Stories
Private Banks at Cheap Valuations? Ladderup's Nath Sees Moderate Festive Demand
M
Moneycontrol•26-09-2026, 08:00
Private Banks at Cheap Valuations? Ladderup's Nath Sees Moderate Festive Demand
- •Raghvendra Nath, MD at Ladderup Asset Managers, notes private-sector banks are trading at unusually cheap valuations despite strong balance sheets.
- •Sluggish growth in bank deposits, due to other asset categories performing well, is a key reason for the de-rating of private banks.
- •Nath anticipates moderate festive demand this season, similar to last year, with monsoon deficits potentially impacting regional demand.
- •The proposed framework for insurance companies and distributors is a "big shock," questioning fundamental business models and potentially leading to earning estimate cuts.
- •Despite current market consolidation driven by macroeconomic factors, the medium-term outlook for Indian equities remains bullish due to strong economic growth and increased activity in manufacturing and services.
Key Questions Answered
Top private-sector banks are trading at historically low valuations due to sluggish bank deposit growth caused by capital flowing into other performing asset categories like gold, real estate, and equities.
The market consolidation is driven by macroeconomic headwinds such as the US-Iran conflict, sharp rupee depreciation, rising oil prices, and an El Niño-led monsoon deficit, alongside tapering consumption demand from higher chip prices.
The proposed regulatory framework has shocked the industry by questioning core business fundamentals, forcing companies to reconsider their operations even if the proposals are implemented only partially.
