India’s largest private-sector bank ICICI Bank (IBN) saw shares ratchet up over 8 percent in Friday action after being plugged as a buying opportunity by analysts.
Sahil Kapoor, the senior manager of Edelweiss RCM, recommended the lender even though the stock is currently nearing its 12-month high. At the same time, Sameer Hassija, senior investment analyst with Morningstar India, called ICIC their “preferred pick” of the March 2014 quarter.
ICICI hit a rough patch at the end of last summer, which was at least partly attributable to the suffering Indian economy, which saw the rupee lose much of its value in a short time span. The freshly installed head of Reserve Bank of India, Raghuram Rajan, took aggressive measures to curtail India’s economic woes and attract outside capital. Since Rajan’s installation the Indian economy has in turn slowly but surely been recovering. ICICI, in conjunction has recovered as well, erasing much of the losses incurred during that time span.
On a micro level, ICICI has been instrumental in leading the push to serve “underbanked” citizens in India. ICICI was one of the first banks to trot out a “branch on wheels” program, using mobile banks to provide basic banking services to isolated, rural customers. ICICI now operates 800 banks in rural areas, 436 in previously unbanked areas.
Back in January 2014 Equities.com identified ICICI as an attractive buy target based on those factors and the strong analyst consensus on the bank. ICICI is up more than 30 percent on the year since.
To be sure, ICICI is on a run that suggests the company’s stock might be overbought. ICICI’s RSI, or Relative Strength Index, is at 72.77. Anything over 70 can mean the stock is due for a pullback, while analysts like Kapoor and Hassija tend to disagree, seeing even moiré room for ICICI to grow.
Regardless, the one thing that is for certain is that ICICI was one of the biggest winners of the trading day. Shares of ICICI gained 8.74 percent on the day to hit $48.50 a share.
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