Hold Canara Bank: Mayuresh Joshi

Mayuresh Joshi of Angel Broking told CNBC-TV18, "Our preference stays with the private space. Canara Bank has seen deterioration in its asset quality – the gross net asset ratio deteriorated to 2.7 percent in the quarter gone by from 2.5 percent. What really hampers a lot of these midcap PSU banks progress is the lower capital adequacy that these guys maintain, so Canara Bank with a CAT one of 7.2 percent, lower CASA ratio it does not help in balance sheet expansion. So NIMs stay within that range of 2-2.2 percent and for return ratios to improve more money needs to get pumped in, so the balance sheet expansion happens. So, the government has promised so much money to get infused into few of these banks but clearly a lot more need to be done and again the asset quality needs to get stablise which I don’t think so will happen at least for the next couple of quarter."At least for the next couple of quarters the asset numbers specifically both on the gross and the net sides are going to remain soft. Though valuations remaining extremely compelling for public sector banks it is going to take some time. So one needs to have a time horizon of at least 15 months. A couple of quarters are going to be weak for a lot of these PSU banking and clearly valuations to improve will take some time. So hold on to the stock but keep a time horizon of more than 15 months," he added.