KR Choksey's research report on ICICI Bank
Net interest income (NII) grew by 34.6% YoY (11.4% QoQ) to INR 1,64,653 Mn in Q3FY23 from INR 1,22,360 Mn in Q3FY22. The net interest margin was 4.7% in Q3FY23 vs 4.0% in Q3FY22 (4.3% in Q2FY23). Pre-Provision Operating Profit (PPOP) grew by 30.8% YoY/ 13.6% QoQ at INR 1,32,716 Mn. Non-interest income stood at INR 50,236 Mn, flat on YoY/ QoQ basis. Fee income grew by 3.7% YoY to INR 49,870 Mn in Q3FY23. Provisions (excluding tax provision) increased by 12.5% YoY/ 37.3% QoQ to INR 22,574 Mn in Q3FY23. The profit after tax grew by 34.2% YoY (10.0% QoQ) to INR 83,122 Mn in Q3FY23 compared to INR 61,938 Mn in Q3FY22. The overall advances as of December 31, 2022, stood at INR 97,40,475 Mn, a growth of 19.7% YoY (3.8% QoQ). Total deposits increased by 10.3% YoY (2.9% QoQ) to INR 1,09,00,080 Mn as of December 31, 2022. Total capital adequacy ratio was 18.33%, and Tier-1 capital adequacy ratio was 17.58% on a standalone basis.
We have applied a P/ABV multiple of 2.9x to the FY24E ABV of INR 332.9 per share, implying a SOTP valuation of INR 1,175 per share (previously INR 1,115 per share). It has a potential upside of 34.8% at the CMP of INR 872 per share. As a result, we maintain our “BUY" rating on ICICI Bank's shares.