ICICI Bank share price: Should you Buy, Sell or Hold?

ICICI Bank share price: What's happening?

ICICI Bank share price have been on an uptrend in the last few weeks. ICICI Bank and HDFC Bank started together in 1994. However, HDFC Bank has held onto its top position for years in the Indian private banking space. Change is inevitable, and we can see it happening now. If we talk of the favourite bank of Dalal Street, ICICI Bank seems to be winning the race.

ICICI Bank's share has outperformed the NIFTY and Bank NIFTY in 2022. ICICI Bank share has delivered over 14% returns to investors compared to flat NIFTY and 10% returns of Bank NIFTY. In the past five years, ICICI Bank's share has delivered nearly 3X returns to investors.

Quick fact: ICICI Bank was the first Indian bank to list on the NYSE (New York Stock Exchange) with its 5 million American depositary shares issuing a demand book 13 times the offered size.

ICICI Bank share price: Deepdive

ICICI Bank: Underperformance in the past (2018-19)

Investors who have been tracking ICICI Bank since 2018 would know that the bank was in trouble in 2018-19, and the same was reflected in its share price. If you are unaware of the bank's past trouble, let us sum it up for you:

In 2017-18, the bank made many strategic blunders, the biggest being switching its lending activities from retail to corporates when there were global financial crises.
It also opted to lend to major infrastructure projects which turned out to be a disaster as many of those projects failed. ICICI Bank's Non-performing Loan spiked to 9% in 2018.
Questions were raised about the leadership as the profits fell sharply and the bank reported the first loss from its domestic operation in its history for June'18 quarter. Then CEO, Chanda Kochhar, had to leave the bank.

ICICI Bank share price: Why is stock price increasing?

Under the new leadership, the bank started the recovery process but the journey was halted by the pandemic. However, in the past two years, the efforts have resulted in better quarterly numbers, and investors are applauding the same. Below are some reasons for ICICI Bank's share price rally:

Strong quarterly numbers: ICICI bank has continuously reported strong quarterly results witnessing a strong recovery across key segments such as SME, Retail, and Business Banking. Bank's asset quality trends remain steady, while PCR is one of the best in the industry.

Sandeep Bakshi's leadership: When Sandeep Bakshi took the leadership in late 2018, the bank was not in good shape, and investors feared it could take years to fix the problems. The man worked quietly and resolved all the issues. After fixing the processes across functions and departments, he galvanised the team into action, and together they strategized for the future. The balance sheet became stronger with a higher provision coverage ratio.

Best risk-reward ratio: Last month, Jefferies stated that ICICI bank offers the best risk-to-reward ratio among all global banks. The bank is better placed as it has lower exposure to riskier sectors or unsecured retail loans.

NPA continues to lower: As mentioned above, in the past, ICICI bank has suffered because of its higher NPA. However, the situation is changing. For the June quarter, the Gross NPA ratio declined to 3.41% from 3.60% in the March quarter, and 5.15% in the year-ago quarter.

ICICI Bank share price insight

Out of 990 trading days that ICICI Bank has seen in the last 4 years, below are the ICICI Bank share price movement insights:

ICICI Bank share price ended in green on 510 trading days
ICICI Bank share price ended in red on 478 trading days
ICICI Bank share price remained unchanged on 2 days

ICICI Bank: Highlights from Apr-June 23 earnings

Profit: The Bank's net profit grew 49.59% year-on-year to Rs 6,904.94 crore on the back of a healthy rise in Net Interest Income.
NII: Net interest income grew at 20.8% YoY to Rs 13,210 crore. Sequentially, the NII increased 4.8% from Rs 12,604.56 crore.
Provisions fell: The total provisions during the quarter were Rs 1,144 crore or about 11.1% of core operating profit and about 0.53% of average advances.
Deposits: Total deposits rose 13% year-on-year to Rs 10.50 lakh crore. Average current account deposits increased by 23% YoY, while average saving account deposits increased by 19% YoY.

ICICI Bank share price target 2022

Motilal Oswal: The firm has maintained a BUY rating with a target price of Rs 1050 per share. The firm added that with strong asset quality, loan growth is getting broad-based, and margin is likely to improve aided by the recent RBI rate hikes. They estimate RoA/RoE to improve to 2.1%/17.1% by FY24.

Jefferies: The international brokerage firm has given a BUY rating with a target price of Rs 1100 per share. The firm expects ICICI Bank to deliver a 17% CAGR in profit over FY22-25 and an ROE of 16%. The bank has successfully ramped up SME and unsecured retail loans and improved asset quality.

Edelweiss: Analysts' at Edelweiss have maintained BUY rating with target price of Rs 1020 per share. ICICI Bank has delivered a solid quarter, the seventh in a row, outperforming consensus PAT by 17% and beating peers on loan growth, NII growth, treasury, and GNPLs. They expect an RoE of 16% for FY24E for ICICI, higher than the merged RoE of 14% for HDFC Bank.

Nirmal Bang: The firm has given a BUY call with a target price of Rs 1079 per share. Analysts at the firm see further scope for margin expansion on the back of the room for improving the C/D ratio further, coupled with a higher share of unsecured retail loans. The management sounded confident about credit demand but with a cautious undertone given the inflationary environment and global disturbances.

ICICI Bank share price: More from INDmoney

The stock recommendations in this blog are by the respective research analysts and brokerage firms. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.

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