Advise to buy and hold PSU Banks for longer terms: Prashasta Seth

In a chat with ET Now, Prashasta Seth, CEO, IIFL AMC, shares his views on the PSU Bank. Edited Excerpts:

ET Now: What about banks? You spoke about bond yields falling. Is all in the price for the PSU banks? Is there more upside? Are you recommending your clients to buy into PSU banks?

Prashasta Seth: If you see in terms of the value that is there in the markets, PSU banks to some extent still have a bit of a value left. One can say that lot of these numbers are hiding the NPAs that are likely to come out, or it is not a true representation of the loan book. If you are think that the economy is going to recover and things are going to improve, then these numbers could see some amount of lower figures than where we are at this point of time.

So my sense is if somebody has a slightly longer term view, PSU banks could be a part of the portfolio. That is one space where there is still some amount of value left. There is a big gap between the valuations of a private sector bank and PSU bank. Given the way we are in terms of markets and what people are looking in terms of value, these banks do will well over the course of the next 12 to 18 months.