Private sector lender ICICI Bank Ltd has become the fifth Indian company and the second bank to surpass Rs 8-lakh-crore market capitalisation for the first time after its shares rallied over 4 percent on strong earnings.
The stock hit a record high of Rs 1,160 on the BSE, up 5 percent, on April 29. At 2.10pm, it was trading at Rs 1,157 on the BSE, up 4.5 percent from its previous close, while the benchmark Sensex rose 1.11 percent to 74,549 points.
Reliance Industries, TCS, HDFC Bank, Infosys and Bharti Airtel have so far crossed this milestone. RIL remained India's most valued firm with an mcap of Rs 20.4 lakh crore, followed by TCS and HDFC Bank, which has an mcap of Rs 15 lakh crore and Rs 9.6 lakh crore. Infosys and Bharti Airtel have mcap of Rs 8.16 lakh crore and Rs 8.1 lakh crore.
The lender thrived, reporting a Q4 FY24 net profit of Rs 10,708 crore, up 20 percent from Q4 FY23, driven by robust advances and reduced credit costs, despite margin pressure. ICICI Bank achieved an ROA of 2.4 percent in FY24, reflecting strong performance across the board.
"We believe ICICI Bank firmly remains on a path to deliver +2.3 percent/18.5 percent average RoA/ RoE over FY25-26, aided by asset quality being in good shape, and continued growth momentum, while margins expected to moderate slightly. ICICI bank has continued to deliver a best-in-class return profile among its larger private peers which will help it retain its valuation premium," said JM Financial in its note.
The net interest income (NII) rose 8 percent to Rs 19,093 crore in Q4 FY24, surpassing estimates of Rs 18,958 crore. While gross NPA decreased to 2.16 percent from 2.81 percent YoY, its net NPA fell to 0.42 percent from 0.48 percent on-year. Deposit growth at 20 percent outpaced advances, led by a 28 percent rise in term deposits, although CASA growth was subdued at 10 percent YoY due to higher term deposit mobilisation. Domestic NIM moderated to 4.4 percent in Q4 FY24 from 4.9 percent a year back, maintaining the full-year NIM at the FY23 levels.
Emkay said ICICI Bank remains our preferred pick in the banking space, given its superior returns profile , top-management credibility, and strong capital/provision buffers.
"ICICI Bank during the quarter saw single digit growth in its top-line which was led by the declining margin during the quarter as cost of funds increased. However, its advances and deposits are growing at a healthy pace and in a sustained manner which is aiding the bank to grow its business with robust asset quality," Religare Broking said in its latest note.
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