A

PROJECT REPORT
“COMPARATIVE RESEARCH OF EQUITY MARKET AND
FUNDAMENTAL ANALYSIS IN NBFC SECTOR”

BY
Aniket Ankush Ulhalkar
MBA (Finance)

Under the Guidance of

“PROF. HARSHAL DAYMA”
Submitted To
Savitribai Phule Pune University

In Partial Fulfillment of the Requirement

For Award of the Degree of
Master of Business Administration(MBA)

DR. D. Y. PATIL UNITECH SOCIETY’S

Dr. D. Y. PATIL INSTITUTE OF MANAGEMENT & RESEARCH
Sant. Tukaram Nagar, Pimpri, Pune - 411018
ACADEMIC YEAR
2022-2024
 DECLARATION

I undersigned hereby declare by that the project report “Comparative Research of Equity
Market and Fundamental Analysis in NBFC Sector” is completed by me for university
of Pune, towards the partial fulfillment for the award of Master of Business Administration
(MBA) in year 2022-2024.

This is my original work and conclusion drawn therein is based on the material collected by
myself.

I further declare that, to the best of my knowledge and belief, this project work is not has
been submitted to this or any other university for the award of my any other degree diploma
or equivalent course.

DATE: ANIKET ANKUSH ULHALKAR

PLACE: PUNE
 ACKNOWLEDGEMENT

The success of any Project Report depends largely on the encouragement and guidelines of
many people. I take this opportunity to express my gratitude to the people who have been
instrumental in the successful completion of the project. I would like to extend my sincere
thanks to all of them.

This Project Report would not have been possible without the guidance and support of my
project guide, Prof. HARSHAL DAYMA, Dr. D.Y. Patil Institute of Management and
Research, who with her technical know-how and experience guided me from the very start.
It is by virtue of her valuable suggestions and mentoring that this project report has
materialized into concrete form.

I am thankful to Director Dr. Meghana Bhilare and our HOD Dr. Jini Saxena of Dr. D.Y.
Patil Institute of Management and Research for their kind support.

DATE: ANIKET ANKUSH ULHALKAR

PLACE: PUNE
 INDEX

Sr. No. Topic Page No.

1 EXECUTIVE SUMMARY 1

2 INDUSTRY PROFILE 2

3 COMPANY PROFILE 4

4 OBJECTIVES 5

5 LITERATURE REVIEW 6

6 RESEARCH METHODOLOGY 10

7 DATA ANALYSIS & INTERPRETATION 13

8 FINDINGS 38

9 SUGGESTIONS 40

10 LIMITATION & SCOPE OF SUTURE STUDIES 41

11 CONCLUSIONS 42

12 BIBLIOGRAPHY 43
EXECUTIVE SUMMARY
 EXECUTIVE SUMMARY

Equity Analysis and Fundamental Study of the NBFC Sector.

In the course of my research and analysis, I embarked on a comprehensive exploration of

the Non-Banking Financial Company (NBFC) sector. This involved an exhaustive equity
analysis and an in-depth fundamental study of the companies operating within this sector.

My investigation encompassed a detailed examination of financial statements, performance

indicators, regulatory factors, and market dynamics. The objective was to develop a
profound understanding of the NBFC sector's present situation and its future potential.

Through this research, I aimed to equip myself with a deeper insight into the intricacies of
this vital financial domain. The results of my equity analysis and fundamental study are
presented in the following sections, offering valuable insights into the investment prospects
and associated risks within the NBFC sector.

I believe that this summary provides a clear understanding of the comprehensive nature of
my research and analysis, which lays the foundation for informed decision-making within
the NBFC sector.

1
 CHAPTER : 1
INDUSTRY PROFILE
 INDUSTRY PROFILE

The Non-Banking Financial Company (NBFC) sector stands as a cornerstone of India's

financial landscape, playing a pivotal role in the nation's economic growth and financial
inclusion. This dynamic sector represents a distinctive category of financial institutions that
provide a diverse range of banking and financial services without holding traditional banking
licenses.

The NBFC sector is a vital bridge between formal banking institutions and the unbanked or
underbanked segments of the population. Over the years, it has evolved to serve as a critical
conduit for credit, investments, and financial services, often filling the gaps left by
conventional banks.

1. Diversity of Services: NBFCs offer a broad spectrum of financial services, including

lending, investment, wealth management, insurance, and asset financing. Their flexibility
and capacity to specialize in specific niches have contributed to the development of a vibrant
and competitive sector.

2. Regulatory Framework: The Reserve Bank of India (RBI) serves as the primary
regulatory authority overseeing NBFCs. This regulatory framework has continually evolved
to address concerns related to capital adequacy, risk management, and consumer protection.

3. Challenges and Opportunities: The sector faces challenges related to regulatory

compliance, risk management, and access to funds. Managing asset-liability mismatches and
maintaining liquidity are critical factors for the stability of NBFCs. At the same time, the
sector is positioned for further growth due to the increasing demand for credit and the rapid
digital transformation of financial services.

Equity Research

Equity research is a detailed analysis of individual companies, emphasizing factors

influencing their financial performance and market standing. Analysts conduct company-
specific research, scrutinizing financial statements, evaluating management effectiveness,
and assessing strategic initiatives. Metrics such as EBIT (Earnings Before Interest and
Taxes) and EPS (Earnings Per Share) are examined to gauge profitability and earnings
2
potential. Valuation models like Comparable Company Analysis (CCA) are employed to
estimate a company's intrinsic value. A comprehensive evaluation of a company's business
model, competitive advantages, and potential risks informs investment recommendations,
providing investors with insights into growth prospects and the investment landscape.

1. Financial Metrics Analysis: Equity research involves a detailed examination of financial

metrics like EBIT (Earnings Before Interest and Taxes) and EPS (Earnings Per Share) to
assess a company's profitability and earnings potential.

2. Comparable Company Analysis (CCA): Analysts employ CCA as a valuation model to

estimate a company's intrinsic value by comparing it to similar companies in the market.

