ICICI Bank (NSE:ICICIBANK, BOM:532174) shares plummeted 5.04% in Monday's trading session, despite reporting an increase in its fiscal second-quarter consolidated net profit. The sharp decline comes as the bank faces a notable analyst downgrade and continues to underperform its peers in the financial sector.

According to a filing on the Indian bourse, ICICI Bank's consolidated net profit rose to 133.6 billion Indian rupees in the quarter ended September 30, up from 129.5 billion rupees a year ago. The bank also reported an increase in interest earned to 481.8 billion rupees from 463.3 billion rupees in the same period last year. However, these positive results failed to buoy investor sentiment, with shares initially dropping nearly 3% in early trading before accelerating their decline.

Adding to the downward pressure, Avendus Spark downgraded ICICI Bank from Buy to Add, with a price target of INR1,643. This downgrade, coupled with the bank's underperformance compared to competitors like IndusInd Bank and State Bank of India, which saw gains on the same day, appears to have fueled investor concerns. The significant increase in trading volume, totaling 624,975 shares compared to the 50-day average of 395,308, further underscores the heightened market activity and potential shift in investor sentiment surrounding ICICI Bank.