Ratios, Quality & Sector Analysis

1. What you'll learn and why it matters

In Chapter 6 you learned to read the three financial statements. The numbers in them are large and hard to compare. Is a profit of ₹4,395 crore good? It depends on how much was invested to earn it, how much debt it carries, how fast it is growing, and what the market charges you for a share of it. Ratios answer those questions by dividing one number by another, so that a paint company with ₹8,000 crore of sales and an IT company with ₹2.7 lakh crore of sales can be compared on the same scale.

By the end of this chapter you will be able to:

• Calculate and interpret the four ratio families Varsity teaches (profitability, leverage, operating, valuation), plus growth, using real FY2026 data for about 30 Indian companies.
• Break ROE into its three DuPont drivers and tell whether a high ROE comes from margins, efficiency or borrowed money.
• Use the ratios that apply only to banks: NIM, CASA, GNPA/NNPA, PCR, CAR.
• Compute a Piotroski F-score, judge business quality, moats, management and promoter behaviour.
• Run Varsity's three-stage equity-research process as a written checklist with thresholds.
• Know which metrics matter in each sector: banks, IT, FMCG, autos, cement, pharma, metals, retail and others.

2. How to read any ratio (and where the numbers come from)

Varsity opens its ratio chapters with a warning that is easy to forget: a ratio on its own tells you very little. A 19% EBITDA margin is excellent for a supermarket and poor for a software exporter. A ratio means something only when you compare it in one of two ways:

1. Across peers: companies in the same industry that sell similar things to similar customers, such as TCS against Infosys, or Asian Paints against Berger.
2. Across time: the same company's ratio over 5–10 years, which shows whether it is improving, stable or deteriorating.

Conventions used in this chapter

• Data source: annual consolidated figures from screener.in, fetched on 2 Oct 2026 and cached in data/extra/screener_ch07/. "FY26" means the year ended 31 March 2026. Amounts are in ₹ crore.
• Averages: wherever a ratio mixes a P&L item (earned over a year) with a balance-sheet item (a snapshot on one date), we use the average of the opening and closing balance, as Varsity does. Example: ROE = FY26 profit ÷ average of equity at Mar-25 and Mar-26.
• Prices: valuation ratios use the closing price on 30 Sep 2026 and trailing-twelve-month (TTM) profits, which means the four quarters to Jun-2026. Share counts are taken from screener's market cap divided by its price.
• Screener quirks: "Borrowings" includes lease liabilities. Consolidated "Net Profit" includes the minority shareholders' share. "Operating Profit" is EBITDA excluding other income. Different websites define the same ratio slightly differently, so always compare numbers from the same source.

3. Profitability ratios: EBITDA margin, PAT margin, ROE, ROA, ROCE

Profitability ratios ask two questions. How much of each rupee of sales does the company keep (margins)? How much profit does it earn on the capital invested in it (returns)? High and stable profitability is the clearest numerical sign that a company has some advantage over its competitors.

3.1 EBITDA margin (operating margin)

What it is: profit from the core business before interest, tax, depreciation and amortisation, as a share of operating revenue. The logic: it strips out how the company is financed (interest), its tax situation, and its accounting for old investments (depreciation). What remains shows how efficiently management turns sales into operating profit. Other income, such as treasury gains or interest on cash, is excluded because it is not the core business.

3.2 PAT margin (net profit margin)

This is the bottom-line profit after every expense, including interest, depreciation and tax. Varsity divides by total revenue (sales plus other income). The DuPont formula in Section 4 uses sales alone. Both are common, so state which one you used.

3.3 Return on Equity (ROE)

ROE shows how much profit the company earns for each rupee that shareholders have put in or left in the business as retained earnings. Varsity calls it one of the most important ratios. It notes that top Indian companies average roughly 14–16%, and the author prefers 18% or more. The logic: a company earning 25% on equity and reinvesting its profits can compound shareholder wealth quickly. A company earning 8% on equity, which is below what you would earn in a fixed deposit after accounting for risk, is quietly destroying value.

