Can PSU banks spark off a good rally for 2024? What to bet on in energy transition?

economictimes.indiatimes.com:

Sailesh Raj Bhan, CIO, Nippon India Mutual Fund, says today with growth being back, PSU banks have the capital and capacity to lend which is not available or it is very tough to find in other pockets of the market, This is one space where valuations still are way reasonable. Most of them are one-time books and their ROEs have all started to improve and are now materially higher. So, some level of re-rating in this category does seem probable and certainly a better risk reward space within the available options today.”

There was a time when PSU banks were bailed out. The government had to infuse capital because they were on the verge of an existential crisis. BOI has raised money via QIP route and J&K Bank has hit the market. So, the cycle has turned for PSU banks and these stocks are still trading way below their private sector counterparts. Do you think for PSU banks what started as a spark could ultimately be a very good rally for 2024 and beyond also?
In public sector banks, the growth is still not there and it is likely to come in the next two or three years because the whole investment lending which will likely to happen and that growth is certainly going to be rewarded by markets because earlier the bigger issue was the banks have constraint for capital and we are not growing and hence any level of valuation was unjustified in the context of the market.

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But today with growth being back, these guys have capital and capacity to lend which is not available or it is very