Brokerages stay upbeat about ICICI Bank inventory after Q3; this is what they are saying

On January 21, the financial institution reported a 34.19 % year-on-year (YoY) progress in its internet revenue at ₹8,311.85 crore for Q3FY23 in opposition to a revenue of ₹6,193.81 crore in the identical quarter a yr in the past.

Net curiosity earnings jumped by 34.6 % to ₹16,465 crore in Q3FY23, in opposition to ₹12,236 crore in the identical quarter final yr.

Net curiosity margin additionally elevated to 4.65 % in Q3 of the present fiscal in comparison with 3.96 % in Q3FY22.

Provisions and contingencies within the present quarter scaled as much as ₹2,257.44 crore as in opposition to ₹2,007.30 crore in Q3FY22.

As reported by Mint, ICICI Bank stated that in Q3, it modified its provisioning norms on nonperforming property to make them extra conservative. This change resulted in larger provisions amounting to ₹1,196 crore in Q3-2023. Provisions for Q3-2023 additionally embrace a contingency provision of ₹1,500 crore made on a prudent foundation.

Gross NPA dropped to three.07 % as of December 31, 2022, from 4.13 % as of December 31, 2021. The internet NPA ratio declined to 0.55 % in Q3FY23 from 0.85 % in Q3FY22.

Shares of the non-public sector lender rose greater than % in morning commerce however erased most beneficial properties to commerce marginally larger though the market benchmark Sensex was up about half a %.

The inventory has outperformed the benchmark Sensex within the final one yr.

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ICICI Bank inventory in final one yr (MintGenie) Brokerages upbeat

Most broking companies are constructive in regards to the inventory for the medium to long run. Many of them have retained their purchase view and see wholesome double-digit progress within the inventory worth.

Brokerage agency Motilal Oswal Financial Services maintained a purchase name on the ICICI Bank inventory with a goal worth of ₹1,150.

Motilal Oswal identified that ICICI Bank reported one other sturdy quarter with in-line earnings regardless of making contingent provisions of ₹1,500 crore and ₹1,196 crore towards NPAs because of strict provisioning norms.

Motilal stated the financial institution’s asset high quality efficiency was exemplary because the GNPA and NNPA ratios and PCR improved additional. The financial institution now has a complete contingency buffer of ₹11,500 crore.

Business progress was sturdy and broad-based throughout retail and company segments. The financial institution continued to put money into tech and digital initiatives to additional increase progress momentum, stated Motilal.

“With a floating-rate book of 70 percent, we think the bank is well placed to ride the rising interest rate environment. We estimate ICICI Bank to deliver RoA and RoE of 2.2 percent and 17 percent, respectively, in FY25,” stated the brokerage agency.

Brokerage agency Emkay Global additionally maintained its purchase name on the inventory with a goal worth of ₹1,250 and stated the inventory stays its prime choose within the banking house, given its superior monetary efficiency, top-management stability and credibility, and robust capital and provision buffers.

“We believe ICICI Bank is best placed among large private banks to deliver growth and absorb any macro or asset-quality shock, given healthy provisions and capital buffers. We expect the bank to deliver the best-ever RoA and RoE of 2.1-2.2 percent and 17-18 percent, respectively, over FY23-25E because of strong margins and lower LLP,” stated Emkay Global.

Brokerage agency Nirmal Bang Institutional Equities additionally maintained a purchase name on the inventory with a goal worth of ₹1,174.

“ICICI Bank reported strong Q3FY23 performance, which was higher than our estimates on the back of high margins and healthy credit growth. Operating profit increased by 30.8 percent YoY (13.6 percent QoQ) and was nearly 7.7 percent above our estimate. We remain positive on ICICI Bank given its growth outlook and earnings trajectory,” stated Nirmal Bang.

Nuvama Institutional Equities additionally maintained its purchase name on the inventory with a goal worth of ₹1,115.

The brokerage agency believes that the financial institution’s NIM will decline with a lag to the sector as ICICI reprices EBLR loans at T+90. It now has the best PCR at 101 % of stress, larger than HDFC Bank.

“With a high base of NIM and provisions and a strong retail franchise, we believe ICICI is better equipped,

versus peers, to navigate FY24 even when RBI stops rate hikes. While results were not as perfect as in the last eight quarters, we reiterate ‘buy’ as we expect sequential loan/fee growth to pick up in Q4FY23E and NIM to stay stronger for longer. ICICI remains among our top picks,” stated Nuvama.

According to a MintGenie ballot, a median of 40 analysts have a ‘strong buy’ name on the inventory.

Disclaimer: The views and proposals given on this article are these of the broking companies. These don’t characterize the views of MintGenie.

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