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|
|ICICI Bank||Rs. 867||Rs.677.9||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
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
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?
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.
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.