3.4 Return on Assets (ROA)

ROA asks how much the company earns on everything it owns, whether funded by shareholders or lenders. Varsity adds back after-tax interest, because lenders also fund the assets. This puts a debt-heavy and a debt-free company on the same footing.

3.5 Return on Capital Employed (ROCE)

ROCE measures pre-tax operating return on all long-term capital, debt plus equity. Because it ignores how the capital is split, it is the fairest way to compare a borrower with a non-borrower. A useful rule: if ROCE is below the company's cost of borrowing, every rupee of debt reduces shareholder returns.

3.6 Trends beat snapshots

Varsity's Amara Raja example looks at four years of EBITDA margin, not one, because a rising margin shows that management is gaining control over costs. The paint industry over 12 years makes the same point.

3.7 How debt flatters ROE: a worked thought experiment

Varsity explains ROE's main weakness with a small pizza-shop example. Here is our own version, which also charges interest on the loan.

4. DuPont: taking ROE apart

DuPont Corporation developed this method in the 1920s. It splits ROE into three multiplied parts. When you multiply them, the fractions cancel back to PAT ÷ Equity, so nothing changes mathematically. What you gain is a view of where the return comes from. Varsity calls it the best way to look at ROE because it shows the quality of the return as well as its size.

• Net margin measures pricing power and cost control. A low margin suggests intense competition or high costs.
• Asset turnover measures how hard the assets work. A high number means a lot of revenue from a light asset base, typical of retailers and software firms.
• Equity multiplier (financial leverage) shows how many rupees of assets each rupee of equity supports. A higher number means more borrowed money or other liabilities. It is the ROE driver that carries the most risk.

5. Leverage ratios: how much risk is in the balance sheet

Varsity calls debt a double-edged sword. Debt helps when the money earns more than the interest it costs. It hurts when profits fall and interest still has to be paid, as the bakery example showed. Leverage (solvency) ratios measure how much debt there is and how comfortably it can be serviced. Liquidity ratios (5.1) check the next twelve months.

Logic of each: D/E shows who funds the company, owners or lenders. A value above 1 means more lending than equity. Interest coverage shows how many times operating profit covers the interest bill, and below about 2–3× one bad year can threaten solvency. Debt/EBITDA is roughly how many years of operating profit it would take to repay all debt, and lenders often become uneasy above about 3×. Net debt subtracts cash, because a company with ₹100 debt and ₹90 cash is not really leveraged.

5.1 Short-term liquidity: current ratio and quick ratio

Leverage ratios ask whether the company can carry its debt over years. Liquidity ratios ask a nearer question: can it pay the bills due in the next 12 months? Current assets are items that turn into cash within a year (cash, receivables, inventory). Current liabilities are amounts due within a year (supplier bills, short-term loans, the current part of long-term debt).

Logic: a current ratio above about 1.2–1.5 means short-term assets comfortably cover short-term dues. The quick ratio leaves out inventory, because stock may take months to sell, and it is the stricter test. Read both against the business model. A company with a negative cash conversion cycle (Section 6), whose customers pay it before it pays suppliers, can safely run a current ratio near 1. A falling current ratio at a company with a long cash cycle is the warning sign. Example: using the proxy built in Section 10, Asian Paints' current ratio slipped from 1.76 (Mar-25) to 1.66 (Mar-26). That is still comfortable, but it cost a Piotroski point. Tata Steel's proxy is about 0.67, which is typical for a steelmaker that funds itself partly through supplier credit, but it leaves little room in a bad year. Screener's summary balance sheet does not split current and non-current items, so for exact figures use the balance sheet in the annual report.

6. Operating (efficiency) ratios and the cash conversion cycle

Varsity also calls these "activity" or "management" ratios. They measure how efficiently the company uses its assets and its working capital. That is the cash tied up in stock and in money customers owe, minus the credit suppliers give.

