PSU Banks Outlook: Why SBI, Canara Bank & Indian Bank Remain Top Picks; HDFC Bank Faces Pressure

PSU banks continue to support the markets, with investors turning bullish on large state-owned lenders. Gaurav Sharma, VP & Head of Research, Globe Capital, says SBI, Canara Bank and Indian Bank remain his preferred picks for a one-to-one-and-a-half-year investment horizon, citing strong CASA and new business growth. He remains cautious on HDFC Bank amid the ongoing mis-selling controversy and does not recommend averaging or fresh buying at present. Sharma expects HDFC Bank could see further downside towards ₹675–680 levels over the coming weeks or month. Meanwhile, PSU banks remain attractive despite the market not fully valuing their improving fundamentals and earnings performance.