Nifty Bank's valuation still lags Nifty 50's despite recent rally

According to analysts the valuation discount is largely due to poor show by banks in the previous five years

Banks have outperformed the broader market in the past six months and most of the leading lenders have given positive returns to investors compared to a negative return delivered by benchmark indices.  

The Nifty Bank that tracks the market capitalisation of the country’s 12 biggest public and private sector banks, is up 4.6 per cent since the end of September 2024, against a 5.7 per cent decline in the Nifty 50 index during the period. The benchmark had peaked on September 30 last year on a month-end basis. Despite this outperformance, Nifty Bank continues to trade at a deep discount