Axis Bank best pick in banking sector: PN Vijay

Axis Bank is a best pick in banking sector and one can also buy ICICI Bank on decline, says PN Vijay, Portfolio Manager, askpnvijay.com.

Vijay told CNBC-TV18, “Axis Bank numbers are pleasant surprise. There are two components to Axis Bank- one is the basic profitability in terms of net interest margins, net interest income, and growth in advances etc- which have always been the strong point of that bank. They have always managed to grow profitably. The Achilles' heel for Axis Bank has been the asset quality.”
He further added, “Suddenly in the last two quarters we have been getting worried. Normally, we don’t get worried about the asset quality of private sector banks, but fortunately the impairment was very little. The asset quality was very good and no wonder even in a weak market today Axis Bank has been strong. So, I will still keep my faith in Axis Bank, which remains one of the best places in the private sector banks with regard to valuation and price hike.”
"For me right now the financials look the best because there is clearly move towards falling interest rates. Whether the RBI does it through a CRR or a rate cut, rates of the market are coming down both for deposits and advances, so this is excellent news for financials whether they are banks or NBFCs. So among the banks, I would say ICICI Bank which has got a very good growth whose results are yet to come, whose NPAs are bit improving would be an excellent bet. Among other financials one could pick LIC Housing, one could pick up REC and many of those strong stocks which are leaders in their particular segment of financing. So right now if one wants to do a buy on decline strategy the best is to play the rate sensitives and among them the financials."