Mid, small-sized PSU banks still not out of the woods; prefer select large PSBs: Deven Choksey

In a chat with ET Now, Deven Choksey, MD, KR Choksey Securities, shares his view on banking stocks.

ET Now: Is there a case for looking at beaten down PSU banking stocks right now or would you rather prefer private sector banks?

Deven Choksey: Private sector banks (PSBs) are certainly a better choice for sure. But within the PSU banking basket, if you differentiate between the large PSUs vis-à-vis mid and small PSUs, the mid and small PSUs are still not out of woods. It seems that they are likely to remain in trouble for some more time because of the way in which the economy is growing, the way in which there is a relatively a slow pace of credit growth and non-performing assets. The larger PSU banks are relatively better and are definitely looking much better at current levels. On the valuation front also, they are looking much better. So within the PSU space, we like one or two companies, beyond which I think we do not create our horizon to add them into the portfolio. We remain selective at this point of time.