ICICI Bank share price rises after strong Q1 results. Should you buy, sell or hold the largecap banking stock?

ICICI Bank share price rose over 2% on Monday after the private sector lender reported strong earnings for the first quarter of FY25. ICICI Bank Q1 results beat analysts’ estimates, with 15% year-on-year (YoY) net profit growth led by healthy treasury gains and dividends. ICICI Bank shares gained as much as 2.67% to ₹1,239.95 apiece on the BSE.

Private lender ICICI Bank reported a standalone net profit of ₹11,059.1 crore in the April-June quarter of FY25, a rise of 14.6% from ₹9,648.2 crore in the corresponding period last fiscal year.

Net interest income (NII) in Q1FY25 increased 7.4% to ₹19,553 crore from ₹18,226 crore, YoY. The net interest margin (NIM) fell to 4.36% compared to 4.78% a year earlier and 4.40% in the previous quarter due to increase in cost of funds.

Asset quality remained strong, with gross slippage ratio of 2.2% though net slippages increased to 1% led by lower recoveries and upgrades due to seasonal impact and gradual normalization of asset quality cycle.

Here’s what analysts have to say about ICICI Bank Q1 results and ICICI Bank share price:

Motilal Oswal Financial Services

ICICI Bank reported a steady quarter, unlike many of its large peers. NII growth has been consistent, and the pace of NIM compression has slowed, while opex has been well under control, even after adjusting for employee increments in Q1. The bank's substantial investment in technology offers some cushion against opex costs, Motilal Oswal said.

The brokerage firm cut its EPS (earnings per share) estimates slightly by 2.3% and 2.0% for FY25 and FY26 and estimated RoA and RoE of 2.19% and 17.3% in FY26. It expects the bank to sustain a ~12% CAGR in PAT over FY24-26E.

MOFSL reiterated a ‘Buy’ rating on ICICI Bank shares and increased the target price to ₹1,400 per share from ₹1,350 earlier.

Nuvama Institutional Equities

According to Nuvama Institutional Equities, ICICI Bank turned in strong earnings and outperformed on three key concerns plaguing its peers in Q1FY25: asset quality, LDR and NIM. Loans grew 15% YoY/3% QoQ while the 4 bps QoQ dip in NIM is lower than expected and the QoQ increase in slippage of 11% YoY is also lower than peers and expectations.

ICICI Bank remains the most consistent in delivering core earnings and granular growth. Given ICICI’s earnings are free of the problems that afflicted its peers in Q1FY25, we argue the stock should re-rate. We expect the superior performance to continue given its strong digital push, focus on risk-calibrated operating returns, and a strong, granular Balance Sheet, Nuvama Equities said.

It maintained a ‘Buy’ rating and with a revised target price of ₹1,430 per share.

Antique Stock Broking

ICICI Bank continues to consistently deliver strong performance with superior RoA, strong asset quality, and balance sheet. Liability profile remains strong, capitalization is comfortable, and the bank has created strong buffers that would help protect/ smoothen earnings, even if the macroeconomic environment turns adverse, Antique Stock Broking said.

It expects RoA to be in the range of 2% – 2.2% and RoE of 16%–18% over FY25–27E. The brokerage firm maintained a ‘Buy’ call and raised ICICI Bank share price target to ₹1,400 apiece from ₹1,350 earlier.

At 10:15 am, ICICI Bank shares were trading 1.73% higher at ₹1,228.65 apiece on the BSE.

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