Federal Bank top pick in midcap banks: Rahul Arora

Rahul Arora, CEO at Nirmal Bang Institutional Equities told CNBC-TV18, "We like Federal Bank. This is a company that will give 1.5 percent kind of RoAs and 15-16 percent RoEs by FY17. We have a buy recommendation on the company. It is our top pick in the midcap banking space at this point in time.""Analysts actually expects net interest margins to expand over the next two years as well. Valuations are not too bad from a private sector bank perspective as well. On public sector banks State Bank of India (SBI) as we have discussed in the past is something that we will continue to hold as our top PSU banking stock," he said.