ICICI Bank gets Goldman push: Shares near 52-week high; check stock price target

Shares of India’s major private sector lender ICICI Bank jumped on Tuesday morning, after Goldman Sachs maintained a buy rating on the stock. ICICI Bank shares jumped by more than 3.2% to hit the day’s high at Rs 405.40. Notably, the stock is just kissing distance away from its 52-week high of Rs 409.55. The global brokerage firm has a target price of Rs 492 on the stock, implying an upside of nearly 21% from the current share price.

Goldman Sachs said that mobilisation and strength of retail franchise is central to its investment thesis. The strong deposit franchise and lower cost of funds puts ICICI Bank at an advantage. Goldman sachs expects icici bank to deliver a ROA/ ROE of 1.8%/17% over FY20-21. The research firm added that it sees a turnaround in ICICI Bank’s corporate business.

ICICI Bank is set to announce its Q4 results on May 6, 2019. According to analysts, the bank is set to report robust results for the latest quarter. According to Motilal Oswal, ICICI Bank is expected to report net profit at Rs 2,162.8 crore up 112% on-year (up 34.8% on-quarter). The Net Interest Income (NII) is expected to increase by 13.6% on-year to Rs 6,839.3 crore, according to the firm. Kotak Institutional Equities expects ICICI Bank to report net profit at Rs 2,851.7 crore up 179.6% on-year.  

“We see banks showing further improvement in key metrics. Impairment ratios to decline led by lower slippages, recovery as well as high provisions for bad loans. Recapitalisation would result in most public banks reporting a sharp decline in net NPL ratios. NBFCs had a marginally better quarter than 3QFY19 as liquidity eased for retail players. Slowdown in auto sales and increase in incremental cost of funding will weigh on 4QFY19E performance,” Kotak Institutional Equities noted. ICICI Bank was the biggest contributor to Sensex’s gain, accounting for 1 70 point jump of the index. The Sensex meanwhile hit a fresh record high of 39,278.

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