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The shares of ICICI Bank recorded fresh highs during the morning trade on Monday after the private sector lender reported strong results for the quarter ended September 2021.
At 10:58 am, ICICI Bank was trading at ₹842.15, up ₹83.05 or 10.94 per cent. It recorded a fresh 52-week high of ₹853. It opened at ₹800 as against the previous close of ₹759.10. It recorded an intra-day low of ₹798.45.
On the NSE, it was trading at ₹843, up ₹83.70 or 11.02 per cent. It recorded a fresh 52-week high of ₹867.
The private sector lender reported a near 30 per cent jump in its standalone net profit for the second quarter of the fiscal with robust growth in net interest income and lower provisions.
The bank’s net profit was ₹5,510.95 crore for the second quarter ended September 30, 2021, a growth of 29.6 per cent over ₹4,251.33 crore in the same period last fiscal. Net interest income increased by 25 per cent year-on-year to ₹11,690 crore in the second quarter of the fiscal from ₹9,366 crore in the second quarter last fiscal.
The net interest margin increased to 4 per cent in the July to September 2021 quarter from 3.89 per cent in the quarter ended June 30, 2021 and 3.57 per cent in the second quarter last fiscal.
Other income grew by 19.08 per cent on a year-on-year basis to ₹4,797.18 crore in the second quarter of this fiscal.
The lender’s asset quality also improved further with net non-performing assets at 0.99 per cent of net customer assets was at the lowest level since December 2014.
Brokerages bullish
Brokerages are bullish on the stock given the strong numbers.
Motilal Oswal Research called it its top pick of the sector, giving the stock a Buy rating with a target price of ₹1,000.
“The steady mix of a high yielding portfolio (Retail/Business Banking) and a low-cost liability franchise is aiding margin expansion. The bank is seeing a strong recovery in business trends across key segments such as Retail, SME, and Business Banking. The Retail and Rural segment is showing robust trends, barring Commercial Vehicles. On the asset quality front, slippages have moderated, and the management expects 2HFY22 to be much better,” It said in a note.
It further increased its estimates for FY22/FY23 by 5per cent/2.5 per cent.
HDFC Securities also gave it a Buy rating with a target price of ₹885.
“A best-in-class liability franchise, risk-calibrated asset book, and industry-leading technology initiatives for new-to-bank (NTB) business sourcing are likely to drive ICICI Bank towards higher share of the profit pools and a 15 per cent RoE trajectory (Q2FY22: 14 per cent). We revise our FY22E/FY23E earnings forecasts by -0.3 per cent/1.6 per cent to factor in higher loan growth, partially offset by higher opex,” it said.
IDBI Capital, Emkay and LKP Securities also gave it a Buy rating with a target price of ₹945, ₹950 and ₹1,020, respectively.