@Chumantar I’m not so sure about that. The growth runway for any well run private bank in India is huge, large or small. We are still a developing country and have a long growth runway ahead of us. Typically in such a scenario, the banking sector as a whole is likely to grow at about 2 times GDP growth. In good times, small (and aggressive) banks like IDFC First may grow much faster, but the large well run banks (Kotak, HDFC, ICICI, Axis in decreasing order of “well run”) will still continue to grow at close to 15-20%.
At present with all the uncertainty around the global banking ecosystem, I personally find the risk-reward favoring a bellwether bank like Kotak which is likely to grow at 20%, over a challenger bank like IDFCF which is likely to grow at 25-30%, especially when Kotak is at historically low valuations, and when I have enjoyed a decent rerating in IDFC already.
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