Pathik Gandotra positive on private banking space

Pathik Gandotra, Partner, Dron Capital Advisors told CNBC-TV18, "We are very positive on the private banking space because I think the big issue with private banks like ICICI Bank, Axis Bank was that there is a chance that the infrastructure loans can blow out potentially 12-18 months down the line and that is a big chunk of their portfolios. Now I am not saying everything has got solved but first steps have been made. So at least we know that there is not going to be 10 large groups which are going to blow up completely and there is no solution to their problems. I don't think that is the case anymore. So that itself calls for getting a bit more positive on private banks."

He further added, "HDFC Bank are brilliant franchises, it has gone through stress because of the RBI and the exchange rate. So the big global cues are okay, big macro cues what the government has done I think is pretty okay. So my view is you may have a reaction here and there, you might see a correction because they have gone up so much from the bottom but you are headed towards much higher levels."
"I will not buy PSU banks. We have to be something really constructive around recoveries with PSU banks and something which says that the book values are not as depressed as they actually appear to be. So there is a big pileup of restructured loans and NPLs and you can possibly guess the amount of write-off that they will take on it. So they are not as cheap as they look like but if something happens on recoveries, these are stocks which will bounce back the fastest. So if there is positive news, these stocks can become multibaggers, you can buy them at 30 percent higher also and you will still make money."