Banking and

Financial
Services
Group – 1
 HDFC Bank

ICICI Securities

Companie SMC Global

s Chosen
Kotak Mahindra Bank

Indian Bank
Industry Analysis
• The banking and financial services industry is undergoing a period of rapid transformation, driven by technological
advancements, changing consumer preferences, and economic fluctuations. While this presents significant challenges,
such as increased competition from fintech companies, stricter regulations, and cybersecurity threats, it also offers
opportunities for growth and innovation.
• Growth opportunities include:
• Digital Innovation: Banks can leverage technology to develop new products and services, improve customer
experiences, and increase efficiency.
• Data Analytics: Utilizing data analytics can help banks better understand customer behavior, tailor products and
services, and manage risk more effectively.
• Sustainable Finance: There is a growing demand for sustainable financial products and services, such as green bonds
and impact investing.
• Financial Inclusion: Banks can play a crucial role in promoting financial inclusion by providing access to financial
services to underserved populations.
• Cross-Border Expansion: Global economic growth and increased trade can create opportunities for banks to expand
their operations into new markets.
Kotak Mahindra Bank
• Kotak Mahindra Bank is one of India's leading private sector banks, known for its robust
financial performance and customer-centric services. The bank has consistently
focused on digital transformation, which has enhanced its operational efficiency and
customer engagement. Its wide range of products and services, including retail
banking, corporate banking, and investment banking, has helped it cater to diverse
customer needs. Kotak's conservative approach to risk management has kept its asset
quality strong, even during economic downturns. Additionally, its commitment to
sustainability and corporate governance has fostered a positive brand image, making it
a trusted name in the Indian banking sector.
CONT…
• Innovative Product Portfolio: Kotak Mahindra Bank has continuously introduced innovative
products that cater to diverse customer segments. The Kotak811 digital banking initiative has
allowed the bank to onboard millions of new customers through digital channels, especially in
underserved regions. Additionally, the launch of ActivMoney, a feature offering automatic
sweeping of funds between savings and fixed deposits, has made banking more convenient for
customers​
• Growth Focus with Stability: Kotak Mahindra Bank has a long-term vision of stable growth
without compromising on asset quality or risk management. The bank's strategy includes
expanding its retail footprint, deepening relationships with SMEs and corporates, and continuing
to lead in digital transformation.
Kotak Mahindra
Bank - Balance
Sheet Analysis
• Kotak Mahindra Bank has demonstrated strong growth
over the years, both in its asset base and liabilities.
• The key highlights are the growth in advances (loans),
deposits, reserves, and surplus which strengthens its
overall financial health.
• The rising contingent liabilities, while not immediately
concerning, are something to watch as they could
become actual liabilities in case of defaults or other
unforeseen circumstances.
• However, the bank appears to be in a strong liquidity
position, with increasing cash reserves and substantial
growth in its investments and advances. The growth
trajectory reflects both expansion in the banking
business and careful management of financial
resources.
Kotak Mahindra Bank
– Cash Flow Analysis
• The large positive operating cash flow in 2024 highlights the bank’s
ability to generate sufficient internal cash to sustain its operations.
The negative operating cash flow in 2023 raised concerns about the
bank’s cash conversion efficiency, but the recovery in 2024 is a
positive signal for stakeholders.

• The continued negative cash flow from investing activities shows that
the bank is focusing on long-term growth through investments,
possibly in loans, assets, or other capital projects. Although these
outflows impact short-term liquidity, they might enhance the bank’s
future earning potential.

• The sharp rise in cash flow from financing activities in 2024 suggests
that the bank sought external funding, potentially to support
expansion, manage liabilities, or boost liquidity. This reflects a
strategic shift toward growth or addressing capital requirements.

• The dramatic increase in cash equivalents by 2024 indicates that the

bank has improved its liquidity, giving it flexibility for future growth,
risk management, or meeting unforeseen challenges. The bank now
has a much stronger cash reserve compared to the past two years.
Kotak Mahindra
Bank – P&L
Statement Analysis
• The increase in interest earned and other income reflects strong
growth in both core banking operations and non-interest income
sources. This positions the bank well for future profitability and
financial stability.