3. Strategic Company Assessment: Company-specific research includes a comprehensive

evaluation of a company's business model, competitive advantages, and potential risks,
providing crucial insights for investment decisions.

Fundamental Analysis

Fundamental analysis is a method used to evaluate the intrinsic value of a company's stock
by examining various financial and economic factors. It involves analyzing financial
statements, income statements, and balance sheets to assess a company's financial health.
Additionally, fundamental analysis considers economic indicators, industry trends, and
company-specific data to make informed investment decisions. Investors use this approach
to determine whether a stock is overvalued or undervalued and to identify potential growth
opportunities. Key indicators in fundamental analysis include earnings per share (EPS),
price-to-earnings (P/E) ratio, and return on equity (ROE). By gaining insights into a
company's fundamentals, investors aim to make well-informed choices about buying or
selling stocks. The process also involves understanding a company's competitive
positioning, management effectiveness, and overall strategic outlook, providing a
comprehensive picture of its investment potential.

3
 CHAPTER : 2
COMPANY PROFILE
 COMPANY PROFILE

Company name Assetvilla Financial Services LLP

Started business on 10th January 2016

Founded by Mr. Jayprakash Maurya

Registered Office Samarth Nagar, Village road, Bhandup, Mumbai

Industry Financial Consulting and Mutual Funds Distributor

Asset-under-
8000+ clients and above 300 crores AUM
management

Products and Mutual Funds; Health, Life and General Insurance

Services PMS, AIF, Structured Products; Tax Planning; Estate Planning

Partner Company Assetvilla insurance Marketing LLP

To be leader in every market we serve, to benefit our customers.

Vision & Mission To help our customers achieve financial prosperity and peace of
mind.

4
CHAPTER : 3
OBJECTIVES
 OBJECTIVES

 To identify company in NBFC sector that gives higher return on investments.

 To determine sales growth and profit growth of the companies.

 To comparative statement of five companies for previous five year data.

 To show liquidity, solvency and profitability of NBFC companies.

5
 CHAPTER : 4
LITERATURE REVIEW
 LITERATURE REVIEW

(Sornaganesh, Maria, & Soris, 2018), The article discusses the economic sustainability of
five major NBFCs in India, namely STF, SF, BF, CF, and M&MF, based on their earnings
per share. The study reveals that SF has performed better than the other four NBFCs in terms
of earnings per share. Overall, the article provides a comprehensive analysis of the Indian
NBFC industry and its economic performance. The future scope for this paper is Analyzing
the risk management practices of NBFCs in India and their effectiveness in mitigating
financial risks.

(Rajeswari., 2020), “A Study On Construction Of An Investment Portfolio Using

Fundamental Analysis”, Based on the investor expected factors SBI attains first. In the
Pharma sector, sun pharma and Lupin Ltd had a tight pace with each other, but in the
previous year, Lupin Ltd incurred a huge loss. For the past two year Lupin Ltd has not
declared any dividend for the investor. For some investors, holding a scrip of well
performing company is a matter of reputation. The researcher tries to help them for making
an initial step into the volatile mark.

(Devi, 2014), The funding source of NBFC sectors and how people have there fundamental
study on all aspects that affect there investments in the stocks of NBFC’s. The Debt strategy,
Equity strategy and also the Management risk the people has in mind at the time of
investment. The future scope for this paper is some legal regulations that can change after
time and also the various age difference that affect difference in mentality and thinking.

(Rustagi, 2007), The book tells about the investment and the basics of understanding of what
is difference between saving and investment, what are real assets and capital appreciation.

(VENKADESH, 2017), The study of short term and long term solvency of the selected
NBFC companies in Tamil-Nadu. This was supported by 4 ratios that are Current Ratio,
Liquid Ratio, Debt-Equity Ratio, and Proprietary Ratio. This study shown the NBFC
solvency in the state and now can be increased to study of country.

(Bakshi & Avijit, 2020), The purpose of the paper is to compare the liquidity profile of banks
with NBFCs to examine how NBFCs perform under stringent RBI and BCBS guidelines
although the business model of both are not fully identical. The liquidity coverage ratio

6
specifies that the stock of liquid assets are not required to service liabilities since cash
inflows up to one month are more than outflows for all NBFCs. While comparing liquidity
profile with commercial banks it is observed that on all the measures except Loan To Deposit
ratio, NBFCs performed better despite their limited stock of public deposits. The results
might change in the current year i.e. after ILF&S collapses. This paper is believed to
be the first attempt discussing on liquidity risk of NBFCs.

(Gumparthi, 2010), Non-banking financial companies (NBFCs) form an integral part of the
Indian financial system. This report covers the industry. Most of this NBFCs’ are operating
with high risk of lending and more often NBFCs’ lend credit to Small and Medium size
enterprises, which are categorized as high risk class of Assets. To assess such high risk assets
we need to have a comprehensive model. This paper aim is to build Risk Assessment Model
for NBFCs’ based on both qualitative and quantitative aspects of the client.

(Awasthi & Shukla, 2023), This article focuses and analyzed the trend growth of non-
banking financial companies (NBFCs) in India as well as the impact of number of NBFCs,
policy intervention by RBI, ratio of market to bank borrowings and economy’s investment
rate on the asset size of NBFCs. This results highlight the significant negative impact with
first two variables and positive but insignificant impact with the other two. This requires
policy intervention by RBI to be calibrated in tune with containing the systemic risk and
facilitating the growth of NBFCs sector. The optimized policy intervention requires
redefining the concept of systemically important NBFCs in India.

(Sengupta, Son, & Vardhan, 2022), In this paper they analyse the evolution of the NBFC
sector in India over time and its importance in extending credit and discusses the factors that
may have contributed to the 2018 crisis. They attempt to understand the advantages and
disadvantages of the business model of NBFCs, and the drivers of their rapid rise and
subsequent challenges in recent years. We also briefly discuss the potential impact of the
Covid-19 pandemic on the NBFC sector. Drawing lessons from the past, NBFCs need to be
strengthened to play an important role in India’s financial landscape. This paper still miss
the key solvency ratio that were impacted at time of COVID-19.

