State-run banks at an inflexion point: IndAsia Fund Advisors

Shares of state-run banks have been in focus this year on the back of ballooning non-performing assets (NPAs). While there have been several steps taken by the government to tackle the issue, a bankers’ panel on Monday submitted a 5-point plan to deal with the stress.

Pradip Shah of IndAsia Fund Advisors sees good progress on the resolution of state-run bank NPAs. “There is potential in state-run bank assets in terms of recoveries and this sector is staring at an inflexion point.”

The Mehta panel’s focus is on governance and asset quality management besides offering a path for profitable growth, he told CNBC-TV18 in an interview, adding that banks have the capability to emerge well out of the problem.

Speaking on the correction in midcaps, Shah said that while Indian economy is giving growth signs, global economies are not doing so. On the domestic front, he highlighted that the political situation is causing concern among investors. Having said that, he added that there are individual scrips in this segment that are exhibiting good value.

Shah highlighted how FIIs were concerned about the impact of crude on the Indian economy. Along with it, rising interest rates in the US and sanctions on Iran are a setback for India, he said, adding that trade wars are another issue to be dealt with.

On sectors, he said FMCG is one place which has continued to do well along with automobiles. "There has been pent-up demand which is visible."