Aditya Khemka, CIO at InCred Asset Management, shares why he believes selective PSU banks and NBFCs could outperform in the coming quarters. He explains how large PSU banks have almost caught up with private banks on key operational metrics such as volume growth, NPAs and ROIs — yet continue to trade at significant valuation discounts. Khemka argues that as these operational gaps narrow, PSU bank valuations are likely to converge towards private peers. He also highlights opportunities in secured and MSME-focused NBFCs, supported by government loan guarantees and improved asset quality.
