Shares Of ICICI Bank Hit 52-Week High After Robust Q1 Earnings

ICICI posted a 40 per cent increase in its net profit after tax in the Q1 earnings on Sunday, beating analysts expectations by a huge margin

Controlled provisions and stable asset quality led to a strong quarter for ICICI Bank. ( Image Source :ABP Live )

Following a strong performance in the first quarter (Q1) earnings of financial year 2023-24 (FY24) reported on Sunday, ICICI Bank’s shares made some more noise with a record 52-week high price of Rs 1,008.7 on the stock exchanges on Monday. ICICI posted a 40 per cent increase in its net profit after tax in its Q1 earnings, beating analysts expectations by a huge margin. The bank reported a net profit of Rs 9,648 crore against the expectations of Rs 8,982 crore. This success led to a positive rating by top brokerages across the market. 

As per the Economic Times (ET) report, brokerage Motilal Oswal noted a combination of high-yielding retail and business banking portfolio along with a low-cost liability franchise behind the steady growth in the Net Interest Income (NII) for the bank. NII is a reflector of interest earned by the bank after measuring the difference between the interest borrowers pay to the bank and the interest paid by the bank to its depositors.

The brokerage emphasised on controlled provisions and stable asset quality as the major factors behind the steady quarter for the bank. ICICI’s Gross Non-Performing Assets (GNPAs) stood at Rs 31,822.4 crores for Q1FY24, down from Rs 33,163 crores in Q1FY23 and it's Net Non-Performing Assets (NNPAs) were down to Rs 5,381.8 crores in the reported quarter from about Rs 6,656.2 crores on a YoY basis. NPAs are loans or advances issued by the bank which are subject to late repayment or unlikely to be repaid by the borrower in full. 

"After a strong outperformance backed by robust earnings growth (3-year CAGR of 60 per cent), we estimate earnings growth to moderate to an 18 per cent CAGR over FY23-25, affected largely by a decline in margins and limited levers available on the opex/credit cost front,” the brokerage said. 

ICICI’s shares closed at Rs 991.95 and Rs 991.85 apiece, respectively, on the NSE and BSE respectively on Monday.