SBI, Yes Bank, Axis Bank, HDFC Bank Good Bets: Angel Broking

Vaibhav Agarwal of Angel Broking says the selloff in banking stocks has been driven by external factors. The fact that a lot of private banks are highly "over-owned" by foreign investors has influenced the selloff, he added. (Watch Video)

Stock Talk

Buy Yes Bank: Smaller private sector banks like Yes Bank do have a slightly higher beta, so in a correction we have seen that they can end up correcting a bit more so we might see slightly lower levels from here. We would view these dips as good buying opportunity in these private banks because the fundamental outlook remains quite strong, the earnings growth outlook remains at 20 per cent for almost all of these private sector banks.

Buy Axis Bank: At current valuations, Axis bank is close to 2 times its price to book value. The lender will gain market share and will see good earnings growth. The correction presents good buying opportunity.

Buy HDFC Bank: In the near term if one wants to look at a particular bank which can correct the least and now has a good upside it is HDFC Bank. Even with the slight bit of correction we have seen in the stock, it still holds 20-22 per cent kind of an upside. Very rarely is HDFC Bank available at less than the kind of premium it typically trades at, so the stock could be a good buy at this point in time.

Buy SBI:  It is the only PSU bank stock, where we still have a buy with a 15-20 per cent kind of upside but otherwise broadly we are still neutral on the PSU banking space right now.