Is SBI the Most Undervalued Bank? Chakri Lokapriya's Analysis of the Banking & NBFC Stocks

In this segment from Business Today TV's Market Today, Chakri Lokapriya, CIO - Equities at LGT Wealth, discusses the recent surge in private sector banks and the broader financial sector. He highlights NBFCs as a key beneficiary of potential interest rate cuts, predicting at least 75 basis points of cuts in the near future. While acknowledging the initial impact on loan books, Chakri Lokapriya anticipates significant loan growth, particularly in industrials-linked NBFCs like REC. He also expresses optimism about PSU banks, specifically SBI, which he notes is trading below its forward price-to-book value multiple despite its strong balance sheet. Chakri Lokapriya also favours mid-cap PSU banks like Canara Bank and Union Bank of India, citing their clean balance sheets and attractive valuations. He believes these banks will benefit from the anticipated industrial corporate lending growth. While acknowledging the strength of private banks like HDFC and ICICI, Chakri Lokapriya emphasizes the potential of NBFCs and PSU banks in the current market environment. He also points to the upcoming RBI credit policy and the new governor's efforts to improve market liquidity.