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Shares of India’s second-largest private lender ICICI Bank surged 3.14% to their day’s high; Should you invest?
ICICI Bank: Buy, Sell Or Hold?
Shares of India’s second-largest private lender ICICI Bank surged 3.14 per cent to their day’s high of Rs 1,295 in Monday’s trade on the BSE after reporting a 14.5 per cent rise in its September quarter standalone net profit, reaching Rs 11,746 crore compared to Rs 10,261 crore in the same period last year.
Net interest margin came at 4.27 per cent in Q2 compared to 4.36 per cent in Q1-2025 and 4.53 per cent in Q2 of last fiscal.
Treasury gains were at Rs 680 crore (US$ 81 million) in Q2 against a treasury loss of Rs 85 crore in Q2 of previous fiscal, reflecting realised and mark-to-market gains in equity and fixed income securities.
ICICI Bank’s gross NPA ratio fell to 1.97 per cent on September 30, 2024 compared to 2.15 per cent on June 30, 2024. In Q2 of the previous fiscal, gross NPA ratio stood at 2.48 per cent. The net NPA ratio was 0.42 per cent in the last quarter compared to 0.43 per cent in the June 2024 quarter and September 2023 quarter.
Core operating profit climbed 12.1 per cent to Rs 16,043 crore in the last quarter from Rs 14,314 crore in Q2 of the previous fiscal. Net interest income (NII) climbed 9.5 per cent year-on-year to Rs 20,048 crore in Q2 from Rs 18,308 crore in Q2 of last fiscal.
However, provisions (excluding provision for tax) climbed to Rs 1,233 crore in Q2 compared to Rs 583 crore in Q2 of FY2024 and Rs 1,332 crore in the June 2024 quarter.
Total deposits climbed 15.7 per cent year-on-year to Rs 14,97,761 crore in the September 2024 quarter.
What Should Investors Do?
Jefferies has maintained its ‘Buy’ rating on ICICI Bank, raising the target price from Rs 1,460 to Rs 1,550. The bank’s growth in deposits is supporting loan expansion, and its asset quality has held up better than expected. Operating efficiencies are further aiding profitability, keeping ICICI Bank among Jefferies’ top picks.
Nomura maintained its ‘Buy’ rating on ICICI Bank, raising the target price from Rs 1,420 to Rs 1,575. The bank reported a flawless quarter, positioning it a cut above its peers, with strong loan and deposit growth and robust asset quality performance. Nomura expects premium valuations to sustain, projecting ICICI Bank to achieve a sector-leading 2.3% RoA and 18% RoE over FY25-27.
IIFL upgraded its rating on ICICI Bank from ‘Add’ to ‘Buy,’ raising the target price to Rs 1,480 from Rs 1,370. The upgrade is driven by three key factors: (1) anticipated higher pressure on net interest margins (NIMs) relative to peers has largely materialized; (2) the bank has recently cut operating expenses significantly; and (3) asset quality is improving beyond expectations. Despite ICICI Bank’s projected 20-25% higher profitability for FY26, its valuation premium to HDFC has narrowed to 9%.
Macquarie maintained its ‘Outperform’ rating on ICICI Bank, with a target price of Rs 1,350. The bank has successfully passed stress tests while sustaining growth and maintaining tightly controlled asset quality. Its PAT beat was driven by treasury income and low credit costs, though the trajectory of NIMs remains a key focus for investors.
Disclaimer:Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.
