After performing well for a period of almost two years, PSU banks have been lately under performing. While it is normal that after a phase of out performance a sector witnessing some consolidation and even might under performer. But in the case of PSU banks, the fear is that it might end up becoming a sector which under performs for a long time. But everything has to be looked into in context. Yes, banking as a sector there are short term headwinds. The question is whether those headwinds are cyclical in nature or they are permanent in nature and which part of the operating matrix of banks is going to get hit by these headwinds. Understanding headwinds probably helps in taking better decisions when it comes to a sector like banking.
