Avoid PSU banks, says Parag Jariwala

Parag Jariwala of Religare Capital Markets told CNBC-TV18, "The market were really excited about the numbers of Bank of Baroda on the day when the results were out but I do not think that there is any reason to get over-excited about. Clearly in terms of barring the broad line or a head line slippage number, there is nothing very encouraging if you look at the credit costs, if you look at the marginsor even the loan growth. So, slippages could be a quarterly phenomena or one off kind of an event. Total stress formation is still very high and with the restructuring window getting over on FY15."

"In first quarter, FY16, you may see stress asset formation arise this time rightly so that slippages number could be much higher than what they reported in fourth quarter. So, I would wait for entire public sector (PSU) banking space, for a clear trend to emerge on the broader economic performance and broad based recovery. Till that time it is best to avoid PSU banks at these levels," he said.