PSU banks' Q1 results decent, but are valuations supportive of next leg of the rally?
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Despite a decent Q1 performance, PSU bank stocks have struggled over the past month, falling nearly 6% (as of August 13), with concerns over valuations in the overall PSU sector weighing on the market. Experts ETMarkets spoke to anticipate stock-specific action rather than a runaway rally. Here’s why! Barring State Bank of India (SBI), which reported a 1% year-on-year (YoY) increase in its June quarter net profit, all other public lenders have posted double-digit growth. Notable gains include Punjab National Bank (PNB) with a 159% YoY increase, Uco Bank with a 147% YoY rise, and Central Bank of India (CBI) with a 111% YoY growth. The remaining banks have shown growth between 10% and 47%. Five banks reported double-digit growth in net interest income (NII): Punjab & Sind Bank (PSB), Bank of Maharashtra, UCO Bank, Central Bank of India (CBI), and Punjab National Bank (PNB). PSB led with a 23% year-on-year increase, followed by 20%, 12%,...