Jefferies says Indian banks are 'going nowhere'

NDTV Profit Desk

08 Apr 2013, 10:30 PM IST

Fundamentals for India's banking sector are unlikely to change much given 'tepid' loan and deposit growth, 'range-bound' net interest margins and 'weak' asset quality, global investment banking firm Jefferies said.

"The reason to own/sell a stock then boils down to valuations," Jefferies said in a report titled 'Initiating on India Banks: Going Nowhere' and dated April 5.

Jefferies started HDFC Bank Ltd, ICICI Bank Ltd and Bank of Baroda with 'buy' ratings, but initiated State Bank of India with an 'underperform' rating.

It also assigned 'hold' ratings to Axis Bank Ltd, Punjab National Bank and mortgage lender Housing Development Finance Corp Ltd.

Jefferies believes banks with strong branch expansion such as HDFC Bank, ICICI, and Axis could face smaller problems.