Arihant Capital's research report on ICICI Bank
ICICI Bank has reported strong performance during Q3FY21 with strong profit growth of 19% YoY to Rs 4,940 cr. NII for the quarter grew by 16% YoY to Rs 9,912 cr led by advances growth of 10% YoY. Operating profit for the quarter grew strongly by 17% YoY/7% QoQ to Rs 8,820 cr led by strong growth in NII and other income. Other income for the quarter increased by 3% YoY/16% QoQ to Rs 4,686 cr, supported by treasury gains of Rs 766 cr (including Rs 329 cr from stake sale in ICICI Securities). OPEX growth was also broadly steady with sequential increase in other OPEX as business volumes & activity has moved up. Asset quality on proforma basis was quite steady with controlled slippages with PCR of 77% and restructuring of 0.40% of loans.
Outlook
BV multiple of 2.2x and rollover our estimates to FY23E adj. BV of INR 238 for standalone bank and use a SOTP approach to value its subsidiaries, arriving at a fair value of INR 647 (INR 467 earlier). We upgrade our rating to Buy from Accumulate. ICICI Bank is one of our preferred pick in banking sector.
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