Gautam Chhaochharia, Head of India Strategy at UBS India told CNBC-TV18, "From a strategy perspective, we still like to stay away from banking space and not come back in a hurry. Valuations have corrected, they are near lows especially for the government banks. Why we say we are not in a hurry is obviously because of the downturn which we are seeing in the economy and even if we don’t see a crisis even then these stocks will face the brunt of earnings, NPL rising etc, so they may not rerate in a hurry."
He further added, "For the banks to come back and rerate in a hurry will need a real tangible signs of economic recovery happening in the impending future, which will again goes back to the government action which is still reactive and incremental as of now. So we will not be going back to banks in a hurry from a strategy point of view."
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