BQ Prime's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer BQ Prime's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Prabhudas Lilladher Report
ICICI Bank Ltd. delivered good numbers yet again with core pre-provision operating profit at Rs 130 billion beating PLe by ~7% led by superior core revenue. Gross non-performing assets was lower led by lesser net slippages which resulted in benign credit costs.
Loan accretion at 5.0% QoQ was ahead, driven by growth in high yielding segments (personal loan/ credit card, small and medium enterprises, auto). Although net interest margin declined by 21 basis points QoQ to 4.83%, it was 13 bps ahead of our estimate due to better treasury management and lower funding cost.
Bank expects NIM for FY24E to be similar to FY23. We raise FY24/25/26E core profit after tax by 3.0-4.0% due to NII increase and lower provisions. Likely return on assets/return on equity for FY25/26E is 2.0%/17.0%.
ICICI Bank is valued at par with HDFC Bank Ltd. at 2.2 times/1.9 times on FY25/26E core adjusted book value; with recent correction in ICICI Bank it should outperform HDFC Bank in near term.
Maintaining multiple at three times, as we roll forward to September-25 core adjusted book value, we raise SOTP based target price to from Rs 1180 to Rs 1280. Reiterate ‘Buy'.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.