New Delhi, Dec. 20 -- State-owned banks, such as Canara Bank, Indian Bank, and State Bank of India, have emerged as top picks among Dalal Street investors in 2025, sharply outperforming their private peers, as investors remain optimistic that a pickup in credit growth, recovery in margins, and strengthening asset quality will continue to support earnings momentum and re-rating prospects for the sector.

Half of the constituents of the Nifty PSU Bank index have delivered returns of over 20%. Some are even on track to extend their annual rally for a fifth consecutive year.

With gains of 28% in 2025 so far, the Nifty PSU Bank index has emerged as the top-performing sectoral index, largely outperforming the benchmark Nifty 50, which has rise...