Time Is Ripe To Buy PSU Banks: Edelweiss Research Report

Foundation being laid for an efficient and focused PSU banks’ structure

– A multi-tiered, capital-efficient structure will evolve with a few larger banks leading the pack and mid-sized banks focusing on different niches. The government will aid larger banks to build scale

– Time is ripe to look at large PSU banks as structural long-term plays–they will breach the historical trading range and narrow the gap with private players. Increase weight on SBI and BoB

– At the same time, be cautious on smaller PSU banks for which consolidation is likely take longer till they find their niche

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