ICICI Bank shares zoom 6%; hit 52-week high on strong Q3 results

Shares of ICICI Bank Ltd surged as much as 5.8% to hit a 52-week high of ₹1,067.40 apiece on the BSE on Tuesday, after the private sector lender reported a 23.6% year-on-year (YoY) jump in its consolidated net profit at ₹10,271.54 crore in the December quarter, as against ₹8,311.85 crore in the corresponding period of the previous year. The surge in its profit was on account of an increase in non-interest income amid stable asset quality.

At 12:48 pm, the share price of the bank was trading 2.62% higher at ₹1,034.75. In contrast, the broader BSE Sensex was trading 522.85 points or 0.73% lower at 70,900.80. The bank’s market capitalisation stood at ₹7,25,894 crore with more than 5.96 lakh shares exchanging hands on the BSE, as against the two-week average of 6.95 lakh shares. The company hit a 52-week low of ₹796.10 on January 30, last year.

In the past one month, three months and a year, the counter has given 4.11%, 11.28% and 18.71% returns respectively. In the year-to-date period, the counter has given 3.34% in returns.

During the October-December period of FY24, the private sector lender’s net interest income -- interest income earned from loans after knocking off interest paid on deposits -- increased by 13.4% to ₹18,678 crore as against ₹16,465 crore in the corresponding period of the previous year. In the December quarter, the net interest margin of the country’s second-largest private sector lender, however, declined to 4.43% as against 4.65% in the December quarter of FY23 owing to a rise in the cost of term deposits. The bank’s domestic loans grew by 18.8% year-on-year and 3.8% quarter-on-quarter. The retail loans grew by 21.4% YoY and 4.5% QoQ. The private sector lenders provision coverage, as of December 31, stood at 80.7%.

Following the bank’s Q3 results, most analysts have given a 'BUY' rating to the company with a revised target price. Analysts at HDFC Securities have maintained a BUY rating with a target price of ₹1,220. “ICICI Bank managed to clock another steady quarter on the back of consistent loan growth (+18% YoY), offset by higher credit costs (39bps of loans) on account of additional provisioning for investment in AIF (INR6.27bn), while maintaining its asset quality and a healthy PCR (~81%). Healthy deposit growth (+18% YoY) came in largely in the form of retail TDs as the CASA ratio dipped further to 39.6% (-112bps QoQ), resulting in a 19- bps QoQ spike in the cost of deposits. Despite an improving retail mix, yields remained flat, and NIMs softened to 4.43% (-10bps QoQ) and are likely to trend lower. We tweak our FY24E/FY25E forecasts to factor in lower credit costs and higher opex; we maintain BUY with a SOTP-based TP of INR1,220 (standalone at 2.8x Sep-25 ABVPS),” say analysts at HDFC Securities.

According to analysts at Emkay Global Financial Services, like most banks, ICICI Bank’s margin would continue normalizing on rising funding costs. The rating agency has maintained a BUY rating with a revised target price of ₹1,400 per share.

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