ICICI Bank Q4 net profit jumps 30% to Rs 9,122 cr: How brokerages see the stock

According to the poll, NII was expected to have grown 38 percent year-on-year (YoY) to Rs 17,712 crore for the three months ended December.

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Here is what brokerages have to say about stock and the company post March quarter earnings:

Prabhudas Lilladher

ICICI Bank saw a steady quarter with core PAT largely in-line at Rs 91.5 billion. Better NIM at 5.3 percent (PLe 5.2 percent) was offset by higher opex due to one-time employee cost. Loan growth was 4.7 percent QoQ (in-line), led by retail/SME while asset quality was superior due to lower net slippages.

Bank further fortified its balance sheet, as provisions for Q4FY23 were mainly contingent in nature. Buffer provisions at 129 bps are best in-class. As focus would be on sustaining growth, branch accretion in FY24 would be higher than FY23 (482 branches). Thus, we are factoring a higher opex CAGR of 17 percent over FY23-25 (earlier 14 percent) and lower FY24/25 earnings by 2 percent.

ICICIB remains the preferred pick due to strong earnings quality and superior deposit profile. Maintaining multiple at 3.0x and rolling forward to core March 2025 ABV, we raise SOTP based Target Price to Rs 1130 from Rs 1090. Maintain 'buy’.

Nirmal Bang

ICICI Bank reported strong 4QFY23 performance on the back of healthy credit growth, margin expansion and improvement in asset quality. The result was largely in-line with broking house estimates, with PAT growing by 30 percent YoY to Rs 91 billion.

Credit growth came in at 4.7 percent QoQ (18.7 percent YoY), driven by domestic credit book. NIM expansion was strong at 25bps QoQ and 90bps YoY to 4.9 percent and stood at a multi quarter high, leading to NII growth of 40.2 percent YoY (7.3 percent QoQ) to Rs 176.7 billion.

Core fee income growth was healthy at 10.6 percent YoY, while total non-interest income grew by 7.4 percent YoY, as it was impacted by a small treasury loss.

Nirmal Bang remain positive on ICICI Bank given its growth outlook and earnings trajectory with return ratios to remain in top quartile going forward.

It maintains 'buy' on ICICI Bank with a target price (TP) of Rs 1,154 (SOTP based).

JPMorgan

JPMorgan has been given an 'overweight' rating to the stock with a target of Rs 1,150 per share. The Q4 earnings were 7 percent higher than JPMorgan's estimates. The core pre-provision operating profit (PPoP) was driven by net interest margin (NIM) expansion and loan growth. Nearly all of the provisions made in the quarter were contingent in nature.

Ex-provisions, the core return on equity (ROE) would have been 21 percent. However, it is expected that NIMs have peaked. Despite this, the bank build-up enough buffer to support high-teens growth with stable return on assets (RoAs).

JPMorgan views ICICI Bank as a steady, low-risk compounding story that is likely to deliver a 16 percent consolidated EPS CAGR over the next two years with a 17 percent RoE.

Bernstein

Bernstein has given ICICI Bank an 'overweight' rating with a target of Rs 1,000 per share. The bank reported very strong Q4 results with EPS increasing by 30 percent YoY. The EPS growth at 36 percent higher, for the full year was also strong.

The EPS growth was largely led by the 31 percent growth in Net Interest Income (NII) and a decline in provision expenses. There was little to complain about this quarter, except a weak deposit growth relative to its larger peer.

CLSA

The broking firm has kept 'buy' rating on the stock and raised target of Rs 1,200 per share. The bank delivered an impeccable Q4, with core pre-provision operating profit (PPOP) growth driven by another 25 bps QoQ/19 percent YoY of NIM expansion. Management has indicated that it does not see any growth or deposit challenges.

The bank plans to use its high profitability phase to invest in more branches in FY24. Its RoRWA (return on risk-weighted assets) of 3.1-3.2% is best in class.

The earnings multiples of 14x/12x FY24/25CL are undemanding.

Jefferies 

The research house has maintained the 'buy' rating with a target of Rs 1,180 per share. The bank's profits is ahead of estimates, aided by stronger net interest margins (NIMs). Asset quality was noted to remain robust, and 99 percent of credit costs were attributed to buffer-building.

Deposit growth was modest at 11 percent, while loans plus investments rose by 18 percent, as liquid assets and Rural Infrastructure Development Fund (RIDF) fell. However, Jefferies expects to see an uptick in deposit mobilisation as a plus expect this to continue into FY24.

Jefferies has raised its earnings estimates by 5-9 percent.

Goldman Sachs 

Goldman Sachs has kept the 'buy' rating on the stock with a target of Rs 1,100 per share. The bank's operational performance was in-line, and market share gains are expected to continue with a strong pre-provision operating profit to return on assets (PPOP-ROA).

It believes that the core PPOP growth could likely slowdown in FY24E/FY25E. This was one of the reasons for taking ICICI Bank off its Conviction List recently, even though it remains a buy.

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