Jefferies says fundamentals for India’s banking sector are unlikely to change much given “tepid” loan and deposit growth,”range-bound” net interest margins and “weak” asset quality.
* “The reason to own/sell a stock then boils down to valuations,” Jefferies says in a report titled “Initiating on India Banks: Going Nowhere” and dated April 5.
* Jefferies starts HDFC Bank Ltd,ICICI Bank Ltd and Bank of Baroda with “buy” ratings,but initiates State Bank of India with an “underperform” rating.
* Assigns “hold” ratings to Axis Bank Ltd,Punjab National Bank and mortgage lender Housing Development Finance Corp Ltd.
* Jefferies believes banks with strong branch expansion such as HDFC Bank,ICICI,and Axis could face smaller problems.