ICICI Bank shares hits record high despite market downturn
ICICI Bank's stock on Tuesday jumped to a record high of Rs. 1,067.40 on the BSE. This surge comes after better-than-expected profits in Q3 FY24, fueled by strong loan growth and solid margins. The private lender's shares climbed by 5% during the day, making it the only gainer on the Nifty Bank index, which slipped 2.26%. In contrast, shares of its larger competitor, HDFC Bank, have fallen nearly 15% in the past five sessions due to less-than-expected Q3 performance.
Record quarterly standalone net profit
ICICI Bank announced a record-breaking quarterly standalone net profit of Rs. 10,272 crore for October-December, surpassing analysts' predictions of Rs. 10,025 crore. Its total loans increased by 18.8% year-over-year, mainly driven by retail loans, while deposits grew by 18.7%. Despite a slight drop in net interest margin (NIM) to 4.43% from the previous quarter, analysts at Elara Capital said, "ICICI Bank may not see an aggressive NIM dip, unlike some frontline peers."
Steady earnings amid banking strain
While the banking sector is under pressure due to consistent double-digit loan growth in recent months and rising deposit costs squeezing margins, ICICI Bank is expected to remain resilient with stable earnings. Analysts at Elara Capital noted that "while banking may be facing strain, ICICI Bank may hold against the tide with steady earnings." This strong performance has led Macquarie Capital to value ICICI Bank at a 15% premium to HDFC Bank on a core price-to-book value basis.
Investors lose Rs. 8 lakh crore in today's crash
ICICI Bank's rise comes amid an overall market downturn. Sensex dropped over 1,000 points to 70,371 while the Nifty50 declined by 1.5% to trade under the 21,250 mark on Tuesday. This led to investors losing approximately Rs. 8 lakh crore, causing the market capitalization of all BSE-listed stocks to decrease to Rs. 366.3 lakh crore. This occurred just as India surpassed Hong Kong to become the world's fourth-largest stock market.
