Accumulate ICICI Bank for the long term; it will gain the most once the economy picks up: Harendra Kumar, Elara Capital

In a chat with ET Now, Harendra Kumar, Managing Director-Institutional Equities, Elara Capital, shares his views on ICICI Bank.

ET Now: Why is ICICI Bank down? This is one stop where FII limit is not frozen, valuations are not looking all that stretched, the NPLs are best in the industry and if the economy revives, ICICI Bank should be the first one to bounce back because they have a deep and a strong exposure to power and road related sectors.

Harendra Kumar: This is a consensus buy in the market. That always weighs on the stock too much because it is so well marketed and but the big variable is the ROE of the company which is obviously lower than some of the private sector banks at this point of time. So in the beta trade, the preference in pecking order was largely towards SBI and some of the other PSU names.

ICICI seemed to have suffered from that overhang. The biggest delta in terms of a performing economy will come in ICICI Bank. So it remains an accumulate as it starts to go lower, slightly expensive given the ROE profile which will get corrected over the next two years. So it becomes a long only FII, long stock for the next two years and not a beta trade. So yes around 1250-1300, it is a level that you would like to accumulate ICICI Bank for the long haul.