(Bhaskar, 2014), This report gives the basics of NBFCs and it’s evolution over the period of
time and all the parts it is being divided by RBI and is classified on the basis of different
finances and also the comparative study of NBFC and Banks and how they have being a

7
game changer in the field and also making a name for same on all figures that are being
analysed in this report. The left thing in this report is about the facts and comparison of
NBFC among themselves and also the common-size statement analysis.

(Dutta, Jain, & Gupta, 2020), This paper analyses the performance of non-banking finance
companies (NBFC) in the Indian context using data envelopment analysis (DEA). The paper
are used to study the financials of NBFCs over the last 5 years, and it gives us a maximum
productivity growth of 8.53%. It was noticed that there is a significant difference in the mean
efficiency values of different sized NBFC’s which can be explained by the lack of
standardization in the NBFC domain and the few companies which are listed on the stock
market. The managers should not consider ROE as a significant indicator of efficiency and
should instead focus on aspects such as ROA and income diversity.

(Mullins & Wadhwani, 1989), This paper is concerned with examining whether exogenous
events whose only direct effect is to change stock prices can indirectly affect corporate
investment through the stock price mechanism. It is argued that the actual effect of share
price changes depends on institutional considerations which affect the degree of managerial
autonomy - e.g., the extent of the use of the takeover mechanism, gearing ratios, and the role
of employees in corporate decision-making.

(Strebel, 1983), A method is presented for analysing the stock market's implicit assessment
of relative strategic position in an industry. The market's overall perception of strategic
position is obtained by comparing the value of future growth potential to that of the existing
earnings stream for each company. More detail is extracted by using the quality and quantity
of future growth, implicit in the relative value of future growth, as a measure of competitive
position and product market outlook respectively.

(Srivastava & Tiwari, 2019), The present paper focus on “Growth and Development of Non-
Banking Financial Companies in India” is an attempt to analyse evolution, growth and
development of Non-Banking Financial Companies in India. Total outstanding borrowing
of the NBFC sectors increased as a CAGR of 14.1% during FY13-FY18 which
commensurate with the CAGR of 14.45% in the overall credit during the same time period.
Overall NBFC sector credit growth has been significantly faster in FY18 than the bank credit
growth.

8
(Reddy & Reddy., 2020), Financial system constitutes financial instruments,
institutions, markets and services. In this, financial institutions are organized system
deals with mobilization, organization, marketing and distribution of financial products
to different sections of society. Banks and non-banking financial companies are major
constitutes of financial institution in the country where banks serve major segments
and later serve the niche segment of financial system. Since beginning, banking
sector has been played dominant role in financial system worldwide, but, due to
liberalization, privatization and globalization reforms non-banking sector has
increased their contribution significantly. Therefore, present study endeavors earlier
research work done on wide elements of non-banking sector globally and presented.

9
 CHAPTER : 5
RESEARCH METHODOLOGY
 RESEARCH METHODOLOGY

 WHAT IS RESEARCH?
o Research is a comprehensive and structured process that involves a
systematic and planned approach to arriving at dependable solutions to
problems or inquiries through the collection, analysis, and interpretation of
data. This definition, attributed to Clifford Woody, captures the essence of
research as a methodical exploration of specific subjects or issues.
o Research typically begins with the identification of a research problem or
question, followed by the formulation of hypotheses or research objectives.
It entails a thorough review of existing literature and sources to build a
foundation of knowledge in the field. Researchers then proceed to design a
research methodology, which may involve data collection, experiments,
surveys, or other investigative techniques.
o The data collected is rigorously analyzed, often employing statistical tools
and software, to derive meaningful insights. The interpretation of findings
involves drawing conclusions based on the analysis, which can lead to new
knowledge, the validation of existing theories, or the formulation of practical
recommendations.
o Research plays a pivotal role in expanding our understanding of various
subjects and issues, driving innovation, making informed decisions, and
contributing to the advancement of science, technology, and society as a
whole. It is a critical component of academic, scientific, and professional
endeavors, guiding us in the quest for reliable solutions and a deeper
comprehension of the world around us.
 NATURE OF RESEARCH:
o Qualitative.
 Qualitative research is a method that seeks to understand and interpret
the complexities of human behavior, experiences, and social
phenomena through non-numerical data collection and analysis.
o Quantitative.

10
  Quantitative research collects numerical data to analyze and draw
statistical conclusions, often using surveys, experiments, and
structured observations.
 RESEARCH DESIGN:
o DESCRIPTIVE.
o EXPLORATORY.
o CASUAL.
 RESEARCH METHODOLOGY IN APPLICATION.

Points Details

Type of Research Design

Descriptive Research Design
(Exploratory/ Descriptive/Causal)

Nature of Research
Quantitative
(Qualitative/Quantitative)

Type of Data (Primary/ Secondary) Secondary Data

Web – Investopedia, ET, Tickertape, Scholarly,

Sources of data collection
Screener.com, etc.

Sampling Method (If Applicable) Stratified Sampling

Sample size (If Applicable) 5

Tools & Techniques used for Data Ratio Analysis, Comparative study, Common
Analysis Size Statements.

 SECONDARY DATA:
o Secondary data refers to information and data that have been collected and
recorded by someone else for a different purpose, but can be used for
research, analysis, or decision-making in a new context. It's pre-existing

11
data that is not generated through your own research but is obtained from
existing sources such as books, articles, databases, or records. Researchers
often use secondary data to save time and resources when studying a
particular topic or to support their primary research findings. The various
data sources I used in research are:
1. NSE, BSE
2. Company Websites
3. Annual Reports
4. Fact Sheets
5. Screener, Tickertape, Etc.

12
 CHAPTER : 6
DATA ANALYSIS
 DATA ANALYSIS

Financial Ratio Analysis.

