Abstract:

Abstract: Information contained in this paper aims at establishing the effect of leverage and profitability in the evaluation of the selected financial institutions in India. As indicated in the research questions above, the study focuses on five key financial ratios of major banks and non-banking financial companies (NBFCs) for the period between 2015 and 2020 in an endeavor to establish the effect of these financial metrics on institutions’ market value and performance. Gearing as captured under debt to equity in this paper and earning capacity as captured under return on assets (ROA) and return on equity (ROE) are used to evaluate the valuation of financial institutions. To evaluate the correlation between these variables the study uses regression analysis. Findings show that there is a moderation relationship between leverage and profitability toward valuation, which varies depending on the type of institutional. The findings will be useful for investors, for those who make economic policies and financial organizations, to make correct decisions regarding the financial tactics and positioning on financial markets.

Description:

.