The logic: money flows round a loop. The company pays suppliers, holds goods (inventory days), sells on credit (receivable days) and finally collects cash. Supplier credit (payable days) funds part of that loop for free. The CCC is the number of days the company's own cash is locked in the loop. A shorter CCC means less capital is needed for each rupee of growth. A negative CCC means suppliers effectively fund the business.

7. Growth ratios: CAGR over 3, 5 and 10 years

Varsity's checklist asks for revenue growth that keeps pace with profit growth, and EPS growth that matches net profit growth (Section 12). Many investors, this course included, also want double-digit growth, with 15% a year or more counted as strong. The standard measure is the Compound Annual Growth Rate: the constant yearly rate that takes you from the starting value to the ending value.

8. Valuation ratios: what you pay for the business

Varsity puts it plainly: a mediocre business at a very cheap price can be a better investment than a great business at an extreme price. Valuation ratios compare the price with what you receive in return: earnings, book value, sales or cash. Full intrinsic-value methods (DCF, reverse DCF) are covered in Chapter 8. Here we cover the quick multiples.

• P/E is how many rupees the market pays for one rupee of annual profit. It is the most popular ratio, and the easiest to distort, because earnings can be managed.
• P/B is price relative to net worth (book value = share capital + reserves, excluding revaluation reserves). It is most useful for banks and asset-heavy firms. A high P/B is justified only by a high ROE.
• P/S works when earnings are temporarily depressed or negative. A rupee of sales is worth more when margins are higher, so check margin before calling a high P/S expensive.
• EV/EBITDA values the whole business, debt included, against operating profit. That makes it fairer than P/E when comparing a borrower with a cash-rich peer.
• Earnings yield is the inverse of P/E. You can compare it directly with a bond yield. A P/E of 50 is an earnings yield of 2%.
• PEG adjusts P/E for growth. A PEG near 1 is often called "fair" for a growing company. It is only as good as the growth number you plug in.

PEG uses 5-year EPS CAGR to FY26. "–" means a comparable 5-year history is not available. The numbers are a snapshot on 30-Sep-2026 and change every trading day.

8.1 Valuation must be read with quality: the P/E vs ROE map

No single P/E is "cheap" or "expensive". The market pays more for earnings that are (a) growing fast, (b) predictable and (c) earned at high ROE with little reinvestment needed. In September 2026 the market was paying about 77× for Trent's 3-year EPS CAGR of 57%, and only about 15× for TCS's 5.7%. Whether either price is right is the job of Chapter 8.

8.2 Multiples change: de-rating and re-rating

8.3 Strip out one-offs before trusting a low P/E

8.4 Index valuation

Varsity also shows how to value the whole market. NSE publishes the Nifty 50's P/E, P/B and dividend yield every day (on niftyindices.com, under historical data). Varsity's 2014 rule of thumb was to be cautious above about 22× and that the best entry points historically came near 16× or below. Earnings composition and interest rates have changed since then. Treat those numbers as history and compare today's index P/E with its own 10-year range. Chapter 8 covers this in detail.

9. Banks need their own ratios

A bank's raw material is money. It borrows from depositors and lends to borrowers, so "sales", "inventory" and "debt" mean something different. A bank with D/E of 7 is normal, and the CCC concept does not apply. Varsity's banking chapters list the metrics to use instead. Banks report most of them every quarter in their investor presentations.

• NIM is the spread the bank earns, the bank's equivalent of a margin. Higher is better, and it usually reflects cheap deposits or higher-yield lending.
• CASA deposits are the cheapest funding: savings accounts pay a few percent and current accounts pay almost nothing. A high CASA ratio supports NIM.
• GNPA / NNPA / PCR measure asset quality. NPAs are loans in default, typically more than 90 days overdue. A high PCR means the bank has already set aside money for those losses. That is conservative and lowers current profit.
• CAR / CET1 are capital buffers that absorb losses. Under RBI's Basel III rules, Indian banks must hold a minimum total CRAR of 9%, with CET1 of at least 5.5% and Tier 1 of at least 7%, plus a 2.5% capital conservation buffer in CET1. The effective total is 11.5%, and systemically important banks need more.
• Liquidity: RBI requires a cash reserve ratio (CRR) and a statutory liquidity ratio (SLR). As of RBI's August 2026 policy, the repo rate was 5.25%, CRR 3% and SLR 18% (the next MPC meeting was scheduled for 5–7 Oct 2026, so re-check). Varsity's 2023 chapter quotes CRR 4.5% and repo 6.5%, which have since been cut.
• ROA is the key return measure for banks. About 1% is acceptable, and 1.5–2%+ is very good. Banks typically run 7–10× assets per rupee of equity, so a 1.5–2% ROA becomes roughly a 10–20% ROE.

