I had written this last month, and already the stock is down 10-15% since then. Agree that ICICI is a high beta play and has extremely high chances of giving outperformance returns if (nowadays it looks like its more a question of “if”, and not “when”) the economy revives.
This link was shared in some other post and am pasting it here as it is very relevant. Net NPA plus Net Restructured Loans divided by Networth is an excellent and very conservative tool to compute the health of the bank. ICICI bank’s position was an eye opener, as I wasnt expecting it to be so bad (the worst of the lot). But they seem to be on a mend, if you believe the sound bytes of Chanda Kochar. I have seen her good work in the bank when I was working there (from 2001-2006) and I believe she has the ability to do an encore this time around. The 2nd tier management is also of decent quality.
One of the comments above, regarding culture, is very important. One possible drawback could be that the top management is largely home grown. Either the existing management needs to learn their own lessons, or someone from outside needs to teach them, which I dont think is possible in ICICI (based on my limited and dated knowledge).
The balance sheet part of the bank (stressed assets) is being addressed gradually, and the P&L part is being taken care of by focusing on growth of retail book and deposit franchise. While this could end up giving good results, it will however test patience.
Discl. - this is not a recommendation. I started investing in ICICI from 230-240 levels (small portion of my PF) and have plans to increase if it continues to fall like this.