Buy ICICI Bank; target of Rs 1230: Motilal Oswal

Motilal Oswal's research report on ICICI Bank

ICICI Bank (ICICIBC) reported a strong performance in 3QFY24, with 24% YoY growth in net earnings (inline) despite making AIF provisions of INR6.3b. NIMs contracted 10bp QoQ to 4.43% (better than estimate).  Credit growth was healthy at 19% YoY/4% QoQ, led by continued traction in Retail, SME and BB segments. Deposit growth was also steady at 19% YoY/2.9% QoQ. On the asset quality side, slippages were slightly elevated amid seasonally higher slippages from the Kisan Credit Card (KCC) segment. GNPA ratio decreased 18bp QoQ while NNPA remained largely flat. The bank maintains a total contingency buffer of INR131b (1.1% of loans), which provides comfort.

Outlook

We slightly raise our EPS estimates by 1.6%/0.9% for FY24/FY25 and expect ICICIBC to deliver RoA/RoE of 2.3%/18.3% in FY25. We maintain BUY with a TP of INR1,230.

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