ICICI Bank hits 10-month high, nears 52-week high on robust growth prospect

ICICI Bank's likely strong delivery on growth, asset quality and return ratios, despite the Covid-19-induced disruption, will call for a re-rating, say analysts

Shares of ICICI Bank hit a 10-month high of Rs 538, up 2 per cent, on the BSE on Thursday in an otherwise range-bound market on expectation of higher growth going forward.

Stock of the private sector lender was trading at its highest level since February. Moreover, it is 2 per cent away from its 52-week high level of Rs 550 touched on February 2, 2020. In comparison, the S&P BSE Sensex was up 0.19 per cent at 47,837 points at 01:51 pm. Most the brokerages have upbeat outlook on the bank and have 'buy' rating with the target price (TP) in the range of Rs 550 to Rs 600.

Analysts at Emkay Global Financial Services, for instance, believe that ICICI's likely strong delivery on growth, asset quality and return ratios, despite the Covid-induced disruption, coupled with its evolution as a strong retail-cum-digital bank will call for a re-rating. The brokerage firm retains Buy/Overweight stance on the stock in Emkay Alpha Portfolio with a revised TP of Rs 600.

"ICICI Bank has made adequate investments in digital platforms, leading to virtually no outages - unlike its large peers that have recently faced regulatory ire - and better customer wallet share/profitability. The bank believes that its focus on balanced 'Phygital strategy' and customer life-cycle banking should lead to better revenues, cost savings - boosting core-profitability in the long run," the brokerage firm said in a stock update note.

Meanwhile, those at HDFC Securities draw comfort from the management's confidence in kick-starting growth in its corporate portfolio. "ICICI Bank hosted an analyst day to showcase its suite of digital capabilities, neatly dovetailing into its growth-profitability strategy. Incrementally, the bank’s comfort and confidence in kick-starting growth in its corporate portfolio holds a gradual re-rating potential on the back of reducing concentration risk from a single growth/profit engine," the brokerage firm said.