A pedestrian walks past a logo of ICICI Bank at its headquarters in Mumbai January 30, 2015.Reuters

ICICI Bank shares hit an all-time high on Wednesday after brokerage house Morgan Stanley retained overweight rating on the stock.

India's largest private sector lender had been reeling from negative publicity for most part of last year on account of the probe into ex-CEO Chanda Kochhar's alleged irregularities. 

The stock rose to 383.35 intra-day, an all-time high, and was trading above its 50-day and 200-day moving averages.

"Asset quality continues to improve, and underlying earnings are accelerating ... Valuation is attractive and foreign ownership remains at 15-year low," the brokerage said.

The brokerage also said that valuations for the stock remained attractive and that it expects a 15 percent return on equity in FY20.

While Morgan Stanley hiked ICIC Bank's price target to Rs 510 from Rs 460, international brokerage CLSA also retained a buy call on the ICICI Bank stock with a target price of Rs 450. The bank is well capitalised for the next two to three years, CLSA added.

Optimism over strong third quarter results

On Tuesday, the bank's shares had risen nearly 4 percent to hit a 52-week high, owing to optimism over strong third quarter results. The board is scheduled to meet on January 30 to approve the financial results for the quarter ended December 31, 2018.

Analysts expect the bank to do well in the third quarter. According to analysts at Reliance Securities, the bank could report 39 percent year-on-year growth in its net profit, Business Standard had reported.

In comparison, the lender had reported a 56 percent decline in net profit in the during July-September quarter.

It was also reported that the percentage of gross non-performing assets with ICICI Bank declined in the second quarter, compared with the previous quarter.

In early October, Chanda Kochhar quit as the CEO and Managing Director.

Kochhar's reputation was tainted when reports emerged that there was a conflict of interest in the massive loan awarded to the Videocon group in 2012.

It was reported in July that the bank was investigating irregularities in 31 loan accounts following a whistleblower revelation, The Economic Times reported that white-collar crime specialist law firm Panag and Babu was hired to examine the allegations. The bank had allegedly inflated profits by at least $1.3 billion over eight years by delaying provisioning for 31 non-performing assets (NPA) accounts.