Mehta told CNBC-TV18, “I think generally positive on the banking space and inflation numbers which will be out this month will also drive the trend. But broadly with oil prices correcting and commodity prices also showing a bit a slide, banks could be market performers or even out performers and within the banks preference is clearly for the private sector banks. We have seen all of them come out with excellent set of numbers, some of the issues which were there with the quality of the assets also have been resolved, they have been able to generate decent net interest income growth as well as other income growth as well and valuation wise they are at extremely attractive levels."
He further added, "Infact, if you scan the entire market its only the private sector banks where we are seeing secular growth apart from the FMCG stock and they are attractive levels and markets will tend to reward the performance which has come through. So we would like to be a bit underweight in the private sector banking space. PSU banks are very volatile in their earnings as well as price although the overall banking sector we are positive on a bit difficult to select the right PSU banks and then extract the returns from them. So just like to avoid them at this point in time.”
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