Financial Ratio Analysis is a fundamental tool used by investors, analysts, and businesses to
evaluate and understand the financial health and performance of a company. It involves
calculating and interpreting various financial ratios based on a company's financial
statements, such as the balance sheet and income statement. Here's a detailed explanation of
this method:

Financial ratio analysis serves multiple purposes, including assessing a company's

profitability, liquidity, efficiency, solvency, and overall financial strength. It helps
stakeholders make informed decisions regarding investments, lending, and strategic
planning.

Financial ratios are categorized into several types:

- Liquidity Ratios: These ratios assess a company's ability to meet short-term financial
obligations. Common liquidity ratios include the current ratio and quick ratio.

- Profitability Ratios: These ratios evaluate a company's ability to generate profits. Key
profitability ratios include the net profit margin, return on equity (ROE), and return on assets
(ROA).

- Solvency Ratios: Solvency ratios examine a company's long-term financial stability and
its ability to meet long-term debt obligations. The debt-to-equity ratio and interest coverage
ratio are examples.

- Efficiency Ratios: Efficiency ratios gauge how well a company utilizes its assets and
manages its operations. The asset turnover ratio and inventory turnover ratio are among
them.

13
ROE (%)

Company Name ROE%

Bajaj Finance 21.16
Shriram Finance 13.81
Muthoot Finance 16.67
Motilal Oswal Finance 14.90
L&T Finance 7.54

ROE(%)
25

20

15

10 21.16
16.67
13.81 14.9
5
7.54

0
Bajaj Fin. Shriram Fin. Muthoot Fin. Motilal Oswal Fin. L&T Fin.
Company

ROE(%)

ROE = (Net Income/Shareholders Equity) X 100

INTERPRETATION & ANALYSIS

This study lets investors understand that the returns they will get on all the investment made
as seen in the figure Bajaj Finance is providing a stable and a good return on the investment
of the people and let the drop be good this ROE of Bajaj Finance has shown a growth from
2017 and is now on stable platform. Where on the other hand even on the midcap company
Muthoot Finance is showing a huge return on the value invested.

14
P/E Ratio

Company Name P/E

Bajaj Finance 39.38
Shriram Finance 10.82
Muthoot Finance 14.28
Motilal Oswal Finance 18.06
L&T Finance 14.34

P/E Ratio
45
40
35
30
25
20 39.38
15
10 18.06
14.28 14.34
5 10.82
0
Bajaj Fin. Shriram Fin. Muthoot Fin. Motilal Oswal Fin. L&T Fin.
Company

P/E Ratio

P/E Ratio = Share price/ Earning Per Share

INTERPRETATION & ANALYSIS

The P/E ratio tells you how much investors are willing to pay for a company's stock
compared to the company's profits. With this the above table gives a clear picture that people
are willing to invest more in Bajaj Finance than any other NBFC companies which is seen a
major growth for the company from time of 2017 and is now steadily growing along with it
there are some activities which Shriram Finance has to keep in mind so that people can make
back there trusts as before and be good to invest in it.

15
EPS

Company Name EPS

Bajaj Finance 190.23
Shriram Finance 173.48
Muthoot Finance 90.83
Motilal Oswal Finance 57.45
L&T Finance 9.28

EPS
200

160

120

190.23
80 173.48

40 90.83
57.45
9.28
0
Bajaj Fin. Shriram Fin. Muthoot Fin. Motilal Oswal Fin. L&T Fin.
Company

EPS

EPS = Net Income / Company’s Outstanding Shares.

INTERPRETATION & ANALYSIS

Earnings per share (EPS) is like a slice of a company's profits that is attributed to each share
of its stock. It's calculated by dividing the company's total earnings by the number of
outstanding shares of stock. This gives what a company is earning per share and is making
a profit for itself this list brings Shriram Finance to a level competing of Bajaj Finance and
also to understand that there increased rates are showing them effect in growing net income.

16
Net Operating Profit Per Share (Rs)

Company Name Net Operating Profit Per Share (Rs)

Bajaj Finance ₹589.35
Shriram Finance ₹795
Muthoot Finance ₹261.92
Motilal Oswal Finance ₹180.22
L&T Finance ₹1.4

Net Operating Profit per Share

1000

800

600

400 795
589.35
200
261.92
180.22 1.4
0
Bajaj Fin. Shriram Fin. Muthoot Fin. Motilal Oswal Fin. L&T Fin.
Company

Net Operating Profit per Share

INTERPRETATION & ANALYSIS

It's like looking at how much money a company makes from its main operations for each
share they have. If the number is higher, it means the company is doing well in making
profits. Bajaj Finance (595): Strong operational efficiency, appealing to investors. Shriram
Finance (795): Exceptional performance, potential standout investment. L&T Finance (1.4):
Faces challenges, needs improvement for investor confidence.

17
Net Profit Margin(%)

Company Name Net Profit Margin(%)

Bajaj Finance 28.83%
Shriram Finance 20.08%
Muthoot Finance 33.03%
Motilal Oswal Finance 21.33%
L&T Finance 40.70%

Net Profit Margin

50
40
30
20 40.7
28.83 33.03
10 20.08 21.33
0
Bajaj Fin. Shriram Fin. Muthoot Fin. Motilal Oswal Fin. L&T Fin.
Company

Net Profit Margin

Net Profit Margin = Net Profit / Total Revenue X 100

INTERPRETATION & ANALYSIS

Net profit margin is the percentage of profit a company keeps from its total revenue after
deducting all expenses and taxes. Even after less EPS and P/E ratio L&T Finance has made
a great profit margin for the year ended 2023 and will eventually grow making it’s profit to
expand it’s root in NBFC sector and also grow it’s market capitalization and rise from small
market cap. to medium market cap. with upcoming 5-7 years.

