Private banks like HDFC Bank richly valued: Ajay Srivastava

In a chat with ET, Ajay Srivastava, CEO, Dimensions Consulting, shares his views on banking space.

ET Now: What about banks, is there anything that you like there?

Ajay Srivastava: Banks have disappointed and that is the amazing story what happened in the last 48 hours that was the first time we have seen banks have gone up but that has been more short covering than positive buying. In fact yesterday we saw ICICI Bank closing in the red so you got to be cautious as to what is happening in the banking sector and again as I said if the corporate balance sheets are full of red on June 30th thanks to rupee dollar depreciation and the falling consumer demand. The demand of restructuring is going to go up tremendously in the next quarter in the economy that is what the bottom line is saying so therefore you would tend to keep away from banks and again back to the same story that which banks you want to keep away the nationalised banks and so on so forth.

Private banks are richly valued like HDFC Bank it is already at 35 PE price to book value, if incrementally how much more do you get it has come down from 720 to 660-650. If you want to buy banks today you have again do not have much choices so you play in the Bank Nifty and the movement of the market because ICICI close negative yesterday which is a great dampener for the market. HDFC Bank is struggling at 660-670. The big private banks have really run up Yes Bank, Indus Bank etc. If you do want to buy those stocks so you ending up buying Bank Nifty on the momentum side not on fundamental side.