Domestic brokerage ICICI Securities has initiated coverage on seven PSU banks, assigning a ‘Buy’ rating to Indian Bank, Union Bank of India, Bank of Maharashtra, Canara Bank, Bank of Baroda (BoB), Bank of India and Punjab National Bank (PNB). The brokerage has also resumed coverage on SBI with a ‘Buy’ rating.
The brokerage has stated in its report that PSB’s phase of strong earnings growth and RoA acceleration seems to be losing steam, with ebbing tailwinds from excess liquidity and recoveries. Despite RoA moderation, it estimates RoE to be healthy at ~15% for FY27-28, while valuations below FY28 RoA for most PSBs provide comfort.
