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When a sector gets re-rated, it is the leader of that particular sector which tends to get the attention in the first leg. If the fundamentals of that sector continue to improve, then companies which are lower than in terms of scale and size are the ones which tend to get re-rated. If one looks at the re-rating of PSU banking space, the likes of SBI, BoB had started to do well some time back. But the mid and smaller PSU banks, not smaller when one looks at the market cap, but in terms of geographical presence and overall size of the business are likely to get more attention now. There are multiple reasons for it: GDP growth rate has a strong correlation with credit off take, which will be visible even in the books of these banks. Some of these banks started their digital journey late, the impact of which will be visible in the coming quarter.

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