See limited downside in PSU bank stocks: Jyotivardhan Jaipuria, BofAML Capital

In a chat with ET Now, Jyotivardhan Jaipuria, HoR, BofAML Capital, gives his views on PSU bank stocks. Excerpts:

ET Now: Is there merit in buying PSU banks? The world wants to own private banks, but nobody likes PSU banks. Have they got beaten down? Nobody likes them, they are getting treated like a step child?

Jyotivardhan Jaipuria: For PSU banks, there are going to be a lot of bad news. We will have more and more of loans turning into NPLs. If we have a series of rate cuts, the PSU banks tend to do well in terms of the stock price. We will have negative news flow coming for these PSU banks in terms of NPLs. A lot of loan restructuring will happen, but at the same time the economy will start getting better as PSU banks do well. Specially, at these valuations, which we are buying them, the downside is very limited.