ICICI Bank Shares Surge As Analysts Positive After Third-Quarter Earnings

Shares of ICICI Bank Ltd. rose over 1% on Monday after analysts increased their target price for the lender on better-than-expected earnings for the December quarter.

ICICI Bank reported nearly a 15% year-on-year rise in profit after tax at Rs 11,792 crore, exceeding analysts' expectations of Rs 11,495 crore, polled by Bloomberg. Provisions and contingencies for the quarter rose 17% on the year to Rs 1,227 crore.

Net interest income rose 9% on the year to Rs 20,371 crore. Meanwhile, net interest margin fell to 4.25% in the December quarter as against 4.27% a quarter ago and 4.43% a year ago.

IDBI Capital Research has raised its target price on the stock by 2% to Rs 1,490 and maintained its 'buy' rating as the brokerage remains positive on the private lender given its ability to maintain return on assets above 2%.

Motilal Oswal Financial Services has reiterated its 'buy' rating on the stock with a revised price target of Rs 1,550 on a healthy performance in the December quarter even in the current challenging environment led by controlled provisions, impressive cost control, healthy other income, and stable asset quality.

Gross non-performing assets ratio of the bank fell to 1.96% at the end of December as against 1.97% a quarter ago and 2.30% a year ago. Net NPA remained flat at 0.42% sequentially but was lower than 0.44% a year ago.

ICICI Bank's stock rose as much as 1.2% during the day to Rs 1,224.9 apiece on the NSE. It was trading 1.1% higher at Rs 1,221 apiece, compared to a 0.42% decline in the benchmark Nifty 50 as of 9:51 a.m.

It has risen 21.19% during the last 12 months. The total traded volume so far in the day stood at four times its 30-day average. The relative strength index was at 33.

Forty seven out of the 51 analysts tracking the company have a 'buy' rating on the stock, and four suggest a 'hold', according to Bloomberg data. The average of 12-month analyst price targets implies a potential upside of 23.3%.