ICICI Bank on Thursday joined the elite club of Rs 6 trillion market-cap with shares hitting a record high. The lender became the seventh Indian stock to hit such a milestone.
Shares of ICICI Bank hit an all-time high of Rs 866.15 on BSE with market-cap of Rs 6.01 trillion. The stock surged nearly 17% so far this year. At 1pm, the scrip was trading at Rs 864 on BSE, up 1.8% from its previous close.
Earlier, Reliance Industries, Tata Consultancy Services, HDFC Bank, Infosys and Hindustan Unilever have hit this achievement. Life Insurance Corp Of India also hit over Rs6 trillion m-cap after it prices its issue at Rs 949 a share.
The stock remained favourite of investors after the lender continued to report better than expected earnings with improved asset quality and lower provisions.
Recently, the lender reported a 50 percent year-on-year growth in its net profit at Rs 6,905 crore for the quarter ended June 2022, as bad loan provisions declined sharply. Net interest income for the June quarter increased by 20.8 percent to Rs 13,210 crore.
Provisions and contingencies fell sharply by 60 percent year-on-year to Rs 1,143.82 crore. Asset quality improved further with gross non-performing assets as a percentage of gross advances falling 19 bps sequentially to 3.41 percent.
" ICICI Bank consistently reports strong performance with improving asset quality, robust credit growth, all time high margins and moderating credit cost. Balance sheet position of the bank remained comfortable with a strong provision buffer. We continue to maintain our positive stance on the stock led by its leveraging digital capabilities, gaining market share position, granular liability franchise and improving return ratios", said Arihant Capital in a note to investors.
Its loan book expanded 21% year on year with: retail expanding 22% yoy driven by mortgages and unsecured book, SME and Business Banking book growing strongly by 32% y/y and 45% y/y, respectively, and Corporate book up 14% y/y. According to Dolat Analysis and Research, "We build in loan growth of 17% YoY over FY23-24E. Traction the bank’s low cost liabilities has been healthy, with continued improvement in CASA ratio over the last few quarters to 46%". The brokerage firm has maintain buy rating with target price of Rs 1000 (Rs980 earlier), valuing the standalone bank at 2.9x FY24E book.
Of the 52 brokers tracking the ICICI Bank stock on Bloomberg, 51 have recommended a buy rating, one have a hold on the stock. It has zero analysts who rate sell on the stock.
Brokerage firm JP Morgan believes ICICI can transform into a low-risk steady compounder offering steady 16% ROEs with consistent market-share gains thanks to its strong position on capital, funding and technology. Sustained strong underwriting quality can also drive its valuations to sustain in-line with more expensive peers such as HDFC Bank/Kotak Mahindra Bank, it added.
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