Shares of ICICI Bank hit a record high. Brokers are still motivated and give a 4-digit target price. | Techno Glob

Shares of ICICI Bank traded at record highs. 885 and brokers see more bullish momentum in the bank stock after its annual report. ICICI Bank’s annual report reaffirmed that the bank is making good progress in efforts to strengthen its balance sheet with a strong focus on retail, analysts said.

ICICI Bank has a strong PPOP; It reported strong performance, led by controlled provisions and stable asset quality. A mix of high-yielding portfolio (retail/commercial banking) and low-cost liability services business is contributing to margin expansion.

“With asset quality strengthening due to broad-based loan growth and margin strengthening due to recent RBI rate hike, we forecast RoA/RoE to improve to 2.1%/17.1% in FY18. We maintain our Buy rating with SoTP-based target price. 1,050,” said Motilal Oswal. ICICI Bank remains its top stock pick in the banking sector.

In ICICI Bank’s FY22 annual report, global brokerage Jefferies highlighted that PSL compliance cost on agriculture credit doubled PSL cost (PBT of 4%) and increased NPL ratio to 5.3%.

“By successfully growing SME and unsecured retail loans and improving asset quality, the bank has the medium to invest in deep markets with 11% more branches in 4 years than Axis & HDFCB and 30% more than Axis & HDFCB. Deposit franchise & ALM were strong and RWA/asset fell to 63%. We see healthy growth and ROE. We expect ICICI Bank to deliver 17% CAGR and 16% ROE over FY22-25. Even in the context of global banks, valuations appear attractive,” the broker said while maintaining a buy rating on ICICI Bank shares at a target price. 1100 each.

The bank is retail, Key sectors such as SME and Business Banking are witnessing a strong recovery. The lender’s asset quality trends remain stable and the provision coverage ratio (PCR) remains one of the best in the industry, Jefferies added in a note.

The views and recommendations expressed above are those of individual reviewers or brokerage firms and not of Mint.

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