The previous PE ratio of Nifty Bank reveals that sharp increase occurs suddenly after a short period of quiescence.NIFTY Bank Index comprises of the most liquid and 12 large Indian Banking stocks from the Banking sector. The top 3 constituents namely HDFC BANK, ICICI BANK & KOTAK BANK alone contributes to 65% of the weightage.

Historical PE-Ratio of Bank Nifty Since 2001:

Historical PE-Ratio of Bank Nifty Since 2001

Currently, the PE ratio stands at 58.33 which is exponential and it has calculated as more than double as compared to the PE ratio of 1st Jan 2018 of Bank Nifty which stands at 26.98. Just in less than 20 months of time PE ratio takeoff. Investors are expecting higher earnings growth in the future and on the other side, it also means kind of overbought levels from the investing timeframe perspective as suggested by P/E.

The current Total market cap of Bank Nifty Stocks comes around 17,68,885.10 Crores. Most of the exponential move comes from the year 2017 annual gains 41% which is quite phenomenal followed by 9% YTD gains during the year 2018 so far.

Bank Nifty – Top constituents by weightage:

Bank Nifty – Top constituents by weightage

The above mentioned 3 private sector banks have an approximate weightage of around 65% in bank nifty. One of the reasons even wild swings in Public Sector banks almost have no impact in moving the Bank Nifty index. Bank Nifty had gained 9.2%, from the start year of 2018. However, PSUBank Index had lost 12.99%. Despite PSU Bank losing the majority of its gains post bank recapitalization, BankNifty managed to test All time high. However, PSU Bank Index is not.

Bank Nifty Top Stocks – 1 Year Performance:

Bank Nifty Top Stocks – 1 Year Peformance

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