It is anticipated by the brokerage firm, Motilal Oswal that the profitability of top seven PSU banks under their coverage can jump to as high as ₹90,900 crore for the current financial year.
The note further says that sustained and consistent performance on delivering healthy return ratios can result in further re-rating of these stocks as valuations are still inexpensive considering the growth and profitability outlook.
Nitin Aggarwal of Motilal Oswal shared his top picks for investment in this sector, naming State Bank of India (SBI), Bank of Baroda (BoB) and Canara Bank as his top choices. He went on to explain that PSU banks can deliver healthy return ratios going ahead, as there is no one-off in earnings of PSU banks.
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