BoB, PNB & Canara Bank top PSB bets, says SMIFS' Sharad Avasthi; stays positive on IT sector
Commenting on information technology (IT) stocks, the market expert said he remains constructive and sees the current phase as an opportunity to accumulate quality names despite concerns around artificial intelligence (AI)-led disruption.
- Feb 18, 2026,
- Updated Feb 18, 2026 11:27 AM IST
Sharad Avasthi, Head of Research (PCG) at SMIFS, on Wednesday picked Bank of Baroda (BoB), Punjab National Bank (PNB) and Canara Bank as preferred bets from the PSU banking space, citing comfortable valuations and a favourable credit cycle outlook.
"Across PSU banks, what has happened is the first leg has played out very well. I think we have appreciated 30-35 per cent from the lows, or even better in some cases, SBI has been an outperformer. From here onwards, I think we are preparing for the second leg. If you look at the likes of PNB, Canara Bank, Bank of Baroda, I think the valuations are still comfortable. Maybe SBI has run a bit too far, but I think PNB, Canara Bank and BOB could still be very decent bets to play on," he told Business Today.
"We are expecting this trend to continue over the next three to four quarters. There's not much risk from the credit cost side and the NPA cycle should be favourable. Corporate loans are also expected to come back with the capex boost. So I think it's all in all a positive development for them. In case if rates also start on the lower trajectory, I think even the treasury part of the business should start supporting. We are bullish, I think, most of these stocks should ideally still have around 20-25 per cent upside from current levels. So Bank of Baroda, PNB, and Canara Bank would be the best bets to play on," Avasthi also said.
Commenting on information technology (IT) stocks, Avasthi said he remains constructive and sees the current phase as an opportunity to accumulate quality names despite concerns around artificial intelligence (AI)-led disruption.
"We are using this opportunity to buy into the IT stocks, while we do think that AI will cause some disruption but most IT companies are very much ready to play along with this whole disruption theme. If you look at most IT companies, they've already worked on various AI infrastructure projects."
Drawing a parallel with the early days of the internet and e-commerce, he added, "AI is something where, internet or e-commerce was around 10-15 years ago. So I think the next 10-15 years, it will have a lot of limelight. But it's not something that you should be so scared that you dump all internet and IT stocks and believe that everything's over for them. So we think this is a good opportunity to buy into IT stocks."
Sharad Avasthi, Head of Research (PCG) at SMIFS, on Wednesday picked Bank of Baroda (BoB), Punjab National Bank (PNB) and Canara Bank as preferred bets from the PSU banking space, citing comfortable valuations and a favourable credit cycle outlook.
"Across PSU banks, what has happened is the first leg has played out very well. I think we have appreciated 30-35 per cent from the lows, or even better in some cases, SBI has been an outperformer. From here onwards, I think we are preparing for the second leg. If you look at the likes of PNB, Canara Bank, Bank of Baroda, I think the valuations are still comfortable. Maybe SBI has run a bit too far, but I think PNB, Canara Bank and BOB could still be very decent bets to play on," he told Business Today.
"We are expecting this trend to continue over the next three to four quarters. There's not much risk from the credit cost side and the NPA cycle should be favourable. Corporate loans are also expected to come back with the capex boost. So I think it's all in all a positive development for them. In case if rates also start on the lower trajectory, I think even the treasury part of the business should start supporting. We are bullish, I think, most of these stocks should ideally still have around 20-25 per cent upside from current levels. So Bank of Baroda, PNB, and Canara Bank would be the best bets to play on," Avasthi also said.
Commenting on information technology (IT) stocks, Avasthi said he remains constructive and sees the current phase as an opportunity to accumulate quality names despite concerns around artificial intelligence (AI)-led disruption.
"We are using this opportunity to buy into the IT stocks, while we do think that AI will cause some disruption but most IT companies are very much ready to play along with this whole disruption theme. If you look at most IT companies, they've already worked on various AI infrastructure projects."
Drawing a parallel with the early days of the internet and e-commerce, he added, "AI is something where, internet or e-commerce was around 10-15 years ago. So I think the next 10-15 years, it will have a lot of limelight. But it's not something that you should be so scared that you dump all internet and IT stocks and believe that everything's over for them. So we think this is a good opportunity to buy into IT stocks."