With a market capitalization of Rs 631,828 crores, shares of ICICI Bank Limited hiked about 2.2 per cent and closed at a price of Rs 905.30. In the last one month period, the stock has generated returns of around 7 per cent for its stakeholders.
The surge in prices today was observed after the company announced its results for FY22-23. Details of the same are discussed later on in the article.
Founded in 1994, ICICI Bank is a commercial bank providing a variety of services such as commercial lending, wealth management, corporate finance, insurance, etc. The lending portfolio of the bank comprises term loans, working capital loans, overdrafts, cash credit (CC), collateral-free loans, etc.
Having a look at the financials of the Bank, the total income reported has increased from Rs 47,860 crores in Q3 to Rs 53,923 crores in Q4. Moreover, the net profits, during the same period, have witnessed a shift from Rs 8,792 crores to Rs 9,853 crores.
Having a YoY comparison of the above-mentioned metrics, the total income increased from Rs 1,57,536 crores in Q3 to Rs 1,86,179 crores in Q4 and net profits, keeping the same timeframe, increased from Rs 25,110 crores to Rs 34,037 crores.
Getting into the Bank-specific parameters, the net NPA ratio has reduced from 1.24 during FY20-21 to 0.81 in FY1-22. Moreover, the CASA ratio improved from 46.17 per cent in FY20-21 to 48.6 per cent during FY21-22.
The profitability metrics of the Bank have also shown operational efficiencies with the return on equity (ROE) ratio going up from 14.74 per cent in FY20-21 to 15.49 per cent in FY21-22 and return on capital employed (ROCE) ratio moving up as well from 10.91 per cent during FY20-21 to 12.96 per cent in FY21-22.
Nuvama gave a ‘Buy’ tag to the Bank with a target price of Rs 1,165 indicating an upside of around 30 percent as compared to the current price levels.
The rationale behind giving such a recommendation is the healthy credit growth in the Retail and SME sector, stable asset quality, and showcasing decent performance in the net interest margins, etc.
Written by Amit Madnani
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