PSU bank stocks vs private banks in FY27: The valuation trap you need to avoid

PSU banks achieved historic profit and NPA lows in FY26, yet analysts favor leading private banks for FY27. This shift is driven by superior earnings compounding potential and a more attractive risk-reward profile amid intensifying deposit pressures and global uncertainty. While PSU banks' structural tailwinds have largely played out, private banks are better positioned for sustained growth.