TOPIC:“A STUDY ON FINANCIAL PERFORMANCE ANALYSIS OF SELECTED NBFC’S BASED ON

CAMEL MODEL”
By
YASHWANTH K .S
Reg. No: P03AX22M015098
Under the guidance of PROF. SHILPA
(ASSISTANT PROFESSOR)
 INTRODUCTION
Non-banking financial companies (NBFC’s) play a pivotal role in the financial sector, particularly in
economies where banking penetration is limited.

These institutions bridge the gap between the formal banking sector and the underserved segments of the
market, providing a wide range of financial services including loans, credit facilities, retirement planning,
and investment products. given their significance, the financial health and performance of NBFC’s are critical
to the stability and growth of the broader financial system.

The camel model, an acronym for capital adequacy, asset quality, management quality, earnings, and
liquidity, is a well-established framework used to evaluate the financial soundness of financial institutions.

The model provides a multifaceted approach to assessing the robustness and efficiency of these institutions
by focusing on key indicators.
 STATEMENT OF THE PROBLEM
The problem statement for NBFC’s financial performance analysis is to evaluate the company's financial
health and identify factors affecting its performance.

It aims to determine if NBFC’s is meeting its financial goals, managing resources efficiently, and sustaining
profitability.

The analysis will also identify potential financial risks or weaknesses. key financial metrics such as revenue,
expenses, profitability, liquidity, and solvency will be examined.

NBFC’s has faced declining net profits, raising concerns about sustainable shareholder returns. regulatory
changes may further impact its operations and profitability.
 OBJECTIVES OFTHE STUDY

To study the financial performance of selected NBFC’S.

To analyze the issues being faced by the selected NBFC'S.
To suggest measures for the speedy growth of selected NBFC’S.
 RESEARCH METHODOLOGY

This study employs a quantitative research methodology using the camel model to analyze the financial
performance of five selected NBFCs. secondary data will be collected from annual reports, financial
statements, and regulatory filings over the past five financial years. key indicators for capital adequacy,
asset quality, management quality, earnings, and liquidity will be calculated and analyzed. statistical tools
such as ratio analysis and trend analysis will be used to evaluate performance. comparative analysis will
identify strengths and weaknesses across the selected NBFCs. this approach aims to provide a
comprehensive assessment of their financial health and stability.
 DATA COLLECTION

Primary data: the data is collected from the known stakeholders in different NBFC’s.
Secondary data: the data is collected from websites, articles, published research.
Survey design: design a comprehensive survey to evaluate the financial performance, risk management,
regulatory impact, and future prospects of non-banking financial companies (NBFCs) under camel model.
 FINDINGS
According to the data's study of financial performance, manappuram finance limited is good performed all
other chosen NBFCs in terms of capital asset quality, management effectiveness, and liquidity position.

When it comes to poor performance, power finance corporation limited is doing poorly overall.
The findings show that, just after muthoot finance limited, mahindra limited and rural electrification
corporation are also wellperforming banks. because of its business management techniques and financial
performance, manappuram finance limited tops the list for management efficiency. despite being a poor
performer, power finance corporation limited has an extremely low net non-performing asset (NPA) when
compared to other banks.
 SUGGESTIONS

Power finance corporation limited needs to modify all of its operations; otherwise, it will face
consequences later on. although manappuram finance limited is doing well, it needs to improve the quality
of its assets to be able to compete effectively with the other NBFC’s. since power finance company limited
and muthoot finance limited are also having trouble with liquidity and capital adequacy, they must now
concentrate on boosting both.
 CONCLUSION
The NBFC system in a nation has a big impact on its economy. owing to significant changes in the non-
bank financial companies (NBFCs) industry in recent years, many industrialised nations now use the
uniform financial rating system in addition to other established practises and methodologies to assess the
performance of their banks. even though the camel grading method is widely utilised, it is not a perfect
solution for assessing the financial performance of NBFCs because it constantly relies on the onsite
examiners' subjective assessments. additionally, there are instances where the camel rating method produces
inaccurate results.