18
Return On Net Worth(%)

Company Name Return On Net Worth(%)

Bajaj Finance 20.20%

Shriram Finance 13.80%
Muthoot Finance 16.49%
Motilal Oswal Finance 12.77%
L&T Finance 18.69%

Return on Net Worth(%)

30

20

10 20.2 18.69
13.8 16.49
12.77
0
Bajaj Fin. Shriram Fin. Muthoot Fin. Motilal Oswal Fin. L&T Fin.
Company

Return on Net Worth(%)

Return on Net Worth = Net Income / Shareholder’s Equity X 100

INTERPRETATION & ANALYSIS

Return on net worth is the percentage of profit a company earns in relation to its shareholders'
equity, indicating how efficiently it utilizes equity capital to generate earnings. This ratio
helps us understand how efficiently all the 5 NBFC companies uses it’s equity amount to
earn profit and all are at close competition at net worth returns. L&T finance uses its equity
with great care for the trust building of the people.

19
ROCE(%)

Company Name ROCE(%)

Bajaj Finance 10.86%
Shriram Finance 10.30%
Muthoot Finance 11.81%
Motilal Oswal Finance 11.50%
L&T Finance 2.10%

ROCE(%)
16

12

8
10.86 11.81 11.5
10.3
4
2.1
0
Bajaj Fin. Shriram Fin. Muthoot Fin. Motilal Oswal Fin. L&T Fin.
Company

ROCE(%)

Return On Capital Employed(%) = Operating Profit / Capital Employed X 100

INTERPRETATION & ANALYSIS

ROCE tells how well a company turns its money (from both owners and loans) into profits,
showing efficiency. It's found by dividing operating profit by the total capital used. The
major reason of L&T falling back here is it does use money from equity and not from any
other debt financing is used to meets its trade and also to make sure that company not falls
in utter debt situation, where as all other has a highly ROCE so as to gain profits of the
company.

20
Current Ratio

Company Name Current Ratio

Bajaj Finance 1.87
Shriram Finance 1.28
Muthoot Finance 0.96
Motilal Oswal Finance 1.22
L&T Finance 24.54

Current Ratio
28
24
20
16
12 24.54
8
4 1.87 1.28 0.96 1.22
0
Bajaj Fin. Shriram Fin. Muthoot Fin. Motilal Oswal Fin. L&T Fin.
Company

Current Ratio

Current Ratio = Current Asset / Current Liability.

INTERPRETATION & ANALYSIS

The current ratio is like a company's short-term financial health check. It's the ratio of its
current assets (like cash and inventory) to its current liabilities (such as debts due soon). This
helps assess if a company can cover its short-term obligations with its available assets. The
graph shows that L&T Finance are having a great amount invested in current assets and yet
having a lot of investment and are having a halt of money rather than having cash in hand.

This could also impact the company’s understanding as the ideal ratio is 2:1 that helps people
cover there current liabilities with that of current assets.

21
Debt Equity Ratio

Company Name Current Ratio

Bajaj Finance 3.17
Shriram Finance 3.66
Muthoot Finance 2.36
Motilal Oswal Finance 0.84
L&T Finance --

Debt Equity Ratio

4

2 3.66
3.17
1 2.36
0.84 0
0
Bajaj Fin. Shriram Fin. Muthoot Fin. Motilal Oswal Fin. L&T Fin.
Company

Debt Equity Ratio

Debt Equity Ratio = Company Total Liability / Shareholder’s Equity

INTERPRETATION & ANALYSIS

Debt-to-equity ratio is a financial measure showing how much a company relies on borrowed
money compared to its own funds. It's calculated by dividing total debt by shareholders'
equity, giving insight into the level of financial leverage and risk. The graph shows that L&T
Finance has a 0 Debt Equity as the company is receiving it’s all finance from equity.

22
SALES AND PROFIT CHARTS.

 Sales Chart:
o A graphical representation of a company's total sales or revenue over a
specific time period, providing insights into sales trends.
o The charts below illustrate the individual and comparative sales performance
of leading Non-Banking Financial Companies (NBFCs), including Bajaj
Finance, Shriram Transport Finance, Muthoot Finance, Motilal Oswal
Financial Services, and L&T Finance, over a span of five years. These visual
representations offer a comprehensive view of the sales trends of each NBFC
from 2019 to 2023. By comparing the sales data of these key players in the
NBFC sector over the specified five-year period, stakeholders can gain
valuable insights into their market positions and growth trajectories during
this extended timeframe. These charts serve as effective tools for investors
and analysts to make informed decisions, identify long-term patterns, and
assess the sustained performance of these NBFCs in the market.

 Profit Chart:
o A visual representation of a company's profitability, showing the difference
between total revenue and total expenses over time, aiding in financial
performance analysis.
o The charts below illustrate the individual and comparative profit performance
of prominent Non-Banking Financial Companies (NBFCs) — Bajaj Finance,
Shriram Transport Finance, Muthoot Finance, Motilal Oswal Financial
Services, and L&T Finance — over a duration of five years, from 2019 to
2023. These visual representations offer a comprehensive insight into the
profit trends of each NBFC during the specified timeframe. By comparing
the profit data of these key players in the NBFC sector over the past five
years, stakeholders can glean valuable insights into their market positions and
sustained financial performance. These charts serve as effective tools for
investors and analysts to make informed decisions, identify long-term

23
 profitability trends, and assess the relative financial strength of these NBFCs
in the market.

SALES OF BAJAJ FINANCE.

SALES
45,000 41,397
40,000
35,000 31,632
REVENUE (IN ₹ CR.)

30,000 26,373 26,668

25,000
18,487
20,000
15,000
10,000
5,000
0
2019 2020 2021 2022 2023
YEAR

SALES

SALES OF SHRIRAM FINANCE.

SALES
35,000
30,476
30,000
REVENUE (IN ₹ CR.)

25,000
19,255
20,000 17,240
15,529 16,555
15,000

10,000

5,000

0
2019 2020 2021 2022 2023
YEAR

SALES

24
SALES OF MOTILAL OSWAL FINANCE.

SALES
5,000
4,500 4,296 4,177
4,000 3,625
REVENUE (IN ₹ CR.)

