Stay invested in ICICI Bank for long term: Thunuguntla

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Stay invested in ICICI Bank for long term: Thunuguntla

Stay invested in ICICI Bank for long term, says Jagannadham Thunuguntla, Strategist & Head of Research, SMC Global Securities.

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Excerpts from Your Stocks on CNBC-TV18 Watch the full show » ALSO READ See previous views by Jagannadham Thunuguntla See what other Experts & Brokerages are saying about ICICI Bank See messages about ICICI Bank

Stay invested in ICICI Bank for long term, says Jagannadham Thunuguntla, Strategist & Head of Research, SMC Global Securities.

Thunuguntla told CNBC-TV18, "ICICI Bank being a Nifty component should see some sell off. In that sense probably lower levels will be reached. If the investor is betting on banking then with a slightly contrarian view probably the midcap PSU banks probably the market is completely avoiding today maybe because of NPA fears or maybe because of slowdown in loan book growth fears, I think some value is definitely there."

He further added, "Some midcap PSU banks are trading at 2-3 PE multiple like Bank of Baroda , Oriental Bank of Commerce , UCO Bank available at very reasonable valuations of 0.4 price to book. I am indicating it is a contrarian bet because there is always a fear of NPAs but if you are looking for quality in banking then ICICI Bank will score ahead in any given day. But if the Nifty sell off continues you will see much lower levels but as the investor is a medium-term investor in one to two years he should be making money. If the Nifty from here falls around 5-6% then one can average ICICI Bank at Rs 650 levels and one can enter at that level as well."

"Today on banking if I have to enter, somehow midcap PSU banking I am finding it lot more meaningful. The stock correction has been quite steep and all those banks are 80-90% is owned by government, so there is no question of these companies going under and also there is always a chance of re-capitalisation. I know I am taking a risk of NPAs but at the current valuations I am finding it a lot more comfort. It's a question if you want high quality HDFC Bank at 20 PE multiple and if one is looking at medium quality probably 2-3 PE multiple these banks are available. So it's a perceptional game but may not be Yes Bank at this point. But either take a quality bet at high valuation or medium quality at lower valuations."