Archive · 2 Dec 2025
PSU Banks Poised for Further Re-rating: Expert
Ashish Chaturmohta, a financial expert, thinks that government-owned banks in India, called PSU banks, are doing well and could become more valuable.
He says these banks are lending more money to small businesses and people, not just big companies.
They are also managing bad loans well.
Even though these banks have done better than others recently, they are still cheaper to buy.
Chaturmohta believes the State Bank of India (SBI) is the best among these banks and could become even more valuable in the future.
PSU banks are showing strong credit growth, especially in MSME and personal loans, with some banks posting 13-15% growth.
PSU banks' operational parameters are comparable to private peers, with net NPA numbers and slippage ratios in line.
PSU banks are trading at a significant discount to private peers, with valuations at 0.8-1 times price to book versus 2.5-2.7 times for private peers.
PSU banks have outperformed private banks in recent returns, with a 29% return compared to 13-14% for Nifty Bank.
Ashish Chaturmohta names State Bank of India (SBI) as his top pick, with potential to reach Rs 1,250-1,300 in the medium term.
- Who
- Ashish Chaturmohta, Managing Director for Portfolio Management Services at JM Financial
- What
- PSU banks are showing strong operational performance and are poised for further re-rating
- When
- Current market conditions and recent performance
- Where
- India
- Why
- PSU banks are showing strong credit growth and operational parameters, and are trading at a discount to private peers
- Expert
- Ashish Chaturmohta, Managing Director for Portfolio Management Services at JM Financial
- Top Pick
- State Bank of India (SBI)
- Credit Growth
- 13-15% in some PSU banks
- Valuation Discount
- 0.8-1 times price to book for PSU banks vs. 2.5-2.7 times for private peers
- Performance
- PSU banks delivered 29% return vs. 13-14% for Nifty Bank
