ICICI Bank share price zooms 12% post Q2 earnings, here's what brokerages say

Shares of ICICI Bank rose 12 per cent to hit an all-time high of Rs 853 on the Bombay Stock Exchange (BSE) after the bank posted a healthy set of numbers for the quarter ended September 2021.
 
ICICI Bank reported a 30 per cent year-on-year (YoY) rise in net profit at Rs 5,511 crore for the July-September quarter. Profit in the year-ago period stood at Rs 4,251.33 crore.
 
Net interest income (NII) rose 25 per cent YoY to Rs 11,690 crore during the quarter under review, while net interest margin (NIM) expanded to 4 per cent from 3.57 per cent in the year-ago quarter and 3.89 per cent in the preceding June quarter.
 
The stock opened 5 per cent higher at Rs 800 against the previous close of Rs 759.10 on the BSE. Market cap of the firm rose to Rs 5,93,858.87 crore. The shares stand higher than 5-day, 20-day, 50-day, 100-day, and 200-day moving averages.
 
According to Motilal Oswal, ICICI Bank reported a strong Q2 FY22, led by strong core PPOP performance, controlled provisions, and robust asset quality, with an NNPA ratio (less than 100bp) at the lowest level since Dec'14.
 
"On the asset quality front, slippages have moderated, and the management expects 2HFY22 to be much better. Provision coverage remains the best in the industry. The additional Covid-19 provision buffer provides comfort on credit cost. Restructured loans increased to 1.3 per cent of loans," the brokerage house noted.
 
"The bank carries 20 per cent provisions on this portfolio. We increase our estimates for FY22/FY23 by 5 per cent/2.5 per cent and expect RoA/RoE to improve to 2 per cent/16.6 per cent by FY24E. We maintain our Buy rating with a revised SoTP-based target price of Rs 1,000/share. ICICI Bank remains our top pick in the sector," it added.
 
"With improving core operating metrics, and healthy NIM/growth outlook, we further raise our standalone bank multiple to 2.7x from 2.5x earlier against RoA/RoE of 1.8 per cent/14 per cent for FY23E. We factor in credit costs of 90-95 bps over FY23-24E," said Dolat Capital in a research report.
 
"Tweaking our estimates marginally and rolling over to Sep-23E, we maintain our BUY recommendation on the stock with a SOTP-based target price of Rs 890, valuing the consolidated entity at 3.2x Sep-23E ABV. The stock currently trades at 2.7x Sep-23E PABV," it added.
 
CLSA has maintained a 'Buy' call and raised the target price to Rs 1,100 from Rs 1,000 per share. The brokerage house noted that the recent asset quality trends indicate credit costs will likely undershoot.
 
Credit Suisse has raised the target price to Rs 900 per share and also raised FY22-24 EPS estimates by 6-9 per cent on stronger NIMs.