Amit Rathi, MD at Anand Rathi Financial Services is of the view that private sector banks will continue to outperform the PSU banks.
Amit Rathi, MD at Anand Rathi Financial Services told CNBC-TV18, "In public sector banks, consensus view of almost everybody is they are fairly bearish. In terms of the whole bankruptcy law, in terms of professional appointments, I think it is setting the stage eventually for public sector banks to start participating. Right now the way the markets are positioned, the way investors view it, private sector banks will continue to outperform the PSU banks."
"If you have got a 5 year perspective I would go with PSU banks but most investors don’t have that sort of time horizon but the question really is in private sector banks you have price to book multiples that are really rich whereas most PSU banks are trading on price to adjusted book at 1 or even below 1 in most cases. So, if balance sheet restructuring takes place, recapitalisation happens, bankruptcy laws are in place, better management quality is brought in and the bank holding company structure, so a lot is being done on the banking side and I think the government recognises that this is a key sector or segment to fix if you got to have long term growth because it is really the State Bank of India and Bank of Baroda actually have the balance sheet of any shape to really support growth going forward,' he said.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.