Should I hold on to ICICI Bank after the latest results? The stock has already rallied quite sharply in the last few months, so I am asking?

Actually the results of ICICI Bank for the Q2 were quite disappointing. The net profit fell by 28% to Rs.655 crore and this was largely due to a sharp rise in the tax to Rs.3,712 crore. However, there was some marginal improvement in the asset quality with gross NPAs falling from 8.54% to 6.37% over the last one year. Even the net NPAs were down to more comfortable levels of 1.6%.

Business growth at ICICI Bank was quite robust with the net interest income higher by 25% to Rs.8,057 crore as against ₹6,417 crore in the September quarter last year. That brings us to the fundamental question as to whether to hold the stock or not? My suggestion is to hold on to the stock with a stop loss. However, fresh positions are not advisable now as valuations are quite stretched compared to historical benchmarks.