ICICI Bank share price jumped 1.27% intraday to Rs 811 on BSE after the private sector bank reported a 50% in net profit to Rs 6,905 crore in the first quarter of the current fiscal, up from Rs 4,616 crore profit reported in the same quarter a year ago. ICICI Bank’s total income improved to Rs 28,336.74 crore in the quarter under review, up from Rs 24,379.27 crore in the in FY22. So far this year, ICICI Bank share price has risen 4.56%, outperforming Nifty 50 which as tanked 5% and Nifty Bank index which is up merely 0.87% YTD. Brokerages see up to 35% potential rally in the stock going forward given the private lender’s growth outlook and earnings trajectory. ICICI Bank shares settled marginally higher at Rs 799, up 0.02% on Monday.
Stock talk: Should you buy, hold or sell?
Motilal Oswal: Buy
Target price: Rs 1,050, Upside: 31%
According to domestic brokerage firm Motilal Oswal, ICICI Bank is seeing a strong recovery in business trends across key segments such as Retail, SME, and Business Banking. Asset quality trends remain steady, while PCR remains one of the best in the industry ~80%. The additional COVID19 provision buffer (90bp of loans) renders further comfort. “Ahead of this new growth cycle, the bank is already positioned well with superior margins, strong RoE/asset quality and robust capitalisation levels. The stock return will be a function of earnings growth and re-rating over the coming years and ICICI Bank has all the ingredients in place to take over the pole position in the Indian Banking space,” it said. The brokerage maintains ‘Buy’ rating on ICICI shares with an SoTP-based target price of Rs 1,050 per share. ICICI Bank remains Motilal Oswal’s top pick in the sector.
Target price: Rs 1,020, Upside: 27.5%
According to analysts at Edelweiss Securities, ICICI Bank delivered a solid quarter, seventh in a row, outperforming consensus PAT by 17% and beating peers HDFC Bank and Kotak on loan growth, NII growth, treasury and GNPLs. Lender’s Opex also exceeded expectations due to employee pay-outs and branch additions. The lender posted a trading gain of Rs 360mn versus a loss by peers. While GNPLs declined on quarter. The brokerage increased the target multiple to 3x (from 2.5x) Sep23E, backed by ICICI’s consistent delivery.
“We reiterate ICICI as our top pick driven by its consistent and best-in-class earnings delivery, high capitalisation, strong liability franchise and efficient treasury. Our target multiple for ICICI is now on a par with HDFC Bank. We expect RoE of 16% for FY24E for ICICI, higher than the merged RoE of 14% for HDFC Bank,” it said. The brokerage maintains ‘Buy’ call on the stock with a revised target price of Rs 1,020, up from Rs 950 earlier.
Nirmal Bang: Buy
Target price: Rs 1,079; Upside: 35%
Analysts at Nirmal Bang see further scope for margin expansion on the back of room for improving the C/D ratio further, coupled with higher share of unsecured retail loans. The management sounded confident about credit demand but with a cautious undertone given the inflationary environment and global disturbances. ICICI Bank’s asset quality improved on-quarter; still, the bank has continued to shore up contingent buffers. “This was the second consecutive quarter when the bank has delivered 2% ROA. We remain positive on the bank given its growth outlook and earnings trajectory,” they said. The brokerage house maintains ‘buy’ rating on ICICI Bank stock with a target price of Rs 1,079.
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