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Motilal Oswal Report
ICICI Bank Ltd. reported a strong performance in Q3 FY24, with 24% YoY growth in net earnings (inline) despite making alternative investment fund provisions of Rs 6.3 billion. NIMs contracted 10 bp QoQ to 4.43% (better than estimate).
Credit growth was healthy at 19% YoY/4% QoQ, led by continued traction in retail, small and medium enterprise and BB segments. Deposit growth was also steady at 19% YoY/2.9% QoQ.
On the asset quality side, slippages were slightly elevated amid seasonally higher slippages from the Kisan Credit Card segment. Gross non-performing asset ratio decreased 18 bp QoQ while net non-performing asset remained largely flat.
ICICI Bank maintains a total contingency buffer of Rs 131 billion (1.1% of loans), which provides comfort.
We slightly raise our earnings per share estimates by 1.6%/0.9% for FY24/FY25 and expect ICICI Bank to deliver return on asset/return on equity of 2.3%/18.3% in FY25. We maintain 'Buy' with a target price of Rs 1,230.
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