Stories
Canara Robeco MF Favours Large Private Banks And Select AI Infrastructure Stocks
- •Canara Robeco Mutual Fund remains constructive on large private banks amid rising interest rates due to strong credit growth and controlled credit costs.
- •The fund house is focusing on Tier-1 NBFCs as a rising rate environment increases the cost of funds for non-banking financial companies.
- •Recent recovery in the IT sector is viewed as a tactical bounce driven by low valuations rather than a structural rerating.
- •Canara Robeco is selectively adding to Indian artificial intelligence infrastructure players following recent market corrections.
Key Questions Answered
Canara Robeco Mutual Fund favours large private banks because rising interest rates are generally beneficial for banks, credit growth is rebounding strongly above 20%, and they currently face no credit cost challenges. Furthermore, these banks have underperformed, making them available at attractive valuations between 1.3 and 1.6 times price-to-book.
Canara Robeco MF views the recent IT sector recovery as a tactical bounce driven by low valuations and under-ownership rather than a structural rerating. With top-line growth expected to remain in the 3% to 8% range, the fund house is adopting a wait-and-watch approach until there are clear growth surprises from AI-related portfolios.
While global hyperscalers and AI labs might face valuation pullbacks due to back-ended monetisation, Canara Robeco sees selective buying opportunities in Indian AI infrastructure support players following recent corrections. The fund house is using this pullback to re-add to specific positions with a one-to-two-year perspective.
