Are banks going to lead from the front again? Devang Mehta explains

economictimes.indiatimes.com:

Devang Mehta, Director – Equity Advisory, Spark Private Wealth, says “we have been maintaining that HDFC Bank is going to now enjoy the economies of scale. The synergies of HDFC and HDFC Bank which now becomes a sort of behemoth or a conglomerate in terms of its banking strengths as well as housing finance strengths. Both of them as they are integrated together and HDFC will benefit from lower cost of funds from HDFC Bank and get to use each other's synergies as well. ”

Do you see the return of the banking names and if yes, which stocks will lead the rally?
There are a plethora of factors which I was just looking at when you talk about the banking index or banking stocks. On the fundamental front, if one can argue, in 2018, in the entire banking system collectively the NPAs were roughly around 11% and now this is roughly around 4% with extremely strong credit growth, extremely strong capex, government induced capex as well as private sector induced capex.

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I think this is one sector which has sort of underperformed the broader markets in the last couple of months. It is very heartening to see the Nifty touching a lifetime high but a plethora of factors is leading to this lifetime high – be it macro stability, micro stability or political stability and I think sentiment. One cannot argue much against the sentiment as well as liquidity.
My sense is, the banking sector probably adds a lot of multiplier effect to the economy and vice versa. The sense one gets here is, yes, one