Private banks are in a solid position currently in terms of capital adequacy and their ability to grow market share, said Navin Agarwal, managing director of Motilal Oswal Financial Services.
According to Agarwal, consumption also continued to grow. “A whole bunch of new interesting ideas which did not participate in the last five years can come to fore like telecom, utiliites, private banks, autos, etc.," he said.
Agarwal said that strong earnings growth was expected for FY20 on the back of assumptions of asset quality improvement of PSU banks and some private banks.
“Earnings growth is not broad-based, it is concentrated in few large companies within Nifty and 15-20 biggest midcap companies,” he said, adding unless the earnings are really broad-based the sustainability of rally will always be questionable.
“This year has been quite big in terms of FII inflows already and we have seen $5-6 billion of flows come in ... a lot of this is not just India buying but global emerging market buying and most EMs have done far better than India in recent past, and India is catching up," he added.