Shares of ICICI Bank rallied over 11 percent intraday to record high of Rs 600.70 apiece on the back of strong earnings for the third quarter of fiscal 2021 leading to brokerages’ bullish view on the stock.

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ICICI Bank, the country's second-largest private sector lender, reported a 19.1 percent jump in its Q3FY21 net profit at Rs 4,939.6 crore as against Rs 4,146 crore for the corresponding period of the previous fiscal. CNBC-TV18 Poll had predicted a profit of Rs 4,269.4 crore for the quarter under review.

The bank’s net interest income rose 16 percent to Rs 9,912.5 crore from Rs 8,545.3 crore, YoY.

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ICICI Bank Q3 results: Profit rises 19.1% YoY to Rs 4,939.6 crore; beats estimates

The reported gross non-performing assets ratio was at 4.38 percent, but would have been 5.42 percent if not for the Supreme Court order asking banks not to classify non-paying loan accounts as NPAs after the end of the loan repayment moratorium.

Its overall provisions increased to Rs 2,741 crore from the year-ago period's Rs 2,083 crore, but lower when compared to the preceding quarter's Rs 2,995 crore, as per its exchange filing.

Here’s what brokerages have to say on the bank’s earnings:

CLSA

CLSA increased its earnings 9 percent-18 percent over FY21-23CL factoring in lower credit costs and a better PPOP. It expects ROE to normalise at +15 percent by FY23CL with potential upside driven by the undershooting of credit costs over the next two years.

CLSA also expects ICICI Bank’s rerating journey to continue and hence increased its target price to Rs 800 per share from Rs 675 earlier.

Jefferies

The brokerage upgraded its earnings estimates on the back of a tad better top line and lower credit cost. It reiterated the 'Buy' call and raised the price target to Rs 700 per share from Rs 670 earlier.

UBS

UBS maintained 'Buy' rating and also raised the target price to Rs 700 per share. It noted the bank’s strong operating performance and stable asset quality trends.

UBS increased earnings for FY21/22 by 5/2 percent and said that ICICI Bank remains its preferred pick.

Macquarie

Macquarie maintained an 'Outperform' call with a target price of Rs 700 per share. It said that the bank’s management moved to more conservative provisioning policy in early bucket NPLs.

Yes Securities

Yes Securities retained a 'Buy' rating and raised the target price to Rs 675 per share.

“Our earnings and ABV estimates for FY22/23 undergo material upgrade, as we raised loan growth assumption and pruned credit cost forecast. We now expect the bank to deliver average 1.7% RoA and 14-15% RoE over FY22-23 with high capitalization levels,” the brokerage said.

At 1:40 pm, the shares of ICICI Bank were trading 11.69 percent higher at Rs 599.80 apiece on the BSE as compared to a 4.19 percent gain in the benchmark Sensex.

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First Published:Feb 1, 2021 10:34 AM IST