Rakesh Jhunjhunwala bullish on bank stocks, even ‘inefficient’ lenders; sees decade long bull run.

As India’s economy gains pace in the next few years, ace investor Rakesh Jhunjhunwala anticipates demand for money to rise, making him extremely positive on the banking sector, especially “so-called inefficient banks.” Rakesh Jhunjhunwala is banking on the country’s long-term growth potential and political stability to propel the stock market upward.

According to billionaire investor Rakesh Jhunjhunwala, annual equity returns from Indian stocks will be roughly five percentage points higher than GDP growth of 7% to 10% in the future years.

Mr Jhunjhunwala, dubbed “India’s Warren Buffett” because of his fondness for equity investing, is banking on the country’s long-term development potential and political stability to propel future advances in the stock market.“The inefficient banks have extremely high cost-income ratios, which will be drastically reduced,” Rakesh Jhunjhunwala said. He went on to say that he expects India’s nominal GDP to rise at 14-15 percent this year and 10-12 percent in the next few years. According to the huge bull, this will lead to an increase in money demand. “If there is a need for money, banks will acquire bargaining power, and lenders will follow.”

“We are in the middle of a bull phase which will last for a very, very long time,” Mr Jhunjhunwala said in an interview earlier this month. “India will also look lucrative when the U.S. Federal Reserve begins to withdraw stimulus, but there will be short-term disruptions.”

Talking about the third wave of the pandemic affecting the economy and market, He said-’’Wave or no wave Indian economy is much better prepared to face this kind of crisis. I, for sure, can bet my money there will be no third wave”.

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