ICICI Bank shares fall over 2% as analysts warn of growth concerns after Q2 results

Shares of ICICI Bank are among the only few losers on the Nifty 50 index on Monday, October 20, in response to the lender's second quarter results that were reported on Saturday.

The lender's loan book grew by 10.3% from last year, and 3.2% sequentially, while deposits remained flat from the June quarter, but grew by 7.7% from the same quarter last year.

Asset quality remained stable and the management said that the margins are likely to remain rangebound in the next two quarters, and that the impact of the ECL provisions will be minimal and depend on the day of the transition.

CLSA maintained its "outperform" rating on ICICI Bank with a price target of ₹1,700 per share, saying that it was a "good" but not a "great" quarter from the lender.

It said that loan growth continues to moderate, driven primarily by business banking. The Net Interest Margin (NIM) expansion of three basis points was also lower than the expectation of 10 basis points.

Bernstein has a "market perform" rating on the stock with a price target of ₹1,440. It said that ICICI Bank is continuing to test the limit of the margins at the expense of growth.

"While profitability remains a positive, a sharp slowdown in growth is concerning," the brokerage said.

DAM Capital believes that while the operational performance for the lender remains steady, the growth needs momentum.

It added that ICICI Bank should start showcasing improvement in growth rate, while other moving parts are getting steady.

51 analysts have coverage on ICICI Bank, with 48 having a "buy" rating, and the remaining have a "hold." No analyst has a "sell" recommendation on ICICI Bank.

Shares of ICICI Bank are bucking the trend in an otherwise strong market. The stock trades 2.1% lower on Monday at ₹1,406.5. Shares have gained 10% so far this year.