Oct 2023 – ICICI Bank clocked operating profit of 14K Cr in the Q2 results and Net Profit of 10.2K Cr. The bank has a NIM of 4.65 which is very healthy. Market cap of ICICI Bank is 653K crores . The surge in profits is due to its increase in deposits which grew 32% on YOY Basis and 19% from previous quarter
( CASA reduced due to this factor ), Unsecured loans increased and becomes 13.3% of the loan portfolio. Increase in unsecured loans is usually a cause of worry which has increased 37% on YOY basis however the bank on the other side has very low slippages (provisions decreased 65% YOY Q1FY24 ) which is a great number to ponder . ICICI has provisions of 1.2% of loan book at 13.K crore which is a great number . The Bank has not expanded its brannches compared to its peer and envisages increase in operational costs . NIMS are expected to slide further . Neverthless the bank is definitely on strong earnings trajectory despite these headwinds . The stock corrected by 100 points from 1000 levels which paves way to enter . India is on strong growth path and the festive demands and increasing loan books makes strong case for holding the stock for long .
When we look at valuations we need to make appropriation for the value of subsidaries ICICI pru life, Lombard , ICICI Securities , ICICI pru AMC , overseas operations …etc + stand alone Value which will drive the valuation much higher beyond 1200. Most of the brokerages have valued ICICI at a Consensus average > 1180 levels which are already published and part of public domain . These factors point out to accumalation of ICICI Bank in a staggered way to accomadate any slip in prices in global market turbulence and wait patiently for the long haul .
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