Broker’s Call: ICICI Bank (Buy) | Techno Glob

Target: ₹1,090

CMP: ₹924.65

ICICI Bank saw a stable quarter with core PAT rising to 1.6 percent. Better loan growth and NIM were partially offset by operating expense misses.

According to the bank, Opex can remain high as a good revenue profile provides a prime location to invest in the business. Loan growth qoq was led by retail, although corporates and BuB attracted. NIM rose by 19 bps QoQ to 4.76 percent due to slower cost of funds. NII was led by slightly better loan growth and NIM at ₹14,790 crore (est. ₹14,500 crore). Loan growth was 22.7 percent yoy (PL est. 22 percent) and deposit growth was 11.5 percent yoy (PL est. 11 percent).

Total deposits grew by 4.3 percent qoq and RTD rates accelerated in the last few weeks, which could boost RTD flows, management said. Hence, cost of funding may rise significantly compared to H1FY23 as EBLR linked loans are reset by 3 months.

Lower GNPA reduced by 17bps QoQ to 3.2 per cent and buffer services of ₹1,500 crore made its total pool to ₹10,000 crore or 1.5 per cent of RWA.

Moving forward to Sep’24 core ABV; We maintain the multiple at 3.0x and raise the SOTP basis TP to ₹1,090 from ₹950.

Source link