Are ICICI Bank Shares a Smart Investment in 2022?

Even though bank posted steady financial performance within the last reported quarter, ICICI Bank (IBN) stocks have been losing energy over the past few months. Therefore let’s evaluate be it worth adding shares to one’s profile given the wider market sell-off, that has had an impact on the entire performance of the financial sector. Read on to find out more.

Based in Mumbai, Indian, ICICI Bank Restricted (IBN) offers a broad variety of banking products and finance worldwide. It are operating in Retail Banking; Low cost Banking; Treasury; Some other Banking; Life insurance; Common insurance; and Other sections. The company’s shares are usually down 15. 1% in price this year plus 21. 5% in the last month, closing yesterday’s trading session in $16. 80.

IBN’s recent quarterly overall performance has been impressive, because of a strong increase in customer loan demand. The expansion in net attention income is a substantial puller and is forecasted to increase the company’s monetary success in the future.

Nevertheless , an increase in costs will be expected to negatively impact bank profits.

This is exactly what can shape IBN’s performance in the near future:

Mixed Finance

IBN net interest income increased 23% year-on-year to INR122.36 billion ($1.6 billion) for the third quarter, ending 31 December 2021. Non-interest income (excluding treasury income) grew 25% year on year – the past value was INR48.99 billion ($659 million). Its fee income rose 19% to INR42.91 billion ($577 million), while total deposits rose 16% to INR10.174.67 billion ($136.9 billion). However, its operating expenses increased by 22% to INR70.75 billion ($951.71 million). In addition, its provisions (excluding tax provisions) fell 27% from the previous quarter to INR20.07 billion ($270 million).

Premium Rating

In terms of trailing-12-month non-GAAP P/E, the stock is currently trading at 19.22x, which is 72.1% higher than the industry average of 11.17x. Also, the 2.57x forward Price/Order multiple is 129.9% higher than the 1.12x industry average Furthermore, the 6.77x IBN forward Price/Sales is 115.1% higher than the industry average of 3.15x .

Mixed Profitability

IBN $14.93 billion after 12 months of cash from operations was 10439.6% higher than the industry average of $140.92 million. However, IBN’s 21.9% trailing-12-month net profit margin was 28.2% lower than the industry average of 30.6%. In addition, the ROA and CAPEX/Sales multiples over the next 12 months were 1.2% and 0.91% lower than the industry averages, respectively.

POWR Ratings Reflect Uncertainty

IBN has an overall C rating, which is equivalent to Neutral in our POWR Rating system. The POWR rating is calculated taking into account 118 different factors, with each factor being weighted to an optimal level.

Our ownership rating system also evaluates each stock according to eight different categories. IBN has a value of F for Value and C for Quality. Higher stock valuations of the industry align with value values. In addition, the profitability of the company mix is ​​consistent with the Quality level.

Of the 96 stocks in the foreign bank industry rated B, IBN is ranked #63.

Beyond what I’ve stated above, one can see the IBN ratings for Growth, Momentum, Stability and Sentiment here.

The main thing is

The company’s share price is currently down 21.5% over the past month and is trading below its 50-day and 200-day moving averages of $20.44 and $19.31, respectively, indicating a bearish sentiment. Moreover, the broader market sell-off due to escalating tensions in Ukraine has weighed on the price performance of banks’ shares and could cause their share prices to retreat further in the near term. Therefore, we believe investors should wait before investing in stocks.

How Does ICICI Bank Limited (IBN) Deal With Its Comparables?

While IBN has an overall C rating, one might want to consider its industry peers, OFG Bancorp (OFG), Banco Bilbao Vizcaya Argentaria SA (BBVA), and UBS Group AG (UBS), which have an overall B (Buy) rating.