From the lows seen in August of last year, government owned banking stocks have rallied close to 50 per cent. However, in the last few days, there has been some reaction in their stock prices. This makes them decent buys at current levels, as there are rising hopes that non performing assets would finally improve.
This may not be fundamentally the best PSU banking stock around. However, it can be a turnaround story given that the fact that the bank's profits rose to Rs 191.6 crore from Rs 21.9 crore in the same quarter last fiscal on strong net interest income. Non performing assets and gross non performing assets also reduced, which could be a trigger for the stock going forward.
Better fundamentals than peers
This is one of the better performing government banks in the country. Canara Bank recently reported a 1.86 per cent rise in net profit to Rs 806.86 crore on 11.61 per cent rise in total income to Rs 11728.01 crore in Q1 June 2014 over Q1 June 2013. the stock has fallen sharply from Rs 430 to Rs 377 levels, and investors may use the opportunity to buy the stock.
In the midst of a scandal
Syndicate Bank has fallen sharply from Rs 180 seen on July 3 to the current levels of Rs 127. The stock has fallen largely after the arrest of the CMD of the bank over bribery allegations. However, fundamentally the stock is sound and one can use the opportunity of the bribery scandal to buy into the stock.
Good opprtunity to buy
IDBI Bank has also fallen considerably from Rs 115 to the current levels of Rs 83. The results that the company reported were bad, but, there are hopes of a turnaround as the managed has emphasised the need for a rapid branch expansion. Good stock to buy with a long term perspective.