Investment decisions, in all sectors, have been gaining paramount importance, warranting the investors to be continuously cautious of risk and return involved in the same. The faculty `investment analysis' calls for planned and meaningful appraisal of both internal and external factors affecting the returns. Ever since Indian economy opened its doors to MNCs, the Indian banking sector has been witnessing bizarre changes in terms of new products and services and stiff competition as well. The sort of IPOs that have been taking place in banking sector are amazing. In the light of these recent developments, a careful analysis of the profitability of Indian banking sector is inevitable. The present study attempts to analyze the profitability of the three major banks in India: SBI, ICICI, and HDFC. The variables taken for the study are Operating Profit Margin (OPM), Net Profit Margin (NPM), Return on Equity (RoE), Earnings per Share (EPS), Price Earnings Ratio (PER), Dividends per Share (DPS), and Dividends Payout Ratio (DPR). The study brings out the comparative efficiency of SBI, ICICI, and HDFC.

The Indian banking scenario witnessed a significant development in the recent years with the entry of private banks and their focus on retail banking and convergence of services. The business models of the leading players are adapting to this impending change as banks widen the spectrum of savings and loan products they offer. Private banks are the best positioned to acquire market share in the emerging scenario. A change is expected to make mergers between banks and Foreign Institutional Investors (FIIs) possible, which will benefit large private bank group(s). Banking in India has its origin as early as the Vedic period. It is believed that the transition from money lending to banking must have occurred even before Manu, the great Hindu jurist, who devoted a section of his work to deposits and advances and laid down rules relating to rates of interest. During the Mogul period, the indigenous bankers played a crucial role in lending money and financing foreign trade and commerce. During the days of the East India Company, it was the turn of the agency houses to carry on the banking business. The General Bank of India was the first Joint Stock Bank to be established in 1786. The others, which followed the suit, were the Bank of Hindustan and the Bengal Bank. The Bank of Hindustan is reported to have continued till 1906, while the other two failed in the meantime. In the first half of the 19^th century, the East India Company established three banks: the Bank of Bengal in 1809, the Bank of Bombay in 1840, and the Bank of Madras in 1843.

A Fundamental Analysis of Indian Banking Industry, banking, HDFC, ICICI banks, Profit, profitability, Share, Dividends, Earnings, comparative, decisions,private banks, focus on retail banking, convergence of services, East India Company.