Watch out for increasing NPLs in case of PSU banks: Manishi Raychaudhuri, BNP Paribas Securities

In a chat with ET Now, Manishi Raychaudhuri, MD & HoR, BNP Paribas Securities, shares his views on the current outlook of PSU banking space. Excerpts:

ET Now: Given that bank re-capitalisation has augured well for PSU space, do you think there is any PSU name to buy?

Manishi Raychaudhuri: We are cautious on the PSU universe as the asset quality risks are still not behind us.

Some of the larger public sector banks could be shielded, as a proportion of the size of their books—the NPLs—might be relatively lower.

However, at the same time, the phenomenon of increasing NPLs is something that we have to watch out for and bear with in case of PSU banks. In our model portfolio, we do not have a single PSU bank right now, neither State Bank of India or PNB or Bank of Baroda, and I am not inclined to make any significant changes either.