Home Correction trading Bluechip Banking Shares Are Trading at Huge Discounts: Should You Buy the Dip?

Bluechip Banking Shares Are Trading at Huge Discounts: Should You Buy the Dip?

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Bank stocks are trading at a huge discount from their 52-week high

Bank All time top Current price at the close of March 11, 2022 Discount
HDFC Bank Rs.1725 Rs.1396.8 19.00%
ICICI Bank Rs. 867 Rs.677.9 22.00%
SBI Rs.549 Rs.470.35 14.00%
Bajaj Finance Rs.8050 Rs.6628 17.60%
Kotak Bank 2253 1763 22.00%

The above is just to imply that the current correction has led to these stocks becoming available at a steep discount.

The fundamentals of banks are not left out

The fundamentals of banks are not left out

Let’s say that if we talk about HDFC Bank, basically the bank, like other banks, is not in trouble. Talking about its recent quarterly results, the bank’s profits are on a steady rise with net profit at Rs. 10,342.2 crores. Moreover, if we talk about the net position of the NPA, it has been steadily improving for the last 2 quarters. So basically nothing looks bad in the bank.

More of a banking sector problem right now given the global turmoil

More of a banking sector problem right now given the global turmoil

Notably, currently the problem is more of a banking sector problem and the reasons for this are aggressive selling of FII, asset side risk for banks and amid the geopolitical crisis, there is also a possibility that bank NPAs may be hard hit due to businesses once again find themselves in a sticky spot due to the inability of businesses to get off the ground properly amid the current crisis. So, as the issue may resolve itself in due course, those stocks that are fundamentally not off track will once again show strong growth.

Should you buy blue chip banking and financial stocks available at deep discounts?

Should you buy blue chip banking and financial stocks available at deep discounts?

But if you believe in these big top banking entities that will only grow in the future and India’s growth story is tied to banking as a whole then these are definitely good bets in a long-term perspective and can help you get richer. So, although these stocks, given the current crisis, may still fall, they even offer a good opportunity to buy at the currently available lows. But certainly if you can’t stand too much volatility, please stay away in the current environment.

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Warning:

Warning:

The story is not a recommendation to buy stocks but a general analysis. We are not professional financial advisors, please take risky market related bets after careful analysis.

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