AgenciesNEW DELHI: Private bank stocks not only have the highest weightage in headline indices Sensex and Nifty but also dominate the portfolio of institutional investors, both domestic and foreign. DIIs and FIIs jointly hold $184 billion worth of private bank stocks.
As the economic recovery becomes broad-based and credit offtake picks up, well-run private lenders are looking attractive, say analysts.
The best way to think about investing in any sector is to look for the strongest companies. “The business cycle is nicely picking up momentum. One day the business cycle will weaken and if you do not have the strongest players, then you could potentially get beaten up in the downturn,” says Dalal Street’s top stock picker and PMS manager Saurabh Mukherjea.
His firm Marcellus, which has invested in , and , has been building a meaningful position in ICICI Bank.
“The credit growth is picking up, credit cost trends are favorable, while margins are broadly
stable. We see less risk to earnings for large banks and valuations as such are favourable versus the rest of the market,” says Ashutosh Bhargava, Fund Manager and Head Equity Research, Nippon India Mutual Fund.
Experts believe that about half of the incremental Nifty earnings growth in the next 2 years would come from the financial sector.
In a rising interest rate scenario, the repricing of loans happens faster than the repricing of deposits, and margins are likely to expand for banks. The improvement in margin is likely to be better reflected in the September and December quarters, as compared to the June quarter.
“With credit costs under control and credit growth picking up, this should translate well in terms of profitability and balance sheet. We are relatively more overweight on some of the large private sector banks as compared to the public sector ones,” says Shyamsunder Bhat, Chief Investment Officer, Life Insurance.
HDFC twins – Bank and HDFC – the top two FII positions in India, form 13.5 per cent of total FII holdings in terms of market value. The other 3 top bank holdings include the usual suspects - ICICI Bank, and Axis Bank.
For Siddhartha Khemka of , ICICI Bank and are two top bets for the long term. “We believe that banks with strong liability franchises are well placed to gain incremental market share,” he said.
So far in the calendar year 2022, Nifty Bank has gained over 7 per cent with ICICI Bank among the top gainers with a return of around 14 per cent.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
As the economic recovery becomes broad-based and credit offtake picks up, well-run private lenders are looking attractive, say analysts.
The best way to think about investing in any sector is to look for the strongest companies. “The business cycle is nicely picking up momentum. One day the business cycle will weaken and if you do not have the strongest players, then you could potentially get beaten up in the downturn,” says Dalal Street’s top stock picker and PMS manager Saurabh Mukherjea.
His firm Marcellus, which has invested in , and , has been building a meaningful position in ICICI Bank.
“The credit growth is picking up, credit cost trends are favorable, while margins are broadly
stable. We see less risk to earnings for large banks and valuations as such are favourable versus the rest of the market,” says Ashutosh Bhargava, Fund Manager and Head Equity Research, Nippon India Mutual Fund.
Experts believe that about half of the incremental Nifty earnings growth in the next 2 years would come from the financial sector.
In a rising interest rate scenario, the repricing of loans happens faster than the repricing of deposits, and margins are likely to expand for banks. The improvement in margin is likely to be better reflected in the September and December quarters, as compared to the June quarter.
“With credit costs under control and credit growth picking up, this should translate well in terms of profitability and balance sheet. We are relatively more overweight on some of the large private sector banks as compared to the public sector ones,” says Shyamsunder Bhat, Chief Investment Officer, Life Insurance.
HDFC twins – Bank and HDFC – the top two FII positions in India, form 13.5 per cent of total FII holdings in terms of market value. The other 3 top bank holdings include the usual suspects - ICICI Bank, and Axis Bank.
For Siddhartha Khemka of , ICICI Bank and are two top bets for the long term. “We believe that banks with strong liability franchises are well placed to gain incremental market share,” he said.
So far in the calendar year 2022, Nifty Bank has gained over 7 per cent with ICICI Bank among the top gainers with a return of around 14 per cent.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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