Buy private sector banks: Sandeep Shah

Sandeep Shah, Associate Director at Motilal Oswal Private Wealth Management told CNBC-TV18, "Private banks have been holding up for quite some time along with IT and pharma. However, we are finally for the first time beginning to see some signs of the slowdown in India’s gross domestic product (GDP) growth impacting not just loan growth, it has been impacting NPAs incrementally but we are seeing that a strong impact coming in terms of loan growth."

"We have had for the last two to three years at least three large private sector banks, which have been growing at over 30 percent and this quarter so far we have just seen one of them, grow at 30 percent. There is a bit of a slowdown but some of the quality large private banks; I think can be accumulated at lower levels. But without a sense that there could be an immediate rebound unless and until we see strong signs of the economy recovering because what we are seeing right now in terms of the earnings rebound, for example, this quarter we think that Sensex earnings could be up about 13 percent but a lot of that is coming from the export sensitive sectors," he added.

"So, till we actually see a sign of economic growth seriously bottoming out you will not see any significant outperformance from there. However, given the fact that these banks have very strong management, they have fairly robust business model, very strong brands; it would make sense to buy them from a medium-term to long-term perspective."