Archive · 20 Sep 2025
Jefferies: Indian Banks in Optimistic Phase with Reasonable Valuations
Prakhar Sharma from Jefferies says Indian banks are looking good right now!
They're growing in a steady way and are reasonably priced compared to others.
Sharma notes that because inflation is low, the actual growth in the sector may be running closer to 12%.
Sharma isn't worried about problems in the SME segment and expects good demand to continue.
He believes the government's and RBI's actions, such as tax cuts and rate adjustments, will benefit the sector.
Overall, quality is the focus, and investors see growth potential.
Indian banks show cautious optimism with valuations seen as reasonable.
Credit and deposit growth are approximately 10%.
Low inflation may impact growth numbers by 150-200 basis points.
High-quality stocks trade at 15-16 times earnings.
Stress in the SME segment isn't considered widespread.
- Who
- Prakhar Sharma (Jefferies)
- What
- Indian Banking Sector Analysis
- When
- Not specified, ongoing analysis
- Where
- Indian Banking Sector
- Why
- To provide insights on the sector
- Credit & Deposit Growth
- Around 10%
- Inflation Impact
- May be down 150-200 bps
- Valuation of High-Quality Stocks
- 15-16 times earnings
- Asset Quality Concern
- Not widespread, possibly temporary
- Key Driver
- Quality remains key
Sources
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