10. Piotroski F-score: a nine-point health check

Accounting professor Joseph Piotroski (2000) designed nine simple yes/no tests to find which cheap (low price-to-book) stocks were genuinely improving. Each test scores 1 or 0, giving a total from 0 to 9. In his study, high scorers (8–9) went on to beat low scorers (0–1). The score measures improvement in health, not absolute quality. That is why it suits value and turnaround situations.

Implementation notes: ROA = net income ÷ beginning total assets, as in Piotroski's paper. Screener does not split current assets and liabilities, so our current ratio is a proxy: (inventories + receivables + cash + loans and advances + other asset items) ÷ (trade payables + customer advances + other liability items + short-term borrowings). The share-issuance test uses equity share capital, which rises when new shares are issued at an unchanged face value. Bonus issues also raise share capital, so check the reason if it moves.

11. Qualitative analysis: business, moat, management, promoters

Numbers tell you what happened. Qualitative analysis tells you why and whether it is likely to continue. Varsity's equity research begins with understanding the business, before any ratio, because "the more you know the company, the higher is your conviction to stay put" when prices fall in a bear market.

11.1 Where stock ideas come from

Varsity lists six sources: general observation (what people around you are buying), stock screeners (for example ROE > 20% and PAT margin > 15%), macro trends (an infrastructure push helps cement), sectoral trends (a shift in what consumers prefer), special situations (a new board member, a demerger, a restructuring) and your circle of competence (a doctor understands healthcare better than most analysts do). Keep a watch-list. A company that fails your checklist today may pass in two years.

11.2 Business model: how does the company make money?

Before any ratio, write down in one paragraph: what it sells, to whom, why customers choose it, what the main costs are, and what could break the model. If you cannot fit that on one page, you do not yet understand the business. Varsity says the author does exactly this after about 15 hours of reading.

11.3 Moats: why competitors cannot easily copy the profits

Warren Buffett popularised the term "economic moat". It means a durable advantage that protects profits from competitors. Sustained ROCE well above the cost of capital is the numerical evidence of a moat. The moat itself is one of these:

Moats erode. Varsity's own PVR example notes that the thesis had to be re-checked once new players entered. Paints shows the same thing here: margins and ROE slipped after FY24 as large new entrants arrived. Re-test every moat once a year.

11.4 Management quality and corporate governance

• Track record: did management deliver what it promised in past annual reports and earnings calls? Compare old guidance with actual results.
• Background of promoters: no criminal cases, no heavy political dependence, no history of minority-shareholder abuse (a Varsity Stage-1 question).
• Related-party transactions: large purchases from, or loans to, promoter-owned entities are a red flag. They appear in the related-party note of the annual report.
• Too many subsidiaries: Varsity warns this can be a way to move money out of the listed company. Ask why each subsidiary exists.
• Auditor and bankers: a reputable auditor, no qualified opinions, no sudden auditor resignations.
• Remuneration: promoter pay that grows faster than profit is a warning sign.
• Accounting consistency: frequent changes in depreciation or revenue recognition policies, or profits that rise while cash flow does not (Varsity's earnings-manipulation warning).

