Prefer HDFC Bank over ICICI, Axis Bank: Sonam Udasi

In a chat with ET Now, Sonam Udasi, Head of Research, IDBI Capital, shares his views on banking stocks.

ET Now: I am guessing you would have looked into Central Bank. It is a stock that has probably been one of the most hammered down PSU banks at least to my memory but not a bad set of numbers, did like what they did this quarter?

Sonam Udasi: The thing that puzzled me a little bit was the kind of NII growth that they saw this quarter. Our view is very clear that we like the banks who have consolidated or are consolidating. So we like the banks which are not growing on the top line and consolidating and improving their asset quality and things like that. So on that note for us, Central Bank is a negative. So while Q on Q the net NPA may have improved marginally, gross NPA remains at elevated levels. So for us, the concern is for many of these banks if you are still growing the top line and the NPAs continue to remain high even on that basis, that is concerning and that re-rating will take sometime.
ET Now: What about ICICI Bank where there is still some pressure?

Sonam Udasi: No even for ICICI Bank, we would prefer HDFC as our number one pick. ICICI is number two and Axis is number three.