BFSI sector valuation discount to overall market at a record high

Valuation re-rating has been much sharper for non-BFSI companies

Companies in the banking, finance sector and insurance (BFSI) sector have underperformed on the bourses despite leading the earnings growth charts in the post-pandemic period. This has created a dichotomy between their 

earnings and share prices.
 

BFSI companies have never been less expensive than the rest of the equity market.
 

BFSI companies’ valuation discount over non-BFSI companies and the broader market is now the highest since at least 2011.
 

The top listed BFSI companies are currently valued 2.62 times their book value at the end of FY24, less than half the non-BFSI companies’ current price to book value