Axis Bank, IndusInd Bank, Kotak Bank top picks: Thakkar

Parag Thakkar of HDFC Securities told CNBC-TV18, "I would go for private sector banks apart from State Bank of India (SBI) in the PSU pack. As we have seen the PSU banks results were more or less reflecting the ground reality. The banks which are under-capitalised, their exposure is already Rs 20-22 lakh. Now they are not going to grow above 7-8 percent because they are starved of capital. Private sector banks will have a lot of room when the economic cycle and their investment cycle picks up. They can easily growth at 20-25 percent so all those private sector banks which do not have a baggage of non-performing assets (NPAs) or restructurings will definitely do very well. "

"Kotak Mahindra Bank have a Tier I of 16 percent, no baggage of restructuring and NPAs, so they can grow in an environment where the governance is good and so you can lend easily. Kotak Mahindra Bank is one, and then Axis Bank is the other one. In Axis Bank even after lending two infra space their provision coverage ratios have been maintained, their earning quality has improved, retail book has grown aggressively and they have maintained their CASA and earnings growth which has been stupendous. Of course as a play on CV recovery IndusInd Bank also features among the top picks of private sector banks," he said.