Stock market: Why Quantum AMC's George Thomas bullish on banking sector

Amid the ongoing bull run, the Bank Nifty soared to a fresh all-time high in Thursday’s trade, lifted by strong gains in IndusInd Bank and ICICI Bank. The index jumped 303 points to hit a record 58,577 in the afternoon session.

In an interaction with Business Today, George Thomas, Fund Manager–Equity at Quantum AMC, said that despite the sharp rally, a mix of promising earnings and attractive valuations is encouraging the fund house to deploy cash.

Thomas said demand momentum is clearly improving, citing faster sales growth across BSE 500 companies—a trend he views as a strong indicator of broad-based recovery. While GST-led supply-chain adjustments had caused some channel correction, discussions with management teams now point to good acceleration in terms of demand, especially from the bottom of the pyramid. “Markets earnings are looking quite promising,” he added.

This upbeat backdrop has prompted Quantum AMC to actively pare cash levels. Thomas said the fund has been deploying capital steadily over the past 3–4 months, trimming cash from 13–14% to about 8%. “We are bottom-up stock pickers,” he noted, adding that the firm is selectively adding stocks with meaningful upside potential.

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On banking—where Quantum AMC owns names like HDFC Bank, ICICI Bank and SBI, Thomas laid out a clear rationale for its bullish view.

He said credit growth, which had been a little benign, is now picking up in line with overall economic strength. At the same time, the gap between credit growth and deposit growth has narrowed meaningfully, easing concerns over banks’ ability to fund incremental loan demand.

Thomas said the asset quality environment remains solid, with stress levels staying benign. “With reasonably strong asset quality and a supportive credit environment likely to persist, banks are trading at quite attractive valuations relative to the broader markets,” he said. “We continue to see fairly strong upside there.”