Shares of ICICI Bank hit an all-time high on Monday after India's second-largest private lender reported a 40% year-on-year rise in its first-quarter net profit.

The stock opened at ₹1,004.95 against its previous closing price of ₹997. The counter rose 1% to touch a new high of ₹1,006 in intraday trade, taking its market capitalisation to ₹7.03 lakh crore.

ICICI Bank clocked a profit after tax of ₹9,648 crore for the April-June quarter, beating analyst estimates.

Net interest income (NII) of the private lender increased 38% year-on-year to ₹18,227 crore for the quarter ended June as against ₹13,210 crore in the corresponding quarter last year.

The bank's net interest margin (NIM) stood at 4.78% during the quarter compared with 4.01% in the same quarter last year.

Most brokerages maintain a 'Buy' rating on the stock. Foreign brokerage Morgan Stanley has an 'overweight' rating on the counter with a target price of ₹1,350 apiece.

Domestic brokerage Nuvama Wealth too has a 'Buy' rating on the stock with a target price of ₹1,195, indicating an upside of around 20%. "ICICI Bank continues to report a strong set of numbers. RoA (Return on Assets) in Q4 FY23 was the bank's highest in at least 15 years, and it has done well to sustain it at that level. Although NIM compressed sequentially, this was not unexpected," the brokerage says.

Asset quality

The gross non-performing asset (NPA) ratio was 2.76% at the end of the June quarter compared to 2.81% as of March 31, 2023. The net NPA ratio was 0.48% in June-end compared to 0.48% at the end of the March quarter and 0.70% in the corresponding quarter of the last fiscal.

The net addition to gross NPAs, excluding write-offs and sale, were ₹1,807 crore in Q1 compared to ₹ 14 crore in Q4 FY23. The gross NPA additions were ₹5,318 crore in Q1 compared to ₹4,297 crore in Q4 FY23.

Recoveries and upgrades of NPAs, excluding write-offs and sale, were ₹3,511 crore in Q1 compared to ₹4,283 crore in Q4-2023. The bank has written off gross NPAs amounting to ₹1,169 crore in Q1-2024. The provision coverage ratio on NPAs was 82.4% on June 30, 2023. Provisions (excluding provision for tax) increased to ₹1,292 crore during the quarter as compared to ₹1,144 crore in Q1 of FY23.

Seasonal elevation in slippages led to some increase in absolute GNPA, according to Nuvama Wealth.

Credit growth

The lender's total advances increased by 18.1% year-on-year and 3.7% sequentially to ₹ 10.57 lakh crore for the quarter ended June. The bank's retail loan portfolio grew by 21.9% year-on-year and 4.5% sequentially, and comprised 54.3% of the total loan portfolio on June 30, 2023.

The business banking portfolio grew by 30.4% year-on-year in the June quarter. The SME business, comprising borrowers with a turnover of less than ₹250 crore, grew by 28.5% year-on-year. The domestic corporate portfolio grew by 19.3% year-on-year.

Deposits increased by 17.9% year-on-year to ₹12.38 lakh crore at the end of the June quarter. Total term deposits increased by 25.8% year-on-year to ₹7.02 lakh crore.

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ICICI Bank net profit

ICICI Bank shares hit all-time high on robust Q1