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Should one buy the dip in PSU banks? Experts discuss

Ashwani Gujral says PSU banks are a buy on dips and the move that was seen earlier will see a follow through at some point.

October 30, 2017 / 05:20 PM IST

Market on the first day of the trading week closed at another high. The midcaps outperformed gaining over one percent.

The Sensex closed up 108.94 points at 33266.16, while the Nifty ended higher by 40.70 points at 10363.70. The market breadth was positive as 1,696 shares.

Market experts Ashwani Gujral of ashwanigujral.com, Mitessh Thakkar of mitesshthakkar.com, SP Tulsian of sptulsian.com, R Sreesankar of Prabhudas Lilladher and Deepak Shenoy of Capitalmind.in spoke on the outlook for market going forward and earnings from midcaps.

Shenoy is of the view that there is more momentum in the market than value and so one has to play the market accordingly.

When asked how one play should the PSU banks because the big expected move in them seemed to have fizzled out, Gujral said they remain a buy on dips. The next trigger could be SBI or PNB results but the move seen earlier will have follow through at some point and they will much higher from current levels.

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Meanwhile, Sehnoy does not think PSU banks make great buys yet. Recapitalization is a chance for them to get rid of their NPAs, he said, adding that they will have to first reocgnise NPAs in advance and then take the capital and start lending again. However, if they do not recognize the NPAs and just take the capital and start lending then they would again become shorting opportunities.

According to Shenoy, the buying opportunity in PSU banks will come at a later point and when that comes, be selective. Indian Bank has a good capital ratio, said Shenoy, adding that the bank has managed to clean up its book and not lend further but others like United Bank of India is a big avoid.

Experts also shared their view on Jet Airways, United Breweries, DHFL, Delta Corp, midcaps etc.
CNBC-TV18
first published: Oct 30, 2017 05:09 pm
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