Ganntrader2Why Bandhan Bank may repeat what ICICI Bank did in 2009
ICICI in 2008-09 vs Bandhan today: similar profit size, P/B at 1, an 80% drawdown, monthly RSI near 33 and a new CEO. A thread on why history may repeat.
A thread on Why Bandhan Bank may repeat what ICICI bank did in 2009
The logic of comparison between ICICI and Bandhan – The profit size Of ICICI Bank was around 3000 crores in 2008-09. The profit size of Bandhan Bank TTM is around 2500 crores
1. Valuation
Bandhan Bank was listed at a very high valuation and was trading in the range of P/B of 5-9 before Covid. It is the first time in history that the valuation of Bandhan Bank is PB 1. History tells us that during an economic crisis, a highly valued bank comes to a P/B of around …
2. The 80% drawdown
It is common for a financial company in India to drop up to 80% before they bottom out, ICICI dropped from a top of ~250 to ~50 during the 2008 crisis. Bandhan Bank has corrected around 80% from the top
3. Monthly RSI
The Relative Strength Index (RSI) is a technical indicator that measures the speed and rate of price changes in an asset. Monthly RSI provides great insight while making long-term bets
In 2009, ICICI Bank monthly RSI bottomed at 32.76, currently, Bandhan's Monthly RSI is at 33
4. Change in management
When a financial stock declines to about 80%, a change in management generally revives the stock. In 2009, Chanda Kochhar became the CEO of ICICI Bank turning around the company back then. The Board of Bandhan Bank took similar action in Nov 2024 when Partha Pratim Sengupta became the MD and CEO of Bandhan Bank
5. Earnings
Share price follows Earnings or Vice Versa, the drop in ICICI shares in 2008-09 was driven by a worldwide correction along with a dip in its earnings which later recovered
6. A numerology / date observation
A bit off the topic but interesting Numerology/Date observation
In 2009, ICICI Bank made a bottom on 6 March 2009 (6+3+2+9 =20 = 2)
In 2025, Bandhan Bank last bottom was made on 18 Feb 2025 (1+8+2+2+2+5 = 20 =2), is this a final bottom or do we have more corrections left? Only time will tell
ICICI BANK was incorporated on 5 Dec while Bandhan was incorporated on 23 Dec, both the banks were incorporated in Dec on a 5th day (2+3 = 5)
Originally posted as a thread on X.
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