3,500
3,000
2,462 2,357
2,500
2,000
1,500
1,000
500
0
2019 2020 2021 2022 2023
YEAR

SALES

SALES OF MUTHOOT FINANCE.

SALES
14,000
12,184 11,897
11,530
12,000
9,683
REVENUE (IN ₹ CR.)

10,000
7,594
8,000

6,000

4,000

2,000

0
2019 2020 2021 2022 2023
YEAR

SALES

25
SALES OF L&T FINANCE.

SALES
14,500
14,104
14,000 13,678
13,500
REVENUE (IN ₹ CR.)

12,989
13,000 12,774

12,500
11,929
12,000
11,500
11,000
10,500
2019 2020 2021 2022 2023
YEAR

SALES

COMPARISON OF ALL FIVE COMPANIES FOR PAST FIVE YEARS.

SALES COMPARISON
₹ 45,000.00

₹ 40,000.00

₹ 35,000.00
REVENUE (IN ₹ CR.)

₹ 30,000.00

₹ 25,000.00

₹ 20,000.00

₹ 15,000.00

₹ 10,000.00

₹ 5,000.00

₹ 0.00
2019 2020 2021 2022 2023
BAJAJ FIN. ₹ 18,487.00 ₹ 26,373.00 ₹ 26,668.00 ₹ 31,632.00 ₹ 41,397.00
SHRIRAM FIN. ₹ 15,529.00 ₹ 16,555.00 ₹ 17,240.00 ₹ 19,255.00 ₹ 30,476.00
MUTHOOT FIN. ₹ 7,594.00 ₹ 9,683.00 ₹ 11,530.00 ₹ 12,184.00 ₹ 11,897.00
MOTILAL OSWAL FIN. ₹ 2,462.00 ₹ 2,357.00 ₹ 3,625.00 ₹ 4,296.00 ₹ 4,177.00
L&T FIN. ₹ 12,989.00 ₹ 14,104.00 ₹ 13,678.00 ₹ 11,929.00 ₹ 12,774.00
SALES

26
PROFITS OF BAJAJ FINANCE.

PROFIT
₹ 14,000.00

₹ 12,000.00 ₹ 11,506.00
AMOUNT (IN ₹ CR.)

₹ 10,000.00

₹ 8,000.00 ₹ 7,028.00

₹ 6,000.00 ₹ 5,263.00
₹ 3,994.00 ₹ 4,419.00
₹ 4,000.00

₹ 2,000.00

₹ 0.00
2019 2020 2021 2022 2023
YEAR

PROFITS

PROFITS OF SHRIRAM FINANCE.

PROFIT
₹ 7,000.00
₹ 6,011.00
₹ 6,000.00
AMOUNT (IN ₹ CR.)

₹ 5,000.00

₹ 4,000.00

₹ 3,000.00 ₹ 2,563.00 ₹ 2,501.00 ₹ 2,487.00 ₹ 2,707.00

₹ 2,000.00

₹ 1,000.00

₹ 0.00
2019 2020 2021 2022 2023
YEAR

PROFITS

27
PROFITS OF MOTILAL OSWAL FINANCE.

PROFIT
₹ 1,400.00 ₹ 1,310.00
₹ 1,197.00
₹ 1,200.00
₹ 932.00
AMOUNT (IN ₹ CR.)

₹ 1,000.00

₹ 800.00

₹ 600.00

₹ 400.00 ₹ 290.00
₹ 215.00
₹ 200.00

₹ 0.00
2019 2020 2021 2022 2023
YEAR

PROFITS

PROFITS OF MUTHOOT FINANCE.

PROFIT
₹ 4,500.00
₹ 4,031.00
₹ 4,000.00 ₹ 3,818.00
₹ 3,669.00
₹ 3,500.00 ₹ 3,168.00
AMOUNT (IN ₹ CR.)

₹ 3,000.00
₹ 2,500.00 ₹ 2,102.00
₹ 2,000.00
₹ 1,500.00
₹ 1,000.00
₹ 500.00
₹ 0.00
2019 2020 2021 2022 2023
YEAR

PROFITS

28
PROFITS OF L&T FINANCE.

PROFIT
₹ 2,500.00 ₹ 2,232.00

₹ 2,000.00 ₹ 1,700.00

₹ 1,500.00
AMOUNT (IN ₹ CR.)

₹ 948.00
₹ 1,000.00 ₹ 849.00

₹ 500.00

₹ 0.00
2019 2020 2021 2022 2023
-₹ 500.00

-₹ 1,000.00 -₹ 728.00
YEAR

PROFITS

COMPARISON OF PROFITS OF COMPANIES.

PROFIT COMPARISON
₹ 14,000.00

₹ 12,000.00

₹ 10,000.00
AMOUNT (IN₹ CR.)

₹ 8,000.00

₹ 6,000.00

₹ 4,000.00

₹ 2,000.00

₹ 0.00

-₹ 2,000.00
2019 2020 2021 2022 2023
BAJAJ FIN. ₹ 3,994.00 ₹ 5,263.00 ₹ 4,419.00 ₹ 7,028.00 ₹ 11,506.00
SHRIRAM FIN. ₹ 2,563.00 ₹ 2,501.00 ₹ 2,487.00 ₹ 2,707.00 ₹ 6,011.00
MUTHOOT FIN. ₹ 2,102.00 ₹ 3,168.00 ₹ 3,818.00 ₹ 4,031.00 ₹ 3,669.00
MOTILAL OSWAL FIN. ₹ 290.00 ₹ 215.00 ₹ 1,197.00 ₹ 1,310.00 ₹ 932.00
L&T FIN. ₹ 2,232.00 ₹ 1,700.00 ₹ 948.00 ₹ 849.00 -₹ 738.00
FINANCIAL YEAR.

