Positive on corporate-linked banks: ICICI Securities’ Amit Gupta
Amit Gupta, VP and Fund Manager-PMS at ICICI Securities, continues to be positive on corporate-linked stocks. “We believe that after the IL&FS crisis, and after the NPAs increasing to almost 12 percent out of the total base of Rs 100 lakh crore, I think a bottom has been made for this particular segment,” he said.
“In the last 10 years if you see, they were continuously losing their weight actually in the index, whether it was SBI, Axis Bank or others, and now, we believe that the NPA cycle is possibly behind this and whatever loan is given to the corporate book, 85 percent is already provisioned… If you look at the slippages, the collection efficiency has bounced back because we saw in the COVID time in April-May, again the siippages had increased, but finally, we got the numbers that the collection efficiency has increased back to you know 95 or 98 percent. SBI said Rs 4,800 crore out of total Rs 6,343 crore of slippages were recovered in July and August… It is heartening to see that these stocks which already bottomed out are now are getting the triggers,” he said.
“Banking is slowly starting now as the capex execution also has already started… I think these are the triggers which are coming in now for the financial services,” he added.
