ICICI Bank stock may soon command premium over HDFC Bank, say analysts

Ability to continue reporting above-average earnings a key trigger; discount with Kotak Bank stock also seen narrowing

Even as ICICI Bank delivered its seventh consecutive beat on quarterly earnings, analysts believe the lender’s stock could sustain its premium valuation over HDFC Bank, and narrow its valuation discount with Kotak Mahindra Bank.

The consistent outclassing of peers could also lead to a “bright future for the bank in a gloomy macro environment”, they say.

“ICICI Bank has cemented its stalwart position with a highly efficient large liability franchise, strong capital ratios, strong provision coverage ratio (PCR), steady asset quality, and best-in-class return ratios. We see ICICI Bank delivering strong compounding returns, with valuations set to rerate higher,” says