ICICI Bank: Brokerages remain bullish on stock post Q4 earnings; raise target price

On Friday aft marketplace hours, the slope reported beardown show successful the 4th fourth of fiscal twelvemonth 2024 (4QFY24), with a 17% year-on-year (YoY) summation successful nett earnings. This maturation was driven by steadfast maturation successful nett involvement income (NII), controlled operating expenses, and managed recognition costs. 

The slope achieved an annualized Return connected Assets (RoA) of 2.4% and a Return connected Equity (RoE) of 18.5%. For the afloat fiscal twelvemonth FY24, Profit After Tax (PAT) reached ₹408.9 billion, marking a 28.2% YoY increase.

The bank's Net Interest Margin (NIM) grew by 8% YoY, supported by a robust 16.2% YoY (2.7% quarter-on-quarter, QoQ) summation successful loans. However, NIMs moderated somewhat by 3 ground points (bp) QoQ to 4.40%. 

Also Read: Yes Bank stock terms jumps 8% aft beardown Q4 results 2024. Do you own?

Other income accrued by 11% YoY but decreased by 7% QoQ to ₹56.5 billion, chiefly owed to beardown maturation successful halfway fees (13% YoY) offset by humble treasury gains astatine ₹2.8 billion.

In presumption of concern expansion, advances grew by 16.2% YoY (2.7% QoQ), driven by maturation successful retail, concern banking (BB), and tiny and medium-sized endeavor (SME) loans. Within the retail segment, determination was steadfast maturation successful housing, rural, and unsecured recognition (personal loans and recognition cards), according to Motilal Oswal. 

The proportionality of unsecured loans accrued to astir 14.2% of full loans. SME lending expanded by 25% YoY, portion BB loans grew by 29% YoY.

We person compiled brokerage ratings and reviews connected ICICI Bank's Q4 numbers, arsenic outlined below.

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JM Financial 

The brokerage is assured that ICICI Bank is well-positioned to execute an mean Return connected Assets (RoA) of +2.3% and Return connected Equity (RoE) of 18.5% implicit the estimated play of FY25–26. 

This affirmative outlook is supported by the bank's beardown plus quality, sustained maturation trajectory, though margins are expected to somewhat ease. ICICI Bank consistently outperforms its larger backstage assemblage counterparts successful presumption of returns, which the brokerage anticipates volition assistance support its premium valuation.

Following the bank's numbers, JM Financial maintains its people terms of ₹1,330 and maintains a ‘Buy’ standing connected the stock. This people terms indicates an upside imaginable of 20% from the stock's erstwhile closing terms of ₹1,107. 

Also Read: BSE stock terms declines 17% station SEBI directions

Systematix Institutional Equities 

Systematix expects the bank's borderline interaction to beryllium mean compared to its earlier estimates owed to the bank’s quality to walk connected rates reflected successful mostly unchangeable spreads and the management’s absorption connected maintaining pricing discipline. 

The brokerage has reduced its estimates for interest income owed to slower concern maturation successful definite retail segments, specified arsenic idiosyncratic loans (PL). However, this simplification is offset by little operating expenses. Additionally, the brokerage has revised down its estimates for recognition costs, reflecting the bank's sustained plus quality.

Overall, Systematix has adjusted its Profit After Tax (PAT) estimates for fiscal years 2025 and 2026 by 5%, resulting successful a 10-basis constituent (bps) betterment successful Return connected Assets (RoA). It maintains its 'buy' standing connected the banal and has raised the people terms to ₹1,275 per share, indicating an upside rally of 15.17%.

"In our view, a tad higher aggregate is besides justified considering that ample adjacent backstage banks look idiosyncratic issues similar HDFCB with its merger-related uncertainties, Kotak with its ongoing regulatory scrutiny, and Axis with maturation headwinds. ICICI Bank remains our preferred pick," said Systematix.

Antique Stock Broking

Antique Stock Broking stated that ICICI Bank maintains its way grounds of robust performance, boasting a superior Return connected Assets (RoA), beardown plus quality, and a coagulated equilibrium sheet. In opposition to erstwhile expectations, the Net Interest Margin (NIM) is anticipated to stay elevated, resulting successful a 4% upgrade for FY25 and a -2% accommodation for FY26 owed to the imaginable for softer NIMs resulting from a delayed complaint chopped cycle.

Also Read: Shareholders of ICICI Securities lodge suit with NCLT implicit delisting proposal

The brokerage highlights that the slope has established robust buffers, which would safeguard oregon creaseless net adjacent successful the lawsuit of an adverse macroeconomic environment. It anticipates a RoA of 2.2% for FY25 and 2% for FY26, on with a Return connected Equity (RoE) of 17% for FY25 and 16% for FY26.

The brokerage besides maintained a 'buy' standing with a revised terms people higher to ₹1,300 apiece.

Motilal Oswal 

The slope continued its dependable show successful the latest quarter, propelled by robust Net Interest Income (NII) and disciplined absorption of operating expenses and provisions, supported by steadfast plus quality. The balanced creation of its portfolio, with a absorption connected high-yielding segments specified arsenic retail and concern banking, alongside sustained maturation successful concern banking (BB), tiny and medium-sized enterprises (SME), and secured retail loans, has fostered wide expansion, ensuring a resilient diversification of its business.

Also Read: Q4 Results: ICICI Bank declares dividend of ₹10 per equity share

While the complaint of Net Interest Margin (NIM) diminution slowed down (3 ground points QoQ), ongoing unit connected backing costs whitethorn persistently support margins astatine little levels. Nevertheless, enhancements successful plus prime person led to further reductions successful gross non-performing plus (GNPA) and nett non-performing plus (NNPA) ratios.

The further provisioning buffer (equivalent to 1.1% of loans) offers further reassurance. Motilal has raised its net per stock (EPS) estimates by 2% for FY26, with insignificant adjustments to its FY25 projections, anticipating Return connected Assets (RoA) and Return connected Equity (RoE) of 2.26% and 18.0%, respectively, successful FY26.

Also Read: Q4 Results: ICICI Prudential reports narrower caller concern borderline for FY 2024

The brokerage anticipates the slope volition support a CAGR of astir 14% successful nett aft taxation (PAT) from FY24 to FY26E. It has reaffirmed its 'Buy' proposal connected the stock, mounting a revised terms people of ₹1,300.

Similarly, CLSA has upheld its 'buy' standing and raised the people terms to ₹1,350 per share. JP Morgan maintains an 'overweight' stance connected ICICI Bank, with a people terms of ₹1,300, portion Nomura, the Japanese brokerage firm, besides maintains its 'buy' standing with a people terms of ₹1,335 per share.

Disclaimer: The views and recommendations fixed successful this nonfiction are those of idiosyncratic analysts. These bash not correspond the views of Mint. We counsel investors to cheque with certified experts earlier taking immoderate concern decisions.

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Published: 29 Apr 2024, 10:25 AM IST