Avoid PSU Banks, says Prakash Diwan

Diwan told CNBC-TV18, “We have had some numbers that kind of distinctly justify the kind of fears and apprehension that we had from the banking sector as a whole. Earlier than that when IndusInd Bank , Axis Bank and PNB came up with numbers things actually started looking very different. Somewhere it’s just becoming a stock specific, company specific, bank specific activity which would decide the course of action for the people to take the new exposures into the banking sector.”

He further added, “The larger private sector bank, the larger PSU banks and the private sectors banks will find much stronger favor as compared to some of the other ones. Canara Bank on Rs 27 possibly those numbers will also be in the same line. The best part is to avoid some of these smaller midcap PSU banks, rather go with the larger ones where things start looking slightly better with some sort of credit growth on the offing, with the CRR cut and potentially in April-March repo cut as well. So play safe, book some profits if you have to but don’t take stretch long exposure to the midcap PSU space.”