ICICI Bank's December quarter results were a beat on most fronts. An analyst darling, the scrip has got no 'sell' call, with just one 'hold' call out of 38 analyst recommendations; rest all are either 'buy' or 'strong buy' calls. This is as per publicly available data with Trendlyne. The optimism on the counter is seen even as the stock is just 8 per cent away from its record high of Rs 958. If one goes by price targets post third quarter earnings, the scrip could see up to 30 per cent upside.
With a floating-rate book of 70 per cent, Motilal Oswal Securities believes the bank is well-placed to ride the rising interest rate environment. The lender's provision coverage ratio (PCR) has improved to 83 per cent that coupled with additional Covid-related provision buffer (1.2 per cent of loans) provides further comfort, Motilal Oswal Securities said while suggesting a target of Rs 1,150.
Nuvama Institutional Equities said ICICI Bank registered an impressive set of numbers on most fronts, beating it's as well as consensus estimates on net revenue, pre-provision operating profit (PPoP) and profit after tax (PAT). But credit and deposit growth were 1 per cent lower than its estimates, it said. Slippages increased on YoY and sequential basis, but absolute gross NPA remained stable and NIM expanded markedly on YoY basis, it said.
"We believe ICICI Bank has reported a stellar set of numbers on most fronts. The bank’s sustained growth outperformance, strong digital push, focus on risk-calibrated operating returns and strong balance sheet will result in the bank’s stocks continuing to see a re-rating. We maintain our BUY recommendation with a revised target price of Rs 1,135 per share, implying a 30 per cent upside," Nuvama said.
On Monday, the scrip rose 1.55 per cent to hit a high of Rs 883.90 on BSE.
JM Financial noted that while deposits growth momentum was a bit tepid at the bank at 10 per cent YoY, the management remains optimistic of deposit growth pick up going ahead, given recent rate hikes. On NIM, the management indicated that incrementally deposits repricing is expected to happen at a faster pace that may lead to some pullback on the strong NIMs trajectory.
"We continue to like management’s consistent focus on risk-adjusted core PPOP, capturing the maximum value in the customer ecosystem while keeping asset quality under check. We maintain our positive stance in light of: highly efficient large liability franchise, robust capital ratios, strong PCR and steady asset quality and strong return profile and superior digital prowess," JM Financial said while suggesting a target of Rs 1,115 on the stock.
YES Securities finds the stock Rs 1,180 worth. It felt that gross slippage ratio was somewhat elevated, as ICICI chose to make some contingent standard asset provisions.
"The cost of deposits has risen 10 bps QoQ to 3.65 oer cent, which is a relatively controlled rise, given the environment. A sequential growth of 3.8 per cent was the slowest since 2QFY22, impacted by sluggish CV/CE loans and de-growth in ‘other’ loans," the brokerage said. The brokerage has maintained its ‘Buy’ rating on ICICI Bank with a revised price target of Rs 1,180.
For Emkay Global, ICICI Bank remains top pick in the banking space, given its superior financial performance, top-management credibility, and strong provision buffers. This brokerage has suggested a revised target of Rs 1,250 per share, valuing the bank at 2.9 times December 2024 P/BV and valuing its subsidiaries at Rs 220 per share.
The bank reported a 34.2 per cent year-on-year (YoY) rise in standalone profit at Rs 8,312 crore for December quarter. NII surged 34.6 per cent YoY to Rs 16,465 crore.
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