While the Centre’s mega recap plan will help over the long run, near-term risk to earnings can weigh on the stock

The Centre’s mega recap plan of infusing ₹2.1 lakh crore into public sector banks has lent a fresh lease of life to beaten down PSU bank stocks over the past month or so. The stock of Bank of Baroda — which had delivered a lacklustre performance on the bourses until then — has rallied 20 per cent since the Centre’s announcement. But while capital infusion by the Centre will help alleviate balan...