• While total expenses have increased, the bank has managed to grow
its income faster than its costs, which has improved its profit margins.

• The efficient management of operating expenses has contributed to

sustained profitability. The consistent rise in net profit, alongside
growing earnings per share, shows that Kotak Mahindra Bank is
improving its profitability, which enhances investor confidence and
market performance.

• The growth in earnings per share and book value per share indicates
that Kotak Mahindra Bank is generating increasing returns for its
shareholders. The proposed dividends further support this value
creation for shareholders.

• The bank’s growing retained earnings and increasing book value

indicate a solid capital base. This strengthens the bank’s ability to
absorb shocks, invest in growth, and maintain regulatory
capital requirements.
Kotak Mahindra Bank
– Financial Ratios
• Profitability: The bank remains highly profitable
with stable net profit ratios and improving ROE
and ROA. However, the declining operating
profit ratio suggests rising operational costs,
which need to be managed.
• Valuation: The decreasing P/E, P/S, and P/B
ratios indicate that the stock is becoming more
attractively valued, especially with improved
profitability metrics like ROE.
• Risk: The declining CASA ratio and high CDR
could pose risks, particularly if the bank needs
to rely more on higher-cost funding or if there
is economic volatility that impacts its
aggressive lending.
SMC Global Securities Ltd.
• SMC Global Securities Ltd. is an Indian financial services firm offering a wide range of
services, including brokerage in equities, commodities, and currency trading, as well as
investment banking, wealth management, and insurance. Established in 1994, the
company has a strong presence in both retail and institutional segments and operates
through a large network of branches and franchise partners. SMC Global is known for
providing technology-driven trading platforms and financial advisory services, catering
to the evolving needs of investors in the stock markets and beyond.
 SMC Global
Securities – Balance
•
sheet analysis
From 2022 to 2024, the company showed a consistent reduction in current
liabilities, dropping from ₹3,527.97 crore in 2022 to ₹1,891.60 crore in
2024, alongside a similar decline in capital and liabilities from ₹4,746.59
crore to ₹2,942.50 crore, suggesting improved financial discipline or debt
repayment.

• Non-current assets remained stable, with tangible assets rising slightly to

₹133.03 crore in 2024, and deferred tax assets showing minor
improvement. Current assets, particularly cash and cash equivalents,
surged from ₹1,281.95 crore to ₹2,358.53 crore, reflecting stronger
liquidity, while short-term loans and advances nearly doubled, indicating
greater lending activity.

• Fixed assets grew steadily, from ₹114.97 crore in 2022 to ₹162.87 crore in
2024, pointing to potential expansion or capital improvements.

• Contingent liabilities decreased, lowering risk exposure, while current

investments fluctuated, dropping to ₹57 crore in 2023 before rebounding to
₹70.26 crore in 2024, likely due to changing short-term investment
strategies.

• Trade receivables increased from ₹434.65 crore to ₹531.71 crore, signaling

higher sales on credit, though there could be concerns over collections.

• Total assets expanded significantly, reaching ₹4,746.59 crore in 2024,

indicating operational growth. Meanwhile, the company’s bonus equity
share capital remained stable, with a slight dip to ₹10.47 crore by 2024.
 SMC Global Securities
– Cash Flow analysis
• In 2024, net income rose substantially by ₹67.88 crore (56%) to ₹188.28 crore,
reversing the prior year’s decline of ₹54.17 crore (31%) from ₹174.57 crore in 2022,
indicating improved profitability after a challenging 2023.

• Depreciation increased by ₹9.41 crore (41%) to ₹32.10 crore in 2024, signaling higher
capital expenditures or asset usage, compared to a smaller increase of ₹2.57 crore
(13%) in 2023.

