Siddhartha Khemka Positive on Banks, Upgrades Bandhan Bank to Buy

• Siddhartha Khemka of Motilal Oswal Financial Services is optimistic about the banking sector, citing picking up credit growth and bottoming out net interest margins.
• Cost control and improving CASA ratios are boosting profitability, especially for large banks like ICICI Bank, HDFC Bank, and State Bank of India.
• Federal Bank and AU Small Finance Bank are top midcap picks, while Canara Bank and Union Bank of India stand out among PSUs.
• The microfinance segment, including Bandhan Bank, shows improvement with stabilizing asset quality and better collection efficiency.
• Bandhan Bank upgraded to 'buy' after five years due to reasonable valuations, expected strong recovery, and attractive trading below book value with a target price of ₹175.

Why It Matters: Khemka is bullish on banks, upgrading Bandhan Bank to 'buy' due to strong recovery potential and attractive valuations.