Led by a confluence of superior credit growth, multi-decadal low bad loans, and record profitability, PSU bank stocks are now Dalal Street’s one of the most compelling stories. The combined market capitalisation of India's 12 PSU banks has swelled by Rs 5.75 lakh crore to Rs 21.35 lakh crore in the last 6 months amid a valuation re-rating that private sector lenders have been unable to match.