ICICI Bank Has Upside of 15%, Can Hit Rs 780: Jefferies

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ICICI Bank Has Upside of 15%, Can Hit Rs 780: Jefferies
Credit: © Reuters.

By Aditya Raghunath

Investing.com -- ICICI Bank Ltd (NS: ICBK ) declared its numbers for the first quarter of FY22, ended June 30. It reported a 78% increase in net profit at Rs 4,616 crore compared to Rs 2,599 crore in the corresponding quarter last year.

Net interest income (NII) for the June 2021 quarter increased 18% compared to Rs 9,280 crore in June 2020. The bank said that it changed its policy on non-performing loans adopting a more conservative approach.

“The change in policy resulted in higher provision on non-performing advances amounting to Rs 1,127 crore (US$ 152 million) for aligning provisions on outstanding loans to the revised policy,” it said.

International brokerage firm Jefferies has recommended a buy on the stock with a target price of Rs 780. It compared ICICI Bank to HDFC (NS: HDFC ) Banj and said that it trades at a discount.

“We see better traction on retail loan growth & NII (vs HDFCB) giving comfort. Growth in business banking (incl ECLG) has been supportive and clarity on asset quality/growth would improve visibility on NIM expansion. HDFCB’s recent results suggest limited risk to slippage/credit cost ests for ICICIB. Its discount to HDFCB’s vals has narrowed to 35-40%, but val at 2.1x is attractive & disc. could narrow to 25-30%. ‘buy’,” said Jefferies.

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