Private banks look expensive: Betadpur

Betadpur told CNBC-TV18, “The reason that banks are all correcting obviously is for concern about monetary policy but the reason you want to own banks is because if you believe in the India story the banks are the ones that are going to lead the India growth in the next phase. We have had the autos driving in the initial phases of our growth out of the recession now, we need the banks and the banks will do well. These are jitters in the market regarding rates which sentiment wise are affecting banks stocks but whenever we get banks close to PSU bank at one time book or in that range we should accumulated these stocks. So the second half of the calendar year for the banks will be very good because you would have gone through all these rate hikes and then the credit growth picks up.”

He further added, “The problem here is that the credit growth has not picked up yet, rates are going up, so that is why there is a sentiment which is very weak. But in the second half we will have credit growth picking up and that is when banks will start making a lot of money. So look out for banks that have corrected a lot and then pick them up gradually as the market is correcting.”

“Private banks are a little more expensive than the public sector banks. So one needs to be again very careful as to which ones you are going to pick up. An ICICI Bank or an HDFC Bank are pretty good picks but they are little expensive whereas I look at a Oriental Bank of Commerce which is trading at 1.2 times book or a UCO Bank those are banks that probably will outperform the private sector banks. So my betting right now is more towards midcap PSU banks that is the way I am targeting my portfolio.”