About ITUS

Investing in growth in the public markets

Research Center

Study our investing style and process at length

Owner's Manual

Owner's Manual

We are a fiduciary of your capital. Your understanding of what we do and how we will approach it is a critical element in enabling us to attain our goal. The Owners Manual helps achieve this....

Learn more

Last week we discussed the Rural Recovery Theme in Indian markets and the trends we are seeing in this area. In the upcoming weeks, we will share with you some charts that will help us better understand this theme and the factors that led us to believe that the rural economy would continue to grow in the future. This week we had quite a few interactions with our partners and one of a major question that arose in the discussions were the reasons we continue to be underweight in the Banking.

While overall deposit growth has been robust, CASA, the current account and savings account deposits growth have slowed down. The growth in Fixed deposits has been higher which means the cost of funds for the banks would be incrementally higher. The increase in FD’s will decline the NIM margins affecting the profitability of the banks. Top banks haves seen advances growth of 14-20% over the last two years, however their Opex also grow more than 25%, this would negatively impact on their ROA. Additionally, if RBI decides to lower the interest rate, this might also affect the deposit growth, which inturn will impact ROAs of the banks.

These are the prime reasons why we are structurally underweight banking. But we will look at strong bottom up stories to tactically allocate wherever we see opportunities.

Why we remain underweight Banking at ITUS_img1

Why we remain underweight Banking at ITUS_img2

The quarterly review of our portfolio is available in the link below-



We will come back with more interesting information on the portfolio and outlook on the market in the following weeks.

Also, we keep writing to you about our SIP program that presents investors with a convenient avenue to regularly infuse capital into their portfolios. Feel free to check out the benefits for your clients. If you need more info, reach out to your dedicated relationship manager at [email protected].

These weekly episodes are now available in our website for your quick read and you may access the same in the below link.

Weekly Enlightenment Archives – ITUS Capital