A Study on Fundamental Analysis of Indian Social Sector Banks

Abstract

With rapid Industrialization investment decisions in all sectors, have been gaining paramount importance, warranting the investors to be continuously cautious of risk and return involved in the same. To cater the growing economic appetite India requires huge investment which is possible with sound saving and investor's attitude to absorb common market risk which requires a planned and meaningful appraisal of both internal and external factors affecting the returns and savings. Ever since Indian economy opened its doors to MNCs, the Indian banking sector has been witnessing bizarre changes in terms of new products and services and stiff competition as welt In competitive global environment survival of banks depends on its profitability and efficient management. The social profitability of the banks, the growth rate and the risk exposure has a direct impact on its market potential. In the light of these recent developments, a careful analysis of the profitability of Indian banking sector is inevitable. The present study attempts to analyze the profitability of five public sector banks in India: SHI, PNB, OBC, AB, and BM. The variables taken for the study are Operating Profit Margin (OPM), Net Profit Margin (NPM), Earnings Per Share (EPS), Dividends Per Share (DPS), Dividend Payout Ratio (DPR), Price Earnings Ratio (PER), Return on Net Worth (RoNW), Current Ratio (CR), Debt Equity Ratio (DER), and Fixed Assets Turnover Ratio (FAIR). The study brings out the comparative efficiency of the banks. This study brings out the competitiveness effectiveness of five major banks.