• Non-cash items also grew by ₹81.03 crore (60%) to ₹216.95 crore in 2024, reflecting
more adjustments for non-cash expenses, which can positively impact operational cash
flow. However, changes in working capital showed a more negative shift of ₹-629.98
crore, worsening by ₹-84.97 crore (16%) from 2023, which may indicate cash flow
pressures due to increased liabilities or reduced assets.

• Cash flow from operating activities remained negative at ₹-192.66 crore, although this
was an improvement of ₹73.34 crore from ₹-266 crore in 2023, suggesting that
operations still struggle to generate enough cash to cover expenses.

• Capital expenditures saw a slight reduction by ₹1.75 crore (5%) in 2024, signaling
cautious investment in growth amidst cash flow constraints. Cash flow from investing
activities was also negative at ₹-28.66 crore, improving slightly from ₹-30.85 crore in
2023, indicating continued investments or acquisitions.

• Financing cash flow worsened significantly, with an increased negative flow of ₹-61.70
crore (74%) to ₹-83.82 crore in 2024, possibly due to higher debt repayments or
dividend payouts. Despite these challenges, the net change in cash was positive at
₹95.68 crore in 2024, a stark improvement of ₹155.49 crore from the previous year’s
negative ₹-59.81 crore, reflecting stronger cash reserves.

• Finally, cash taxes paid rose slightly by ₹2.20 crore (5%), suggesting that the
company’s profitability had improved, as taxes typically correlate with income.
SMC Global Securities
–P&L analysis
• In 2024, the company experienced significant growth in revenue from
operations, reaching ₹1,638.50 crore, a 35% increase from the previous
year, indicating strong core business performance, likely driven by higher
trading volumes and improved service offerings.

• Other income rose by 60% to ₹6.54 crore, though it remains lower than
2022, suggesting some volatility in non-core income sources.

• Total revenue also increased by 35% to ₹1,645.04 crore, reflecting robust

operational performance.

• Total expenses rose by 32% to ₹1,400.52 crore, aligning with revenue

growth and demonstrating efficient cost management.

• Operating expenses increased by 33%, and employee benefit expenses

grew by 20%, indicating investments in operational capabilities and human
resources. However, finance costs surged by 73%, raising concerns about
profitability management.

• Profit before tax increased by 51% to ₹244.52 crore, and profit after tax
rose by 56% to ₹188.30 crore, signaling strong operational efficiency and
effective tax management.

• Earnings per share improved significantly by 64% to ₹18, indicating

stronger profitability for shareholders. While equity share dividends slightly
decreased by 3% to ₹25.13 crore, this may reflect a focus on retaining
earnings for future growth initiatives.
SMC Global Securities
– Ratio Analysis
• The debt-to-equity ratio decreased from 0.17 in 2022 to 0.11 in 2024,
indicating reduced financial leverage and a stronger equity position, which is
favorable for attracting investors.

• The return on equity (ROE) improved to 17.09% in 2024 from 12.87% in

2023, reflecting enhanced efficiency in generating profits from shareholders'
equity, although it remains below the 2022 level of 18.82%.

• The net profit margin rose to 11.49% in 2024, signifying better cost control
and income generation, but the decline from 15.77% in 2022 suggests
ongoing challenges in maintaining profitability.

• The return on assets (ROA) increased slightly to 3.94%, indicating

improved asset utilization, though it has decreased from 5.92% in 2022.

• The interest coverage ratio fell to 2.79, reflecting a declining ability to

cover interest expenses, which may signal future concerns if earnings do not
improve.

• Meanwhile, the gross profit margin rose to 21.55%, showing better

operational efficiency, and the price to earnings (P/E) ratio remained low
at 7.31, suggesting the stock might be undervalued.

