Shares of ICICI Bank rose almost 2% to hit their fresh 52-week high of ₹942.70 in morning trade on BSE on October 25, buoyed by the healthy September-quarter scorecard of the private lender.
However, the stock witnessed profit booking and closed 0.14% lower at ₹924.65.
As reported by media, ICICI Bank on October 22 registered a 31.43% jump in its September quarter consolidated net profit at ₹8,006.99 crore.
The stock has been on a bull run this year so far; it is up 25% this year as of October 24 against a nearly 3% gain in the benchmark Sensex.
The bank's total income grew to ₹31,088 crore in Q2FY23 while the overall expenses climbed to ₹19,408 crore from ₹18,027 crore.
Healthy Q2 numbers of the bank have garnered positive reviews from most brokerages; some have raised their earnings per share (EPS) estimates and a few have raised target prices too.
Motilal Oswal Financial Services has maintained a 'buy' call on the stock with a target price of ₹1,100, citing the bank reported a strong performance, led by a combination of impressive core PPOP growth, healthy NII growth, and controlled provisions (despite the creation of contingent provisions), underpinned by pristine asset quality.
Motilal Oswal pointed out that a stable mix of a high-yielding portfolio (retail/business banking) and a low-cost liability franchise is fueling steady NII growth, resulting in a margin expansion of 4.31%.
"The bank sees a strong recovery in business trends across segments, while asset quality trends remain steady, with an industry best PCR at nearly 81%. The additional Covid-19 provision buffer (1.1% of loans) renders further comfort. We expect the bank to deliver an FY24 RoA (return on assets) and RoE (return on equity) of 2.1% and 17.2% respectively," said Motilal Oswal.
Brokerage firm Sharekhan by BNP PARIBAS underscored that ICICI Bank reported stellar September quarter earnings.
The brokerage firm has a buy call on the stock with a target price of ₹1,120, implying a 21% upside from the stock's closing price of ₹925.90 on October 24.
The brokerage firm pointed out that the ICICI Bank stock currently trades at 2.6 times and 2.2 times its FY2023E and FY2024E, respectively, core BV.
Sharekhan said the bank reported steady performance on all fronts – NII, core operating profits, earnings, and advances recording healthy growth with better asset quality trends and lower core credit cost.
Sharekhan believes the bank is on an accelerated growth path trajectory with healthy business growth and 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 bank has all the ingredients in place to take over the pole position in the Indian banking space. The bank’s continuous building up of its digital capabilities and growing franchise sustainably in a risk-calibrated approach are likely to bode well for future growth going ahead," said Sharekhan.
"With high PCR, strong balance sheet, improved asset quality, and improved return ratios matrix, the bank is set to see good earnings compound going ahead," said the brokerage firm.
Nuvama Wealth Management Limited (formerly Edelweiss Securities Limited) maintained a 'buy' call on the stock and raised the target price to ₹1,115 from ₹1,020.
"ICICI retains its position as the best-in-class performer for the eighth quarter, outperforming peers on every metric from core PPOP to treasury and buffer provisions. We believe the bank can continue to deliver on loan growth and NIM expansion even on a high base. We are increasing EPS by 7% and 10% in FY23E and FY24E, respectively," said Nuvama Wealth Management.
Among the global brokerage firms, Morgan Stanley maintained an 'overweight' call on the stock with a target price of ₹1,250. Morgan Stanley expects earnings consistency to drive continued re-rating, reported CNBC-TV18.
HSBC maintained a 'buy' rating with a target price of ₹1,100. It revised EPS estimates by 6.9% and 1.1% for FY23 and FY24, respectively, reported CNBC-TV18.
Nomura also maintained a 'buy' call on the stock with a target price of ₹1,060. It raised EPS estimates by 1.2% and 3% for FY23 and FY24 respectively, as per CNBC-TV18.
According to a MintGenie poll, an average of 43 analysts have a ‘strong buy’ call on the stock.
Disclaimer: The views and recommendations given in this article are those of broking firms. These do not represent the views of MintGenie.
