Trading Idea – From lows of
INR183 on February 25, 2016, ICICI Bank has gradually trended higher to INR238
and I expect the rally to sustain in the foreseeable future.
Idea Rationale – While ICICI Bank
has trended higher in the last one month, the stock is still lower by 26% in
the last 12-months. I expect the RBI to cut rates in April 2016 policy meeting
and that is likely to trigger further upside for ICICI Bank. I must mention
here that public sector banks have witnessed increasing NPAs in the recent past
and private sector banks are attractive on a relative basis.
Long-Term View – India’s banking
sector still have huge impending growth potential from a penetration and credit
growth point of view. ICICI Bank is India’s largest private sector bank and is
well positioned to tap the potential. I also expect long-term value unlocking
through separate listing of insurance subsidiary.
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