Kotak Mahindra Bank a safe bet: Dipan Mehta

In a chat with ET Now, Dipan Mehta, Member, BSE and NSE shares his views on the banking pack. Excerpts:

ET Now: One safe idea and one slightly risky proposition but which may give a better than expected return in the banking sector?

Dipan Mehta: Within the banking sector, we like the private sector banks and a safe idea there is Kotak Mahindra Bank. A more risky idea there is Development Credit Bank.

Now, these are all stocks which we have investments in, these are 'clients-only' stocks and recommendations so one needs to mention that as a disclosure.

ET Now: Regarding DCB, would you be playing that takeover candidate theme out here?

Dipan Mehta: Well that of course is certainly a possibility. Secondly, they have been gradually increasing their return on capital employed and return on equity and as and when that momentum picks up, we do expect the PEs to get re-rated upwards and if you do a quick comparison check, in last two-three quarters they have really outperformed the industry big time and we do feel that there is scope for them maintaining the earnings momentum and the PEs to get re-rated upwards as well. So within the small cap stocks that would say be amongst the top picks.