Fundamental Analysis of

State Bank of India

Three Tire Analysis

We will be doing the fundamental analysis of

SBI using three tire analysis ie

1. Economic Analysis

2. Industry Analysis

3. Company Analysis

Economic

Introduction

1.India is currently one of the world's most attractive

investment destinations.

2. With the opening up of foreign direct investment (FDI) in

several sectors, the country is an eye-catching destination for

overseas investors.

3. There has been marked improvement in the hiring scenario

in the country, as Naukri Job Speak Index for May 2014

showed a 14 per cent increase in hiring activity when

compared to May 2013.4. Five-Year Plan is set to help in

further improving the export performance of Indian

companies and the Indian growth story, which will

consequently improve the overall Indian economy.http://www.marketexpress.in

Statistics

GDP growth 5.7% (Q2 2014)

GDP per capita $1,165 (nominal: 140th; 2011)

Inflation 5.52% (Oct 2014)Main industries

telecommunications, textiles, chemicals, food

processing, steel, transportation equipment,

cement, mining, petroleum, machinery,

software, pharmaceuticals

Source http://www.tradingeconomics.com

Import export

Export goods petroleum products, precious stones,

machinery, iron and steel, chemicals, vehicles,

apparel Import goods crude oil, precious stones,

machinery, fertilizer, iron and steel, chemicals

Main export partners US , UAE , China, Hong Kong

import partners China . UAE ,Saudi Arabia , US ,

Australia

http://www.thegu

ardian.com

Industry Analysis

Market Structure in Indian Scenario

RBI

Scheduled

Commercial

Public Private Foreign RRB

Cooperative

Urban Rural

Unscheduled

Market structure in the global scenario

In the world’s top 1000 banks, there are many more large and medium-sized domestic

banks from the developed countries than from the emerging economies.

Illustratively, according to The Banker 2011, out of the top 1000 banks globally,

over 200 are located in USA,

just above 100 in Japan,

over 80 in Germany,

over 40 in Spain and

around 40 in the UK.

Even China has as many as 16 banks within the top 1000, out of which, as many as 14 are

in the top 500.

Top 10 banks in IndiaPUBLIC SECTOR BANKS

State Bank of India(SBI)

Punjab National Bank

Bank of Baroda

Canara Bank

Bank of India

PRIVATE SECTOR BANKS

ICICI Bank (Industrial Credit and Investment Corporation of India)

HDFC Bank (Housing Development Finance Corporation)

Axis Bank

Citi Bank

IDBI Bank

Source:www.thetoplist.in

Top 10 Banks of World

1. Industrial & Commercial Bank of China

2. HSBC Holdings, UK

3. China Construction Bank Corporation

4. BNP Paribas, France

5. Mitsubishi UFJ Bank, Japan

6. J. P. Morgan Chase & Co. USA

7. Agricultural Bank of China

8. Bank of China

9. Credit Agricole SA, France

10.Barclays PLC, UK

64. State Bank of India

81. ICICI Bank Source: (http://www.livemint.com)

Wikipedia

Industry Concentration in Public Sector

HERFINDAHL INDEX

source: capital line

database

Industry Concentration In Private Sector

The Herfindahl index for the private sector

banks is 0.2442.

So, In Banking Industry private sector

indicates moderate concentration so the

concentration ratio lies between 0-

50percent.

Company Analysis

Introduction

Founded on 02-June-1806

Chairman Arunadhati Bhattacharaya

More than 16000 Branches

Provides a wide range of banking products through its vast network of branches in India and overseas .

The headquarter of SBI is at Mumbai.

SBI has 14 Local Head Offices

57 Zonal Offices

It also has around 130 branches out of the country.

SUBSIDIARIES OF SBI

State Bank of Bikaner & Jaipur

State Bank of Hyderabad

State Bank of Mysore

State Bank of Patiala

State Bank of Travancore

Industry Analysis (Porter’s Five Force Model)Bargaining power

of customers(loan receivers)is high due to possibility of multiple banking

Threat of substitutes is low as banking is more convenient

and safe investment

Threat of substitutes is low as banking is more convenient and

safe investment

Competitive rivalry is high as

there are many private players with the state of the art

technology

Bargaining power of suppliers (a/c holders) is high due to

strong competition

Managem

ent

Corporate

Relations

CSR

Financial

Analysis

Financial AnalysisNet Profit FY 2010,2011,2012,2013

76,796.02

88,954.45

109,165.61

121,586.96

2010 2011 2012 2013

Net Profit SBI

Earning Per Share And Book Value

2011-2012 2012-2013 2013-2014

184.31 210.06156.76

1214.78

1394

1503

EPS AND BOOK VALUE OF SBI

EPS

Book Value

Book Value per share: common stock share holders

equity/common stock shares outstanding

Ratio Analysis

Some Other Ratios

Balance Sheet Ratio

Leverage Ratio

Cash Flow indicator ratio

Investment Valuation Ratio:

Dividend Per ShareFY2014 FY2013 FY2012 FY2011

30.00 41.50 35.00 30

23.00 20.00 16.50 14.00

Profitability Ratios:

Interest SpreadFY2014 FY2013 FY2012 FY2011

5.76 5.95 6.87 6.12

7.35 7.30 7.45 6.95

Net Profit Margin:

Net Profit Margin

FY2014 FY2013 FY2012 FY2011

7.03 10.39 9.68 7.58

17.96 17.19 15.75 15.79

(Total Revenue – Total Expenses)/Total Revenue

= Net Profit/Total Revenue = NetProfit Margin

Balance Sheet Ratio:

Capital Adequacy Ratio:

CARFY2014 FY2013 FY2012 FY2011

12.96 12.92 13.86 11.98

17.70 18.74 18.52 19.54

Debt Coverage Ratio:

Credit Deposit Ratio:

CDRFY2014 FY2013 FY2012 FY2011

86.84 85.17 82.14 79.90

54.23 97.1 90.45

Leverage Ratio:

Current Ratio:

0.03 0.04 0.05 0.04

0.09 0.98 0.12 0.07

FY2014 FY2013 FY2012 FY2011

Current Ratio

Quick Ratio:

FY2014 FY2013 FY2012 FY2011

Quick Ratio

13.88 12.15 12.05 8.50

11.31 10.53 9.37 15.86

Cash Flow Indicator Ratio:

20.56 20.12 20.06 25.84

27.09 27.71 29.41 31.30

FY2014 FY2013 FY2012 FY2011

Dividend Payout Ratio

Dividend Payout Ratio

Yearly dividend per share/EPS

NPA Non Performing

Assets

Thank You