Shares of ICICI Bank have been trading around record high level of ₹958 that it had recently hit and the bullish momentum is seen to continue as out of 40 analysts – about 23 have strong ‘Buy’ recommendation for the banking stock, 16 ‘Buy’, 1 ’Hold’, and none have given ‘Sell’ rating, as per data by Refinitiv.
Post the lender’s analyst day, which focussed on strategic initiatives & priorities and, digitisation & network expansion along with SME, supply chain financing, ecosystem banking & retail as focus segments, global brokerage Jefferies said “At macro level, the management reaffirmed stronger growth with better retail borrower behaviour & corporate balance sheet. Despite no takeaways for near-term earning per se, visibility of growth runway is positive. ICICI stays among its top picks.”
The brokerage sees ICICI Bank delivering 19% CAGR in earnings over FY22-25E and ROE of 17% in FY24 as it believes valuations are also reasonable and insights from analyst day improves medium term visibility on strengthening of franchise. The brokerage has its Buy tag on the banking stock with a SOTP based target price of ₹1,150 apiece.
“ICICI’s digital strides to capture higher share of customer wallet are reflecting in higher market share across transaction products, cross-selling of 1mn+ retail products per month via app, new channels to acquire quality new-to bank customers, and quick scale-up of SME/BBG and unsecured loans. Change in focus to profitability at the bank level coupled with formidable prowess on technology and analytics puts ICICI Bank on a strong footing to deliver growth/ROE on sustainable basis,” said another brokerage Ambit with a target price of ₹1,025.
The strong Q2 earnings of the bank was led by growth in net interest income (NII), declining provisions, and return on assets. ICICI Bank shares have outperformed by gaining more than 25% in the last six months as compared to about 12% rise in benchmark BSE Sensex during the period.
Brokerage Prabhudas Lilladher also has Buy rating on ICICI Bank shares (TP: ₹1,090) as it believes that the lender would continue to profitably grow by focusing on superior customer experience.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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