• Conversely, the price to sales (P/S) ratio and price to book (P/B) ratio
both increased, indicating a more favorable market perception of the
company and higher expectations for future growth, respectively.
HDFC Bank
• HDFC Bank, India’s largest private sector bank by market capitalization, is known for its strong leadership,
robust risk management, and diverse business model that spans retail, corporate, and SME banking. The
bank's market position is fortified by its extensive branch network, superior digital capabilities, and cost
efficiency, making it a leader in both traditional and digital banking. HDFC Bank’s conservative risk culture
has enabled it to maintain low NPAs and high asset quality, while its consistent focus on technology and
customer-centricity drives growth and customer loyalty. Although it faces competition and regulatory
challenges, its focus on expanding into underpenetrated rural markets, SME segments, and digital innovations
ensures strong growth prospects, supported by a commitment to corporate governance and sustainability
initiatives.
 HDFC Bank – Balance
Sheet analysis
Financial Year 2023-24 (FY 2023-24)

• In FY 2023-24, HDFC Bank demonstrated robust financial performance with significant growth in various metrics. Shareholder’s funds

increased to Rs. 4,52,982.84 crore, up from Rs. 2,88,879.55 crore in FY 2022-23, reflecting strong capital generation and profitability.

Deposits grew impressively to Rs. 23,76,887.28 crore from Rs. 18,82,663.25 crore, indicating the bank’s ability to attract more funds from

customers, likely due to enhanced customer trust and expanding market reach. Borrowings also saw a sharp rise, increasing to Rs.

7,30,615.46 crore from Rs. 2,56,548.66 crore, suggesting greater use of external financing, possibly to support the bank’s aggressive

lending activities. Advances, a key indicator of business growth, jumped to Rs. 25,65,891.41 crore from Rs. 16,61,949.29 crore, signifying

an aggressive push towards loan disbursement. Investments also grew significantly to Rs. 10,05,681.63 crore from Rs. 5,11,581.71 crore,

enhancing the bank’s asset base. Notably, contingent liabilities soared to Rs. 23,44,487.73 crore, reflecting a substantial increase in off-

balance sheet exposures, which could indicate higher future obligations or risks.

Financial Year 2022-23 (FY 2022-23)

• In FY 2022-23, HDFC Bank reported solid growth, with shareholder’s funds increasing to Rs. 2,88,879.55 crore from Rs. 2,46,771.62 crore

in FY 2021-22, underscoring a consistent build-up of capital reserves through retained earnings. Deposits rose to Rs. 18,82,663.25 crore

from Rs. 15,58,003.03 crore, showcasing the bank’s growing market presence and ability to mobilize savings. Borrowings stood at Rs.

2,56,548.66 crore, up from Rs. 2,26,966.50 crore, indicating moderate reliance on external sources of funds. Advances increased to Rs.

16,61,949.29 crore from Rs. 14,20,942.28 crore, showing a strong credit growth trajectory. Investments also expanded to Rs. 5,11,581.71

crore from Rs. 4,49,263.86 crore, reinforcing the bank’s asset portfolio. Contingent liabilities reached Rs. 14,00,197.64 crore, reflecting the

bank’s exposure to potential off-balance sheet risks, though lower than the following year. This year highlighted steady growth across key

financial parameters, setting the stage for the bank’s accelerated expansion in FY 2023-24.
HDFC Bank – Cash
Flow analysis
• Financial Year 2023-24 (FY 2023-24)

• In FY 2023-24, HDFC Bank achieved a net profit before tax of Rs. 75,184.14 crore, a 22.56%
increase from the previous year. However, net cash from operating activities decreased to Rs.
19,069.34 crore, indicating challenges in cash generation despite strong profits. Notably, cash
from investing activities improved significantly to Rs. 5,313.77 crore, while financing activities
resulted in a negative cash flow of Rs. -3,983.06 crore. The bank's overall cash and cash
equivalents increased by 16.07% to Rs. 2,28,834.51 crore, reflecting healthy liquidity.

