PSU Banks unlikely to deliver expected earnings over the next quarters: Harendra Kumar

In a chat with ET Now, Harendra Kumar, Managing Director-Institutional Equities, Elara Capital, shares his views on Bank earnings.

ET Now: What is the sense that you are getting about the banking earnings so far? Firstly, the disappointment somewhat coming in from HDFC Bank, HDFC again an inline set of earnings and so is Axis Bank.

Harendra Kumar: Yes, so the street was expecting a lot from some of these banks. But the managements of all these banks have been full warning the street that the expectations are too much and the prices have run up far ahead of the real fundamentals. So what the private pack has gone out and done is obviously they have managed the numbers extremely well and they have shown stable set of results. But clearly, this is not something to write home about or where the market could go out and break new highs on these set of numbers. So what the takeaway from here is that you could have one more quarter of consolidation in private banks.

But the other more important takeaway is that while the PSU banks sustain at this level or weaken further given that there is some difficulty of pushing numbers for private banks. So my takeaway would be that the PSUs will struggle over the next quarters in terms of delivering numbers and probably you should look to pare some positions out there.