ICICI Bank and ITC among the top picks of leading brokerages as they stock up on blue chips

MUMBAI: ICICI Bank and ITC are among the top picks of leading brokerages as they feel that these stocks can withstand turbulent market conditions over the next few months.

Dipen Shah, head-PCG Research, Kotak Securities said, "ICICI Bank has demonstrated prowess in improving the funding mix, conserving capital, maintaining operating efficiencies, managing liquidity and containing risk. Its CASA mix has improved sharply over the past few years to ~42% at the end of Q1FY12 while NIM is likely to remain stable at 2.6% (FY12)."

It has a target price of Rs 1,364 on ICICI Bank. According to an analyst at Angel Broking, which has a target ofRs 1,281 for the stock, "Contrary to the overall trend in the sector, we expect this favourable change in the bank’s liability mix to improve its NIMs to around 2.7% by FY13.

Kotak Securities and Motilal Oswal are also positive on ITC on account of strength in earnings visibility. Kotak believes that ITC provides superior earnings visibility in the medium term vis-a-vis FMCG peers, given the prevailing environment of uncertain demand and adverse raw material prices. Kotak has a target of Rs 223.

Most of the brokerages have been advising clients to buy fundamentally large-cap stocks that have a strong balance sheet and management track record. For instance, Angel has given a buy call on stocks like Lupin, Tata Steel, Reliance Industries and Axis Bank as its other top picks. Motilal Oswal Securities is also bullish on stocks like Bajaj Auto, and Bharti Airtel.

Motilal is also bullish on Coal India, which is very to becoming a largest company by market capitalisation if the trend in the last few months persist. Its market cap stood at Rs 2.4 lakh crore as compared to RIL’s market cap of Rs 2.5 lakh crore.