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Banks and IT sector outperformed alternately in the last 10 years; Read here

Motilal Oswal has looked at the performance of Banks and Information Technology sectors over the last decade.

The two sectors together constitute 41% of Nifty50 and ~31% of NSE500 weights.

Nifty50 declined just once in the decade, whereas Nifty Bank and Nifty IT each declined on three occasions during CY12-22.

The divergence between IT and banks over CY12-22 was over 40% in 6 out of the 11 years and over 10% in 10 out of 11 years.

Nifty50 reported a 12% CAGR in this period, Nifty Bank and Nifty IT clocked 13% and 17% CAGR, respectively.

Nifty Bank’s 12-month forward P/E is near its LPA, whereas that of Nifty IT is trading at a 13% premium to its LPA.

During CY12-22, the total market cap of Nifty Bank reported a 15.9% CAGR to 31 lakh crore; whereas, the market cap of Nifty IT grew at 16.1% CAGR to 27 lakh crore.

MF allocation in banks remained strong with an average of 22%, down 330 bps from the 2019 peak.

Motilal Oswal expects the divergence in the performance of these two sectors to continue.

Click here to know more about the banks and IT sector. 

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Domestic brokerage house Motilal Oswal looks at the roles of two major and critical domestic sectors, which have crested multiple outperformers over the last decade – Banks and Information Technology.

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Banks and IT sector outperformed alternately in the last 10 years; Read here

Domestic brokerage house Motilal Oswal looks at the roles of two major and critical domestic sectors, which have crested multiple outperformers over the last decade – Banks and Information Technology.

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