Monday, February 26, 2024

Brokerage house is bullish on ICICI Bank, you can bet on this banking stock for profit

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Buy ICICI Bank Share: After the quarterly results, the shares of ICICI Bank, the country’s second largest private lender, are seeing a good rise today. There has been selling in the market, but this stock remains among the top gainers of Sensex 30. Today the bank’s shares strengthened by about 5 percent in intraday and reached Rs 1059, which had closed at Rs 1009 on the previous trading day. The market has liked the bank results (ICICI Bank Results). Not only the market but also the brokerage houses are bullish on this banking stock after the results and are advising investment (Buy ICICI Bank). Currently the share is trading around Rs 1032.

Brokerage house on ICICI Bank shares

Motilal Oswal

Rating: Buy
Target: Rs 1230

LKP Securities

Rating: Buy
Target: Rs 1195

JM Financial

Rating: Buy
Target: Rs 1330

Yes Securities

Rating: Buy
Target: Rs 1260


Rating: Buy
Target: Rs 1260


Rating: Buy
Target: Rs 1200


Rating: Buy
Target: Rs 1214


Rating: Buy
Target: Rs 1400


Rating: Buy
Target: Rs 1322


Rating: Buy
Target: Rs 1250


Rating: Buy
Target: Rs 1175

Opinion on investing in stocks

According to brokerage house Motilal Oswal, the December quarter of the financial year 2024 has been strong for ICICI Bank. There was 24 percent growth in net earnings on annual basis, that too after AIF provisions of Rs 630 crore. Net interest margin declined by 10bp to 4.43% on quarterly basis, which is better than expected. Credit growth was 19% YoY and 4% QoQ which would be considered better. Deposit growth was 19% YoY and 2.9% QoQ. On the asset quality side, slippages increased slightly amid seasonally higher slippages from the Kisan Credit Card (KCC) segment. Gross NPA ratio declined by 18bp on a quarterly basis, while net NPA remained largely stable. The bank has maintained a total contingency buffer of Rs 13100 crore (1.1% of the loan) which provides comfort.

According to brokerage house JM Financial, ICICI Bank’s PAT increased by 24 percent (flat QoQ) on annual basis, which is as per estimates. The bank has shown healthy NIM of 4.43 per cent (-10bps QoQ) and deposit growth of 2.9 per cent QoQ. Nii Graroth also remained healthy. PPOP grew by 10.9% YoY (+3.5% QoQ) to Rs 14720 crore which was better than expected due to continued loan growth momentum (+4% QoQ), lower opex. Credit cost for 3QFY24 was at 39bps (vs 23bps QoQ) as the bank made provisions of Rs 630 crore on AIF investments, while core credit cost remained under control. On gross basis, loans grew by 4% QoQ (+19% YoY) and retail loans grew by 4.5% QoQ (+21% YoY). Domestic corporate loans grew by 13.3% YoY (2.9% QoQ) with continued strong growth in SME, business banking and rural sectors. Despite the decline in margins, the bank is generating RoAs of more than 2 percent.

How were the results of ICICI Bank?

ICICI Bank’s profit increased by 24 percent to Rs 10271.54 crore in the quarter ending December 2023, which was Rs 8311.85 crore in the same quarter a year ago. The bank’s Net Interest Income (NII) saw an increase of 13.5 percent on an annual basis. The gross non-performing assets (GNPA) of the bank stood at 2.30 percent, which was 2.48 percent in the September quarter of this year and 3.07 percent in the same quarter last year. Whereas Net NPA (NNPA) has improved to 0.44 percent in Q3 FY24, which was 0.43 percent in the September quarter.

Net interest margin (NIM) stood at 4.43 percent in the third quarter, whereas it was 4.65 percent in the same quarter last year. Net interest margin in the first nine months of last year was 4.57 percent. The bank’s provisions in the quarter were Rs 1050 crore, whereas in the same period a year ago it was Rs 2257 crore.

(Disclaimer: The advice to invest in stocks has been given by the brokerage house. These are not the personal views of digitnews. There are risks in the market, so take expert opinion before investing.)

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