Sharekhan's research report on ICICI Bank
Core earnings were broadly in line but reported earnings were above estimates mainly led by higher treasury gains and other income which resulted in steady state RoA at ~2.36%. Core PPoP growth (excluding treasury gains & dividend income) was soft, grew by 7% y-o-y on expected lines. Credit cost stayed lower. Overall, asset quality trends were broadly stable including unsecured retail except seasonality in agri portfolio was seen. Deposit growth (1% q-o-q) was lower than loan growth 3% q-o-q. The bank guided that competitive intensity in deposit rates remain elevated thus it will take a view on pricing only on need based depending upon the maturity outflows, as the CD ratio is still reasonable at ~86%. Overall, we see ICICI Bank relatively well-positioned among large private peers despite gradual normalisation of the business matrix.
Outlook
We maintain a Buy with a revised PT of Rs.1,450. Stock trades at 2.5x/2.1x its FY2025E/FY2026E core BV estimates.
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