ICICI Bank rallies over 3% post strong Q2 show: Should you buy, sell or hold?

Shares of  ICICI Bank rallied over 3 per cent in early trade on Monday (October 28) after the leading private sector lender released its quarterly numbers on Saturday. Ahead of the results, the bank's shares ended 0.23 per cent higher at Rs 1,255.5 apiece on the BSE.

At the last count, shares were up 3.37 per cent or Rs 42.35 at Rs 1,297.85 apiece, while at the day's high it scaled to Rs 1,299.1 per share.

For the Q2 period, the lender posted strong financial performance with standalone net profit climbing 14.5 per cent on year to Rs 11,746 crore during the reporting quarter. The private sector lender had earned a net profit of Rs 10,261 crore in the same quarter of the previous financial year. Zee Business research estimated profit at Rs 10,952 crore. 

The net interest income (NII) at the lender also grew 9.5 per cent to Rs 20,048 crore in the review period as against 18,308 crore in Q2FY24. This metric that is the difference between interest earned and spent came in better in comparison to Zee Business estimates at Rs 19,931 crore.

What do global brokerages suggest for ICICI Bank stock post-Q2 show?

Hong Kong-based global brokerage has continued with its óutperform' call on the stock with the target raised to Rs 1,600 from the earlier Rs 1,500 per share. The set target implies an upside of over 27 per cent from the previous close. According to the brokerage, the lender delivered yet another steady quarter. Furthermore, balance sheet growth remained in mid-teens, while net interest margin (NIM) moderated 5-10bps sequentially.

The PPOP or Pre-Provision Operating Profit grew faster than NII, driven by operating leverage, it added.

Meanwhile, Nomura also suggested a 'buy' on the stock with the target raised to Rs 1,575 from the earlier Rs 1,420. As per the brokerage, the bank reported a flawless quarter with strong loan and deposits growth. Also, asset quality performance remained robust at the lender.

The brokerage has raised the lender's FY25-27F EPS estimates by 2-3 per cent, factoring in lower opex & slightly lower credit cost.

Other brokerages including Jefferies and JP Morgan have also continued with their earlier stance of 'buy' and 'overweight' respectively, with targets raised to Rs 1,550 and Rs 1,400 per share. 

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