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Banks' valuation discount to Sensex hits 10-year high, shows data

This is due to a relatively poor showing by top banking stocks on the exchanges in recent months. Analysts attribute this to the prospects of their muted earnings growth in the next few quarters

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This is a trend reversal for the banking index, which traded at a premium to the broader market during the pre-pandemic period

Krishna Kant Mumbai

4 min read Last Updated : Jan 31 2024 | 12:35 AM IST

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Banks, the biggest component of the Indian equity market, are now trading at a big discount to the benchmark indicesThe BSE Bankex index, which tracks the share price of the 10 top listed banks, is trading at a trailing price to earnings (P/E) multiple of 15.3X, nearly a 40 per cent discount to the BSE Sensex current P/E of 24.37X.

This is the biggest valuation gap between the two indices in at least 10 years.

Similarly, the BSE Bankex price to book ratio (P/B) of 2.22X is 40 per cent lower than the current Sensex

P/B ratio of 3.61X.

This is

Topics : Banks Indian equity markets benchmark indices BSE HDFC Bank

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