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HDFC Securities Institutional Equities
ICICI Bank - Outperformance in tough times; gradual normalisation
ICICI Bank Ltd.'s earnings beat estimates on the back of strong operating performance and healthy growth on both sides of the balance sheet, partly offset by continued upward normalisation in asset quality and a QoQ dip in margins.
Loan growth (+15 YoY) was largely driven by business banking, SME, rural and credit card segments. ICICI Bank witnessed lower gross slippages in the retail and rural portfolios, partly offset by higher write-offs, while also maintaining a healthy provision coverage ratio (79%).
Deposit growth (+5% QoQ) was healthy even as the CASA ratio clocked in at 40.6% (-28 bps QoQ). Margins trended lower (- 9 bps QoQ), driven by the dual impact of lower yields and higher incremental cost of deposits.
While the bank managed to outperform across parameters, we flag the relatively high growth concentration in unsecured retail and business banking segments (~32% of loan book) over the past three years.
We maintain Buy with a revised SOTP-based target price of Rs 1,370 (standalone at 2.6x Sep-26 adjusted book value per share).
DLF - Strong launch pipeline to drive presales growth
DLF Ltd. reported a subdued quarter with presales of Rs 6.9 billion (-68%/89% YoY/QoQ, largely due to the absence of any new launch (delays in obtaining necessary approvals), seasonally weak quarter and the Shraadhh period.
For FY25, management has guided a launch of 12msf, which would accelerate presales momentum. Value-wise, the launch pipeline stands at Rs 410 billion, of which Rs 400 billion is earmarked for the uber-luxury segment.
There has been a marginal tweak in the launch of a 1msf sliding in FY26 as compared to previously guided 12.8msf. On the back of subdued presales, collections were marginally impacted, coming in at Rs 23.7 billion (+0.5%/-20.1% YoY/QoQ); however, DLF maintained net cash status at Rs 28.3 billion (versus Rs 28.4 billion net cash in Q1 FY25).
Moreover, the developer is heading towards launch of its next uber luxury projects—The Dahlias, DLF 5, and Privana 3—in Q4 FY25 which will drive presales. DLF is aiming to launch its Mumbai project in Q4 FY25.
Hence, given the strong launch pipeline; likely robust presales momentum supported by price hikes; and an expected increase in office occupancy levels, we maintain Buy on DLF, with unchanged target price of Rs 988/share.
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