Suresh Mahadevan, MD & Head of Indian Equities, UBS Securities is negative on banks.
Mahadevan told CNBC-TV18, "Our base case scenario for the markets is to trough out this year and banks being 25% plus weighting and the indices will have to play a big role in that. But clearly we are still underweight banks as we speak primarily because we think that NPAs are going to increase and also with credit growth slowing its not the best time to own banks yet. Some of the high quality names should do well like HDFC , HDFC Bank , Federal Bank is something we like, the Gold Fin companies are something we like, so the Gold Fin companies and Federal we like for specific reasons which are more specific to those kind of companies."
He further added, "We have been negative on banks particularly the PSUs. So that trend is going to continue into the next 3-4 months before we kind of see things reversing from inflation rates etc perspective."
