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Edelweiss Financial maintains 'buy' on ICICI Bank after Q4 numbers

Updated : May 07, 2019 09:39 AM IST

ICICI Bank on Monday reported a healthy set of numbers for the fourth quarter ended March 31. The bank's growth hits a three year high and net interest margin figures beat the street expectations. ICICI Bank said its net interest margin (NIM) for the March quarter stood at 3.72 percent.  Its net interest income (NII) increased by 27 percent year-on-year to Rs 7,620 crore in Q4 from Rs 6,022 crore in the quarter ended March 31, 2018.

Kunal Shah, senior vice preside and head - BFSI Research, Edelweiss Financial Services, shared his views and readings on the numbers and stock.

The overall Q4 performance of ICICI Bank was characterised by strong operating momentum and strengthening of the balance sheet, Shah said.

“It reaffirms our confidence that it will clock 16-17 percent RoE (return on equity). So we have a buy recommendation on the stock with a target price of Rs 493,” Shah said.

On asset quality front, Shah said, “A major part of the slippage on the corporate side has come in from the BBB... Otherwise, there was one sugar account which they have highlighted wherein there is a change in management even though it’s performing one and we will see the resolution there.”

"I think FY20 should be a much better year with respect to the credit cost,” he added.
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