FUNDAMENTAL ANALYSIS

OF NBFC GENERAL
SECTOR
By- Aditya Pala
SIESCOMS MMS
COMPANIES UNDER NBFC GENERAL
SECTOR INDEX
• Bajaj Finance
• Muthoot Finance
• Bajaj Holding
• Sundaram Finance
• Shriram Transport Finance
• L&T Finance
• Manappuram Finance
• M&M Financial
• Motilal Oswal
 Index Calculation
Taking the Index base as 1000 as on 19th of May
2020

Calculation of change in the price of stock with

respect to previous days price of the stock

Calculation of new index base

Calculation of new market cap with respect to the

change in stock price
 Fundamental Analysis
Calculation of PE ratio (Price to earnings ratio) of the
companies

Calculation of average PE ratio which indicates the

overall sectors PE Ratio

The companies stock where bifurcated on the bases of

their PE ratios as Undervalued and Overvalued stocks.

• Undervalued stocks – Shares which had PE ratio less than the sector
PE ratio
• Overvalued stocks – Shares which had PE ratio more than the sector
PE ratio
 Analysis of Undervalued shares

Analysis of Revenue • Revenue and Profits of previous year and

and Profits current year of each company was recorded

Comparison of
• The revenue and profits were compared on the
Revenue and basis of percentage change.
Profits

• 1. Selecting the stock in which both revenue

and profit or any one of them show positive
Finding value picks change
of stock • 2. Rejecting the stocks which shows negative
change in both revenue and profit
 Analysis of Overvalued stocks

Analysis on the Criteria for

basis of PEG selection
Ratio
• Select: If the PEG ratio
• PEG ratio (Price is between 0 and 1
earnings to growth • Reject: If the PEG
ratio) of the ratio is negative and
overvalued stock was more than 1
calculated.
 Calculation of Ratios
Ratios Return on Equity
considered
for Current ratio
Analysis
Return on Assets

Interest coverage ratio

Debt to equity
• The above ratios are considered as important ratios for NBFC Sector
and hence they were equally weighed for ranking of the stocks.

• Funds were allocated to each stock as per their rankings

 NAV Calculation
Data as on 17th June 2020 was taken for NAV calculation
• NAV base:10
• AUM(Asset Under Management):Rs,10 crore
• Number of units:1 crore

Formula for NAV = AUM

No. of Units

NAV was tracked on daily basis and the fund performance was analysed
by looking whether the NAV is beating the benchmark accordingly
30.00%
Fund Performance
25.00%

20.00%

15.00%

10.00%

5.00%

0.00%
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
202 202 202 202 202 202 202 202 202 202 2 02 202 202 2 02 202 202 202 202
/ / / / / / / / / / 1- 2- 3- 6- 7- 8- 9- 0-
/17 /18 /19 /22 /23 /24 /25 /26 /29 /30 -0 -0 -0 -0 -0 -0 -0 -1
6 6 6 6 6 6 6 6 6 6 07 07 07 07 07 07 07 07

Index NAV
Conclusion