ICICI Bank shares end 3.6% higher on strong Q4 performance

Our Bureau Chennai | Updated on April 26, 2021

Analysts expect stock will narrow gap with top peers

Shares of ICICI Bank jumped over 6 per cent in early trade on Monday as brokerages upgraded the stock following the lender’s strong performance in the quarter-ended March. According to analysts, the performance helped ICICI Bank narrow its gap with other private sector peers such as HDFC Bank and Kotak Mahindra Bank.

After gaining 6.14 per cent to hit a day's high of ₹604.90 on the BSE, ICICI Bank shares closed at ₹590.75, up 3.63 per cent, over the previous day's close.

Strong CASA

"ICICI Bank is well positioned on the liability side with retail deposits/CASA being 59 per cent/46 per cent of deposits which puts the bank in an advantageous position. This should help the bank in growing its balance sheet without hit on NIMs and without taking excessive balance sheet risk. Gross/net slippages/restructured loan trends in FY21 also reflect that worst of the asset quality pressure for the bank is over and it is closing the gap with HDFC Bank/Kotak Mahindra Bank," said Ambit Capital.

On Saturday, the private sector lender reported a 260 per cent increase in a standalone net profit of ₹4,402.61 crore in the quarter-ended March 31, 2021 with a robust increase in net interest income. Its standalone net profit stood at ₹1,221.36 crore in the fourth quarter of 2019-20. "With an end to the past 5-6-year intense corporate credit cycle, its improving granularity of earnings and potentially ICICI Bank being the new growth leader among large banks, we expect its rerating cycle to continue," said CLSA.

Elara Securities said with a strong beat on core PPOP and NIM, and strong loan growth in a pandemic year, the firm reiterates a ‘Buy’ rating on the stock. ICICI Bank has expanded market share in both corporate and retail loans, but not at the cost of profitability. “We believe ICICI Bank is closing the gap with HDFC Bank on loan growth and core PPOP growth," it added.

Published on April 26, 2021

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