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Target: ₹1,090
CMP: ₹924.65
ICICI Bank saw a stable quarter with core PAT being higher by 1.6 per cent. Better loan growth and NIM was partly offset by operation expenditure miss.
As per the bank, opex might remain elevated as healthy revenue profile provides headroom to invest in business. Loan growth q-o-q was largely led by retail while corporate and BuB also saw traction. NIM rose by 19 bps QoQ to 4.76 per cent due to slower rise in cost of funds. NII was a beat at ₹14,790 crore (est. ₹14,500 crore) led by slightly better loan growth and NIM. Loan growth was 22.7 per cent y-o-y (PL estimate 22 per cent) while deposit accretion was 11.5 per cent y-o-y (PL estimate 11 per cent).
Total Deposit grew by 4.3 per cent q-o-q and management stated that RTD rates have accelerated in last few weeks which may boost RTD flows. Hence cost of funds might rise more in H2FY23 sharply compared to H1FY23 although increase in yields may continue as EBLR linked loans have a 3-month reset.
Led by lower slippages GNPA reduced by 17bps QoQ to 3.2 per cent and buffer provisions of ₹1,500 crore were created taking its total pool to ₹10,000 crore or 1.5 per cent of RWA.
Rolling forward to Sep’24 core ABV, we maintain multiple at 3.0x and raise SOTP based TP from ₹950 to ₹1,090.
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