Sridhar Sivaram of Enam Holdings advises investors to hold banking stocks as he expects the next five years to be great for large banks.
"Banking sector had a lot of issues in the past such as covid uncertainties, restructuring of NPAs. We believe they have come out from this, especially private sector banks. Credit costs have normalised and improved much faster than anyone would have anticipated," said Sridhar Sivaram of Enam Holdings.
"We think the next five years would be great for large banks whether it is private or some public sector bank. Very difficult to see losing money from this bet," Sivaram added.
Banks that will keep its CASA and deposits cost reasonable, will do well. Banks which are struggling to get its deposit base within a reasonable price band they will have issues, Sivaram said.
Sivaram said he is underweight on IT sector. "It is a myth that when the Indian currency depreciates, IT firms do well. See past five or ten year data when the currency has declined nearly 45%, but there has been no improvement in margins of the IT firms."
The Indian market is looking good as inflation peaks and growth rebounds. In next few years expect credit growth to be driven by revival in Capex spends.
Apart from banks, Sivaram added that if anyone wants to invest domestically, China +1 is a massive opportunity and it is not just in chemicals. There are even more opportunities in other sectors. Recently, a news report suggested that Apple wants to manufacture its iphone 14 in India.
"So one has to be very nimble in trying to look at these opportunities. There are many more opportunities coming which were not available earlier," he added.
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