Q: What would you do with this whole private sector banking lot?

A: I can see that there is a whole lot of selling among the top private sector banks like Axis Bank and HDFC Bank, but they are all right. The only problems they had were high cost of deposits because unlike the PSU banks, they don’t have that huge low deposit based on the agricultural sector. But given the sharp downturn in inflation and expected a correction downward in both deposit rates and interest rates in next three months and higher current and savings account (CASA) that these people Axis Bank and HDFC Bank are building up; this year should be good for them.

I don’t see any Non-Performing Asset (NPA) issues in these two banks. We hear rumours, but I don’t see the NPAs an issue in these two banks. So one would have to watch but it is not at all a good strategy to sell-off an Axis Bank or a HDFC Bank.

Q: Would you look at anything in the aviation space like Kingfisher where the promoter is talking about getting some strategic investors and some money in? Is there a contrarian trade there or you would stay away?

A: No, Kingfisher looks very interesting. SeeingVijay Mallya’s loves being with foreigners, the whole group in the last 50-years was built through foreign joint ventures (JVs), so you can’t get these shares cheaper. The group has resources, unlike Jet Airways, it’s a large group with a strong cash flow companies in breweries and distilleries, so if they are holding on to prices even though the fuel prices have fallen about 48%. So at this level you could even take a contrarian pick and buy Kingfisher, you can’t lose at such a low level.