Reuters Market Eye - Jefferies says fundamentals for India's banking sector are unlikely to change much given "tepid" loan and deposit growth, "range-bound" net interest margins and "weak" asset quality.
"The reason to own/sell a stock then boils down to valuations," Jefferies says in a report titled "Initiating on India Banks: Going Nowhere" and dated April 5.
Jefferies starts HDFC Bank Ltd , ICICI Bank Ltd and Bank of Baroda with "buy" ratings, but initiates State Bank of India with an "underperform" rating.
Assigns "hold" ratings to Axis Bank Ltd , Punjab National Bank and mortgage lender Housing Development Finance Corp Ltd .
Jefferies believes banks with strong branch expansion such as HDFC Bank, ICICI, and Axis could face smaller problems.
(Reporting by Manoj Dharra)