ICICI Bk, HDFC Bk may see a bit of pull back

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ICICI Bk, HDFC Bk may see a bit of pull back

ICICI Bank and HDFC Bank may see a little bit more of a pullback or maybe Rs 1100 in ICICI Bank and Rs 1500 in HDFC bank is also possible because the run-ups were frankly quite spectacular.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See what other CNBC-TV18 anchors have to say Nifty BSE | NSE 25/05/12 Are Mutual Funds betting on Nifty? Other Stocks in this news ICICI Bank |

Q: What yanking these private banks down both on the ADR's and then on the cash market here?

A: CNBC-TV18's stocks editor, Udayan Mukherjee - A bit of the run-up, which they had just going into November. In a way I was just looking at the numbers, between the 19th of October and the 2nd of November, which is last week, HDFC Bank and ICICI Bank ran up 30% in ten days time. That's a serious run up for these stocks. They are matured stocks, there story is well understood, they are not inexpensive and suddenly in ten-day period they ran up 30%.

There was a lot of overheating out there, and then they have corrected from that peak both ICICI Bank and HDFC Bank have come back to Rs 1200 and Rs 1600, which is a 10% cut from their recent highs on the 2nd of November.

So part of the correction I imagine is because of the sharp run up, which preceded the November fall that we are seeing now. And they are not cheap stocks, sentimentally maybe the way the financials are moving globally is probably a little bit of a overhang on them.

But ICICI Bank is trading at 25 PE on FY09; HDFC Bank is trading at 30 times FY09 earnings nearly. Price to book is one is three plus, one is four and a half plus.

So in that kind of valuation range you can probably expect the stock to slip a little bit without looking horrendously inexpensive or anything like that.

So maybe even a little bit more of a pullback maybe Rs 1100 in ICICI Bank and Rs 1500 in HDFC bank is also possible because the run-ups were frankly quite spectacular.