ICICI Bank’s Q1 numbers drive stock to all-time highs; analysts weigh in

Shares of ICICI Bank jumped nearly 1 percent in early trade on July 24 post solid Q1 numbers to hit all-time highs. At 9:24 am the ICICI Bank stock was trading 0.45 percent higher at Rs 1,005 on NSE.

ICICI Bank reported its Q1 numbers on July 22. The country’s second-largest private sector lender has reported a 39.7 percent on-year growth in standalone profit at Rs 9,648 crore for the quarter ended June FY24 despite elevated provisions & contingencies.

Net interest income increased by 38 percent on-year to Rs 18,227 crore with net interest margin expansion of 77 bps on-year at 4.78 percent, while loan growth was 18.1 percent and deposits grew by 17.9 percent YoY. Asset quality was stable with gross NPA falling 5 bps sequentially to 2.76 percent and net NPA flat at 0.48 percent for the quarter.

Brokerage Views

CLSA has given a target of Rs 1225 per share on ICICI Bank backed by strong growth and confident commentary. “The bank has the highest earning certainty over the next three years. Net interest margin (NIM) moderation has been in-line and deposit accretion has picked up pace. Core pre-provision operating profit (PPoP) was reported 37 percent higher YoY and the bank will invest in growth In FY24. Earnings multiple of 15.5/13.5x FY24/25 Is still reasonable.”

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Morgan Stanley has also given an overweight rating to ICICI Bank with a target price of Rs 1350 per share. Deposit growth of the bank accelerated to 18 percent YoY/5 percent QoQ in Q1. Deposit Growth has helped sustain strong domestic loan growth. The margin was adjusted for seasonality, yet the asset quality remains strong.

JPMorgan is also overweight on ICICI Bank and has given a target of Rs 1150. The brokerage house stated that the profit after tax (PAT) of ICICI Bank was ahead of estimates driven by lower provisions. Core PPoP was in line with estimates driven by loan growth and higher NIMs.

Also Read: Kotak Mahindra Bank Q1 results: Consolidated net profit up 50.62% at Rs 4,150.19 crore

Meanwhile, Jefferies gave a buy rating on ICICI Bank with a target price of Rs 1240 per share. The brokerage house further stated that the Q1 profit of the bank was ahead of estimates with a tad better net interest margins (NIM’s).

Stock Performance

ICICI Bank stock has given a return of 15.41 percent over the last six months. Thus, outperforming the Nifty Bank index which has given a return of 7.82 percent over the same duration.

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