Good time to invest in private banking stocks: Silky Jain, Nirmal Bang Securities

In an interview with ET Now, Silky Jain of Nirmal Bang Securities shares her views on the latest numbers of some banks. Excerpts:

ET Now: What is your call on Yes Bank now that the numbers have largely been in line?

Silky Jain: Numbers are broadly in line with expectations because the PAT number has come in at around Rs 550 crore and we were expecting a PAT of Rs 555 crore. Moreover, if we look at the numbers a little more deeply, we see that the NIM has come a little higher than expectations. So I am still looking at the numbers, but apparently the numbers look decent enough. The asset quality has remained stable and NPS coming at 0.41% is not a material deterioration compared to the last quarter. But we need to check what has been the slippage number because most of the banks have been reporting a decline in NPAs.

ET Now: First it was IndusInd Bank and now Yes Bank. Both the big private banks have surprised, numbers have been strong, growth has been solid and consistent. Is it a time to really buy into private banks once again? Do you think they have corrected enough or looking at the market conditions, should one wait to buy into stocks like Yes Bank hoping that they will get better entry levels?

Silky Jain: We think that Yes Bank has definitely corrected a lot from the recent past. So it offers a very good opportunity to enter at current prices. If you look at the valuation, it is trading at around 2.4 times FY16 and around 2 times FY17. Adjusted price to book provides a very fair entry point. One can never time the market and you can see that the stock can come down 5%-10% more, but definitely from a long-term perspective, we feel that right now is the good time to enter into private banks.