Buy ICICI Bank; target of Rs 1295: Religare Retail Research

Religare Retail Research report on ICICI Bank

ICICI Bank reported net interest income growth of 2.2% QoQ/8.1% YoY to Rs 191bn in Q4FY24 as the bank saw decline in its margins with healthy growth in assets. Owing to single digit top-line growth, its pre-provision operating profit grew by 2.1% QoQ/8.8% YoY to Rs 150.4bn. The bank saw decline in provision and contingencies by 31.5% QoQ/55.6% YoY as the bank sees improvement in its asset quality. Due to such decline in provisions, PAT was reported at 4.2% QoQ/17.4% YoY to Rs 107.1bn.

Outlook

The bank is expected to improve on its margins and generate healthy returns. Financially, we expect NII/PPOP/PAT to grow at 13%/7%/9% CAGR over FY24-26E. We maintain Buy rating on ICICI Bank and increase our target price of Rs 1,295 valuing the bank at 2.4x of its FY26E Adj. BV.