The rally in state-run banks has been attributed to the government's announcement to infuse capital worth Rs 70,000 crore over four years. Among individual stocks, Bank of Baroda has been among the biggest winner; shares in India's second-biggest state-run lender by assets have jumped 25 per cent in five sessions as its management forecast growth in troubled loans to slow in the coming quarters.
Stock Talk
1) Market analyst Rajat Bose says that except Dena Bank, most of the other PSU banks have shown reversal signals on the charts. The rally in PSU banks have been accompanied by strong volume and delivery-based activity, he added. Mr Bose expects some profit-taking to emerge in SBI at around 290-300 levels. But it should be bought into, he added. Shares of SBI were trading 0.40 per cent higher at Rs 289 on Wednesday.
3) Equinomics Research & Advisory founder G Chokkalingam said investors can look at PSU stocks with net non-performing assets of around 2 per cent or below and credit growth of 10-15 per cent.
3) Deven Choksey, MD of K R Choksey Securities said largecap PSU banks can give good returns. There is valuation comfort and the banks' fortunes could see a turnaround as the economy improves, he added.
4) However, Phani Sekhar, fund manager at Karvy Stock Broking said PSU banks were under-owned by institutions. For PSU banks, it is difficult to predict where the bottom is in terms of bad assets and even some private sector banks have seen a rise in bad assets this quarter, he added.
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