Banks may settle between lows and old highs

CNBC-TV18’s Executive Editor, Udayan Mukherjee - Yesterday we saw private banks did okay; most of them bounced back a bit led by ICICI Bank and HDFC Bank. But for Yes Bank it’s like saying, “now that Mastek has declared good numbers we are completely assured about Infosys.” So the parallels are that.

Yes Bank is new bank, small business, small balance sheet, cautious therefore hasn’t had much to disclose. Who knows what the larger banks will do?
 
But my sense is that if one-two more such numbers come in, the market might say, “we overdid private bank disclosure number and maybe we need to unwind some of the pessimism a bit which I think would be a fair call too if one-two bank numbers come in from here.
 
But going forward even if there are no great disclosures or mark to market hits there would be much lower earnings from the whole forex business and on the margin it will shave off growth for many of these companies. So my sense is that if the numbers are not too bad in terms of disclosures one will see a bounce in many of these private banks stocks because they have got beaten down quite a bit.
 
But I would be extremely surprised if they went anywhere close to their old highs because business will slow and business will be stunted for the rest of the year for many of these private banking stocks. So they will not go back to their peak valuations; at best they will probably settle somewhere between their lows and their old highs.