• Financial Year 2022-23 (FY 2022-23)

• In FY 2022-23, HDFC Bank recorded a net profit before tax of Rs. 61,346.80 crore, up 48.07%
from FY 2021-22. The net cash from operating activities was positive at Rs. 20,813.70 crore,
demonstrating solid cash generation. While investing activities resulted in a cash outflow of Rs.
-3,423.89 crore, financing activities contributed a substantial inflow of Rs. 23,940.56 crore.
The net increase in cash and cash equivalents was Rs. 41,762.08 crore, leading to a closing
balance of Rs. 1,97,147.81 crore, highlighting strong liquidity and financial stability.
HDFC Bank –
P&L Analysis
Financial Year 2023-24 (FY 2023-24)

• In FY 2023-24, HDFC Bank reported total income of Rs. 4,07,994.77 crore, a remarkable
increase of 99.35% compared to FY 2022-23, driven primarily by a significant rise in
interest earned, which reached Rs. 2,83,649.02 crore, up 66.12%. Total expenditure also
surged to Rs. 3,42,548.27 crore, reflecting a 116.10% increase. The bank's net profit for
the year stood at Rs. 65,446.50 crore, marking a 41.82% rise from the previous year. Basic
EPS improved to Rs. 90, indicating strong profitability and returns for shareholders.

Financial Year 2022-23 (FY 2022-23)

• In FY 2022-23, HDFC Bank achieved total income of Rs. 2,04,666.10 crore, a 22.05%
increase from the previous fiscal year, primarily due to growth in interest income, which
reached Rs. 1,70,754.05 crore. The total expenditure for the year was Rs. 1,58,517.40
crore, up 22.37%. The net profit was Rs. 46,148.70 crore, reflecting a 20.96% increase.
Basic EPS rose to Rs. 83, demonstrating the bank's consistent profitability and financial
health during this period.
HDFC Bank –
Ratio Analysis
• The Debt-to-Equity Ratio rose significantly from 0.89 in 2023 to 1.61 in 2024,
indicating a higher reliance on debt and increased financial risk.

• Conversely, the Gross Profit Ratio experienced a substantial decline from 16.87% in
2023 to 8.38% in 2024, signaling challenges in maintaining profitability from core
operations, potentially due to rising costs or competitive pressures.

• The Net Profit Ratio also decreased from 27.02% in 2023 to 23.07% in 2024,
suggesting a reduction in overall profitability, possibly from escalating operational
expenses. However, the Operating Profit Ratio improved significantly to 20.76% in
2024, highlighting enhanced operational efficiency.

• The Operating Ratio increased sharply to 28.96%, indicating rising operating

expenses relative to total revenue, which necessitates improved cost management.

• The Return on Equity (ROE) decreased to 14.03% in 2024, reflecting diminished

returns for shareholders, while Return on Assets (ROA) fell to 1.58%, indicating
reduced efficiency in asset utilization.

• The Price to Earnings Ratio (P/E) declined to 18.42, reflecting lowered market
expectations for future earnings growth. Similarly, the Price to Sales Ratio (P/S)
dropped to 3.88, indicating a diminished market valuation of the bank’s revenue. The
Price to Book Ratio (P/B) also decreased to 2.41, suggesting concerns regarding the
bank's financial stability and growth potential.

• The Current Account Savings Account (CASA) Ratio fell to 38.13%, indicating a
reduction in low-cost deposits, which may pressure the bank's net interest margins.
Finally, the Credit to Deposit Ratio (CDR) increased to 107.95%, signaling
aggressive lending practices that could raise liquidity concerns if not managed
carefully.
ICICI Securities
• ICICI Securities, a leading financial services firm in India, offers a comprehensive range of investment
banking, wealth management, and retail broking services. As a subsidiary of ICICI Bank, it benefits from a
strong brand, wide distribution network, and cross-selling opportunities within the ICICI ecosystem. The firm
has capitalized on the rise in retail participation in financial markets, expanding its digital platform and
enhancing customer experience through innovative technology solutions. ICICI Securities has a diversified
revenue base, with growing contributions from its wealth management and advisory segments, although its
dependency on market volatility for retail broking income poses risks. The company’s focus on enhancing
client engagement through digital channels, coupled with a robust research team, positions it for continued
growth. However, increasing competition from discount brokers and regulatory changes in the financial
services sector are potential challenges that may impact its margins and market share in the long run.
ICICI Securities –
Balance sheet analysis
• Between FY23 and FY24, ICICI Securities experienced a significant expansion in
its balance sheet. Shareholders' funds increased from Rs. 2,852.50 Cr. in FY23 to
Rs. 3,922.42 Cr. in FY24, reflecting a rise in reserves and surplus by Rs. 1,069.67
Cr., a 39.75% increase. This surge signifies the company’s strong earnings
retention. On the liabilities side, current liabilities witnessed a sharp increase,
particularly in short-term borrowings, which grew from Rs. 9,300 Cr. to Rs.
16,690.29 Cr., a 79.46% rise, indicating increased reliance on short-term debt for
operational needs. Trade payables also grew significantly, adding Rs. 1,473.52 Cr.,
representing a 161% increase, reflecting a higher volume of business transactions.

