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Motilal Oswal Report
ICICI Bank Ltd. reported a healthy performance in Q4 FY24, with 17% YoY growth in net earnings (inline) amid contained opex and provisions. The pace of net interest magin contraction decelerated, down 3 bp QoQ at 4.4% (versus - 10 basis points in Q3).
Credit growth was healthy at 16% YoY/3% QoQ, led by healthy traction in the retail, small and medium enterprise and BB segments. Deposit growth surprised positively at 20% YoY/6% QoQ.
On the asset quality side, slippages declined QoQ as Q3 had KCC slippages. gross non-performing asset/net non-performing asset ratios decreased 14 bp/2 bp QoQ. The bank holds a prudent contingency buffer of Rs 131 billion (1.1% of loans).
We increase our earnings per share estimates by 2% for FY26, with little change to our FY25 outlook. We estimate return on asset/return on equity of 2.26%/18.0% in FY26.
We expect ICICI Bank to sustain a ~14% compound annual growth rate in profit after tax over FY24-26E. Reiterate Buy with a revised SoTP-based target price of Rs 1,300.
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