Investors can look at 4 to 5 stocks in the banking package: Dipan Mehta from Elixir Equities
Dipan Mehta, director of Elixir Equities, believes that one can look at 4 to 5 stocks in the banking package, including ICICI Bank, HDFC Bank, Kotak Mahindra Bank and Axis Bank. “Beyond that, every bank is a little bit suspicious in terms of what can come out of it in the future,” he said.
“I was hit hard by all those Tier II banks that bought IDFC First Bank and RBL Bank earlier, and before that we also had the Yes Bank saga. I think I came to the conclusion that it is better to stick with I think overall in banking we have at least learned the hard way that the top 4-5 banks continue to do very well, when there is a correction with the Bank Nifty, they don’t do as much. They are less affected by corporate governance, NPA and leadership issues, “he said.
In terms of returns, Mehta is not sure whether the smaller PSUs or mid-sized private sector banks have really outperformed the larger private sector banks in any meaningful way. “As for the banks, again, we are going to see a consolidation not in the banking sector, but in the investor’s portfolio, where instead of having 10-15 banks or NBFCs, it is better to focus on the top 3-4, and keep good bits of it and keep it in your core portfolio, ”he said.