Bank Stocks A Buy In Current Correction, Says Enam Holding

Speaking to CNBC-TV18 after the Union Budget announcement, Sridhar Sivaram, Investment Director of Enam Holdings said that he will definitely buy banks during this correction period and is considering both private sector banks as well as public sector banks.

“I will definitely buy banks. The top private sector banks and some of the larger PSU banks are the preferred bets. We have been long on the PSU banks for a while. That looks very attractive,” he said.

While sharing his thoughts on the current market correction and investment opportunities in the banking sector, he stated that banks are being very conservative and the construction work is going on at a great speed with many projects in the pipeline. He believes that while infrastructure companies can be difficult to buy, it is better to play in the space through banks.

He added that the only concern for banks currently is the scramble for deposits, but he does not see a systemic issue from large conglomerates to banks.

“On a systemic banking level, I don’t see any issues. Banks have learnt lessons from the past and have been very conservative as far as the lending is concerned. So I don’t see any issue as far as the banking sector is concerned from the infrastructure lending,” he said.

The government had already indicated that they were plugging all loopholes as far as savings products, which were tax free, are concerned and he has been bearish on life insurance companies for a while for exactly this reason.

“Only 10 percent of life insurance companies is individual protection, rest, almost everything is actually some sort of a tax arbitrage product, which is a savings product,” he said.

According to him, the growth aspect of insurance is going to go, so now one will have to look at them for a while as a non-growth stock.

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