PSU Banks - Carnage over?
We have seen PSU banking stocks correcting by over 20% in last couple of weeks, largely due to dull Q3 numbers posted by these banks, coupled with poor assets quality. Banks like Andhra Bank, having posted good Q3 numbers with good asset quality even was not spared and fell in line with the other PSU banks.
But now with Q3 results coming to an end, with SBI due to declare its Q3 numbers on 13-02-2015, the last in the PSU list, it seems that PSU banks have bottomed out and are seen oversold as well, thus lot of value is seen amongst these banks and more especially in larger banks like SBI, PNB, Canara, BoB, BoI.
Apart from this, infusion of capital by Government for FY15 in these banks are an added sweetener, which can see them going up, on renewed buying and short covering. So stop shorting them now and revive positive bias on them, as they will be the largest beneficiaries of rate cut, to be announced by RBI, in the 1st week of March.