S Arora bullish on banking space

Excerpts from Bazaar on CNBC-TV18 Watch the full show » Nifty BSE | NSE 08/02/12 Are Mutual Funds betting on Nifty?

Sandeepa Arora , India Infoline is bullish on banking space.

Arora told CNBC-TV18, "Most of the public sector undertaking (PSU) banks are still quoting at 1-1.5 times price to book and the kind of results that we have seen are again absolutely stellar. I think given the fact that you will see now the deposit rates coming off, their margins on the balance will also start improving from here. So I think that is another play vis-à-vis the private which is already fairly expensive now which starts looking attractive even from here on, so I would be bullish on that space."

She further added, "In terms of the safety I would still prefer the frontline but I think even in the smaller ones - if we look at Punjab National Bank in the frontlines we continue to like; PNB and Bank of India , Bank of Baroda , even Union Bank . So some of the smaller names also look attractive and most of them will do well and if we compare valuations vis-à-vis the state owned banks in China, I think they are clearly undervalued. There is a good opportunity here from a longer term perspective."