World’s second most widely tracked stock is from India; has 59 buy calls

Leading private sector lender ICICI Bank has now become the second most widely tracked stock in the world after e-commerce giant Alibaba.

As many as 59 analysts covered ICICI Bank, and all of them had ‘buy’ ratings on the lender. On the other hand, 64 experts tracked Alibaba and 63 had ‘buy’ ratings on the stock, while one had a ‘hold’ call, ETNOW reported.

In terms of wealth creation, the stock has outperformed the benchmark equity indices over the past 10 years: ICICI Bank had delivered 8.70 per cent annualised return to investors between July 2010 and July, 2020, while BSE Bankex has gained 8.50 per cent CAGR and Sensex 7.8 per cent.

But in India’s banking space, Kotak Mahindra Bank delivered the most returns to investors at 21.61 per cent on an annualised basis. It was followed by HDFC Bank (18.48 per cent CAGR), City Union Bank (16.40 per cent CAGR) and IndusInd Bank (9.63 per cent).

SBI eroded 2.25 per cent annually during last 10 years, while Axis Bank and The Federal Bank gained 4.88 per cent and 5.30 per cent annually since July 2010.

As many as 57 analysts tracked Axis Bank and IndusInd Bank with 44 and 35 ‘buy’ ratings, respectively. On the other hand, out of 56 analysts who track HDFC Bank, 51 had ‘Buy’ call, one ‘sell’ and four ‘hold’ ratings.

Of late, analysts have come out with ‘buy’ ratings on ICICI Bank despite the lender having missed estimates on June quarter earnings. The bank on July 25 reported 36.22 per cent year-on-year rise in net profit at Rs 2,599 crore for the quarter ended June 30.

The figure fell short of the Rs 3,300 crore profit figure that analysts had projected in an ETNOW poll.

Overall, gains of over Rs 3,000 crore on stake sale in the life and general insurance arms aided the bottom line.

The proportion of borrowers availing repayment moratorium has fallen to 17.5 per cent by value as of June 30 from 30 per cent in April, and 90 per cent of them have opted for both first and second moratoriums.

Global brokerage firm Morgan Stanley said it is overweight on ICICI Bank with a price target of Rs 505. It noted that June was another quarter of high teen pre-provision operating profit (PPoP) growth. The bank has continued to focus on improving its balance sheet, it said, adding that valuations look attractive at 1.5 times trailing core book.

While retaining a ‘buy’ call on ICICI Bank with a target price of Rs 465, Emkay Global Financial Services said, “We cut FY21 an FY22 earnings estimates by 7 per cent and 8 per cent, respectively, factoring in the frontloading of provisions and lower fees, but still expect the bank to report 1 per cent and 1.3 per cent RoA, respectively, which should improve to 1.5 per cent by FY23E,” Emkay said. Consolidated return on assets of the lender stood at 0.86 per cent as of March 31.

Among others, Chinese firms Tencent, a leading provider of internet value-added services, and JD.com, an e-commerce company headquartered in Beijing, are some of the other most tracked stocks with 56 and 51 analyst calls. Around 52 analysts have ‘buy’ call on the former, while 46 are bullish on the latter, ETNOW reported.