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Fund managers are divided on banks’ valuations. But they agree that a V-shaped recovery is unlikely.

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Markets

Fund managers are divided on banks’ valuations. But they agree that a V-shaped recovery is unlikely.

Since the beginning of 2020, banking shares have plummeted 38.6% while the Nifty50 index has shed 24.6%, raising questions over the sector’s ability to outperform. Fund managers and broking firms, though divided on their views, believe the quality and rate of lending will now decide the composition of the banking index and large-cap mutual fund portfolios.
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24 Apr 2020 6 Mins Read 1 comments
Exterior view of HDFC Bank building in Mumbai. Getty Images
Exterior view of HDFC Bank building in Mumbai.
Diametrically opposite views often bring out the best in financial analysis — more so, when they are coming from leading brokerage houses. And when that outlook is on HDFC Bank, investors sit up and take notice because they know it could be a leading indicator for the entire banking sector. That’s exactly what happened in March 2020 when
to sub-15%. We expect the succession challenges to impact its premium valuation multiples.” HDFC Bank shares closed Thursday at INR952 on the NSE. And for now, no matter what the forecasts say, the future of banking shares, including those of HDFC Bank, is uncertain as long as the virus is not defeated. ( Graphics by Sadhana Saxena)
Diametrically opposite views often bring out the best in financial analysis — more so, when they are coming from leading brokerage houses. And when that outlook is on HDFC Bank, investors sit up and take notice because they know it could be a leading indicator for the entire banking sector. That’s exactly what happened in March 2020 when to sub-15%. We expect the succession challenges to impact its premium valuation multiples.” HDFC Bank shares closed Thursday at INR952 on the NSE. And for now, no matter what the forecasts say, the future of banking shares, including those of HDFC Bank, is uncertain as long as the virus is not defeated. ( Graphics by Sadhana Saxena)

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