ICICI Bank share price shuns bearish D-Street momentum; improved asset quality keeps analysts bullish

ICICI Bank share price dodged bearish market sentiment on Monday morning days after the private sector lender reported its October-December quarterly earnings.

ICICIC Bank
ICICI Bank stock price was up 1.7% on Monday to hit an intraday high of Rs 818.8 per share. (Image: REUTERS)

ICICI Bank share price dodged bearish market sentiment on Monday morning days after the private sector lender reported its October-December quarterly earnings. Analysts have retained a bullish outlook and upgraded their target price for the scrip after the quarterly earnings showed strong business growth with robust asset quality. Despite being a leader in the private banking space, analysts across brokerage firms believe the stock is available at attractive valuations making them reiterate their positive stance on the stock. ICICI Bank stock price was up 1.7% on Monday to hit an intraday high of Rs 818.8 per share. 

Performance highlights

  • The private sector lender reported a net profit of Rs 6,193 crore, up 25.4% on-year basis.
  • Net interest income rose 23.4% to come in at Rs 12,236 crore. 
  • ICICI Bank’s total advances increased 16% from a year ago to Rs 8.14 lakh crore. 
  • Total deposits increased 16% on-year to Rs 10.17  lakh crore.
  • Gross NPAs were down 25 basis points to 4.13%.
  • Provisions fell 27% from a year ago to Rs 2,007 crore. 

What do analysts say?

Edelweiss: Buy

Analysts at Edelweiss have ICICI Bank as their top pick and have upgraded the target price for the lender to Rs 935 from Rs 890 earlier. “Confidence on earnings delivery and high equity sanctity suggest ICICI is primed for the next cycle. Consistent delivery over the last few years reflects an impressive turnaround, setting a gold benchmark for financiers,” analysts said. They added that ICICI Bank with its current combination of safety-cheapness-recovery gearing is best placed among lenders. The target price implies 14% upside potential.

Kotak Securities: Buy

ICICI Bank was unscathed post-pandemic in eyes of Kotak Securities. They added that ICICI Bank has been a consistent performer fueled by fewer negative surprises on asset quality, growth and its operating metrics. “ We value the bank at ~2.8X book and 18X FY2024 EPS for RoEs at 15% levels,” said Kotak Securities while adding that the lender is available at attractive valuations. The fair value has been increased to Rs 975 per share from Rs 900 earlier. 

Motilal Oswal: Buy

ICICI Bank is Motilal Oswal’s top pick for the current year. The brokerage firm has a bullish target of Rs 1,100 per share on the stock, implying an upside of 34% from today’s high. Fresh slippages at ICICI Bank have ebbed leading to continued moderation in credit cost, while PCR remains the best in the industry at around 80%. “We raise our FY22E/23E earnings by 3%/4% and estimate the bank to deliver an improved FY24 RoA/RoE of 2.0%/17%, respectively. We maintain our BUY rating with a SoTP-based TP of Rs 1,100 (based on 3x FY24E ABV),” they said.

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