ICICI Bank surges into the top five, with a market capitalization of almost Rs 8 trillion
With a gain of more than 5% in shares on Monday, ICICI Bank’s market capitalization crossed the `8-trillion barrier and climbed into the top five firms by market value. After HDFC Bank, the private lender is now the second bank to reach this milestone. After closing the session with a gain of 4.72%, ICICI Bank’s shares hit an all-time high of Rs 1,163 each, bringing its market capitalization to Rs 8.14 trillion.
With a market capitalization of Rs 19.8 trillion, Reliance Industries continues to be the most valuable business in India. Software behemoth Tata Consultancy Services (TCS) comes just behind with a market cap of Rs 14 trillion. With a market capitalization of Rs 11.6 trillion, HDFC Bank is the biggest bank in the nation; the largest lender, State Bank of India, is valued at Rs 7.4 trillion.
Better-than-expected fourth-quarter numbers released by the lender on Saturday served as the catalyst for the rise. The lender’s target price was increased by CLSA to Rs 1,350. JPMorgan has raised its FY25/26 profits per share forecast by 4% and said that values are acceptable, leaving room for an upward re-rating. The bank has an overweight rating and a target price of Rs 1,350 on ICICI Bank.
Not even the unsecured lending market’s peer-to-peer quicker expansion has produced unfavorable shocks so far. Analysts at Kotak Institutional Equities noted that the bank is encountering fewer business challenges, which suggests a consistent execution is more than adequate to sustain its outstanding valuation multiple.
The bank said on Saturday that its net profit for the fourth quarter of the previous fiscal year increased by 17% to Rs 10,708 crore, helped along by strong loan growth.
By reducing its gross non-performing asset (NPA) ratio from 2.30% on December 31, 2023 to 2.16% on March 31, 2024, the bank was also able to enhance the quality of its assets.
According to Nuvama, the bank continues to provide core profits and granular growth in the most consistent manner.
It said, “We view ICICI as less vulnerable to regulatory lapses than peers, not to mention the moderation in opex much ahead of peers,” because of its early-mover advantage in using technology for growth and risk management.
