PSU banks - Is anyone else buying?

Hi everyone,

PSU banks seem at really bottomed out valuations. Fair to say that they are being beaten down due to the NPA issues and no one is really touching it. But considering that they still hold nearly 70% of Indian banking and if we are looking at industrial/economic recovery in the future, then revival of these banks is essential for India's credit economy to kickstart.

The valuations seems like that of near bankruptcy levels, but I feel this is the opportunity to buy. I am buying the following on every dip:

1. SBI
2. PNB
3. Syndicate
4. BoB

Every quarter till end of FY-17 is probably going to give us this opportunity. Anyone else believing in this story? Any counter points?

 

not enough brave to touch bombs.

 

I am holding State Bank of India. I am positive on the stock at these levels. It appears undervalued.

 

I thought the same about sugar stocks, look at where they are now. Without the psu banks, our economy is not going anywhere. These are too big to fail banks, and honestly are now pretty cheap!

 

Short and simple : time it and buy.

 

Sugar stocks were quite obvious beginning late last year/ early 2016. The quantum was the unknown and thats what suprised me.

PSU Banks - the cleanup isnt over and so pain will persist. Therefore I said time it to buy. But buy is a given.

 

i like sbi and BOB only when their books are cleaned up.

 

By then it will be too late because stock will shoot up 50%. No gain without pain.

 

Maybe I wasnt alert enough on it at that point. I see a pattern though in these banks though. The pain is limited I think. Much of it is already priced in. I keep on buying after every quarter results, and probably will accumulate quite a bit. I feel we can see a screaming rally in these banks once the stress is over, which I expect to be at least 3-6 months more. Lets hope for the best.

 

yes that right

 

I agree. Buying arnd qtrly results is a good strategy. Look at SBI sliding these days. It may not be a screaming rally, but with good monsoons and lower economic stress, post cleanup PSU banks could easily offer a doubling opportunity over the next 15-18 months.

 

Check out the stock price of PNB today after a disastrous result! It actually gained a few! Now I am not saying this is definitive as it might even be short covering, but still the downside seems limited to me on these. Syndicate also in the same boat. Big ones like SBI, BoB might only double but I feel mid ones like Syndicate which has (supposedly) better NPAs might bring in more. Look forward to some action after 15-18 months. Wish the best to others.

 

Please read the following Reader Comments on PNB News in Times of India.

https://timesofindia.indiatimes.com...oss-of-Rs-5367-crore/articleshow/52324184.cms