A dream run for banks with 20%, 10% Bank Nifty returns in the last six, three months, has supported the Nifty rally beyond 6,600 levels. Mid-sized PSU banks have surged 30-40%.
'Post the rally, all stressed PSU banks are trading at 0.9-1x adjusted P/BV, which is a fair valuation in the current scenario. We do not expect further sustained upside in the near term,' according to ICICIdirect.
''We expect PSU banks to remain trading bets with NPA and MTM provision concerns cropping up anytime. Large PSU banks will be preferred for relative profit stability. We have revised upwards our targets for BoB, BoI and PNB among PSUs and Axis, Yes, J&K Bank, HDFC bank and Kotak Bank among private banks,'' ICICIdirect said.
The stock broker prefers SBI, BoB, IndusInd Bank among frontline stocks and City Union and DCB among small cap banks.
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