11.5 Promoter holding and pledging

• Level: a meaningful promoter stake (for example 40–75%) aligns owners with minority shareholders. A low or zero stake (Infosys 13.8%, ITC 0%) is not bad in itself, since professional management and strong institutional owners can work very well. But it changes what you need to watch, such as board independence and capital allocation.
• Trend: steady selling by promoters is worth questioning. Over the year to Jun-2026 most companies in our sample were stable. JSW Steel's promoter stake moved from 45.3% to 44.3% and Tata Steel's from 33.2% to 32.9%.
• Pledging: promoters sometimes pledge shares as collateral for loans. If the share price falls, lenders can sell the pledged shares, which pushes the price down further. Under SEBI's Takeover Regulations (Regulation 31), promoters must disclose the creation, invocation or release of any encumbrance (pledge, lien, non-disposal undertaking) within 7 working days. NSE publishes a consolidated "Pledged data" page, and pledges also appear in the quarterly shareholding pattern. Rule of thumb: any pledge deserves an explanation, and a rising pledge combined with a falling price is a serious red flag.

11.6 Capital allocation: what management does with the cash

A company that earns 25% ROCE but reinvests in projects earning 8% destroys value. Look at the last 5–10 years of cash flow statements:

• Reinvestment: did capex (fixed assets purchased) raise revenue and EBIT? Check whether ROCE held up as capital employed grew.
• Dividends and buybacks: mature companies with few growth opportunities should return cash. HUL paid out 64% of FY26 profit and TCS 81%.
• Acquisitions: do they earn their cost? Wipro's low asset turnover (Section 4) partly reflects goodwill from past acquisitions.
• Diversification: Varsity prefers companies with one or two focused business lines. Conglomerates often trade at a discount.

12. Varsity's three-stage research process, turned into a checklist

Varsity organises equity research for retail investors with "limited resources" (annual report, internet, spreadsheet) into three stages. Do not skip any of them.

1. Stage 1 · Understand the business. Read at least five years of annual reports and answer questions such as: What does the company do? Who are the promoters? Where are the plants, and are they running at full capacity? What raw materials does it use, and are they regulated or imported? Who are the customers and competitors? What is the revenue mix? How heavy is regulation? What are the entry barriers? Could cheap-labour countries replicate the product? How many subsidiaries are there? Who are the auditors and bankers? If you find a red flag here, stop. Do not go on to Stage 2, however good the numbers look.
2. Stage 2 · Apply the financial checklist. Varsity's list includes gross margin > 20%, revenue growth in line with profit growth, EPS consistent with net profit, low debt, a sensible inventory trend, sales not driven by receivables, positive operating cash flow, ROE > 25% (checked together with debt; in the ratio chapters the author says he personally prefers 18% or more), one or two simple business lines, and not too many subsidiaries.
3. Stage 3 · Valuation. Even a company that passes every check is a poor investment at the wrong price. Varsity uses DCF with a ±10% intrinsic-value band. See Chapter 8.

12.1 Our adapted Stage-2 checklist with thresholds

13. Sector analysis: what to measure in each industry

Varsity's Sector Analysis module starts from a simple point: no two sectors can be analysed the same way. Banks are judged on NPAs and capital, airlines on revenue per seat-kilometre, cement on capacity and cost per tonne. General ratios tell you how a company performs. Sector KPIs tell you why, and how it compares with its real competitors.

13.1 Tools for any sector

• Value chain: trace the product from raw material to the end customer and find where the money is made. A company that owns several stages is vertically integrated. Cement makers own limestone mines, plants and distribution. Owning the supply side is backward integration, such as Tata Steel's iron-ore mines. Owning distribution is forward integration, such as oil marketers' own pumps. Lean companies focus on one or two steps, as many FMCG firms do by outsourcing manufacturing.
• PESTLE: Political, Economic (rates, inflation, currency), Social and demographic, Technological, Legal and regulatory, and Environmental factors. Examples: the monsoon for fertilisers and FMCG, USD-INR for IT, carbon rules for cement and steel.
• How companies differ inside a sector: size (scale economies, survival through shocks like COVID), age (networks and relationships, but also legacy inertia), focus (single business against conglomerate, mass market against premium, cost leadership against pricing power) and substitutes (mobile phones replaced cameras, EVs threaten petrol engines).

