ICICI Bank Q3 Review: Solid growth, stable asset quality impress analysts
ICICI Bank's Q3FY25 results impress with fifteen per cent profit growth, stable asset quality, and robust CASA performance, earning bullish ratings from top brokerages with price targets up to Rs 1,600.
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ICICI Bank delivered a stellar performance in Q3FY25, garnering positive reviews from brokerages due to its robust profit growth, stable asset quality, and superior execution compared to peers. The bank's focus on improving efficiency and maintaining its leadership in asset quality reinforced its position as a top choice for investors.
Earnings growth boosts investor confidence
India's second-largest lender reported a 15 per cent year-on-year rise in net profit to Rs 11,792 crore, showcasing its ability to sustain strong earnings momentum. Net interest income (NII) rose 9 per cent to Rs 20,371 crore, slightly below Zee Business estimates of Rs 20,634 crore. Despite a marginal dip in net interest margin (NIM) to 4.25 per cent from 4.27 per cent in the previous quarter, ICICI Bank's profitability metrics remain robust.
Asset quality remains a key highlight
The bank's gross non-performing asset (NPA) ratio improved marginally to 1.96 per cent, down from 1.97 per cent in Q2FY25 and 2.3 per cent a year ago. Net NPA stood steady at 0.42 per cent, reflecting a decline from 0.44 per cent in the previous year. Analysts commended ICICI Bank for maintaining pristine asset quality despite challenging market conditions.
CASA growth bucks industry trend
Brokerages highlighted ICICI Bank's exceptional Current Account Savings Account (CASA) growth, which outpaced the industry trend of declining deposits. This growth indicates strong customer confidence and a solid deposit base, which is critical in maintaining liquidity and funding stability.
Brokerages remain bullish with higher price targets
Several top brokerages reaffirmed their bullish outlook on ICICI Bank, citing its best-in-class metrics. Key highlights include:
- Kotak Institutional Equities: Price target of Rs 1,500, driven by superior execution.
- Jefferies: Target of Rs 1,600, emphasizing the bank’s resilience in asset quality.
- Bernstein: Rs 1,440 target, praising ICICI Bank's return on assets (RoA) and cost control.
- JPMorgan: Raised target to Rs 1,500, applauding its CASA performance.
Analyst verdict: A leader among peers
ICICI Bank's steady performance amidst a challenging macro environment reinforces its reputation as a reliable and growth-oriented institution. With brokerages unanimously positive, the bank remains a compelling investment for those seeking quality in the banking sector.
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