Worried about over-valued market? Hunt for stocks in these 4 sectors
1) Banking and Finance The banking industry continues to present attractive value opportunities for investors, particularly among mid-sized private banks. These institutions have been experiencing significant growth in their loan books, with many reporting an annual increase of 15% to 20%. In fact, a select number of banks are even surpassing the 20% mark, indicating a robust demand for credit. Alongside loan growth, banks have been improving their asset quality, with non-performing assets decreasing, suggesting a reduced risk of bad loans on their books.
Deposits have been rising rapidly as well, adding another layer of financial stability. Despite these positive fundamentals, many banks—both large universal banks and small financing banks and nonbanking financial companies (NBFCs)—are still trading at relatively low valuation multiples. Price-to book (P/B) and price-to-earnings (P/E) ratios remain in the single digits, creating potential value plays for investors looking to capitalize on the sector’s ongoing growth without overpaying.
However, there are some warning signs in the microfinance sector. In certain regions, early indications of a slowdown have begun to emerge, largely due to external factors. Election-related uncertainty and the impact of heat waves on agricultural and rural sectors could lead to rising credit stress, potentially affecting the ability of borrowers in those areas to service their loans.
2) Infrastructure Sector
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Market 101: An Insight into Trendlines and Momentum
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