ICICIBC witnessed another strong quarter with core PAT beating estimates by 4% led by better asset quality and stronger loan growth. While NII was inline, margins were superior driven by increased LDR and efficient liquidity management. Sequential credit flow was healthy across segments viz. retail (mortgages, PL/CC), corporate and BuB. To aid business growth, the bank has reorganized its teams to focus on cities with large market opportunities while maintaining focus on micro markets. Asset quality surprised positively yet again with GNPA reducing by 15bps QoQ mainly led by higher recoveries, while buffer provisions increased and OTR/BB & below pool further reduced. CAR is strong with CET-1 at 17%. ICICIBC has consistently outperformed with earnings quality improving each quarter.
OutlookOur multiple at 3.0x on core FY24 ABV and SOTP based TP at Rs950 remain unchanged. Retain BUY.
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