1

Aditya Birla Sunlife Insurance

• A Study on Fundamental Analysis of
Indian Banking Industry
 2

Introduction of the company

• Aditya Birla Group
The Aditya Birla Group group was founded by Seth Shiv Narayan Birla in
1857.The Aditya Birla Group is an Indian multinational conglomerate and It
operates in 40 countries with more than 120,000 employees worldwide.

It is the third-largest Indian private sector conglomerate behind Tata

Group with revenue of just over US$100 billion and RIL with revenue of
US$74 billion.
 3

Sunlife Financial Inc.

• Sun Life Financial, Inc. is a Canada-based financial services company
known primarily as a life insurance company. It is one of the largest life
insurance companies in the world
• Sun Life Financial had total assets under management of $975 billion. (As of
December 31st 2016)
 4

Birla Sunlife Insurance company Limited

• Birla Sun Life Insurance Company Limited was founded in 2000.Birla Sun
Life Insurance Company Limited (BSLI) is a joint venture between the
Indian conglomerate Aditya Birla Group, and Sun Life Financial Inc.
• ABSLI is one of India's leading life insurance companies offering a range of
products like
• customer's life cycle
• children future plans,
• wealth protection plans,
• retirement and pension solutions,
• health plans,
• ULIP
 5

Rationale of the study

• The globalization and liberalization policies have significantly changed the

banking scenario.
• However, the Indian Banking industry is facing formidable challenges.
Increasing competition, increasing level of Non-performing Assets
• The parameters considered for study are labor productivity, branch expansion
and profitability ratios.
• The study concluded that Public sector banks are lagging behind in various
financial parameters comparing with private sector banks.
 6

Introduction of the banking industry

• The Indian banking system consists of 27 public sector banks, 26 private
sector banks, 46 foreign banks, 56 regional rural banks
• The bank capitalization plan by Government of India is expected to push
credit growth in the country to 15 per cent and as a result help the GDP grow
by 7 per cent in FY19.
• Public sector banks are lining up to raise funds via qualified institutional
placements (QIP) and govt has also planned to recapitalized banks.
• Under the Union Budget 2018-19, the government has allocated Rs 3 trillion
(US$ 46.34 billion) towards the Mudra Scheme .
 7

Claim settlement ratio

Year Claim settlement ratio

2011-12 91%

2012-13 83%

2013-14 88%

2014-15 95%

2015-16 88%

2016-17 95%
 8

Objectives of proposed study:

• To identify the growth drivers of the banking sector

• The main objective of project is to do fundamental analysis of banks
• To study the present scenario of banks through its net interest income and net
interest margin
• To recommend increase/ decrease of investment in a particular security
 9

Growth drivers of the Indian banking industry

• Improve Risk management capital
Banks have already embraced the international banking supervision accord of
Basel II.; interestingly, according to RBI, majority of the banks already meet
capital requirements of Basel III, which has a deadline of 31 March 2019.
• Technological innovations
• Demonetization
• Focus towards Jan Dhan Yojana
increase the accessibility of financial services such as bank accounts,
insurance, pension, credit facilities, etc.
• Know Your Client
Reduce in money laundering activities
 10

Findings

Through analyzing various figures, tables, ratios and charts of different

fundamentals of the banks. The finding of the research is,
• As per the NIM ratio HDFC and ICICI banks are looking good performer
because they both can retain their ratios on above 3% while SBI bank’s NIM
ratio has been reduced from 2.52 to 2.28.
• As per the NPA ratio HDFC bank has lowest amongst three banks with only
1% while SBI and ICICI banks performance are not good in maintaining
their low level of NPA.
• As per the Net profit margin it can be seen that ICICI bank has earned the
highest NPM of RS 22.76 for every Rs.100 among all the three banks.
HDFC is closely followed by ICICI. ICICI has the highest degree of
variability in NPM with a standard deviation of 2.60.
•
 11

CONT’d
• As per the ROE that HDFC Bank scores highest in average ROE at 16.55%
followed by ICICI bank with 11.73%. HDFC bank has given maximum on
their ROE i.e. 16.91.

• According to EPS HDFC tops with a highest average value of Rs47.39.

HDFC stands highest with an average EPS of Rs. 51.18. and also, the degree
of variability of EPS is lowest in case of ICICI bank with a standard
deviation of 1.46.

• According to DPS HDFC has declared the highest amount of dividend per
share with an average of Rs.9.5 over the last three years and the HDFC
stands for more stable.
 12
Recommendations

• So according to NPM HDFC and ICICI bank both are more efficient at
converting their sales into actual profit. As per the NPM ratio both private
banks are good in earning profits so it is good for the investors to add in their
portfolio.

• So according to ROE HDFC is good stock because it has a lowest score in

terms of volatility with a standard deviation and also HDFC bank has given
highest average return of 16.6% so it is good for investors to invest in HDFC
bank.

• According to data which has been shown in table suggests that here lowest
volatile stock as per the SD is ICICI bank but the HDFC’s profitability is
higher in the year of 2017 with 51.18. so both stocks are looking good to
invest for the investors.

• According to data investor should invest in HDFC bank because its DPS is
good over the period of time compare to other two banks in the table
 13

Conclusion
• This research paper provides insights on the financial performance of the
selected banking companies. HDFC bank has scored the highest average in
terms of Earnings per Share.
• HDFC bank scores a higher average than others in Net Profit Margin,
Return on Equity.
• The Indian banking industry is expected to witness better growth prospects
in 2018 due to the Government's measures towards recapitalization of the
banks. In addition, RBI's new measures may go a long way in helping the
restructuring of the domestic banking industry.