PSU banking space is going to surprise the market: Vinit Bolinjkar

economictimes.indiatimes.com:

«We believe that that stock has got significant upside potential. In the housing finance space, we like PNB Housing. We believe that stock has got potential to re-rate by 40%,» says Vinit Bolinjkar, Ventura Securities.We have been asking our experts as to in this kind of market wherein we are almost close to that all-time high and on a daily basis clocking a new peak barring the last two trading sessions, where do you think in this market are pockets of overvaluation and which are the pockets which you still think are undervalued? Let me start with the undervaluation because that is what people would like to hear.

I believe that the PSU banking space is going to surprise the markets. They are doing very well. Advances growth is going to be between 15% to 18%, earnings growth is going to be anywhere between 20% to 25%.

And ROAs are also picking up. So they are going to catch up with their counterparts that is the private sector banks. So I believe there is significant undervaluation in that sector.

We like the metal stocks, particularly Lloyd metals. We believe that that stock has got significant upside potential. In the housing finance space, we like PNB Housing.

We believe that stock has got potential to re-rate by 40%. We have seen significant activity, corporate action taking place and we believe that the asset quality will improve and growth will pick up. They recently did a rights issue where they raised growth capital.

So I think that stock is one which is firing on all cylinders. I believe that the overvaluation is going to be in the IT stocks. The IT stocks are not performing as expected and with the fear dollars days almost numbered.