ICICI Bank Q4 result review: An in-line March quarter (Q4) result by ICICI Bank, for financial year 2023-24 (FY24), has led analysts raising target price and earnings per share (EPS) forecast on the stock.
ICICI Bank, they said, appears least vulnerable to regulatory action on its digital offerings or for risk monitoring lapses.
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Compliance with regulatory norms shall be one of the key valuation drivers over the next 12 months, and ICICI ticks most boxes on this while many of its peers are being pulled up for lapses, analysts noted.
Meanwhile, on the stocks, ICICI Bank stock price gained 2.3 per cent to hit a fresh record high of Rs 1,133 apiece on the BSE on Monday as against 0.5 per cent rise in the benchmark S&P BSE Sensex.
In Q4FY24, ICICI Bank posted net profit of Rs 10,707 crore, registering a growth of 17 per cent year-on-year (YoY). Its net interest income (NII) increased by 8 per cent YoY to Rs 19,093 crore, with net interest margin at 4.4 per cent vs 4.43 per cent QoQ.
NII was aided by loan growth of 3 per cent QoQ and 16 per cent YoY with deposits up 6 per cent QoQ and 20 per cent YoY.
The bank’s loan-to-deposit ratio (LDR) stood at 83.8 per cent versus 86.6 per cent QoQ.
Here’s how brokerages interpreted ICICI Bank’s Q4FY24 results:
Nuvama Institutional Equities | Buy | Target: Rs 1,295
ICICI Bank remains the most consistent in delivering core earnings, granular growth, and moderating opex growth ahead of peers.
With an early-mover advantage in leveraging technology for growth and risk management, we view ICICI Bank as less vulnerable to regulatory lapses than peers
We review FY25E and FY26E EPS upwards by 5 per cent and 6 per cent, respectively. This, along with a rollover in base, pushes up the target price to Rs 1,295 from Rs 1,200 earlier.
Motilal Oswal Financial Services | Buy | TP: Rs 1,300
ICICI Bank reported another steady quarter aided by stable mix of a high-yielding portfolio (Retail/Business Banking) and continued traction in BB, SME, and secured loans.
Although the pace of NIM contraction has decelerated, persistent funding cost pressure may keep margins low.
We increase EPS estimate by 2 per cent for FY26, with little change to our FY25 outlook. We expect RoA/RoE of 2.26 per cent/18 per cent in FY26. We expect the bank to sustain a 14 per cent CAGR in net profit over FY24-26.
JM Financial | Buy | TP: Rs 1,330
Management expects some increase in deposit costs to continue although they wish to maintain NIMs around current levels by playing on favorable risk reward growth strategy.
We expect credit cost to normalize going ahead and build average credit cost of 52bps over FY25-26.
We believe ICICI Bank firmly remains on a path to deliver 2.3 per cent/18.5 per cent average RoA/ RoE over FY25-26, aided by asset quality being in good shape, continued growth momentum while margins expected to moderate slightly.
Kotak Institutional Equities | Buy | TP: Rs 1,300
We are seeing most banks comfortable to grow at 15 per cent CAGR and not necessarily looking to accelerate faster as the focus has shifted to building a sustainable long-term franchise with fewer lending mistakes.
