"For the Hardcore types: You can DM me to get an annotated pdf of the Q3FY24 IP with my comments/doubts/notes.". Could I please get the annotated pdf? How do I DM you? Or should I just post my email ID in the comments here?
I don't think Good or cheap are the only two ends of the continuum. For me its about Risk Reward. It's not the best bank out there, not even close. I don't even pay attention to IT Awards and all that. All I understand is that this is a mediocre bank, coming out of deep sh*t, valued cheap and if the banking sector continues to be healthy and grows, SIB might grow enough to get my investment from ~0.9X P/B to maybe 1.2-1.3x....the sooner that happens the better. That's the basic thesis. Hope this helps
Your composition is truly exceptional, akin to a meticulously kept ledger detailing your investment thesis. Upon distilling it to the reassessment of valuation as a rationale, I find a glimmer of hope.
Reflecting on my two decades of market observation, numerous banks such as KVB, CUB, OBC, PSB, Lord Krishna Bank, Yes Bank, Dena Bank, Jammu and Kashmir Bank, UCO Bank, Centurion Bank, and the venerable Kotak Mahindra have weathered unforeseen circumstances on multiple occasions.
ICICI and UTI endured prolonged squeezes as well. Dhanlaxmi and the recently listed TMB found themselves in precarious situations too.
While some banks may not warrant a reevaluation or a second chance, others possess potential deserving of recognition, which the markets may eventually acknowledge. I sincerely hope your hypothesis bears fruit with SIB, yielding profitable returns and validating your insights.
I hesitate to mention, but for the benefit of your blog's readers, I refrain from investing in any bank. Fundamentally, they all seem indistinguishable, and in this era dominated by technology, what sets apart a superior bank from a lesser one is not solely technological prowess or service quality. Rather, it is the art of astute lending— a facet not easily gleaned from annual reports alone. This is what I seek to discern through management interviews, discussions, televised appearances, public addresses, and the like. For instance, the perspectives offered by figures such as Deepak Parikh, KV Kamath, or even the incumbent Axis Bank leader elicit distinct impressions.
Thank you sir for your detailed comment :) You should not hesitate at all, there is a huge section of Investors who avoid financials as a rule and I do NOT blame them, there seems to be good reason for being very cautious in this space. I hope I do NOT have to join the camp :P Fair point on the Technology part, the reason why I am a little ignorant on that front is that I do NOT know how to assess the same, other than obvious cases. You can see IDFC First seems to have a better technology stack than HDFC Bank etc. But then again, at the end of the day I want that superiority to reflect in results. So while it is super important, I just don't seem to have an edge on that front, although I am very open to learning more. Please feel free to share anything on that front if you think it can help myself or the readers of this substack :) Once again, very grateful for your detailed and extensive write up. Very very grateful that you shared your view with us.
Hi Rahul. Very well researched and articulated.
"For the Hardcore types: You can DM me to get an annotated pdf of the Q3FY24 IP with my comments/doubts/notes.". Could I please get the annotated pdf? How do I DM you? Or should I just post my email ID in the comments here?
you may email me sir at info.firsprinciplesinvesting@gmail.com
Thank you so much for your kind words 🙏🙏
Is this the cheapest bank or the most well run bank?
I know that it got the best bank award for using Tech-that anyone can do, spending a bit of money on good IT fellows.
I wonder what makes a good bank-the organisation or the bankers involved in risk assessment!
I don't think Good or cheap are the only two ends of the continuum. For me its about Risk Reward. It's not the best bank out there, not even close. I don't even pay attention to IT Awards and all that. All I understand is that this is a mediocre bank, coming out of deep sh*t, valued cheap and if the banking sector continues to be healthy and grows, SIB might grow enough to get my investment from ~0.9X P/B to maybe 1.2-1.3x....the sooner that happens the better. That's the basic thesis. Hope this helps
I perceive your point.
Your composition is truly exceptional, akin to a meticulously kept ledger detailing your investment thesis. Upon distilling it to the reassessment of valuation as a rationale, I find a glimmer of hope.
Reflecting on my two decades of market observation, numerous banks such as KVB, CUB, OBC, PSB, Lord Krishna Bank, Yes Bank, Dena Bank, Jammu and Kashmir Bank, UCO Bank, Centurion Bank, and the venerable Kotak Mahindra have weathered unforeseen circumstances on multiple occasions.
ICICI and UTI endured prolonged squeezes as well. Dhanlaxmi and the recently listed TMB found themselves in precarious situations too.
While some banks may not warrant a reevaluation or a second chance, others possess potential deserving of recognition, which the markets may eventually acknowledge. I sincerely hope your hypothesis bears fruit with SIB, yielding profitable returns and validating your insights.
I hesitate to mention, but for the benefit of your blog's readers, I refrain from investing in any bank. Fundamentally, they all seem indistinguishable, and in this era dominated by technology, what sets apart a superior bank from a lesser one is not solely technological prowess or service quality. Rather, it is the art of astute lending— a facet not easily gleaned from annual reports alone. This is what I seek to discern through management interviews, discussions, televised appearances, public addresses, and the like. For instance, the perspectives offered by figures such as Deepak Parikh, KV Kamath, or even the incumbent Axis Bank leader elicit distinct impressions.
Thank you sir for your detailed comment :) You should not hesitate at all, there is a huge section of Investors who avoid financials as a rule and I do NOT blame them, there seems to be good reason for being very cautious in this space. I hope I do NOT have to join the camp :P Fair point on the Technology part, the reason why I am a little ignorant on that front is that I do NOT know how to assess the same, other than obvious cases. You can see IDFC First seems to have a better technology stack than HDFC Bank etc. But then again, at the end of the day I want that superiority to reflect in results. So while it is super important, I just don't seem to have an edge on that front, although I am very open to learning more. Please feel free to share anything on that front if you think it can help myself or the readers of this substack :) Once again, very grateful for your detailed and extensive write up. Very very grateful that you shared your view with us.