Hold SBI with a long term view: Prashastha Seth, IIFL Wealth

In a chat with ET Now, Prashastha Seth, Senior Fund Manager, IIFL Wealth, shares his views on SBI.

ET Now: What is your call on State Bank of India?

Prashastha Seth: It depends on timeframe. If we have a 12 months timeframe, there is value in SBI. There are two reasons why this stock can do well. One, the worst of the NPA cycle is probably over or we would see NPAs stagnating for the March quarter. Thereafter, we would see improvement in terms of NPA cycle over the next 3-6 months.

Secondly, we expect interest rates to go up by 100-150 bps over the course of the year and that would provide mark-to-market gains in terms of investments to a large extent. So for a long term view, we could continue to hold. We have a decent holding of State Bank and we would probably not be looking to sell out because we have essentially invested it with a longer term perspective.