Even so, investors in the stock should not get complacent. The fight for grabbing more deposits is poised to get intense and ICICI Bank, despite its stronger financials, is not completely immune to the after-effects.

“While the quarter had strong takeaways from superior NIM and lower credit costs, we would be wary of the sustainability of the former (NIM) and comfortable with the latter (credit costs) on a relative basis,” said analysts at Kotak Institutional Equities. According to the domestic brokerage house, the ability to sustain NIM would be difficult for all banks, including ICICI Bank.

In Q2, ICICI Bank’s domestic NIM rose 31 basis points sequentially to a multi-quarter high of 4.45%. One basis point is 0.01%. The private sector lender saw higher NIM expansion than close competitor HDFC Bank Ltd. However, it should be noted that bank’s management told analysts that incrementally, deposit repricing is likely to happen at a faster pace, which may put pressure on NIMs.

This means, if the bank’s deposit growth does not adequately catch up, it could hamper its chase for market share. Apart from that, the Bukkry.com”>Bukkry.com”>Bukkry.com”>New to bank franchise, which also caters to the SME segment, may falter in a scenario of economic distress, said Krishnan ASV, senior vice president, institutional research, HDFC Securities. “As of now, the market’s assumption is that nothing can go wrong here and, hence, investors should remain watchful,” he said.

Besides, the trends in ICICI Bank’s operating expenses are an important monitorable. During the quarter, its standalone operating costs rose 24% year on year on the back of higher employee expenses and retail business and technology-related costs. This was a dull spot in its otherwise decent Q2 earnings, as the bank missed analysts’ expectations on this metric. The bank’s management expects operating expenses to remain elevated. The bank added 200 branches in H1FY23 and the pace of addition was higher than in the past, the management said.

Meanwhile, ICICI Bank’s stock hit a 52-week high of ₹943.25 on the NSE on Tuesday. In this calendar year so far, ICICI Bank’s shares have rallied 25%, ahead of sector index Nifty Bank. A robust earnings performance gives ICICI Bank an edge over peers, but after the recent up move, a meaningful rally in the stock is expected to happen gradually, said analysts.