Is ICICI Bank the next HDFC Bank?
ICICI has closed the gap with HDFC Bank on most financial parameters. A stellar September quarter results sent its shares soaring 13 per cent intraday on Monday, making investors wonder whether more juice is left in the counter. At the prevailing levels, price targets suggest up to 28 per cent potential upside in the stock.
CLSA called the private lender best in class, as it increased target on the stock to Rs 1,100 from Rs 1,000. Net slippages were negligible with high recoveries, it said. Jefferies finds the stock worth Rs 1,000 as it believes the quarterly results were impressive on most counts.
JM Financial called September the perfect quarter for ICICI Bank and said the stock is up for rerating. It has a target of Rs 1,010 on the stock. Motilal sees the stock at Rs 1,000, Emkay Global at Rs 950, Edelweiss Rs 890 and Goldman Sachs at Rs 829.
The stock rose 12.95 per cent to hit a 52-week high of Rs 859.15 on BSE.
“We see ICICI hitting the 2 per cent RoA mark by FY24 which should drive a substantial valuation rerating from current core banking business valuation of 1.9 FY24 BVPS. We raise our target multiple to 2.75 times FY24E BVPS for the core banking business and maintain a BUY rating with a revised target price of Rs 1,010,” JM Financial said.
Emkay Global said the bank’s asset quality was better than expected.
“A leg-up from robust subsidiaries reinforces our positive view. We continue to earmark ICICI as our top pick,” Edelweiss said while setting a target of INR 890 on the stock.