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ICICI Bank gets a thumbs up from global brokerages, may fetch up to 53% return. Here's why

CLSA has maintained buy on the stock with target at Rs 1,100 per share, an upside of 53 percent from current market price while Nomura has also maintained buy call on the stock with target at Rs 910 per share, an upside of 27 percent from the current level.

December 06, 2021 / 10:22 AM IST
ICICI Bank

ICICI Bank

 
 
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ICICI Bank began drawing attention since global brokerages retained the ‘buy’ call on the share. The stock was trading at Rs 715.20, down Rs 1.40, or 0.20 percent, at 9:34am on December 6. It has touched an intraday high of Rs 719.20 and a low of Rs 714.


Global research firm Nomura has maintained the ‘buy’ call on the stock with target at Rs 910 per share, an upside of 27 percent from current market price. The brokerage firm is of the view that the bank is fully geared to meet the challenges of digital disruption and added that it has managed the asset quality blips well through both the COVID-19 waves.


“We continue to expect 15-16 percent RoE by FY23-24 with the core bank retracing from key levels at 2.8-3x. Further re-rating contingent depends Upon delivering steady EPS growth while the bank can deliver an EPS CAGR of 28 percent over FY21-24,” Nomura said.


On the other hand, CLSA has also maintained a ‘buy’ on the stock with target at Rs 1,100 per share, an upside of 53 percent from current market price. “The bank’s focus is shifting towards building infra for new-to-bank customers with successfully improved granularity and quality of its earnings over the past 6-7 years,” it said.


“ICICI Bank is ahead of its peers in its digital initiatives and is also a new growth leader. It remains one of our top picks in the sector,” the research firm said.

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Domestic research and broking firm Motilal Oswal feels that ICICI Bank has been reporting strong growth in retail advances, supported by an impressive share of digital originations, while SME/Business banking growth has been robust, aided by various digital applications. With a resilient asset quality and an improving economic environment, it appears firmly positioned to deliver healthy sustainable growth.


“We estimate ICICI Bank to deliver 25 percent earnings CAGR over FY22-24, while RoA/RoE improves to 2 percent/16.6 percent in FY24E. The bank remains our top pick in the sector. We reiterate a buy with an SoTP-based target of Rs 1,000 (2.8x September 2023 ABV), an upside of 30 percent from the current level,” said a Motilal Oswal report.


The country’s second largest private sector lender recorded profit after tax of Rs 5,511 crore for the September 2021 quarter, increasing significantly by 30 percent from the year-ago period, as provisions for bad loans declined and asset quality performance improved. Double digit growth in net interest income, operating profit and other income also aided earnings for the quarter.


Net interest income, the difference between interest earned and interest expenses, has grown 25 percent to Rs 11,690 crore in Q2FY22, with 43 bps improvement YoY (11 bps QoQ) in net interest margin at 4 percent, said the bank in its BSE filing on October 23. One percent is equal to 100 basis points.

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.

Moneycontrol News
first published: Dec 6, 2021 10:22 am
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