• On the asset side, ICICI Securities’ total assets grew by Rs. 10,053.87 Cr., a
64.57% rise from FY23 to FY24. The company’s liquidity position improved
drastically, with cash and cash equivalents rising by Rs. 4,460.69 Cr., a 65.69%
increase, reflecting stronger operational cash flow. Tangible assets also saw a
notable increase from Rs. 220.68 Cr. to Rs. 452.11 Cr., a 104.87% rise, indicating
continued investment in infrastructure. The company's short-term loans and
advances also grew substantially, increasing by Rs. 5,514.49 Cr. (85.90%), which
may reflect higher lending or advances to its clients. Overall, ICICI Securities saw
robust growth across key balance sheet metrics, showcasing its expanding
operations and financial health.
ICICI Securities -
Cash Flow analysis
• For FY24, ICICI Securities saw significant shifts in its cash flow dynamics compared to
FY23. The net cash flow from operating activities took a major hit, moving from a
negative Rs. 674.16 Cr. in FY23 to a much larger negative Rs. 5,621.06 Cr. in FY24, a
deterioration of Rs. 4,946.90 Cr. (733.79%). This indicates a substantial increase in
working capital requirements or operational expenses. Despite an increase in net profit
before tax by Rs. 776.40 Cr. (51.72%), the company struggled to generate positive
operating cash flow, which could suggest higher outflows tied to business operations or
investments in growth.

• In terms of financing activities, ICICI Securities saw a massive inflow in FY24, with net
cash used in financing activities increasing from Rs. 265.99 Cr. in FY23 to Rs. 5,714.86
Cr. in FY24, a rise of Rs. 5,448.87 Cr. (2,048.52%). This suggests a substantial amount
of financing was raised, possibly through debt or equity to support business growth. On
the investing side, the outflow nearly doubled, rising by Rs. 132.15 Cr. (105.91%) to Rs.
256.93 Cr. in FY24. Overall, despite the sharp increase in financing inflows, the
company ended FY24 with a reduced cash balance, with cash and cash equivalents
declining to Rs. 77.51 Cr., indicating that the large financing inflows were primarily
used to cover operational and investing activities.
ICICI Securities –
P&L Analysis
• For FY24, ICICI Securities demonstrated a strong performance, with total
operating revenue growing significantly by Rs. 1,633.46 Cr. (47.82%) from Rs.
3,415.75 Cr. in FY23 to Rs. 5,049.21 Cr. This robust revenue increase reflects
the company’s successful operations and market positioning. Despite a slight
decline in other income, the total revenue for FY24 amounted to Rs. 5,051.10
Cr., representing a 47.46% increase over the previous year. However, operating
expenses also rose considerably, particularly employee benefit expenses, which
increased by Rs. 176.69 Cr. (25.32%) and finance costs, which surged by Rs.
450.66 Cr. (84.03%), indicating higher debt servicing or interest costs.

