American Depository Receipts (ADRs) of ICICI Bank Ltd. (IBN) achieved a new 52-week high, reaching $52.28 within the first hour of the trading session on May 22. Notably, the stock closed at $52.16, reflecting a solid year-to-date return of 44.9%. The trading volume for the session was 2.4 million ADRs.
Despite the strong price appreciation, this Zacks Rank #2 (Buy) stock has plenty of upside left, given its sturdy estimate revisions over the last 30 days.
Growth Drivers
The implications of the recent election results in India will be far reaching for the economy as a whole. We believe that ICICI Bank, along with other Indian financial institutions like HDFC Bank Ltd. (HDB), would benefit from the policies of the new government.
Further, strong fourth-quarter fiscal 2014 (ended Mar 31) results, along with improvement in loan and deposit balances were the primary growth drivers for ICICI Bank.
ICICI Bank reported fiscal fourth-quarter results on Apr 25. The company’s net profit of INR26.52 billion ($443 million) was up 15% from the year-ago figure of INR23.04 billion ($385 million). Results improved due to a rise in net interest income and fee income, partially offset by higher-than-expected loan loss provisions and increased operating expenses.
Estimate Revisions Show Potency
Over the last 30 days, one out of two estimates for fiscal 2015 has been revised upward, lifting the Zacks Consensus Estimate by roughly 2.4% to $3.36 per ADR. For fiscal 2016, the Zacks Consensus Estimate stands at $4.22 per ADR.
Some better-ranked foreign banks include Banco Bradesco S.A. (BBD) and Banco do Brasil S.A. (BDORY). Both these stocks sport a Zacks Rank #1 (Strong Buy).
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