I feel rerating will happen due to
- single digit PE and near book value while company over long run is growing in double digit
- gold price increase ( my prediction is 2500 USD in 2024 ie 25% increase in gold prices )
- non gold portfolio growth benefit
- gold loan growth
- improving operating efficiency
- increase in gold loan branches
- competition slowing down
Derating will happen
- if growth stops or slows
- gold price goes down
- regulatory changes
- pandemic
- intensified competition
It’s multi factorial ,so far cheap valuation offers the cushion from major downside
I am biased towards rerating
So far price movement is in strong favour
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