ICICI Bank share price up 14% since November; what should investors do? Experts weigh in

ICICI Bank share price has witnessed decent traction in the recent past. On a monthly scale, the stock has been on an upward march since November last year, overall gaining about 14 per cent. However, the stock has slightly underperformed the equity benchmark Nifty 50 which has jumped nearly 16 per cent since November.

ICICI Bank share price hit its 52-week high of ₹1,059.40 on January 23 this year and saw mild profit booking after that. On Tuesday, February 20, the stock rose about a per cent to hit its intraday high of ₹1,052.65; at this price, the stock is down about 0.6 per cent from its 52-week high level.

ICICI Bank reported a 23.5 jump in their standalone net profit for Q3FY24, which stood at ₹10,272 crore from ₹8,312 during the same quarter last year.

The NII (net interest income) of the ICICI Bank grew by 13.4 per cent YoY to ₹18,678 crore during the quarter under review from ₹16,465 crore during the year-ago period.

The NIM (net interest margin) of the ICICI Bank stood at 4.43 per cent during the quarter ending December 2023 compared to 4.53 per cent in Q2FY24 and 4.65 per cent in Q3FY23.

Also Read: ICICI Bank Q3 Results: Operating profit rises 10% YoY, asset quality stable; 5 key highlights

Mint gathered expert opinions to evaluate the current indications from the stock's fundamentals and technicals to understand whether investors should buy the stock. Let's take a look:

Fundamental views

Shreyansh V.Shah, Research Analyst, StoxBox

In Q3FY24, ICICI Bank started recalibrating its exposure to well-rated NBFCs to save capital. 

Furthermore, the bank has a comfortable CD ratio of around 80 per cent amidst the brunt faced by its peers in the current environment. 

There is a tailwind that we are currently witnessing as the bank is focusing on shifting its loan book toward higher-yielding assets. 

In addition, its business growth momentum on deposits and loans is better than industry and the bank’s asset quality is holding up reasonably well. 

Though the bank is facing cyclical pressures on NIMs, the bank is poised to deliver superior return ratios and strong business growth in the medium term. 

Thus, we remain constructive on the company at the current juncture as it is trading at 2.5 times FY25E book value which we believe is reasonable amidst the robust credit growth and healthy asset quality.

Also Read: Bank stocks to consolidate till margins start improving, says InCred Equities; recommends HDFC, ICICI Bank, SBI

Sharekhan by BNP Paribas

After the company's Q3 results, the brokerage firm maintained a buy call on the stock with a target price of ₹1,200.

The bank is positioned well with superior margins, strong RoE (return on equity), asset quality, contingency buffers, and robust capitalisation levels. 

A strong liability franchise indicates a robust business outlook for the bank. 

We find ICICI Bank to be an attractive franchise with a strong balance sheet and a better return ratio matrix, which makes it attractive over the mid to long term. 

Moreover, its well-performing subsidiaries, which are strong players in their respective fields, add value to the overall business. 

The franchise is looking towards more predictable performance, which is a key positive.

ICICI Bank currently trades at 2.2 times and 1.8 times its FY2025E and FY2026E core BV (book-value) estimates respectively. 

The bank reported another steady quarter, led by healthy credit growth and strong asset quality. 

Despite NIM contraction in the near term and gradual normalisation of credit cost over the medium term, we see the bank sustaining RoA (return on assets) over 2 per cent in the near to medium term. 

We believe the bank is on the path of delivering a sustainable and predictable earnings growth trajectory.

Technical views

Milan Vaishnav, CMT, MSTA, Founder and Technical Analyst of Gemstone Equity Research and ChartWizard FZE

ICICI Bank has been one of the relatively much stronger stocks in the private banking space.

Currently, the price action over a couple of weeks has led to the formation of a bullish ascending triangle.

Despite relative underperformance against Bank Nifty, ICICI Bank has a promising technical setup.

The stock will see a renewed momentum if it can cross above ₹1,050 level supported by volumes.

While maintaining a stop loss of ₹998, the stock offers a good entry opportunity for the near term as any breakout from the current levels may see the stock testing ₹1,100-1,130 levels.

Jigar S. Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers

Over the past two weeks, ICICI Bank has been maintaining a trading range roughly between ₹970 and ₹1,030. However, a recent development has seen the stock surpass this range and hold its position above it.

For a more cautious approach, it is advisable to wait for a weekly closing price above ₹1,060, which represents the next significant resistance level. It is noteworthy that the weekly stochastic indicator has not yet entered overbought territory.

On the flip side, if ICICI Bank breaches the ₹1,060 mark on a weekly basis, the next target could be around ₹1,100, with a recommended stop loss set near ₹1,035 based on daily closing prices.

Pravesh Gour, Senior Technical Analyst at Swastika Investmart

ICICI Bank is exhibiting a promising pattern on both weekly and daily charts.

The weekly chart shows a breakout from a triangle formation, while the daily chart indicates an upward-sloping channel with a retest of the breakout level at ₹980, forming a solid base.

Favorably, the stock is trading above key moving averages, making it attractive for long-term investors.

Momentum indicators like RSI are in a positive position, and MACD shows a bullish crossover on the upside.

Notably, ₹1,060 serves as a psychological resistance level, potentially leading to a move towards ₹1,100 or higher in the near term. For support, ₹970 is significant in case of any corrections.

The bullish trend is expected to persist, making current levels attractive for buying with the potential for selling at higher levels.

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Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.