Rick StuchberryICICI Bank Ltd.IBNBUYMay 06, 2019

A great way to get exposure to India.

India's largest bank. Investing in India right now makes all the sense in the world. It's the largest population now, surpassing China. India has significant growth, population is relatively young and moving to cities, with more banking needs required. 

His exposure is through HDFC instead.

Inflation is rising in India because of oil imports, plus strong US dollar. All Indian banks have been falling. With typhoons and people moving to online banking, they’re scrambling. Not the time to be stepping into EM. They’re cheap, but they could be getting a lot cheaper. EMs are twice as risky as NA and European.

(A Top Pick Mar 2/18, Down 2%) Super long term play on India. It is a play on lower middle class to middle class. Owning banks is always the right play.

He has had this bank for a number of years and likes the country from a demographic point of view. The country has the fastest growth rate even over China. The Indian banking system keeps getting overhauled.

Since PM Modi took power in India, India has received a lot of fund flows and other macro developments. The rupee is seeing challenges (depreciation). Sell some here, even at a capital loss.

This Indian bank is the best way to invest in the region’s growth and this is the largest bank. The bank has over 18,000 ATM locations. From a technology perspective, they are well positioned and are involved in blockchain. He is okay with the low yield, to allow the business to grow. Yield 0.75%. (Analysts’ price target is $14.50 )

If you are going to be in an emerging market like India, then you want to be in consumer products or financials, because they are going to get you to all the consumers that are out there. For him, it was between HDFC Bank and this company. HDFC had better metrics. You will be dealing with the volatility of being in India. Both stocks had huge run ups last year in the 30%-40% range. They are pausing right now because they have to see what is going to happen with all of economic changes the government has put through. The government is allowing banks to write off bad loans and to start fresh again. These 2 are probably the best capitalized of the banks, and therefore the least risky. You are going to have volatility of roughly 30%-40% a year and will have to live with it. (See Top Picks.)