Why Saurabh Mukherjea Expects Large Private Banks To Fare Better Than PSU Peers
The four large private banks will make a lot of money in the coming years, says Saurabh Mukherjea. Here’s why...
Saurabh Mukherjea expects large private banks with strong capital ratios to fare better than public sector peers and non-bank lenders in the next couple of years.
The four large private banks with strong current account savings account growth franchise and tier-I capital ratios will make lots of money in the coming years as public sector lenders will continue their struggle with inadequate tier-I ratios and non-bank finance companies and housing finance sector deal with difficulties in raking in affordable money, Mukherjea, founder of Marcellus Investment Managers, told BloombergQuint in an interview.
“These four private sector banks will continue to have a great run for a couple of years as the market share in lending gets concentrated in their hands,” Mukherjea said.
Buy all four or three out of four and make money as the entire sector falls into the hands of four well-managed private sector banks.Saurabh Mukherjea, Founder, Marcellus Investment Managers
Invest In NBFCs Only If...
Housing finance companies are in deeper trouble than the NBFCs, Mukherjea said. That’s because NBFC loans are short-dated, so their problems are less acute than housing finance companies, he said.
Still, Mukherjea is only positive on NBFCs that are...
- Backed by large and credible corporate houses with strong balance sheets,
- Have asset tenures of not more than two years, and
- Stretched out liabilities, at least up to two years.
“The shorter the asset liability mismatch, extreme loss margin stretched out, the ideal for the NBFCs,” he said.
Other Key Highlights:
- Politics and stock market in India don’t have much to do with each other.
- Market appreciates familiar set of politician running the country.
- Don’t expect stock market to fly through roof or have massive correction.
- Standard challenges will continue.
- Bulk of Nifty companies struggled to give healthy return on capital employed in over 10 years.
- Broader market not a pretty place to invest in India.
Listen to the full conversation here: