IBN
ICICI Bank Limited
$29.46
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 29.1% below fair value
You pay
$29.46
Bear
$39.10
Fair
$41.53
Bull
$41.53
Bear
$39.10
+32.7%
ROTCE 11.5% → 3.77x TBV
Fair
$41.53
+41.0%
ROTCE 15.4% → 4.00x TBV
Bull
$41.53
+41.0%
ROTCE 17.7% → 4.00x TBV
Adjust Assumptions
15.4%
6.0%
Key Value Driver
ROTCE (15.4%) vs. cost of equity (6.0%)
Implied Market Multiple
2.84x
Summary
With ROTCE of 15.4% vs. 6.0% cost of equity, fair P/TBV is 4.00x on $10.38 tangible book, implying $41.53 per share.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Financial statements were converted from INR into USD using USDINR at 0.0105 USD per INR.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly