Banks' NPA situation to worsen: Harendra Kumar
"Working capital cycle is also getting elongated and there is a go slow on projects so corporate defaults are going to elevated."
Updated:
In a chat with ET NOW, Harendra Kumar, MD-Institutional Equities, Elara Capital shares his views on the banking sector.
ET Now: Does it seem that any of the private or PSU banks could be close to bottoming out in terms of its NPA situation?
Harendra Kumar: Actually if you see a recent report by one of the rating agencies the corporate defaults have actually moved up to 4.5%.
Our indication where we have been talking to lot of infrastructure and other companies is that the working capital cycle is also getting elongated and there is a go slow on projects so this number is going to elevated and this along with that rising interest does not augur well for the banking sector.
ET Now: Does it seem that any of the private or PSU banks could be close to bottoming out in terms of its NPA situation?
Harendra Kumar: Actually if you see a recent report by one of the rating agencies the corporate defaults have actually moved up to 4.5%.
Our indication where we have been talking to lot of infrastructure and other companies is that the working capital cycle is also getting elongated and there is a go slow on projects so this number is going to elevated and this along with that rising interest does not augur well for the banking sector.
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