ICICI Bank hits 52-week high as private lender woos Street with strong Q1 results

ICICI Bank shares scaled a 52-week high on Monday, after the private sector lender reported a strong set of quarterly numbers during the weekend. The stock of ICICI Bank — India's second-largest lender by market value — rose by as much as Rs 11.3 or 1.1 per cent to Rs 1,008 apiece on BSE, surpassing its existing 52-week peak hit on Friday.

ICICI Bank Q1 results

On Saturday, ICICI Bank reported a 39.7 per cent year-on-year increase in net profit to Rs 9,648.2 crore for the April-June period, beating analysts' estimates. Its net interest income (NII) — or the difference between interest earned and interest paid — grew 38 per cent to Rs 18,226.5 crore for the first quarter of the current financial year, according to a regulatory filing.

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The private sector lender's net interest margin (NIM) — a key measure of profitability — came in at 4.78 per cent for the June quarter as against 4.9 per cent for the previous three months, according to the filing. Read more on ICICI Bank Q1 results

The lender beat analysts' estimates in most parameters. According to Zee Business research, ICICI Bank's quarterly net profit was estimated at Rs 9,160 crore, NII at Rs 17,780 crore and NIM at 4.8 per cent.

ICICI Bank's asset quality remained steady as expected

ICICI Bank's gross non-performing assets (NPAs) — or gross bad loans — as a percentage of total loans came in at 2.76 per cent for the June quarter as against 2.8 per cent for the previous three months. Its net NPAs stood at 0.48 per cent, unchanged sequentially.

EDITOR'S TAKE | Best results in banking space

Zee Business Managing Editor Anil Singhvi pointed out that ICICI Bank's quarterly performance was the best in the entire banking sector, with asset quality as well as deposit growth best in nine years.

Singhvi also highlighted that the lender's restructuring book was the lowest in 10 quarters. He expects a higher range in ICICI Bank shares at Rs 1,025-1,040 levels.

How brokerages read ICICI Bank's Q1 results

According to Morgan Stanley, which maintained an 'overweight' rating on ICICI Bank and raised its target price for the stock by Rs 75 to Rs 1,350, the lender's deposit growth of 18 per cent helped it sustain its strong growth in domestic loans, and asset quality was strong. The brokerage's target price suggests upside potential to the tune of 35 per cent from Friday's closing price.

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