The $32 billion lender has 56 buy recommendations, and its consensus rating of 4.95 on a scale of 5 is the highest among the 50 largest banks globally, data compiled by Bloomberg show. Meanwhile its share price is down 32% this year, ranking it in the bottom four of that same group.
Coronavirus lockdowns and low interest rates have taken a toll on global financial stocks, and India’s banks are still reeling from a crisis among the nation’s smaller shadow lenders. Even so, attractive valuations and signs of demand picking up in the villages should stand ICICI Bank’s shares in good stead, said Sanjiv Bhasin, executive vice president at IIFL Securities Ltd.
“We are witnessing a strong monsoon rainfall, and the rural sector is doing very well,” Bhasin said. “The valuation of ICICI Bank gives a lot of comfort as it has been an underperformer.”
India’s second-largest public lender is trading at about 1.9 times book value, cheaper than the NSE Nifty Bank Index’s 2.7 times. Its earnings have held up, with a 36% rise in net income for the June quarter, helped by the sale of stakes in its insurance subsidiaries.
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