Prabhat Awasthi bullish on banks

Prabhat Awasthi, Head of Equities & MD, India of Nomura Financial Advisory told CNBC-TV18, "We are actually more bullish on banks compared to non-banking financial companies (NBFC). Within that we have a mix, in fact we like both private and public sector banks. There has been an underwriting standard issue in public sector undertakings (PSU) banks and underwriting standards have been poorer, as the cycle has clearly proven in the last five to six years."

"The valuation gaps are there, you have to balance between two and a mix is advisable. Also remember that in the index and in all indices the weight of private banks is always be higher, even that they have much larger free floats. Even the portfolio construction will have always more weight towards private banks. On longer term structural basis and obviously cyclically PSU banks can benefit a lot if the economy picks up. The distress on asset side can shrink much faster and much more in these banks than for private banks which did not face that much distress in the first place," he said.