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.


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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. 


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