The banking stocks are under pressure ahead of Reserve Bank of India's policy outcome later in the day.
According to Nomura, the banks are not a growth story, but it still sees value after underperformance. Among them, it sees value in corporate banks and has a buy rating on five stocks.
The broking firm believes that the sector will be closer to the end of NPA recognition cycle in FY18 and provisioning could remain elevated going into the next fiscal.
It prefers ICICI Bank or Axis Bank over PSU banks.
Mitessh Thakkar of mitesshthakkar.com said Bank Nifty remains the key today, is there is some positive news from RBI then it could get past 24225-24230 levels but if there is nothing positive then Bank Nifty could start correcting and could pressure on Nifty.
Bank Nifty is currently trading at 24109.
Nomura has kept buy rating on ICICI Bank and Axis Bank with revised target price of Rs 335 and Rs 610 respectively.
The firm has buy rating on Bank of Baroda, target cut to Rs 165, buy on SBI with a target of Rs 300 and buy on PNB with a target price of Rs 160.
It also has buy call on Union Bank of India and Bank of India with a target of Rs 140 and Rs 120 respectively.
Posted by Rakesh Patil
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