ICICI Bank vs Axis Bank: Stock price targets, technicals, valuation, financial metrics and more

Shares of private sector lenders ICICI Bank Ltd and Axis Bank Ltd are among the top picks of investors in the banking sector apart from market leader Axis Bank whose stock is on a recovery path post correction after Q3 earnings.

The stocks of these two banks, which are major players in the banking industry form a major chunk of the portfolio of long-term investors. In terms of returns, ICICI Bank has delivered higher returns compared to Axis Bank in the last five years.

While shares of ICICI Bank rose 181 per cent, Axis Bank stock gained 42.54 per cent in five years. Axis Bank shares have fallen 2% in 2024. ICICI Bank shares, on the other hand, have clocked 8.55% returns this year.

Currently, both shares stand below their 52 week high levels.

ICICI Bank stock rose to a 52-week high of Rs 1113.35 on March 6, 2024. In the previous session, the ICICI Bank stock ended at Rs 1086.85 mark on BSE.

Axis Bank shares rose to a 52-week high of Rs 1,151.50 on December 5, 2023. Axis Bank stock ended at Rs 1075.20 mark on BSE in the previous session.

VALUATION

ICICI Bank has a price to book ratio of 3.63. It has a PEG ratio of 0.5. A stock having PEG less than 1 is considered undervalued and with PEG ratio above 1 is regarded as an overvalued one.

On the other hand, Axis Bank price to book ratio stands at 3.53. ICICI Bank has a PEG ratio of 2.56.

Here’s a look at key metrics, which reflected the financial health of both lenders as of December 31, 2023.

Return on Assets

Return on assets (RoA) of Axis Bank at the end of Q3 stood at 1.84%. On the other hand RoA of ICICI Bank came at 2.19% at the end of December 2023 quarter. RoA is the ratio of how profitable a company is compared with its total assets.

CASA Ratio

The CASA ratio of Axis Bank stood at 42% as of December 31, 2023. On the other hand, CASA ratio of ICICI Bank stood at 39.4% as of December 31, 2023.

Net interest margin

Net interest margins (NIMs) of Axis Bank stood at 4.01% in the last quarter In case of ICICI Bank, net interest margins (NIMs) fell to 4.4% in the last quarter against 4.65% in the December 2022 quarter.

Capital adequacy ratio

Capital adequacy ratio (CAR) of Axis Bank stood at 16.63% as on December 31, 2023. ICICI Bank's capital adequacy ratio (CAR) stood at 16.42% as on December 31, 2023.

Net Interest Income

Net Interest Income (NII) of Axis Bank climbed 9% to Rs 12,532 crore in the third quarter against Rs 11,459 crore in Q3 of the last fiscal. On the other hand, NII of ICICI Bank climbed to Rs 18678 crore in the third quarter against Rs 16,465 crore in Q3 of the last fiscal.

STOCK MOVEMENT

Axis Bank stock ended 1.61% higher at Rs 1075.20 on Monday. The banking stock is trading neither in the oversold nor in the overbought territory as the relative strength index (RSI) of Axis Bank stands at 54.4. The stock has risen 7.42% in six months. Market cap of Axis Bank climbed to Rs 3.31 lakh crore amid a rally in the broader market.

Total 3.98 lakh shares of the firm changed hands amounting to a turnover of Rs 42.70 crore on BSE. Axis Bank stock has a one-year beta of 0.4. This signals the stock has low volatility.

The large cap stock is trading higher than the 5 day, 10 day, 100 day, 150 day and 200 day moving averages.

On the other hand, ICICI Bank stock ended higher at Rs 1087.15. The banking stock is trading neither in the oversold nor in the overbought territory as the relative strength index (RSI) of ICICI Bank stands at 56.6. Market cap of ICICI Bank stood at Rs 7.44 lakh crore on Monday.

ICICI Bank stock has a one-year beta of 0.6. This signals the stock had low volatility during the period. The large cap stock stands higher than the 5 day, 10 day, 100 day, 150 day and 200 day moving averages.

Here is a look at what brokerages said on the prospects of the banking stocks.

Among the two banking players, brokerage Motilal Oswal is bullish on ICICI Bank stock. “We continue to prefer ICICI Bank on its steady return ratios and its ability to deliver superior growth. We thus estimate ICICI Bank to deliver FY26E RoA/RoE of 2.2%/17.8% vs. Axis Bank RoA/RoE of 1.7%/17.1%” said the brokerage.

Global brokerage Nomura has assigned a buy call to the stock with a target price of Rs 1250.

Nomura expects Axis Bank to report healthy returns on assets (RoAs) or return on equity (RoE) of 1.7 percent or 18 percent and strong earnings per share (EPS) CAGR of 16 percent over FY24-26F.

"While Axis Bank may go through a period of loan growth moderation, book value compounding should continue to be strong and we continue to like the franchise," the brokerage firm said.

Domestic brokerage Sharekhan has a price target of Rs 1,300 on the ICICI Bank stock.

“The bank has been consistently sustaining its growth leadership while simultaneously managing a superior asset quality. We believe the bank is on the path of delivering a sustainable and predictable earnings growth trajectory. Despite NIMs contraction and normalisation of credit costs, we see the bank sustaining its RoA over 2% in near to medium term. Key monitorable remains that the bank should be able to keep healthy deposit mobilisation in line with the loan growth in order to sustain healthy growth given tight liquidity conditions,” said Sharekhan.