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Dolat Capital Report
ICICI Bank Ltd. reported a steady quarter with net interest margin at 4.36% (-4 basis points QoQ), contained opex, stable asset quality metrics with slippages at 2%, and healthy loan growth at 3% driving return on asset of 2.4%. Excluding of higher dividend income and increased treasury gains, PAT was in-line.
Credit costs stood at 50 bps, after adjustment for release of Rs 3.89 billion AIF provisions. Credit costs guidance retained at 50 bps for FY25. With stable cost of fund QoQ, net interest margin to be range-bound until rate cuts.
We tweak estimates and maintain ‘Buy' rating with SOTP based target price of Rs 1415 (from Rs 1325 earlier), valuing standalone bank at 2.8 times FY26E price/adjusted book value (from 2.7 times earlier) against return on asset/return on equity of 2.1%/17%.
Amongst large private banks, ICICI Bank is best placed across key metrics including loan-to-deposit ratio, liability profile and CoF, profitability ratios (RoA/RoE), capital comfort, and provision buffers.
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