ICICI Bank on Saturday reported a 158 percent year-on-year (YoY) jump in net profit at Rs 4,146.5 crore for the third quarter ended December 31 helped largely by the Essar Steel recovery and a jump in its core income.
Brokerages remained bullish increased their target price on ICICI Bank after it reported a strong financial performance in the third quarter of financial year 2020. The stock of ICICI Bank has been best performer of this year among its peers. The stock has given 48.74 percent returns in the past one year.
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Global brokerage Jefferies has raised the target price (TP) on ICICI Bank stock to Rs 620 from Rs 545 earlier, retaining its ‘Buy’ call.
The brokerage said the bank has a strong balance-sheet and is well placed to face tough macro-economic conditions.
JPMorgan maintained ‘Overweight’ rating and raised TP to Rs 650 from Rs 560 per share.
The brokerage said its Q3 result was mixed with strong operating profit and improvement in recoveries.
“Domestic loan or deposit growth were offset by higher slippages. Cumulative 9-month slippage of 2.1 percent still well within our tolerance limit,” JP Morgan said.
The brokerage increased FY21/22 EPS estimates by 1.4%/4.5%.
Kotak Securities maintained ‘Overweight’ call and increased TP to Rs 615 from Rs 575 per share.
“ICICI Bank reported 2.5X YoY earnings growth led by 23 percent YoY operating profit growth and 50 percent YoY decline in provisions. Asset quality showed further improvement led by utilization of excess provision from an NPL resolution (steel). We don’t see a rationale to change our thesis as the bank is in a nice slipstream,” Kotak Securities said.
ICICI Bank on Saturday reported a 158 percent year-on-year (YoY) jump in net profit at Rs 4,146.5 crore for the third quarter ended December 31, helped largely by the Essar Steel recovery and a jump in its core income.
The net interest income (NII) increased by 24 percent YoY to Rs 8,545 crore in Q3FY20 from Rs 6,875 crore in Q3FY19. The net interest margin was at 20 quarter high of 3.77 percent in Q3FY20 compared 3.40 percent in Q3FY19.
The core operating profit (profit before provisions and tax, excluding treasury income) increased by 24 percent YoY to Rs 7,017 crore in the quarter ended December 31, 2019, from Rs 5,667 crore in the quarter ended December 31, 2018.
“Core NIM (ex-tax refund & recovery advantage) was up 9 bps QoQ to 3.67 percent, driven by pricing power and further loan mix improvement to higher yielding retail loans. Management acknowledged that a large part of falling cost advantage is now behind us, and expects NIMs to remain stable going forward,” Jefferies said.
The bank’s slippages in December quarter rose to Rs 4,363 crore from Rs 2,482 crore in the September quarter.
Gross non-performing assets (NPA) decreased 4.8 percent to Rs 43,454 crore versus Rs 45,639 crore QoQ. GNPA ratio was lowest in 14 quarters at 5.95 percent as compared to 6.37 percent on quarter.
Net NPA declined to Rs 10,388.5 crore from Rs 10,916.4 crore while net NPA ratio fell to 1.49 percent from 1.6 percent QoQ.
At 11:55 am, ICICI Bank shares were trading 1.84 percent higher to Rs 543.75 on the BSE.
First Published: IST