Private sector banks may do well, sell on PSU banks: Centrum Wealth Management

In a chat with ET Now, G Chokkalingam, Executive Director & Chief Investment Officer, Centrum Wealth Management, shares his views on banking sector.

ET Now: What is your call on banking?

G Chokkalingam: Most of the PSU banks will continue to remain negative except the Bank of Baroda. I would suggest investors even now to sell the banking stocks, particularly PSU bank like Central Bank of India which is a costliest bank in terms of price to book. However, for efficiently run private sector banks, I would suggest investors to use this opportunity for two reasons, one the outstanding NPA is manageable and it is quite low and second the concern on monsoon is receding, about a month back we had the monsoon deficit up 31% but as of this morning it has come down to as low as 13% plus. Agricultural ministry also has informed that in September rainfall could be good. So statically, there is a possibility of even monsoon becoming near normal. In that scenario the private sector banks would do well and there is a possibility of reversal of interest rate cycle within one or two month.