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Morgan Stanley bullish on ICICI Bank; sees 34% upside

The brokerage firm, which sees 34 percent upside in the stock, believes that the strong digital capabilities have helped ICICI Bank improve market share in higher-margin segments, and there is further room to improve

December 05, 2022 / 12:21 PM IST
ICICI Bank

ICICI Bank

 
 
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Shares of ICICI Bank were in focus on December 5 after global research firm Morgan Stanley retained the private sector lender as one of its top picks with a target price of Rs 1,250 per share.

The brokerage firm, which sees 34 percent upside in the stock, believes that the strong digital capabilities have helped ICICI Bank improve market share in higher-margin segments, and there is further room to improve. "The bank is gaining market share across granular higher margin profit pools (tax collections, transactions and trade. This is owing to improved digital capabilities as well as higher cross-sell/up-sell which is all coming at lower incremental costs. It noted higher penetration and deepening among high-quality corporates in recent years, the research firm said.

"ICICI Bank has also accelerated new-to-bank customer acquisitions via these digital assets. Overall, we expect a significant shift toward send-to-end digital originations at large private banks like ICICI, and this implies potential for significant operating leverage over the medium term – whether this flows through the bottom line or gets competed away owing to a) increasing competitive intensity and/or b)higher tech/employee costs needs to be seen."