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Last Updated : May 11, 2020 09:40 AM IST | Source: Moneycontrol.com

ICICI Bank share price falls post Q4 nos; brokerages maintain buy

The domestic loan growth was at 13 percent YoY in March quarter, driven by 16 percent growth in retail segment that contributed about 53.3 percent to total loan book.

 
 
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ICICI Bank share price fell over 1 percent in the early trade on May 11 after the company posted better-than-expected numbers for the March quarter.

The company on May 9 reported a 26 percent year-on-year growth in standalone profit at Rs 1,221.36 crore in quarter ended March 2020 against Rs 969.06 crore.

The bank had made COVID-19 related provisions of around Rs 2,725 crore against standard assets to further strengthen balance sheet.

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Net interest income for the quarter grew by 17.1 percent year-on-year to Rs 8,926.89 crore with 10 percent loan growth and 18 percent increase in deposits year-on-year (YoY).

The domestic loan growth was at 13 percent YoY in March quarter, driven by 16 percent growth in retail segment that contributed about 53.3 percent to total loan book.

Also Read - ICICI Bank tags $100 mn Singapore Hin Leong exposure as NPA, makes provisions

Arihant Capital | Rating: Accumulate | Target: Rs 385

ICICI Bank is poised to do well in terms of NIMs and PPOPs for the next few quarters due to excessive liquidity in hand, fallen interest rates and highly regulated sanctioning of new loans towards both retail and corporate segment.

The bank’s insurance subsidiaries however will not be paying dividends, thereby declining in dividend income for the year ahead.

Dolat Capital | Rating: Buy | Target: Rs 420

The disappointment on asset quality was driven by high corporate slippages, led by two overseas exposures.

Substantial provisions on these however ensured PCR was sequentially stable. Margins showed healthy trends despite a sequential 500 bps decline in CD ratio.

HDFC Securities | Rating: Buy | Target: Rs 435

Banks Gross NPAs dipped (-10.5/4.7% YoY/QoQ) to Rs 414.1 billion (5.53%, -117/42bps) facilitated by higher reductions as gross slippages at Rs 53.1 billion (3.3% ann. versus 2.8% QoQ and 2.5% YoY) increased.

Total deposits grew 18.1/7.6% to Rs 7.71 trillion, driven by 29% YoY growth in term deposits. Average CA deposits grew 15% YoY and average SA deposit grew 11% YoY. The CASA ratio was 45.1% (versus 47.0% QoQ and 49.6% YoY).

Prabhudas Lilladher | Rating: Buy | Target: Rs 436

The broking house unable to foresee hits on asset quality as yet but see high probability of rising stress, hence conservatively build 2.5% slippage ratio and 180bps of credit cost in FY21 with residual flow in FY22 as well.

The bank remains best placed in amongst banking sector.

Motilal Oswal | Rating: Buy | Target: Rs 475

Broking firm expect loan growth to moderate given the weak macro environment, weighed by the COVID-19 outbreak.

As a prudent measure, the bank has made additional provisions of Rs 27.2b toward COVID-19-related stress; furthermore, lower exposure to the SME segment (3.5% of loans) and high granularity in the BB and below book provides some comfort.

Motilal Oswal increase credit cost estimate to 2.2% in FY21E and cut FY21/22E earnings by 8%/3% and estimate bank to deliver RoA/RoE of 1.3%/12.4% in FY22.

At 09:20 hrs ICICI Bank was quoting at Rs 334.70, down Rs 3.05, or 0.90 percent on the BSE.

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First Published on May 11, 2020 09:40 am
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