Is it ideal to buy, hold, or sell ICICI Bank shares?

Is it ideal to buy, hold, or sell ICICI Bank shares?

Written by Sophie Robertson, In finance, Updated On
May 22nd, 2024

ICICI Bank Ltd is among India’s top private sector banks, with a network of 5,288 branches and 15,158 ATMs. Through its delivery channels and group companies, it seeks to offer its corporate and retail consumers a comprehensive range of financial goods and services. Besides its experience in forex and treasury operations, ICICI Bank Ltd. runs its business through a network of branches spread out over India.

Additionally, ICICI Bank offers its customers a comprehensive range of investment banking, insurance, and financial services. When writing the article, the ICICI Bank’s share price is Rs. 870.10, and its market capitalization stands at Rs. 6,05,376.79 crore. Any investment decision on the part of the investor should include extensive research about the company’s fundamentals and keeping an eye on its stock performance.

Is it ideal to buy, hold, or sell ICICI Bank shares?

sell ICICI Bank shares

Let us now check the highlights of ICICI Bank’s stock as announced in its Q1FY23 results:

  1. 19.4% YoY growth to Rs. 102.73 billion
  2. Excluding dividends from subsidiaries, core operating profit increased by 21.1% year over year.
  3. In Q1-2023, average current account deposits rose by 2.9% sequentially and 23.0% YoY.
  4. In Q1-2023, average savings account deposits rose by 4.4% sequentially and 19.1% yearly.
  5. On June 30, 2022, period-end term deposits increased by 11.4% YoY.
  6. Domestic Loans grew by 21.7%YoY.
  7. Retail Loans increased by 24.4% YoY.
  8. Rural Loans increased by 8.4% YoY.
  9. The business banking portfolio increased by 44.7% YoY.
  10. The SME portfolio increased by 32.3% YoY.
  11. The portfolio of domestic corporations increased by 14.4% YoY.
  12. From 0.76% on March 31, 2022, and 1.16% on June 30, 2021, the net NPA ratio decreased to 0.70% on June 30, 2022.
  13. Gross NPAs increased by 3.82 billion rupees in Q1 2023. (Q4-2022: net deletions of Rs. 4.89 billion)
  14. 11.44 billion rupees (0.53% of average Loans and 11.1% of core operating profit) in Q1-2023, including a prudently prepared contingency provision of Rs.10.50 billion.
  15. On June 30, 2022, there were Rs 85.00 billion contingency provisions.
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The bank has some strengths, which include:

  1. The last two years’ return on equity has improved, showing that shareholders’ funds are effectively used.
  2. Also, the return on the asset has improved in the last two years, demonstrating efficient asset management’s ability to generate profits.
  3. There has been a high 12-month trailing EPS growth.

Despite these factors, the bank has not effectively used its capital to generate profits, leading to a decline in RoCE in the last two years. The ICICIBank share price can be bought considering its performance. However, indulging in caution and doing thorough research before making it a part of your portfolio is essential.

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