Is the peak over for the PSUs or is there a lot more legs to this rally? Gurmeet Chadha answers

economictimes.indiatimes.com:

Gurmeet Chadha, CIO & Managing Partner, Complete Circle Consultants, says “probably a large part of the PSU rally is already in the price. One has got to be more selective here, especially with banks, because you will see some pressure on NIMS. There is some concern on unsecured lending by RBI and in PSU banks you can have some negative surprises, which can rekindle the previous experience people have. If given a choice, I would prefer to be with SBI, Bank of Baroda, if I go a notch down, maybe Canara Bank.”

A slew of earnings has attracted all the attention. Is there anything that has got your attention?
If you remove IT and chemicals, it has been a pretty good earning season. In fact, even including them, the median earnings has been upwards of 18% as far as the larger universe we track is concerned which also points to a decent growth momentum in the economy. The RBI governor also highlighted that Q2 GDP could surprise positively. The domestic oriented consumption theme is clearly standing out. Among capital goods stocks, L&T was a standout result. What it tells us is that not only is the domestic investment cycle upticking, the Middle East is now meaningfully contributing as oil inches higher and the countries start investing in renewable energy.

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Also it is leading to a lot of demand overall because India also needs 30-40 gigawatts of renewable energy. So with increasing demand for transformers, insulators, switchgears and cables, there is a huge multiplier effect. That