Now Reading: PSU banks top alpha pick, OmniScience stays overweight on banking
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PSU banks top alpha pick, OmniScience stays overweight on banking
PSU banks top alpha pick, OmniScience stays overweight on banking
Portfolio management firm OmniScience Capital has identified PSU banks as offering the highest alpha-generation potential over the medium term, citing clean balance sheets, double-digit growth and significant discounts to intrinsic value.
CEO and Chief Investment Strategist Vikas Gupta said the banking sector is "completely mispriced," with PSU banks trading well below intrinsic worth despite delivering double-digit asset and revenue growth. The firm remains overweight across banking, spanning PSU, large private and mid-cap private banks.
On the broader economy, Gupta said domestic revenue and earnings remain healthy and GDP growth exceeding 7 per cent is achievable this fiscal year even if West Asia conflict persists. The firm is underweight on consumer discretionary and avoids information technology due to uncertainty over future workforce requirements.
Indian Opinion Analysis
The view that PSU banks are deeply undervalued reflects a broader market trend where government-owned lenders have cleaned up non-performing assets and improved profitability after years of provisioning. Investors should watch whether this valuation gap closes as earnings growth continues, or if governance concerns and government stake sales cap upside. The key signal will be the next round of quarterly results, where sustained double-digit loan growth would validate the thesis.
Source: thehindubusinessline.com
This story was synthesised by AI from the source linked above. Methodology and corrections.
