- The short — 60-second brief
- PSU vs Private: scorecard
- Deposits & funding — where risks sit
- Capex flywheel — loan demand map
- Positioning & exits
The short
- Momentum: Retail + capex-linked corporate credit keep prints healthy; asset quality stays benign.
- Edge: PSU banks ride project pipelines; private banks hold NIMs via CASA, fees, and mix.
- Risk: Faster deposit beta and wholesale reliance can crimp spreads in Q4.
- Setup: Favor franchises with strong OCF-to-EBITDA proxy, diversified funding, and tech-led ops.
PSU vs Private: scorecard (illustrative ranges)
| Metric | PSU Banks | Private Banks | Investor read |
|---|---|---|---|
| Retail credit growth | ~12–16% | ~15–20% | Private stronger on unsecured + mortgages |
| Corporate credit growth | ~14–18% | ~10–14% | PSU lever to infra/capex |
| NIM trend (q/q) | Flat to –20 bps | Flat to –10 bps | Deposit beta the swing factor |
| GNPA | ~2.5–3.5% | ~1.5–2.5% | Benign cycle but watch retail stress |
| CASA ratio | ~38–45% | ~40–48% | Higher CASA buffers NIM pressure |
| Wholesale funding mix | Low–moderate | Low | Lower is safer into rising betas |
Ranges reflect early-October context; use bank disclosures to calibrate.
Deposits & funding
- Reprice term buckets in waves; map fixed-rate asset maturities vs liabilities.
- Reduce reliance on bulk deposits; chase granular retail and salary accounts.
- Fee diversification: payments, distribution, trade & cash management.
Capex flywheel
- Flows strongest in power equipment, rail/roads, industrial capex, and urban infra.
- Blend working-capital + term lending; watch execution risk and escrow discipline.
- Underwriting: prefer projects with milestone-based cash flows and guarantees.
Positioning & exits
- Overweight: Retail-heavy private banks with stable CASA; diversified PSU banks with strong project books.
- Trim/avoid: High wholesale mix, weak deposit franchises, or rapid unsecured build without loss buffers.
- Exit rule: If a top holding lags Nifty Financials by 5–7% over 4 weeks and net revisions turn negative.
Playbook Pair a PSU leader (capex lever) with a private comp (CASA + fees) to smooth beta.