ICICI Bank @ Make or Break LevelICICI Bank closed @ 676.65, almost near its lifetime high on 23/07/2021 ahead of its Q1-2021-22 results. the doji candle shows the indecisiveness but the momentum shows positive bias. While the results are out today and all you must have seen and analyzed them. The results are good, no doubt. But there is a silver lining attached to it. the catch behind the results lies in note 6.
Note the trend angle drawn on the price and RSI. they are showing a divergence of 10% (price 7 degress up rsi 3 degrees down). ICICI Bank needs to cross the previous high of 684 decisively to sustain the momentum, if it closes in green on monday i.e. 26.07.2021 then one can go long. But if it does not close in green and closes in red with heavy volumes then it could be a shorting candidate. Though the results are portrayed to be rosy, but the hidden picture can be seen clearly in the note 6 of its results. Whether ICICI Bank improves in its core banking business or just depends on stake sale in its subsidiaries to paint a rosy picture about its profits, only time will tell.
Note # 6 says:
During 01-2021. the Bank sold equity shares in its subsidiaries and made a net gain of Rs. 3,036.29 crore in
standalone financial results and Rs. 2,715.87 crore in consolidated financial results
during FY2021: net gain Rs. 3,669.94 crore in standalone financial results and Rs. 3,297.05 crore in consolidated financial results).
So, the cons. net profit of Rs. 4747 Cr includes treasury gain of Rs. 3,297 Crores. If we deduct this treasury gain out of total cons. net profit the bank is left with just 1,450 Crores of Cons. Net Profit. vs 4,886 crores in prev quarter ending Mar'2021. A steep fall of 70% QoQ in profit from banking business.
ICICI Bank has been boosting up its profits figures since a couple of quarters by stake sales in its subsidiaries. Its reflects weakness in their core banking business.
Cheers!
