Recommendation: Buy it.
Target price – Rs 1,070
ICICI Bank could grow its loans by 22.4% and 4.5% sequentially over last year quarter. Deposit growth is expected to be 12% quarter-on-quarter and 4.5% sequentially. The bank’s net interest income (NII) is expected to grow by 17% quarter-on-quarter and 3% sequentially.
However, lower growth in non-interest income could lead to single-digit growth in operating profit. Analysts at IIFL Securities expect the bank’s slippage to moderate, continuing the trend of improving asset quality.
A sharp 58% drop in provisions contributed to a 32% increase in Profit After Tax (PAT) over the year-ago quarter.
Important management tips to keep in mind:
- Credit demand across major segments
- Asset quality trends
- Margin drivers
- A look at the credit cards business
One hundred lakh rupees
September 2022 forecast
|Net interest income||136.6||3%||17%|
|Pre-Provisioning Operating Profit||108.5||5%||9%|
|Food expenses||11.5||1%||(58) percent|
|Profit after tax||72.8||5%||32%|
Source: Company; IIFL Research