. Fundamental analysis studies the fundamental aspects of the economy, industry and the company as a whole. The position of the banking sector in the economy and the main private companies are studied. Investor can arrive at rational decisions and avoid unnecessary losses if they make fundamental analysis. Nowadays majority of the stock brokers use this technique, along with the others to advice clients on investment matters. The exercised proved fruitful as it opened our eyes to the reality of the stock market and the sector under study as well as the prospective to be invested.



  • http://www.irjcjournals.org/ijmssr/june2013/4.pdf
  • www.nmims.edu/…/fundamental-analysis-of-selected-public-and-private-sector-banks…
  • http://www.moneycontrol.com/financials/yesbank/ratios/YB
  • http://www.moneycontrol.com/financials/axisbank/ratiosVI/AB16#AB16
  • http://www.moneycontrol.com/financials/hdfcbank/ratios/HDF01
  • http://www.moneycontrol.com/financials/icicibank/ratios/ICI02
  • https://www.ndtv.com/business/stock/icici-bank-ltd_icicibank/financials-ratio
  • https://www.ndtv.com/business/stock/axis-bank-ltd_axisbank/financials
  • https://www.ndtv.com/business/stock/yes-bank-ltd_yesbank/financials
  • https://www.ndtv.com/business/stock/hdfc-bank-ltd_hdfcbank/financials


  • Kavajecz and Odders-White (2004)
  • Frankel and Froot (1990)
  • Conrad and Kaul (1988)
  • Lui and Mole (1998)
  • Dr. Virender Koundal (2012)
  • Seema Malik (2014)
  • Sana Samreen (2014)
  • Malaya Ranjan Mohapatra, AvizeetLenka, Subrat Kumar Pradhan (2015)


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