Why did Mark Mobius say banking stocks are overrated in India? | Mobius Big Prediction on Stock Market.

 

Why did Mark Mobius say banking stocks are overrated in India? 

The Indian stock market is once again gaining momentum. Recent figures ranging from GDP to car sales are such that the whole world is in awe because when the giant economies from Western countries to Europe and China are struggling to save themselves from recession, India's Both economy and the market are gaining momentum. 

This is the reason why leading investors and brokerage houses are also bullish on India. A big name for leading investors is Mark Mobius. Mark Mobius is a leading investor and founder of Mobius Capital Partners LLP. Mark Mobius has said that India's market will do best. 

Although one of his statements is in discussion and it has raised the ears of the investors. Mobius has said that India's banking sector has been described as largely overrated. This means that the banking sector has been exaggerated. On the other hand, smaller companies in many sectors are underrated. 

The question is also arising from the statement of Mark Mobius whether investors will be able to get good returns in banking stocks in the coming times or not. Banking sector stocks have the highest weightage in the country's major indices and the performance of banking stocks has been erratic in the recent past.

On several occasions, banking stocks have disappointed investors. However, despite all this, most analysts are bullish on the stocks in this sector. Mark Mobius has said in an event that perhaps the bank is the most overrated. Most of the underrated are medium-sized companies. 

Nifty Bank has given a return of around 11% every year in the last five years, which is slightly less than the 11.5% CAGR of Nifty. Mark Mobius has four stocks in the Indian stock market, including Persistent Systems and Apollo Hospitals, and plans to hold them for a long time. 

Mark Mobius also said that the maximum earning opportunities lie in non-index companies. These are companies that are not part of any major index. He said that the biggest feature of the Indian markets is that many companies have given more than 20% return on assets or return on capital.

Mark Mobius has also given investors an idea of which sectors they are bullish on. He said that at the moment there is bullish about technology and especially hardware companies. He said that India has achieved great success in software, but the hardware will prove to be very important in the future. 

He said that semiconductors and their related business will become more important for India. He also agreed with Chris Wood of Jefferies group that the Sensex could touch 1 lakh in the next 4 to 5 years. Chris Wood had said in his recent newsletter that the Sensex could cross the 1 lakh mark anytime now. 

Sensex will have to grow by 10 to 13% every year to reach this level. In the last 23 years, the Sensex has grown at a CAGR of 11.5% and has risen from the level of 5,000 to 62,000. India's growth figures have come recently. The country has achieved 7.2% growth in 2022-23. 

Not only this, but the May GST figures, manufacturing PMI, and car sales figures are also encouraging. Now in such a situation, everyone is getting bullish about the Indian market. In such a situation, the statement given by Mark Mobius regarding the banking sector is very important.