Screener works best for filtering stocks, but is it enough?
Well, not really. That’s exactly what we explored in one of our Big Bull Podcast episodes with Parth—a trader who goes beyond checkboxes to spot real opportunities.
He explained the next step every trader should take before diving into technical analysis: understanding the stock’s context, especially within its sector.
“Parth, so is your analysis the same for every stock?” I asked, my voice heavier than usual, partly out of anticipation.
He paused, then replied firmly, “No, it depends on the sector as well.”
That got me leaning forward.
“Can you share one example to get a clearer picture?” I asked a bit too eagerly.
He smiled, as if he’d been waiting for this question. “Yes, one of my favorites is the Banking sector.”
His eyes lit up like a teacher excited to explain something they truly believed in.
“Alright then,” I said, rubbing my hands with curiosity, “Let’s dive into your process. I’m all ears.”
He turned his screen toward me.
“Let’s take Bank of Baroda. First, I check the market cap. It’s ₹46,000 crore, which easily passes my base filter of ₹1000 crore.”
I nodded, impressed by the simplicity of the benchmark.
“The second thing I always check is the book value. It’s a crucial metric for banks,” he said.
“Book value? As in, how much cash the bank holds?” I paused for a second, trying to recall my fundamentals.
“Exactly!” he nodded. “It reflects the bank’s capacity to provide loans and credits. The higher the book value, the more cash available. For Bank of Baroda, the book value is ₹155, but it’s currently trading at just ₹103.”
I blinked. “That’s quite a gap. So, it’s undervalued?”
“Yes, and that gives it a margin of safety. Plus, it offers dividends, so even if the stock stays flat, you earn passive income.”
“That’s a strong point,” I said sincerely. “Many traders overlook dividends.”
“True,” he smiled, then continued. “Next, I check the revenue trend—whether it’s growing, stable, or declining. But here’s an important point—when it comes to banking, financing profit isn’t the biggest deal.”
That caught me off guard. “Really? But isn’t profit everything?”
“In manufacturing, maybe. But banks have other ways to measure performance. What matters more is the NPA—Net Performing Assets.”
“Alright, now you’re speaking Greek,” I laughed. “What’s NPA in simple terms?”
He grinned. “Imagine a bank gives a ₹100 crore loan. They recover ₹90 crore, but the last ₹10 crore is stuck. NPA tells you how much of that unrecovered part the bank is prepared to handle.”
“Ah, so lower NPA means better bank?”
“Exactly. It reflects efficiency and trust.”
“Can banks manipulate NPAs?” I asked, eyebrows raised.
He leaned in. “Yes, but not for long. Some banks claim the client repaid, then reissue the same loan in a different name.”
“Wait, seriously?” I was stunned.
“Yes,” he said. “But eventually, the books tell the real story.”
He scrolled down.
“Next, I check the PB Ratio—Price to Book.”
“And what does that show?”
“It shows how much loan a bank has taken compared to its equity. So, if a bank has ₹100 crore in equity and ₹500 crore in borrowings, the PB is 1:5. That’s okay.”
“What if it’s more than that?”
“If it’s above 8, that’s a red flag. I stay away. It means the bank is over-leveraged.”
I sat back, soaking in the details. The conversation wasn’t just informative—it felt like pulling back the curtain on a world many traders never look into deeply.
What I Learned from Parth’s Sector-Based Analysis
Stock screeners are a great start, but they only tell part of the story. What Parth showed me was how sector-specific fundamentals can turn an ordinary filter into a powerful decision-making tool. It’s about reading between the lines—understanding which metrics matter more in different industries.
In banking, it’s not just profit and charts—it’s book value, NPA, PB ratio, and how a bank truly manages risk.
And that’s what separates noise from insight.
Because trading isn’t just about what looks good on a chart—it’s about knowing why it matters.
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