Valuations of PSU bank stocks are at historical highs while private banks are trading at decade-long lows. Bulls are still optimistic about PSU banks due to their recent earnings turnaround, but the case for underdogs is gaining attention. Private banks have a P/B ratio of 2.3 compared to 1.2 for PSU banks. While valuations are important in a bullish market, fundamentals also favor PSU banks.