ICICI Bank’s share price jumped one per cent on Monday to touch an height of Rs 761.5 on the Bombay Stock Exchange (BSE) after the private lenders reported a 59 per cent on-year jump in net profit to Rs 7,019 crore for the quarter ending March.
In the past year, ICICI Bank shares have rallied 28 per cent. Brokerages remain bullish on the stock and see up to 43 per cent upside going forward on account of a positive asset quality outlook.
“We expect return ratios to remain strong given the bank’s digital push, which will keep open in check; high PCR, which will provide comfort on the credit cost front; and consistent mid-to-high teens credit growth,” said brokerage firm Edelweiss Securities in its Wealth Research report.
The bank’s asset quality improved as gross non-performing assets fell to 3.60 per cent of gross advances as of March 31, 2022, from 4.96 per cent in the corresponding period a year ago.
Net NPAs also declined to 0.76 per cent from 1.14 per cent at the end of the fourth quarter of the previous financial year.
After ICICI Bank delivered an exceptionally strong performance with 60 per cent on-year earnings growth led by around 20 per cent on-year operating profit growth. ICICI Bank stock remains Kotak Securities’ top pick. “It is one of the few large banks with a simple thesis ahead with no merger headwinds. We maintain BUY with FV at Rs 975,” the brokerage said.
According to the analysts the progress made thus far has been good and the bank is in a strong position to compound its earnings. The brokerage expects consistent returns and lower shocks to earnings to result in the bank taking the leadership position among the large banks.