Financial services stocks are the talk of the town once again. Growth in the banking sector has picked up by more than seven percent with a rise in corporate credit, and the overall credit growth is expected at 13 percent in FY23-24, Kunal Shah of ICICI Securities told CNBC-TV18.

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Shah is positive on banks and non-banking financial companies, and has the likes of HDFC, State Bank of India (SBI) and Axis Bank among his favourites. He expects private banking names to outperform their PSU counterparts.

"Private banks outbeat the entire industry in terms of the overall credit growth. So banks have underperformed, corrected a bit so our preference within the space is Axis Bank and SBI," he said.

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Among the NBFCs, his top picks are HDFC and Cholamandalam Investment.

“Our preference would be HDFC and Cholamandalam Investment within the NBFCs,” he said.

The RBI has clarified that non-performing assets can only be upgraded when arrears are paid, stating that bad loans have to be recognised daily with respect to due dates, mentioned Shah.

For the full interview, watch the accompanying video.

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(Edited by : Sandeep Singh)

First Published:Dec 3, 2021 11:37 AM IST