ICICI Bank shares rise after strong results. Should you buy, hold or sell the stock?

ICICI Bank shares rose on Monday, after the country's second largest lender reported a strong set of quarterly financial results. The ICICI Bank stock climbed by as much as Rs 13.6 or 1.6 per cent to Rs 883.9 apice on BSE. Brokerages have largely positive views on ICICI Bank, with targets implying a potential upside as high as 43.6 per cent.  

On Saturday, the bank reported a 34.2 per cent increase in net profit to Rs 8,311.8 crore for the October-December period on the back of 34.5 per cent growth in net interest income — or the difference between interest earned and interest paid — to Rs 16,465 crore compared with the corresponding period a year ago. 

Its net interest margin  —  a key measure of profitability for lenders — improved by 34 basis points sequentially to 4.65 per cent, according to a regulatory filing. 

According to Zee Business research, the lender's quarterly net profit was estimated at Rs 8,120 crore, NII at 15,730 crore and NIM growth at 10-15 bps. 

ICICI Bank's gross non-performing assets (gross bad loans) as a percentage of total loans shrank by 12 bps on a quarter-on-quarter basis to 3.07 per cent, better than the analysts' estimates.

Net bad loans improved by six basis points to 0.55 per cent, as against the Zee Business research estimate of no change.

The lender's provisions increased 12.5 per cent on year to Rs 2,257.4 crore, according to the filing.

What brokerages say after ICICI Bank results

Morgan Stanley maintained an 'overweight' rating on ICICI Bank with a target price of Rs 1,250, implying upside potential of 43.6 per cent compared with the closing price on Friday.  

The brokerage said the lender reported another strong quarter with growth of 30 per cent in core pre-provision operating profit (PPoP), but added that the question remains whether this rate can be sustained at 18-20 per cent in two financial years ending March 2025. 

Citi retained a 'buy' on ICICI Bank and raised its target price for the stock by Rs 20 to Rs 1,100.

ICICI Bank shares grew 3.3 per cent in value in the quarter ended December 2022, a period in which the Sensex benchmark rose 5.9 per cent.

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