13.2 Sector KPI guide

*Varsity's Sector Analysis module covers cement, insurance, IT, automobiles, banking, steel, hotels, retail and real estate. The FMCG and pharma rows are standard industry practice added for this course, not taken from Varsity.

14. An honest check: did quality pay off?

It is tempting to think that buying high-ROE companies guarantees good returns. Our data says otherwise, at least over 2021–2026.

• TCS (5-year average ROE 49%) and Britannia (56%) delivered −11% and +4% a year in price. Both started the period at very high P/E multiples.
• Hindalco and JSW Steel (ROE 13%) delivered +14% and +13% a year. They started cheap, at a cyclical low.
• Trent (24%) delivered +30% a year because its growth exploded beyond what the market had priced in.

15. Try it yourself (Python)

These snippets need a copy of the course repository and Python with pandas and numpy (setup steps are in its framework/README.md). Run them from the repository's root folder, for example with .venv/bin/python, because the file paths are relative to that folder. They use the cached screener pages and helper functions in course/scripts/ch07_data.py.

(a) ROE, ROCE and DuPont for any cached company

import sys
sys.path.insert(0, "course/scripts")
import ch07_data as D

m = D.company_metrics("PIDILITIND")
print(f"EBITDA margin {m['ebitda_margin']:.1%}  ROE {m['roe']:.1%}  ROCE {m['roce']:.1%}")
print(f"DuPont: {m['net_margin']:.2%} x {m['asset_turnover']:.2f} x {m['equity_multiplier']:.2f} = {m['dupont_roe']:.1%}")
print(f"D/E {m['de']:.2f}  interest cover {m['icr']:.1f}x  CCC {m['ccc']:.0f} days")

(b) A CAGR function and a growth table straight from the P&L

import sys
sys.path.insert(0, "course/scripts")
import ch07_data as D

def cagr(start, end, years):
    return (end / start) ** (1 / years) - 1

pl = D.table("BAJAJ-AUTO", "profit-loss")
for n in (3, 5, 10):
    s, e = pl.loc["Sales", f"Mar {2026 - n}"], pl.loc["Sales", "Mar 2026"]
    print(f"{n}y revenue CAGR: {cagr(s, e, n):.1%}")

(c) Your own peer screen from the computed metrics file

import pandas as pd
m = pd.read_csv("data/extra/ch07_company_metrics.csv", index_col=0)
screen = m[(m.roe > 0.15) & (m.de < 0.5) & (m.cfo_pat > 0.8) & (m.rev_cagr5 > 0.10)]
print(screen[["sector", "roe", "de", "rev_cagr5", "pe"]].sort_values("pe").round(3))

(d) Rolling P/E from price history and annual EPS

import sys
sys.path.insert(0, "course/scripts")
import pandas as pd, ch07_data as D

px = pd.read_csv("data/ohlc/INFY.csv", index_col=0, parse_dates=True)["Close"].resample("ME").last()
pl = D.table("INFY", "profit-loss")
eps = {int(c[-4:]): pl.loc["EPS in Rs", c] for c in pl.columns if c.startswith("Mar 20")}
pe = pd.Series({d: p / eps.get(d.year if d.month >= 5 else d.year - 1, float("nan")) for d, p in px.items()})
print(pe.loc["2021":].resample("YE").last().round(1))

Exercise: change the thresholds in (c) to sector-specific ones (for example ROE > 10% for cement) and see how the list changes. To refresh the data, re-download a page with curl -A "Mozilla/5.0" https://www.screener.in/company/SYMBOL/consolidated/ into data/extra/screener_ch07/SYMBOL.html.