29
INTERPRETATION & ANALYSIS OF SALES & PROFIT GROWTH.

INTERPRETATION

The above figures shows how well the companies are being growing and are having a proper
constant increase in sales and profit and is being able to run and survive in the market this
not only tells the well being but also to expand in the competitive environment. The five
Non-Banking Financial Companies (NBFCs) are experiencing robust financial performance,
marked by impressive sales and profit growth. This positive trend indicates their operational
efficiency and market competitiveness. Importantly, the sustained growth has provided these
NBFCs with substantial funds, enabling them to make strategic investments and
advancements for the betterment of their operations. This financial strength positions them
well for future opportunities and reinforces their commitment to enhancing overall business
excellence.

ANALYSIS

These five Non-Banking Financial Companies (NBFCs) are doing really well – they're
selling more and making more profits. This is because they're attracting more customers or
offering new products that people like. Not only are they making more money, but they're
also getting better at managing their costs, which means more profit.

What's cool is that they're not just hoarding the money; they're using it smartly. They're
investing in things that will make their business even better – like new technology, hiring
talented people, or expanding to new areas. So, not only are they making money, but they're
also making their companies stronger for the future. It's a win-win!

The only drawback to this is that L&T Finance is now showing a major profit growth and is
not being came out from revenue from operations but from disinvestment.

30
Common Size Statements.

The common size financial statements spanning the past five years, from [starting year] to
[ending year], provide a comprehensive breakdown of financial statement items as a
percentage of total revenue or assets for major Non-Banking Financial Companies (NBFCs).
This analytical approach sheds light on the nuanced financial structure of each NBFC,
offering valuable insights for stakeholders.

Key Points to Examine:

1. Segmental Revenue Distribution:

a. Analyze the percentage distribution of revenue across various business
segments to identify the most significant contributors to income.
2. Expense Management Efficiency:
a. Evaluate the proportion of expenses to total revenue to understand the
efficiency of cost management practices employed by each NBFC.
3. Asset and Liability Composition:
a. Examine the composition of assets and liabilities as a percentage of the total
balance sheet to assess the financial risk and leverage of each NBFC.
4. Working Capital Trends:
a. Assess the common size representation of current assets and liabilities to
understand the working capital trends and liquidity positions.
5. Profitability Metrics:
a. Analyze common size representations of key profitability metrics, such as net
profit margin and return on assets, for insights into overall financial
performance.

These common size statements serve as essential tools for investors and analysts, providing
a nuanced understanding of each NBFC's financial health, identifying trends, and making
informed decisions based on the relative composition and performance in the market.

31
COMMON SIZE INCOME STATEMENT.

Company name Bajaj Finance %

Sales 35686.57 100%

Direct expenses 1934.38 5.42

Gross Profit 33752.19 94.58

Salary 4573.08 12.81

other expenses 5568 15.60

EBITDA 23611.11 66.16

Depriciation & Amortisation 443.77 1.24

EBIT 23167.34 64.92

Interest 9285.83 26.02

EBT 13881.51 38.90

Tax 3591.77 10.06

EAT 10289.74 28.83

32
Company name Shriram Finance %

Sales 29802.89 100%

Direct expenses 303.61 1.02

Gross Profit 29499.28 98.98

Salary 2506.11 8.41

other expenses 5738.34 19.25

EBITDA 21254.83 71.32

Depriciation & Amortisation 524.18 1.76

EBIT 20730.65 69.56

Interest 12545.76 42.10

EBT 8184.89 27.46

Tax 2205.55 7.40

EAT 5979.34 20.06

33
Company name Motilal Oswal Finance %

Sales 2692.71 100%

Direct expenses 778.86 28.92

Gross Profit 1913.85 71.08

Salary 610.95 31.92

other expenses 310.21 50.78

EBITDA 992.69 36.87

Depriciation & Amortisation 50.06 5.04

EBIT 942.63 35.01

Interest 217.33 23.06

EBT 725.3 26.94

Tax 156.39 21.56

EAT 568.91 21.13

34
Company name Muthoot Finance %

Sales 10543.75 100%

Direct expenses 0 0.00

Gross Profit 10543.75 100.00

Salary 1199.44 11.38

other expenses 920.13 8.73

EBITDA 8424.18 79.90

Depriciation & Amortisation 58.31 0.55

EBIT 8365.87 79.34

Interest 3699.44 35.09

EBT 4666.43 44.26

Tax 1192.9 11.31

EAT 3473.53 32.94

35
Company name L&T Finance %

Sales 360.03 100%

Direct expenses 0 0.00

Gross Profit 360.03 100.00

Salary 12.73 3.54

other expenses 57.88 16.08

exceptional items -2858.09 -793.85

EBITDA 3147.51 874.24

Depriciation & Amortisation 0.26 0.07

EBIT 3147.25 874.16

Interest 6.05 1.68

EBT 3141.2 872.48

Tax 569.5 158.18

EAT 2571.7 714.30

36
ANALYSIS OF COMMON-SIZE INCOME STATEMENT.
1. L&T Finance:

- Positive Aspect: L&T Finance is performing well by significantly reducing expenses.

This efficiency is reflected in a lower percentage of expenses relative to total sales.

- Implication: The cost-cutting measures contribute to improved profitability and financial

stability for L&T Finance.

2. Bajaj Finance:

- Positive Aspect: Bajaj Finance is excelling with an impressive "Earnings After Tax"
(EAT), indicating strong profitability.

- Implication: The high EAT suggests effective management of costs and robust revenue
generation, positioning Bajaj Finance as a financially sound entity.

3. Muthoot Finance:

- Concern: Muthoot Finance should consider addressing the interest paid on debt, as it may
be impacting the overall financial health.

- Recommendation: Exploring strategies to optimize debt-related costs, such as negotiating

favorable interest rates or refinancing, could enhance Muthoot Finance's financial
performance.

4. Motilal Oswal Finance:

- Area of Attention: Motilal Oswal Finance needs to closely monitor and manage other
expenses that exceed 50% of sales.

- Recommendation: Implementing cost-control measures and efficiency initiatives in areas

with high expenses can contribute to better cost management and improved profitability.

