Shares of private lender ICICI Bank surged 3% in early morning trade following the bank reported robust Q2 FY2024-25 results. Shares opened a gap up and hit the day's high at ₹1,295 before settling 2.91% higher at ₹1,292 on the BSE, taking its m-cap to ₹9.1 lakh crore.
The bank released its second-quarter financial results over the weekend. Its net profit grew by 14.5% year-on-year to ₹11,746 crore in Q2-2025 from ₹10,261 crore in Q2-2024. The net interest income NII increased by 9.5% to ₹20,048 crore in the said quarter from ₹18,308 crore in the year-ago period. The NII margin dipped to 4.27% in Q2-2025 compared to 4.53% in Q2-2024.
The private lender says its fee income grew 13.3% in the said quarter to ₹5,894 crore from ₹5,204 crore in the year-ago period. "Fees from retail, rural and business banking customers constituted about 78% of total fees in Q2-2025." The bank's provisions in the second quarter (excluding provision for tax) were ₹1,233 crore compared to ₹1,332 in the year-ago period.
The bank says its net domestic advances grew by 15.7% year-on-year and 4.6% sequentially on September 30, 2024. The retail loan portfolio grew by 14.2% year-on-year and 2.9% sequentially and comprised 53.0% of the total loan portfolio on September 30, 2024.
The gross NPA ratio was 1.97% on September 30, 2024, compared to 2.15% on June 30, 2024. The net NPA ratio was 0.42% on September 30, 2024, compared to 0.43% on June 30, 2024. The gross NPA additions were ₹ 5,073 crore in Q2 vs ₹5,916 crore in the previous quarter.
The consolidated PAT increased by 18.8% year-on-year to ₹ 12,948 crore in Q2-2025 from ₹10,896 crore in Q2-2024. Consolidated assets grew by 18.4% to ₹25,16,512 crore from ₹21,24,850 crore in the year-ago period.
Brokerage PhillipCapital, in its commentary on the ICICI Bank, says its core operating performance was in line and showed stable asset quality amid a tough environment. "Expected decline in NIM owing to rise in cost fund, resulted into a moderate NII growth annually," says the note by research analyst Manish Agarwalla and research associate Dhruti Parekh.
As NIM remains under pressure owing to the lead-lag impact of rate transmission, the bank has levers like operating efficiency and stable credit cost to drive earnings, they write. In its outlook and valuation, the brokerage expects earnings growth of 12.6%/9.5% in FY25e/26e, translating into RoA of 2.40%/2.30%. "At CMP, ICICIBC trades at 3.0x/2.5x/2.2 FY25e/26e/27e core ABVPS of ₹364/421/483 (valuing subsidiaries at ₹200). We maintain Buy with a revised TP of ₹1530 (₹1350 earlier) value core banking business at 2.75x FY27e ABVPS."
