Banking companies in India are one the most favourable investment decisions by shareholders. The Fundamental analysis studies the various parameter influencing the risk and return of stocks. The profitability and growth of stocks can be determined by using Fundamental analysis, which in turn helps the shareholders to make a informed and profitable decision making. This research analyses the profitability position of selected private sector banking companies in India using independent financial parameters. The analyses of profitability position leads to ascertain the best investment decision among the selected private sector banks. The study requires secondary data and the requisite data has been collected from official journals and websites. ANOVA test has been used for hypothesis testing. HDFC bank, ICICI bank, AXIS bank, Yes Bank and Kotak Mahindra bank was selected for the analysis. Return on Equity (ROE), Net Profit Margin (NPM), Return on Assets (ROA), Price to Earnings ratio (P/E), Debt to Equity ratio (D/E), Net Non – Performing Assets (NPA), Earnings per Share (EPS) and Dividend per Share (DPS) were the variables considered for this study. The investors have to analyse these variable to determine the profitability position of the banks.
Key Words: Profitability, Indian Banking sector, ROE, NPM, ROA, P/E, D/E, NPA,DPS, EPS.

INTRODUCTION:

The Banking industry in India plays an important role in the financial system as it provides financial assistance to industrial sector, agricultural sector and household sector. The banking industry contributes to the economical growth of the country as they are the major credit creators of the nation. During the recent time, the banking industry has seen significant development and large investments. The Reserve of India (RBI) is the central bank of India, it regulates, controls and monitors other banks in India. Banks are classified into commercial banks, private sector banks, public sector banks, foreign banks and cooperative banks. Technological advancements have improvised the banking sector. Banking sector provide wide variety of financial services which increases the productivity of the economy.

However the banking industry is facing many challenges. Increase in competition, increasing percentage of non – performing assets (NPA), asset quality issues are major concerns in the banking industry. Due to increase in competition, the private sector banks are trying to improve their performance and increase their profitability position.

Due to challenges faced by the banking industry, the investors are facing difficulty to determine the most profitable and best performing banks. This study primarily focuses on determining the profitability p