ICICI Bank shares rise over 2% as Q1 performance impresses Street. Should you invest?

Shares of personal lender ICICI Financial institution rise 2.5% on Monday on BSE to its day’s excessive of Rs 1436.70 after the financial institution on Saturday reported a 14.6% year-on-year (YoY) bounce in its standalone revenue after tax to Rs 11,059 crore for the June quarter.

The financial institution’s web curiosity earnings (NII) for the quarter rose by 7.3% YoY to Rs 19,553 crore whereas the online curiosity margin was 4.36% in Q1 in comparison with 4.40% in This fall of FY24 and 4.78% in Q1 of FY24.

Throughout the quarter, ICICI Financial institution’s payment earnings grew by 13.4% YoY to Rs 5,490 crore in Q1. Charges from retail, rural, enterprise banking, and SME prospects constituted about 78% of whole charges.

The NII of the financial institution was in step with ET Now ballot estimates whereas PAT was above expectations. Right here is how analysts seen the quarterly outcomes:

Morgan Stanley: Chubby| Goal worth: Rs 1,500

The worldwide brokerage agency has maintained an chubby name on ICICI Financial institution and hiked the goal worth to Rs 1,500 vs Rs 1,400The supply stood uninterrupted and Morgan Stanley expects the inventory to do properly submit sturdy F1Q25. RoAs have been properly above normalized ranges and had room to soak up potential margin normalisation. The inventory is well-placed to soak up potential regulatory modifications.

Nuvama: Purchase| Goal worth: Rs 1,450

Nuvama stated that ICICI Financial institution turned in sturdy earnings and outperformed on three key considerations plaguing its friends in Q1FY25: asset high quality, LDR and NIM. Loans grew 15% YoY/3% QoQ whereas the 4bp QoQ dip in NIM is decrease than anticipated and the QoQ enhance in slippage of 11% YoY can be decrease than friends and expectations. Regardless of elections and the heatwave, ICICI’s retail slippage ratio declined YoY. Core PPOP grew 11% YoY/remained flat QoQ because of the seasonal sequential spike in opex.

ICICI Financial institution stays essentially the most constant in delivering core earnings and granular progress.

Macquarie: Outperform| Goal worth: Rs 1,300

Macquarie retained an outperform score on the financial institution with a goal worth of Rs 1,300.

PAT was in line and a excessive opex offset by excessive payment earnings was seen whereas the credit score price is more likely to normalize to 50bp in close to time period. Macquarie believes that margin stress will stay within the close to time period

IIFL: Add| Goal worth: Rs 1,320

IIFL has maintained an add score on ICICI Financial institution with a goal worth of Rs 1,320.

The expansion was wholesome whereas the NIM stress ought to persist. The financial institution’s asset high quality was steady and credit score prices are more likely to inch-up. IIFL expects valuation premium to slim.

(Disclaimer: Suggestions, recommendations, views and opinions given by the specialists are their very own. These don’t symbolize the views of Financial Instances)