India's ICICI Bank hits record high on profit beat, margin comfort

BENGALURU (Reuters) -Shares of India's ICICI Bank hit a record 1,059.4 rupees on Tuesday after its third-quarter profit beat estimates on robust loan growth and margins met expectations.

The private lender rose as much as 5% in the session and was the sole stock posting gains on the Nifty Bank index, which was down 0.7%.

ICICI's performance is in sharp contrast to that of larger rival HDFC Bank, whose shares declined nearly 14% over the past five sessions after margins declined due to rising cost of deposits and intense competition.

Macquarie Capital said ICICI Bank was now at a 15% premium to HDFC Bank on a core price-to-book value basis.

Mumbai-based ICICI reported a 10 basis point dip in net interest margin (NIM) to 4.43% from the previous quarter.

"While NIM may be strained, ICICI Bank may not see an aggressive NIM dip, unlike some frontline peers," analysts at Elara Capital said in a note.

"While banking may be facing strain, ICICI Bank may hold against the tide with steady earnings," they said.

Indian lenders have been consistently reporting double-digit loan growth over the past few months on increased demand. However, their margins have been squeezed by rising deposit costs.

ICICI reported a record high quarterly standalone net profit of 102.72 billion rupees ($1.24 billion) in October-December, compared with analysts' expectations of 100.25 billion rupees, as per LSEG data.

The bank's total loans grew 18.8% from the previous year, largely led by retail loans, while deposits grew 18.7%.

($1 = 83.0920 Indian rupees)

(Reporting by Nishit Navin in Bengaluru; Editing by Sonia Cheema and Dhanya Ann Thoppil)