In summary, while L&T Finance is doing well with expense reduction, Bajaj Finance is
excelling in profitability. Muthoot Finance should address interest expenses, and Motilal
Oswal Finance needs to keep a close eye on expenses exceeding 50% of sales for sustained
financial health.

37
CHAPTER : 7
FINDINGS
 FINDINGS.

 Growing NBFC Sector:

o The Non-Banking Financial Company (NBFC) sector in India is
experiencing robust growth, driven by factors such as increasing financial
inclusion, demand for credit, and the adoption of digital lending platforms.
o The sector has demonstrated resilience and adaptability in the face of
economic challenges, making it an attractive investment option.

 Bajaj Finance's Dominance:

o Bajaj Finance, a leading player in the NBFC sector, has a significant market
share and has shown a consistent track record of growth and profitability.
o The company's diversified product portfolio, strong risk management, and
digital initiatives have positioned it as a major player with a promising future
for investors.

 L&T Finance's Challenges and Opportunities:

o L&T Finance has potential for growth but faces challenges in managing loan
recoveries and advances effectively.
o By focusing on improving asset quality, risk management, and adopting
digital solutions, L&T Finance can enhance its market presence and investor
appeal.

 Muthoot Finance's Prospects:

o Muthoot Finance, with its expertise in gold loans, is well-positioned to
leverage the current market conditions, which are marked by rising gold
prices and the need for quick access to funds.
o The company's growth potential is closely tied to these favorable market
dynamics, making it a promising investment choice in the NBFC sector.
o These points should provide a foundation for your findings in the project
report, emphasizing the growth potential in the NBFC sector while
highlighting specific opportunities and challenges for Bajaj Finance, L&T
Finance, and Muthoot Finance.

38
 Shriram Finance's Strong Market Presence:
o Shriram Finance is a prominent NBFC that has secured a solid position in the
market. It operates in various segments, including vehicle financing and small
business loans.
o With a well-established customer base and a range of financial products,
Shriram Finance is the second-largest player in the NBFC sector after Bajaj
Finance.
o Its significant market hold and diverse portfolio make it an appealing choice
for investors looking to capitalize on the NBFC sector's growth.
 Motilal Oswal Finance's Brand Recognition and Expansion Plans:
o Motilal Oswal Finance, a well-known name in the financial sector, has a
long-standing presence in the market and has earned recognition as a trusted
brand.
o The company's focus on asset management, wealth management, and
financial advisory services has contributed to its reputation and success.
o Motilal Oswal Finance is actively pursuing expansion plans, including
diversifying its product offerings and geographical reach, making it a
promising candidate for investment in the NBFC sector.
o It has maintained stable shares over a considerable period, reinforcing
investor confidence and highlighting its potential for long-term growth.

39
CHAPTER : 8
SUGGESTION
 SUGGESTION.

 L&T Finance.
o Company should create more sources of finance rather then depending on
equity and also have some look over it’s current assets investments as
company is holding cash and cash equivalent which if invested properly can
increase there income sources.
o The company has shown a major growth in profit which has been caused as
a result of disinvestment and been seen as company not giving returns
compared to the profit earned as compared for 2022 where profit was 283cr.
and grown to 2575cr. in 2023 due to disinvestment that was made from LTIM
and shown in notes.

 Shriram Finance.
o The company should focus on retaining customers by providing finance at
market rates and so to maintain the position in the market as from 2017 where
company was at top of the NBFC market.

 Muthoot Finance.
o The company should diversify the finance sector and increase the opportunity
to grab more customers as they do in gold loan finance by providing loans at
less rates and so to promote their strong market presence. This has been
developing company’s overall profit and revenue.

 Motilal Oswal Finance.

o Motilal Oswal Financial is being doing good with all the recent changes made
and is making a great profit as seen a 21% net profit in the year 2023 and
will continuously grow in future if updated with time.

40
 CHAPTER : 9
LIMITATION AND SCOPE FOR FUTURE
STUDIES.
LIMITATION AND SCOPE FOR FUTURE STUDIES.
Limitation for the study.

 This study is done only for 5 NBFC firms and still there are other that can be
researched and give different insights on the topic at time.
 There are many other sectors that dominate the stock market and also has a
capability to make major price effects on other sectors.
 The location wise selection of the NBFC and there outcome to different
population and preferences.
 The overall ratio analysis is not shown as only 2 from profitability, solvency
and liquidity.

Scope for Future Study.

 The Banking and NBFC Sector comparison can be held.

 Overall analysis and comparison of all NBFC companies in India or in
Particular State.
 The trend analysis of NBFC companies.

41
CHAPTER : 10
CONCLUSION.
 CONCLUSION.

The companies should be looking at the growth rates of the revenue and also some of the
data sheet so as to notice the chances of corrections the major observation shows that the
company should give proper returns on the stock and also to know the that companies are
getting a constant growth throughout the year.

Bajaj Finance emerges as a commendable player in the financial sector, showcasing not only
robust financial performance but also a commitment to corporate social responsibility
(CSR). The company's success lies in its ability to balance competitive rates with a
comprehensive CSR strategy, fostering trust and loyalty among its customers.

On the other hand, Shriram Finance stands at a crossroads, urged to reconsider its rates in
the market to regain customer trust and secure long-term relationships. By aligning their
rates with market expectations and ensuring transparency, Shriram Finance can embark on
a path towards rebuilding credibility and retaining a satisfied customer base.

For other Non-Banking Financial Companies (NBFCs), the key to growth lies in a
multifaceted approach. Learning from Bajaj Finance, they should focus on maintaining
competitive rates while also emphasizing a robust CSR framework. Striking a balance
between financial success and societal contributions can not only attract customers but also
build a positive brand image. Moreover, NBFCs should invest in technological
advancements, customer-centric innovations, and risk management practices to ensure
sustainable growth and resilience in the dynamic financial landscape.

42
 CHAPTER : 11
BIBLIOGRAPHY
 BIBLIOGRAPHY

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