• As a result, the profit before tax for FY24 increased by Rs. 776.40 Cr.
(51.72%), reaching Rs. 2,277.52 Cr., despite a decrease in FY23 due to higher
operating and financing expenses. The net profit after tax also saw a substantial
rise of Rs. 579.06 Cr. (51.81%) compared to FY23, finishing at Rs. 1,696.69 Cr.
The basic earnings per share (EPS) grew by Rs. 18 (51.43%) from Rs. 35 in
FY23 to Rs. 53 in FY24. This strong profitability growth is a result of increased
revenue and effective cost management, although the company saw a small
decline in dividends paid, down by Rs. 39.70 Cr. (5.47%) compared to the prior
year.
 ICICI Securities –
Ratio Analysis
• Debt to Equity: The company’s Debt to Equity ratio has risen from 3.19 in 2022 to 4.26 in 2024,
indicating that the company is relying more heavily on debt to finance its operations. This increasing
leverage could be a sign of aggressive expansion, but it also adds financial risk as the company becomes
more exposed to debt repayments.

• Gross Profit Ratio: The Gross Profit Ratio remained stable at 100% across all three years, meaning the
company maintains a strong ability to cover its direct production costs, indicating solid pricing power and
cost management.

• Operating Ratio: The Operating Ratio has improved slightly, dropping from 8.17% in 2022 to 7.72% in
2024, signalling that the company has been able to lower its operating costs as a percentage of sales.

• Operating Profit Ratio: The Operating Profit Ratio has fluctuated, declining from 53.86% in 2022 to
45.06% in 2024, suggesting that although the company has been efficient operationally, its profit margins
from operations have been decreasing.

• Net Profit Ratio: The Net Profit Ratio followed a similar trend, decreasing from 40.25% in 2022 to
33.60% in 2024, reflecting lower overall profitability despite efforts to control costs.

• Return on Equity (ROE): The ROE decreased from 56.88% in 2022 to 43.52% in 2024, indicating that
the company is generating lower returns on shareholders’ equity.

• Return on Assets (ROA): ROA declined from 10.13% in 2022 to 6.62% in 2024, suggesting reduced
efficiency in utilizing its assets to generate profit.

