Positive on banks linked to companies: Amit Gupta of ICICI Securities
Amit Gupta, vice president and fund manager-PMS at ICICI Securities, continues to be positive on corporate-related stocks. “We believe that after the IL & FS crisis and after the NPAs increased to almost 12% of the total base of Rs 100 lakh crore, I think a bottom has been reached for this particular segment,” said he declared.
“Over the past 10 years, if you see, they were continually losing their weight in the index, be it SBI, Axis Bank or others, and now we think the NPA cycle may be behind that and whatever the loan granted to the business book, 85% is already provisioned … If you look at the slippages, the efficiency of the collection has rebounded because we saw during the COVID period in April-May, still a times the siippages had increased, but eventually we got the figures that the collection efficiency increased to 95 or 98% .SBI said that Rs 4,800 crore out of a total of Rs 6,343 crore was recovered in July and August … It is heartwarming to see that these stocks that have already bottomed out are now the triggers, ”he said.
“The bank is starting slowly now, because the execution of capital spending has also already started … I think these are the triggers that are now in play for financial services,” he added.