Amit Rathi talks about PSU Bank reforms and their benefits

Good earnings have boosted valuations in midcap and small cap stocks, says Amit Rathi, Managing Director of Anand Rathi Financial.  Midcaps and small caps have risen nearly 40 percent on an average over the last year and are valued better than large cap. Average earnings growth is 20 percent in both segments and investors are taking an over two-year view, and are expecting interest rate cuts which in turn could spur demand for vehicles.

The PSU bank reforms recently are necessary as per Amit Rathi as they will improve capital raising, bank holding structure and gradual reduction of government’s stake

After a keen analysis of prevalent market, Rathi says that the Stock prices are up, on an average midcap smallcap sort of fund which is the reflection of all the sectors done is up about 40-45 percent in the last one year. This, however, is followed by high interest rates. With the midcap index at its peak, people are troubled by incessant evaluations and valuations.

Amit Rathi says, “When you are looking at valuations, it is important to also sort of look at earnings growth in financial metrics. For the odd 100 companies, that we have here, if you look at sort of average earnings growth we are seeing in the range of 20 percent, which is very different from what we are seeing in the large cap companies. People are paying for growth and for better balance sheets. If you look at historical sort of valuation, gap one could argue that midcaps valuations are high. However, the growth metrics at this point of time really support the midcap – smallcap story. “

Lauding the PSU bank reforms, Amit Rathi remarks them as a fantastic move by the government.  These steps would help cut down the huge arbitrage raking in the private banking sector in spite of the Non Performing loan goals.


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  • Rohit kindra

    I like articles by Amit Rathi. They convey financial information to people in a very simple and comprehensible language. They have been influencing my decision making approach and I am glad I am no more at the losing end.

  • Rohit kindra

    I believe it is their experience doing all the talking. Being in the business for so many years and surviving against all odds is a rare trait. I would only want you people to talk more frequently on various financial topics. It would be really good if you guys could talk about issues related to global financial sector.

  • Rahana Zubaidah

    Mr. Amit Rathi hit the right place by asking people to look at the earnings growth in the financial metrics.

  • Rahana Zubaidah

    Even I would like to agree with Mr. Rathi here that lauding PSU banks is an appreciable move taken by the government. And I am quite hopeful that it will contribute in banking sector’s growth.

  • Ashwani Patel

    Private Banks’ situation is always on a better position as compared to public, in my opinion. They are more organised and well-mannered. Their way to deal with clients is the reason that people prefer the private banks over public.

  • Sachin Verma

    It is informative to read about amit rathi.

    • sujjaainasma

      @s@disqus_0L8LIrIhvU:disqus it seems you know lot about pls tell us also so we can get more about it

  • sujjaainasma

    PSU’s are not always good so whats the matter of considering it

  • abhishek awsthi

    Nice article as it talks about PSU bank reforms and their benefits.And as per amit Rathi PSU banks reforms are necessary as it will improve apital raising, bank holding structure and gradual reduction of government’s stake.

  • puneet yadav

    Amit rathi has rightly mentioned the fact that if you are looking for the valuations it is important for people to also look at the earnings growth in financial metrics.

  • navneet sharma

    PSU bank reforms proves to be really good move by the government and it proves to be beneficial to the banking sector as well.

  • Deval das

    The Ravi Developers has brought section 24 of the Income Tax to the limelight to authenticate the information provided by the leading real estate developer in Mumbai.

  • shripal singh tomar

    Being a business analyst I am a big fan of anand rathi as the analysis of the market that he provides is really good and worth the praise.

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