ICICI Bank Q4 Results Review: Robust Quarter Backed By Consistent Growth

ICICI Bank's results for the fourth quarter of FY23 were broadly in line with expectations and are indicative of the bank's long-term growth potential, according to brokerages.

The bank reported a 30% year-on-year rise in net profit for the quarter ended March 31 on account of higher core income.

Net profit for the quarter stood at Rs 9,121 crore, compared with Rs 7,019 crore a year ago. Analysts polled by Bloomberg estimated a net profit of Rs 9,138 crore for the quarter.

While ICICI Bank reported a net interest margin of 4.9% in Q4 FY23, the bank's management has stated that it is likely to have peaked and will moderate going forward.

The bank's operating expenses were also elevated over the quarter on account of branch expansion and a one-time change in employee retirement benefit assumptions.

ICICI Bank's strong growth in profits was also bolstered by a 51.5% year-on-year fall in provisions to Rs 1,620 crore.

The bank's overall advances grew 8.7% year-on-year to Rs 10.2 lakh crore. Total deposits rose 10.9% year-on-year to Rs 11.8 lakh crore.

ICICI Bank's asset quality also saw an improvement over the quarter, with the gross non-performing asset ratio falling 26 basis points sequentially to 2.81%. Similarly, the net NPA ratio fell 7 basis points quarter-on-quarter and stood at 0.48% as of March 31.

Shares of ICICI Bank rose 1.12% to Rs 895.60 apiece as of 10:10 a.m., compared with 0.02% decline in the benchmark Nifty 50.

Out of the 52 analysts tracking the company, 50 maintain a 'buy' rating and two recommend a 'hold,' according to Bloomberg data. The average 12-month consensus price target implies a potential upside of 24.9%.

Here's what analysts had to say about ICICI Bank's financial performance in the January-March quarter:

• Strong performance was backed by growth, margin expansion, and better asset quality.

• Growth in unsecured products and faster re-pricing of loan books aided margins.

• Management expects to maintain the pace of branch additions in FY24.

• Maintain 'buy' with a target price of Rs 1,154 per share.

• ICICI Bank reported a stellar set of numbers with the big positive being a sharp expansion in net interest margin

• The lender's Q4 results have little to complain about except the still weak deposit growth

• We would have preferred to see more aggressive network expansion even if it meant slightly lower current profitability

• We would prefer the bank to increases investments and operating expenses now rather than aiming for a display of operating leverage

• Maintain 'market perform' rating with a target price of Rs 1,000 per share

• Expect NIMs to have peaked as the re-pricing of deposits will be visible in FY24.

• The cost-to-income ratio is likely to remain elevated in the short to medium term.

• Lower credit costs, led by better recoveries, have resulted in the best return ratios over the last few years.

• Maintain 'buy' with a target price of Rs 1,210 per share.

• ICICI Bank is well-positioned to deliver steady earnings supported by healthy asset quality and strong business growth momentum.

• The bank has identified strong growth opportunities in the retail, SME, and business banking segments.

• ICICI Bank is seeing strong trends in recovery across segments.

• Maintain 'buy' with a target price of Rs 1,150 per share.

• ICICI Bank's Q4 performance was led by superior margin delivery and contained credit costs

• Bank expects credit growth momentum to remain healthy in FY24

• Recent RBI approval to HDFC to increase stake in the insurance business should takeout stake sale overhang on ICICI Lombard as well

• Maintain 'buy' with a target price of Rs 1,250 per share

• ICICI Bank's operating expenses are likely to remain elevated due to branch expansion and investment in technology.

• The bank is well placed to continue reporting credit costs below long-term averages.

• ICICI Bank stands out for its superior liability mix, strong digital capabilities, and improvement in core profitability metrics.

• Maintain 'buy' with a target price of Rs 1,170 per share.