Bonanza Portfolio Views on Large cap Banking Sector

STATE BANK OF INDIA

The bank is the largest commercial financial organisation in India. M&A among SBI group banks have started, with State Bank of Saurashtra merging into SBI. In view of growth potential of Indian economy and under banked status of the masses, with rising incomes & purchasing power, SBI has good potential going forward. The government has given strong signals of the economy heading for softer interest regime.

HDFC

The company has shown constant growth in past three decades. It is able to maintain margins in spite of slow down shown by industry. There is visibility in its earnings and growth. India is heading for softer interest regime as government is infusing more liquidity to over come the glut in economy. Further, the scrip has hidden value of about Rs 800 per share in form of its investments and subsidiaries.