ICICI Bank Posts Solid Earnings, Impressing Analysts
ICICI Bank has once again delivered a strong quarter, with steady earnings growth that has garnered positive reactions from analysts across the board. The bank’s solid performance, particularly its stable asset quality and superior growth compared to peers, has kept investor sentiment upbeat.
Shares of ICICI Bank opened nearly 1% higher on January 27 and were trading at ₹1,216.95 on the NSE by 9:34 am.
Stable Asset Quality and Strong Profit Growth
For the December quarter (Q3FY25), ICICI Bank showed stable asset quality. Its gross non-performing assets (NPA) ratio improved to 1.96%, down slightly from 1.97% in the previous quarter and significantly lower than 2.3% a year ago. The net NPA remained steady at 0.42%, reflecting improvement from 0.44% in the same period last year.
The bank also reported a 15% year-on-year increase in net profit, which reached ₹11,792 crore. Additionally, net interest income (NII) grew by 9% to ₹20,371 crore, although net interest margin (NIM) saw a small dip, coming in at 4.25%, down from 4.27% in the previous quarter and 4.43% last year.
Analyst Sentiment: Positive Across the Board
Brokerages are largely optimistic about ICICI performance, with firms like Kotak Institutional Equities, Nuvama Institutional Equities, CLSA, Bernstein, Jefferies, and JPMorgan maintaining ‘buy’ or ‘outperform’ calls on the stock.
- Kotak Institutional Equities, with a price target of ₹1,500, praised ICICI Bank’s execution, which they believe has led to best-in-class metrics.
- Jefferies highlighted the bank’s asset quality, which remains strong compared to its peers, setting a price target of ₹1,600.
- Bernstein pointed out that ICICI Bank’s return on assets (RoA) is significantly higher than that of its peers, driving strong 14% EPS growth. They also noted that the bank’s cost control continues to support its stellar performance. Bernstein has set a price target of ₹1,440.
- JPMorgan echoed these sentiments and raised its target price for the stock to ₹1,500, while Nuvama expressed confidence in ICICI Bank’s strong CASA growth, with a price target of ₹1,470.
Strong Outlook Despite Slight NIM Dip
Even though there was a slight dip in NIMs for the quarter, analysts believe that ICICI Bank’s pristine asset quality and impressive CASA growth make it one of the top performers in the banking sector, outpacing competitors. Overall, the outlook for ICICI Bank remains positive, with analysts confident in its ability to continue delivering strong results.
