ICICI Bank - Time to start accumulating

The market today plunged with over 200 points dip in Nifty. With this dip, the Indian market may open another opportunity to long term investor. I believe that there are many investors (domestic and as well as foreign), who were waiting at the sideline complaining that Indian market was expensive, may come back. The market may fall further, but no one can predict the bottom. It may be possible that market pull back will be as sharp as the downward journey. Thus it is best to track the stocks, in which you are interested. If it is near your target level, it better to start accumulating it, instead of waiting for the bottom.

If you believe in India growth story, the best bet is the Private sector banks, which have corrected significantly. Just for example, consider ICICI bank. In February, one of the renowned brokerage farms gave a target of Rs 434 with current market price (at that time) Rs 361. Thereafter, many people ran after the stock and purchased it. After 4th quarter result of the same bank, nothing has been changed significantly; though the price has fallen and currently hovering at the range of Rs 310. But the people are not interested to purchase the stock at this point of time.

I suggest people to look at this counter. ICICI bank is the largest private sector bank of India. They have a strong management. In quarter  four, ICICI bank reported strong 16.6% growth in NII. NIMs improved by 11 bps QoQ. Though the asset quality remained under stress in Q4, the management guided for a decline in stressed asset.

The India growth story remaining intact, ICICI bank will be a major beneficiary.  With  its strong CASA portfolio, we believe that credit off-take will pick up significantly in the coming years. Once, the NPA problem is sorted out, the stock price may see significant uptick. At the current market price of Rs 310, the stock has limited downside as it is trading at significant discount compared to its peers. It has also strong support around the level of Rs 300.

Brokerage Statistics:

Brokerage Farm	Recommendation Date	Recommendation Price	Target Price
Prabhudas Lilladhar	27th April, 2015	Rs 302	Rs 390
KR Choksey	17th Feb, 2015	Rs 352	Rs 400
Angel Broking	2nd Feb, 2015	Rs 361	Rs 434