J&K Bank a good buy at current levels: Pankaj Pandey, ICICIdirect.com
One needs to be selective. You cannot really look at all the stocks in the PSU basket with the same colour, says Pankaj Pandey.
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In a chat with ET Now, Pankaj Pandey, HoR, ICICIdirect.com, shares his views on markets. Excerpts:
ET Now: Just when it appeared that the tide was about to turn for PSU banks, cracks and wrinkles have surfaced once again with Bhushan Steel, Syndicate Bank bribery issue. Do you think one is better off giving PSU banks a skip? Even though on paper they look cheap but businesses are so much in trouble that they are unlikely to recover.
Pankaj Pandey: The PSU banks have been cornering most of the NPA concerns in this particular quarter as well. For next one or two quarters, this concern might still remain but our sense is that once you have prospects of recovery getting more visible, the PSU banks will recover.
For example, J&K Bank witnessed peak slippage on one particular count but we would like to believe that this is more kind of a one-off. So, one needs to be selective in terms of approach which is why for example for a bank like J&K Bank, we will believe that the bank is a good buy at current levels because we would not expect this repetition to happen in the subsequent quarters. It is available at about one time adjusted book basis and we believe that it can easily command 1.2 to 1.3 on a forward basis and we have a target price of 1700.
One needs to be selective. You cannot really look at all the stocks in the PSU basket with the same colour.
ET Now: Just when it appeared that the tide was about to turn for PSU banks, cracks and wrinkles have surfaced once again with Bhushan Steel, Syndicate Bank bribery issue. Do you think one is better off giving PSU banks a skip? Even though on paper they look cheap but businesses are so much in trouble that they are unlikely to recover.
Pankaj Pandey: The PSU banks have been cornering most of the NPA concerns in this particular quarter as well. For next one or two quarters, this concern might still remain but our sense is that once you have prospects of recovery getting more visible, the PSU banks will recover.
For example, J&K Bank witnessed peak slippage on one particular count but we would like to believe that this is more kind of a one-off. So, one needs to be selective in terms of approach which is why for example for a bank like J&K Bank, we will believe that the bank is a good buy at current levels because we would not expect this repetition to happen in the subsequent quarters. It is available at about one time adjusted book basis and we believe that it can easily command 1.2 to 1.3 on a forward basis and we have a target price of 1700.
One needs to be selective. You cannot really look at all the stocks in the PSU basket with the same colour.
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