• Valuation Ratios (P/E, P/S, P/B): The company’s Price-to-Earnings (P/E) ratio dropped significantly
from 25.08 in 2023 to 16.57 in 2024, signalling a reduction in market valuation, possibly due to declining
profitability. Similarly, the Price-to-Sales (P/S) ratio increased from 4.04 to 4.65, and the Price-to-Book
(P/B) ratio rose from 4.84 to 5.98, indicating the market is placing a higher value on its sales and book
value, despite the decline in profit ratios.
Indian Bank
In the fiscal year ending 2024, Indian Bank reported a net profit of ₹2,403 crore,
reflecting a steady increase in profitability amidst market challenges. The bank's
total business surpassed ₹12.2 trillion, driven by robust credit demand across
corporate, retail, and MSME segments, alongside improved asset quality
management, evidenced by a better gross non-performing asset (NPA) ratio. The
bank continues to leverage the advantages of its 2020 merger with Allahabad Bank,
which has expanded its geographical reach and customer base, particularly in rural
areas. Despite facing challenges with high NPAs, Indian Bank is proactively
addressing these issues through dedicated recovery teams and improved monitoring
systems. The management is prioritizing credit growth by targeting key sectors,
enhancing profitability through cost-cutting and expanding non-interest income,
embracing sustainability initiatives aligned with ESG principles, and investing in
employee development to boost productivity and leadership within the organization.
Indian Bank –
Balance Sheet
Analysis
• The Cash it has is more than the Debt it is holding. It
does not need to completely depend upon Debt as a
financing source.
• The Reserves are increasing at a significant rate. It
shows retention rate of the company. The growth of this
will show that the company is retaining money for
future growth and investment.
• The investments are increasing at a two-fold which
shows that they are investing into various sources of
revenue for the company, which will reduce
dependency on core and main activities for revenue
generation.
• The deposits are increasing which shows increasing
trust of customers into the company. The advances are
also increasing for the bank which is in ratio with the
increasing deposits. Credit-Deposit Ratio can show how
much of an aggressive lender they are.
Indian Bank – Cash
Flow analysis
• The consolidated cash flow analysis indicates a company with
strong profitability growth, as evidenced by an increase in net
profit before tax from 4,414.19 in March 2022 to 8,422.52 in
March 2024 (a 51.12% rise).
• However, the company faces significant challenges,
particularly with negative cash flows from operating activities,
which fell dramatically from 28,750.33 in March 2022 to -
8,617.26 in March 2024, suggesting operational difficulties and
high working capital demands.
• Although cash outflows from investing activities have
increased, the return to positive cash flow from financing
activities in 2024 is a positive sign compared to the previous
year's outflows.
• Nonetheless, the declining cash reserves—from 79,968.22 in
March 2023 to 42,176.91 in March 2024—raise concerns about
liquidity and financial stability. These insights highlight the
need for effective cash management strategies to ensure
sustainability and the ability to convert profitability into
operational cash flow, despite the promising growth in profits.
Indian Bank –
P&L Analysis
• The core activities income of interest/discount of
advances/bills has been increasing at a significant
rate of 27% for this year and 18% the previous year.
It shows that the company is not entirely dependent
upon other income sources. It is higher than the other
sources of income like investments and Interest on
Cash reserve in RBI.
• The Interest expended for the year 2024 is growing at
a higher rate than the interest earned on advances.
This is a significant factor that has t be controlled.
• The total expenditure growth with regards to the Total
income is lesser than the total income growth. This is
a good ratio to have. The EPS is growing at a good
rate and as the net income is increasing at a
significant rate.
 Indian Bank – Ratio
Analysis
• The Debt-to-Equity Ratio has decreased from 0.446 in 2023 to 0.384 in 2024,
signaling that the company is relying less on debt financing relative to equity. This is a
positive trend as it reduces financial risk.

• The ROE has consistently improved from 10.52% (2022) to 15.38% (2024). This
indicates that the company is generating higher returns on shareholders' equity,
making it attractive for investors seeking equity returns.

• The Net Profit Margin has also improved significantly from 10.15% (2022) to 14.49%
(2024), suggesting better profitability and cost control. A higher margin means the
company is keeping more of its revenue as profit, which is a good sign for investors.

• The ROA shows a gradual increase from 0.58 (2022) to 1.01 (2024). Although still low,
the upward trend suggests the company is becoming more efficient in generating profit
from its assets.

• The Interest Coverage Ratio is stable around 1.24 (2024), which indicates that the
company is just about able to cover its interest obligations. A ratio above 1 is positive,
but a higher ratio would be more reassuring for investors

• .The CASA Ratio has slightly decreased from 41.76% (2022) to 40.77% (2024),
showing a marginal decline in the share of low-cost deposits. While the impact isn’t
severe, it’s something to monitor as it affects the cost of funds.

• Price to Earnings (P/E) has decreased from 15.39 (2022) to 7.93 (2024), indicating
that the stock may be undervalued or that earnings have significantly improved,
making it a potentially attractive buy for investors. Price to Sales (P/S) and Price to
Book (P/B) ratios have also decreased, which may suggest that the stock is trading at
lower multiples, potentially offering a value opportunity if the company is on a
growth trajectory.
Overall Analysis
• The banking and financial services industry is a dynamic and essential sector of the
global economy. It provides a wide range of financial services to individuals and
businesses, including savings, loans, investments, and payment processing.
• While the industry has faced significant challenges in recent years, such as the global
financial crisis and increased competition from fintech companies, it continues to be a
vital part of the economic landscape. The industry is undergoing rapid transformation,
driven by technological advancements and changing consumer preferences.
 Mayank Rungta - 222
Akshaya Mallemkondu -
179
Nikhil Sharma Gattupalli -
GROUP 1 251
Arihant Jain - 237

Alapati Vaishnavi - 79