ICICI Bank stock rises post Q3 earnings, here's what brokerages say

Shares of ICICI Bank rose over 1% amid a market crash today after the private sector lender reported a 25 per cent year-on-year (YoY) rise in its net profit for October-December quarter. ICICI Bank stock climbed 1.76% to Rs 818.80 against the previous close of Rs 804.60 on BSE.

ICICI Bank share trades higher than 20 day, 50 day, 100 day and 200 day moving averages but lower than 5 day moving averages.

The banking share has gained 51.33% in one year and risen 9.07% since the beginning of this year. In a month, the share has climbed 11%.

Total 5.34 lakh shares of the bank changed hands amounting to a turnover of Rs 43.61 crore on BSE.

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The stock hit its 52 week high of Rs 859.70 on October 25, 2021 and a 52 week low of Rs 512.10 on January 28, 2021.Market cap of the bank stood at Rs 5.54 lakh crore on BSE. The bank reported a net profit of Rs 6,194 crore in Q3 against Rs 4,939 crore profit in the corresponding quarter of previous fiscal.

Net interest income (NII) rose 23 per cent YoY to Rs 12,236 crore in Q3, while net interest margin stood at 3.96 per cent during December 2021 as against 3.67 per cent in the same quarter a year ago and 4 per cent in the quarter ended September 30, 2021.

Total deposits climbed16 per cent YoY and 4 per cent sequentially to Rs 10,17,467 crore as of December 31, 2021. Average current account deposits increased 34 per cent YoY, while average savings account deposits grew 25 per cent YoY.

On credit growth, the bank said, "The retail loan portfolio grew by 19 per cent year-on-year and 5 per cent sequentially, and comprised 61.3 per cent of the total loan portfolio at December 31, 2021. Including non-fund outstanding, the retail loan portfolio was 51.3 per cent of the total portfolio at December 31, 2021."

Net non-performing assets declined 10 per cent sequentially to Rs 7,344 crore as of December 31, 2021 from Rs 8,161 crore as on September 30, 2021.

"The net NPA ratio declined to 0.85 per cent at December 31, 2021 from 0.99 per cent at September 30, 2021," it said.

"During Q3-2022, there were net deletions from gross NPAs of Rs 191 crore, excluding write-offs and sale, compared to net additions of Rs 96 crore in Q2-2022. The gross NPA additions declined to Rs 4,018 crore in Q3-2022 from Rs 5,578 crore in Q2-2022 and Rs 7,231 crore in the quarter ended June 30, 2021 (Q1-2022)," the bank said.

YES Securities has given a buy rating to the bank with a target price of Rs 1,044 in 12 months.

"ICICI did not have anything negative to report from a perspective of fees from credit cards and payments business. While there was marginal NIM compression on a sequential basis, we do not see any structural headwinds in this regard but rather a constructive backdrop. We maintain 'Buy' rating on ICICI with a revised price target of Rs 1044."

Motilal Oswal has maintained a buy rating to the stock and said it was their top pick in the sector.

"The lender reported a strong quarter propelled by impressive core PPoP performance and controlled provisions underpinned by robust asset quality. The steady mix of high-yielding portfolio (Retail/Business Banking) and a low-cost liability franchise is fueling steady NII growth. The bank is seeing a strong recovery in business trends across key segments such as Retail, SME, and Business Banking. Fresh slippages have ebbed leading to continued moderation in credit cost, while PCR remains the best in the industry at 80%. The additional COVID-19 provision buffer (79bp of loans) renders further comfort. 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 an SoTP-based target price of Rs 1,100 (based on 3x FY24E ABV), implying 37% potential upside. ICICI Bank remains our top pick in the sector, " the brokerage said.