Are ICICI Bank shares worth buying now? Anshul Saigal’s view on current valuations

Anshul Saigal, Founder, Saigal Capital, says private and PSU banks look attractive on valuations after years of consolidation, with credit growth expected to improve. The alcobev sector offers long-term growth potential, though high valuations warrant caution. Consumption, especially value retail, building materials, and consumer durables, is set to benefit from tax cuts and festival demand. Metals could surprise on the upside as global capacity and defence spending rise, while Indian textiles remain strong long-term despite short-term tariff challenges.

Let us talk about ICICI Bank. The minimum amount requirement in the savings bank account was raised to Rs 50,000, and ICICI Bank has made further revisions. While it’s not expected to significantly impact financials, it wasn’t a welcome move either. What is your take on ICICI Bank right now?

Anshul Saigal: This move did ruffle some feathers. Customers were wary about the change, as were market participants, though higher minimum balances are generally preferred by banks. From a customer perspective, it wasn’t welcome, but for banks, it’s not unfavorable. Looking at the broader private banking sector, over the last four to five years, retail-oriented private sector banks have largely consolidated. Stock prices have remained stagnant due to stretched valuations and tepid retail lending growth, particularly in unsecured loans and credit cards. Now, valuations have turned attractive, with many private banks trading at a discount to the Nifty. While credit growth remains subdued, we expect improvement later this year. The sector appears attractive in terms of both valuations and growth potential. PSU banks also look appealing from a valuation standpoint. Overall, it’s an interesting space to watch.

What’s your view on the alcobev sector, especially after recent numbers showed volume growth but continued margin pressure, along with regulatory changes in Maharashtra and Telangana?

Anshul Saigal: The long-term growth opportunity in the alcobev space is strong. However, valuations for some stocks, like United Spirits, are high—trading at over 50 times earnings—leaving little room for multiple expansion unless earnings significantly exceed expectations. If performance matches market expectations, the upside is limited. Other players like Radico and smaller names like Global Spirits have delivered robust growth, particularly in B2C segments. While the sector has strong potential, reasonable valuations are key, and a period of consolidation could be healthy.

Over the next four to five months, festival demand could benefit FMCG, consumption, automobile, hotel, travel, tourism, and aviation. Do you think this is the market’s direction?

Anshul Saigal: Yes, certain consumption segments, both discretionary and non-discretionary, have clear tailwinds. Value retail is seeing same-store sales growth of over 10%, in some cases 20%, after four to five years. Building materials companies are showing a positive shift in tone, suggesting robust growth ahead. Consumer durables could also benefit, helped by government tax cuts—those earning under Rs 12 lakh now pay zero tax, increasing disposable income. This transmission takes time, but by the second half of the year, we expect consumption to pick up. Consumer durables, in particular, look interesting after a prolonged consolidation. These trends should reflect in stock prices.

What’s your outlook on the metals sector? Is there a structural story here, or will it depend on global sentiment?

Anshul Saigal: Metals are cyclical, influenced by global commodity prices. In recent years, China’s slowdown, geopolitical tensions, and tariff uncertainties have kept prices and stocks subdued. If tariffs ease—possibly as part of a negotiation strategy—and capacity creation in the US increases, metal demand should rise. Global defence spending is also increasing, boosting demand for metals. Even a small shift in demand patterns could lift prices meaningfully. Given that expectations are currently low, this sector could surprise positively in the coming quarters and years.

The textile sector was hit hard by the 25% tariff hike. With neighbouring countries now more competitive due to lower tariffs, what’s the outlook?

Anshul Saigal: Short-term price competitiveness may divert some orders to neighbouring countries, but long-term success depends on scale, quality, manpower, and consistent supply at competitive prices. India is well-positioned here, being one of the largest cotton producers with established relationships with global buyers. While current conditions are challenging, the long-term prospects for Indian textiles remain strong, and buyers are likely to return to India for their needs.