Fundamental Analysis Report – Nifty PSU Bank Index – 18 August 2025

Index Overview

The Nifty PSU Bank Index reflects the performance of India’s listed public sector banks (PSBs). Index drivers include RBI policy (rates & liquidity), government ownership & policy actions, credit growth, Net Interest Margins (NIMs), treasury gains/losses (yield moves), and asset quality cycles (GNPA/NNPA, provisioning). Rebalances are semi-annual per NSE methodology.

Institutional Holdings & Fund Activity

FIIs: Tactical flows tied to rate trajectory and fiscal/sovereign yield moves; preference for larger PSBs.
DIIs: Continued allocations via financials/banking funds; valuation-sensitive accumulation on dips.
Impact: Liquidity supportive but sensitive to RBI guidance and bond-yield direction.

Financial Health Snapshot (Sector Averages)

Capital: CET1 buffers improved across large PSBs; AT1/ Tier-2 supportive.
Profitability: NIMs normalising from peaks; fee income steady; treasury line volatile with yields.
Asset Quality: GNPA/NNPA trending lower; slippages manageable; credit costs moderating.
Liquidity: CASA mix under watch as deposit competition persists; LCR comfortable.

Valuation Check

Current Valuation: Leaders (SBI, Canara, BoB) trade at premium-to-PSB pack; mid/small PSBs at discounts.
Tone: Neutral-to-Positive for quality PSBs; watch for rate-cycle turns and credit-cost surprises.
Driver: RBI policy path, bond yields, credit growth prints, and government policy (e.g., divestment/recap).

Top & Bottom Performers in Nifty PSU Bank Index (Illustrative Financials)

Note: Banks do not report EBITDA. Below, we use Operating Profit (PPOP) as a practical proxy. Figures are illustrative placeholders to be replaced with the latest quarterly results before publication.

Bank	Total Income (₹ Cr)	Net Profit (₹ Cr)	Gross ‘EBITDA’ (PPOP) (₹ Cr)	Net ‘EBITDA’ (PPOP after adj.) (₹ Cr)	Operating Expenses (₹ Cr)	Performance Rank
State Bank of India	410,000	61,000	98,000	94,000	1,95,000	Top Performer 1
Canara Bank	125,000	16,500	29,000	27,500	58,000	Top Performer 2
Bank of Baroda	115,000	15,800	26,000	24,800	52,500	Top Performer 3
Punjab National Bank	110,000	13,200	24,000	23,000	50,000	Top Performer 4
Union Bank of India	108,000	12,700	23,500	22,500	49,500	Top Performer 5
Central Bank of India	38,000	2,100	7,200	6,800	17,500	Bottom Perf. 1
Punjab & Sind Bank	20,000	1,100	3,800	3,600	9,400	Bottom Perf. 2
UCO Bank	36,000	1,900	6,500	6,100	16,200	Bottom Perf. 3
Indian Overseas Bank	33,000	1,800	6,000	5,700	15,400	Bottom Perf. 4
Bank of Maharashtra	40,000	2,500	7,800	7,300	18,000	Bottom Perf. 5

Market Timing Insight – Nifty MidSmall Healthcare Index

Put–Call Ratio (PCR) remains elevated, signalling short-term froth/overbought conditions. Preferred approach: staggered entries on dips rather than lump-sum buys.
Short-term: Avoid chasing breakouts; wait for mean reversion.
Medium-term: Use 5–8% dips to build positions in profitable, low-debt names.
Long-term: Structural demand tailwinds intact (domestic formulations, export ramp-up, hospital capex).

Investment Strategies

Short-Term (1–3 months): Trade liquid PSBs around RBI MPC, quarterly results, and bond yield moves. Prefer SBI/Canara/BoB; keep tight risk controls given rate/treasury sensitivity.

Mid-Term (6–12 months): Accumulate top-5 PSBs on corrections if NIMs hold and credit costs remain benign. Watch CASA trends and deposit repricing. Add Healthcare MidSmall after PCR cools.

Long-Term (3–5 years): Core exposure to scale PSBs benefitting from formalisation, credit growth, and tech upgrades. Track government policy (divestment/recap) and sustained improvement in GNPA/NNPA.

Key Technical Levels – Nifty PSU Bank Index

Time Frame	Critical Support Levels	Critical Resistance Levels
Short-Term (1–3 M)	6,900 / 6,750	7,150 / 7,305
Mid-Term (6–12 M)	6,600 / 6,400	7,600 / 7,900
Long-Term (3–5 Y)	6,000 / 5,600	8,200 / 8,600

Upcoming Important Events (Next 3 Months – PSU Banks)

• Sep 29 – Oct 1, 2025: RBI MPC policy meeting (rates, stance, liquidity).
• Mid-October 2025: RBI MPC Minutes (approx. 14 days post-meeting).
• Oct–Nov 2025: Q2 FY26 results window for PSU banks (earnings, NIMs, slippages, credit costs).

Monthly (end-month): RBI bank credit–deposit data & WSS releases (loan growth, liquidity).

📌 Disclaimer – aiTrendview.com

This report has been prepared by aiTrendview.com for informational and educational purposes only. The information, data, and analysis presented herein are based on publicly available sources, believed to be reliable, but aiTrendview.com makes no representation or warranty, express or implied, as to their accuracy, completeness, or timeliness.

This report does not constitute investment, trading, or financial advice and should not be construed as a recommendation to buy, sell, or hold any security, asset, or instrument. All investments involve risks, including possible loss of principal. Past performance is not indicative of future results.

Readers are advised to conduct their own independent research or consult with a licensed financial advisor before making any investment decisions. aiTrendview.com, its affiliates, employees, or partners shall not be held liable for any direct, indirect, incidental, or consequential losses arising from the use of this report or any information contained herein.

• By accessing and using this report, you agree to this disclaimer in full.