Prefer Bank of Baroda: Sandeep Singal

One can prefer Bank of Baroda within public sector undertaking (PSUs) space, says Sandeep Singal of Emkay Global Financial Services.

Singal told CNBC-TV18, "Our take is that the degradation in the quality of asset has not bottomed out as yet. There is issue because corporate India is not able to perform, their return on equities (RoEs) are down, their cash flows are under stress and their balance sheet is still leveraged and debt coverage ratios are not good enough to give a comfort to bank."
He further added, "On the other hand government is waving off various loans, subventions etc. So, the whole regime of non-performing asset (NPA) has not bottomed out. So, what to do in that particular parlance? Therefore, we are saying that stick to banks where there is a good capital adequacy ratios, so there we prefer Bank of Baroda kind of play within public sector undertaking (PSUs) space."
"Within PSUs and private, we are clearly saying private banks would be far better-off because of their prudential lending norms and there our best pick is ICICI Bank because it consolidated for the last four-five years and ready to participate in the net growth of India followed by HDFC Bank. So, these two are our picks in the private sector banks.