Motilal Oswal Sees This Bank Stock Soaring After Q3 Result, Buy For Return Up To 32%

Motilal Oswal has recommended investors to buy large cap bank stock, ICICI Bank Ltd with a target price of Rs 1150 apiece. ICICI Bank announced another robust quarter with in-line earnings (RoA of 2.2%) despite making contingent provisions of INR15b and INR11.96b toward NPAs due to strict provisioning norms. If you buy the stock at last trading price of Rs 870.80 apiece, you will potentially receive a return of 32%. Check details below:

1. ICICI Bank Stock Performance & Return

The last trading price of ICICI Bank is Rs 870.80 apiece with intraday fall of 0.09%. The stock's 52-week high is Rs 958.00 apiece and 52-week low is Rs 642.00 apiece, respectively.

The bank has a market capitalisation of Rs 6,07,645.97 crore. The banking stock declined 6% in last 3-months, gave a return of 9% in last 6-months, 9% return in last 1-year, and 63% return in last 3-years. In last 5-years, the stock surged 146%.

2. Business Growth Robust

According to Motilal Oswal, "ICICIBC's 3QFY23 PAT grew 34% YoY (in line) to INR83.1b, aided by healthy NII growth and controlled opex, even as the bank continued to create contingent provisions (INR15b) and strengthen provisioning norms, which resulted in additional provisions of INR11.96b. The bank, thus, reported 3QFY23 annualized RoA and RoE of 2.2% and 17.6%, respectively. For 9MFY23, PAT grew 40% YoY to INR227.7b. NII grew 35% YoY (6% beat), aided by 34bp QoQ expansion in margins to 4.65% and healthy loan growth of 20% YoY."

3. Valuation

According to the analyst, "The bank is seeing a strong recovery across segments, while asset quality trends remain steady with industry best PCR at ~83%. The additional Covid-related provision buffer (1.2% of loans) provides further comfort. We estimate ICICBC to deliver RoA/RoE of 2.2%/17.0% in FY25. Reiterate Buy with our SoTP-based TP of INR1,150 (2.8x Sep'24E ABV)."

4. About ICICI Bank

ICICI Bank was incorporated in 1994 as a part of the ICICI group. In 1999, ICICI became the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the New York Stock Exchange.

In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank.

Disclaimer

The stock has been picked from the brokerage report of Motilal Oswal. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.