Buy This Banking Stock For Sharp 21% Return, Steady Performance On NII, Operating Profit & Earnings: Sharekhan

Reputed brokerage firm Sharekhan, in a report, suggests investors buying the stocks of ICICI Bank. The firm said that sustainable business performance along with improving return ratios matrix makes it our preferred pick in the banking sector.

Stock To Buy: Target Price, Current Market Price

The Current Market Price (CMP) of ICICI Bank is Rs. 800. Sharekhan has estimated a Target Price for the stock at Rs. 970. This stock has the potential to give a 21.25% return, in the upcoming 1 year. This is a large-cap stock with a market capitalization of around Rs. 557,154 crore.

Stock Outlook
Current Market Price (CMP)	Rs. 800
Target Price	Rs. 970
Potential 1 year return	21.25%
52 week high share price	Rs. 867
52 week low share price	Rs. 642.15

ICICI Bank reported steady performance on all fronts - NII, core operating profit, earnings, and advances recorded healthy growth with better asset quality and minimal core credit cost during the quarter. The bank reported PAT at Rs. 6,905 crore, which was significantly above street's expectations of Rs. 6,260 crore, mainly led by higher PPoP (led by treasury income) and lower core credit costs. PAT grew by 42% YoY/-2% QoQ.

Sharekhan: Why Should You Buy This Stock?

"The bank reported steady performance on all fronts - NII, core operating profits, earnings, and advances recording healthy growth with better asset quality and lower core credit cost. We believe the bank is on an accelerated growth path trajectory with strong advances growth, led by retail, business banking, and SME. The bank's continuous building up of its digital capabilities and growing franchise sustainably in a risk-calibrated approach are likely to bode well for future growth going ahead. With high PCR, strong balance sheet, improved asset quality, and improved return ratios matrix, the bank is set to see good earnings compound going ahead," Sharekhan stated.

The key risks of the stock are economic slowdown due to which slower loan growth and higher-than-anticipated credit cost especially from BB and below-rated corporate portfolio and unsecured retail book could affect earnings.

Company profile: ICICI Bank

ICICI Bank is India's second-largest private bank and has a leadership position in other financial services businesses through its subsidiaries. The bank offers the entire spectrum of financial services to customer segments covering large and mid-corporates, MSME, agriculture, and retail businesses. Core PPoP grew by 19.4% YoY/1.1% QoQ despite higher opex growth (25% YoY/7% QoQ). Asset quality improved with both GNPA and NNPA ratios falling by 19 bps QoQ and 6 bps QoQ to 3.41% and 0.70%, respectively, during the quarter.

Disclaimer

The above stock was picked from the brokerage report of Sharekhan. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.