Synopsis
In a market that continues to trade at high valuations, the one sector with some “valuation comfort” is banking, and that too for both private and public sector banks. However, one factor, which is cost of deposit, continues to bother banks. And the chances are that it will remain a worry for some time. Even so, it may be a good idea to stay medium-term bullish on banks. Except, of course, small finance banks or anything to do with micro finance. Check out Stock Reports Plus, powered by Refinitiv, for price targets of over 4,000 listed stocks along with detailed company analysis focusing on five key components ,earnings, fundamentals, relative valuation, risk, and price momentum, to generate standardized scores. SR+ Reports is a complimentary offering to ETPrime members.
There are three things worth noticing in the market from the perspective of the banking sector. And these three things lead to another factor that matters a lot to the street. First, banking is probably one of the few sectors where valuations have not gone through the roof. Second, banking is among the few sectors where there have been more positive than negative surprises in Q2 earnings. And third, banking is where FIIs have high holdings. Yet,
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