Religare overweight on banks

Manoj Singla, Religare Capital Markets is overweight on banks.

Singla told CNBC-TV18, "On the bank side clearly a lot of people including us expect a slightly softish quarter. Growth is clearly coming off. There is some expectation of compression in NIMs as well. Having said that, the checks that our analyst has done with some of the banks indicate that some of the banks could actually positively surprise and you might not see that much of NIM compression as people are expecting. I think the NPL cycle is something which is more to be worried about. So net-net the banks should have a modest quarter. I do not expect a big quarter from banks but banks is something which has discounted into the share prices as well."
He further added, "On a portfolio stance we are overweight banks. Our view is if Indian market has to have any rally it would be led by banks. I think the bigger variable to watch out for is the October 25th RBI policy because if we get any sense from the RBI that they are close to the peaking of the interest rate cycle or they would not do any rate hikes going forward I think the banks is a first sector one could get a big rally."