16. Practical checklist

• Stage 1 first: can I describe the business, its customers, competitors, costs and moat on one page? Any red flag in promoters, governance or subsidiaries means stop here.
• Pick the right peer set (same products, same customers), and use the same data source and definitions for all of them.
• Profitability: EBITDA and PAT margin against peers and against the company's own 10-year trend. ROE and ROCE above about 15%, or above the sector median for low-return sectors.
• DuPont: is ROE driven by margin and turnover, or by leverage? Is the equity multiplier rising?
• Leverage: D/E, interest cover and net debt/EBITDA, tested against a bad-year EBITDA for cyclical companies. Check what the debt really is: leases, gold loans, a lending subsidiary.
• Working capital: inventory and receivable days stable, receivables not growing faster than sales, CCC compared with peers.
• Cash: 5-year cumulative CFO ÷ PAT above 0.8; free cash flow positive in most years.
• Growth: 3/5/10-year revenue and EPS CAGR, with abnormal base years checked and EPS growth close to PAT growth (no dilution).
• Valuation snapshot: P/E (after stripping one-offs), P/B, EV/EBITDA and dividend yield against peers and the company's own history. Then do a full valuation (Chapter 8).
• Banks: NIM, CASA, GNPA/NNPA/PCR, CAR/CET1, CD ratio, ROA. Use the bank's latest investor presentation.
• Sector KPIs: the 3–5 metrics specific to the industry (Section 13.2).
• Promoters: holding trend and pledge status (NSE pledged-data page, quarterly shareholding pattern).
• Piotroski F-score for turnaround or value candidates; treat 8–9 as "improving", not "high quality".
• Write down the thesis, what would prove it wrong, and the date of the next review (after each quarterly result).

17. Key takeaways

18. Quiz and exercises

19. Sources

Zerodha Varsity, Module 3 – Fundamental Analysis: Financial Ratio Analysis (profitability, DuPont) · Financial Ratios Part 2 (leverage & operating) · Financial Ratios Part 3 (valuation & index valuation) · Investment Due Diligence (stock ideas, moat, checklist) · Equity Research Part 1 (Stage 1 questions, Stage 2 checklist) · Equity Research Part 2 (Stage 3, DCF – used in Ch 8).
Zerodha Varsity – Sector Analysis: Overview · Cement · Insurance 1 · Insurance 2 · Information Technology · Automobiles 1 · Automobiles 2 · Banking 1 · Banking 2 · Steel 1 · Steel 2 · Hotels 1 · Hotels 2 · Retail 1 · Retail 2 · Real Estate 1 · Real Estate 2.
Data: Company financials and shareholding: screener.in consolidated pages (standalone for banks), fetched 2 Oct 2026 and cached in data/extra/screener_ch07/. Prices: NSE daily closes via Yahoo Finance (data/ohlc/; extra peers in data/extra/ch07_extra_closes_yf.csv), close of 30 Sep 2026. Computed metrics: data/extra/ch07_company_metrics.csv, data/extra/ch07_bank_metrics.csv. Scripts: course/scripts/ch07_data.py, ch07_figures.py, ch07_tables.py.
Bank Q1 FY27 metrics (quarter ended 30 Jun 2026): HDFC Bank Q1 FY2027 investor presentation (data/extra/HDFCBANK_Q1FY27_earnings_presentation.pdf); ICICI Bank performance review, Q1 FY27 and DSIJ results summary; Kotak Mahindra Bank Q1 FY27 press release; Axis Bank Q1 FY27 press release (18 Jul 2026); SBI Q1 FY27 press release (7 Aug 2026).
Regulation: RBI Basel III capital regulations (minimum CRAR 9%, CET1 5.5%, Tier 1 7%, CCB 2.5%) — RBI master circulars; policy rates (repo 5.25%, CRR 3%, SLR 18% after the Aug 2026 MPC) — rbi.org.in, as summarised by ClearTax (verify after the 5–7 Oct 2026 MPC). Promoter encumbrance disclosure — SEBI (SAST) Regulations 2011, Reg. 31 (sebi.gov.in; explainer: Vinod Kothari); NSE pledged data.
Other: DMart FY26 retail metrics as summarised by scanx.trade (check the company's investor presentation for the original). Piotroski, J. (2000), "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers", Journal of Accounting Research 38 (Supplement).