Method and system for identifying and analysing hidden relationships in application databases is provided. During a database session database query language statements (DQLS) are retrieved from log tables in application databases to analyze and identify join indicators. Join indicators represent data fields from two or more tables which are joined using values common to each data field. Based on identified join indicators, data definition language (DDL) file is generated including relationship between two or more tables. Above steps are repeated until all DQLS in log tables are analyzed. Thereafter it is ascertained if content of created DDL file is defined in database schema (DS). DS is represented in physical data models of application databases. If it is not defined in the database schema, a logical data definition language file is generated based on generated DDL file to update logical data model, which represents hidden relationships between tables in application databases.