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What should investors do with ICICI Bank post Q3 earnings; buy, sell or hold? –


ICICI Bank share price inched higher in the early trade on January 24 after company declared its December quarter earnings.

On January 22 ICICI Bank reported over 25% growth in net profit for Q3FY22, to Rs 6,193.81 crore from Rs 4,939.59 crore in the same quarter of the corresponding year.

Net interest income (NII), or the core income a bank earns by giving loans, was up 23.44% to Rs 12,236.04 crore from Rs 9,912.46 crore last year. Other income grew 6.42% to Rs 4,987.07 crore.

Provisions and contingencies fell 26.8% to Rs 2,007.30 crore from Rs 2,741.72 crore year-on-year.

Gross non-performing assets (NPAs) rose 6.3% to Rs 37,052.74 crore in Q3FY22 from Rs 34,860.43 crore in Q3FY21. Slippages stood at Rs 4,018 crore, lower than Rs 5,578 crore in the previous quarter.

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Here is what brokerages have to say about the stock and the company post December quarter earnings:

Prabhudas Lilladher

We believe that bank’s growth momentum will continue in 4Q as well given 1) Lower slippages of Rs 40.2bn (annualized 2.1% of loans) were reported with improvement in economic activity, 2) Asset quality metrics have held up well with strong recovery/upgrades, PCR maintained at 80%, 80bps of COVID contingency provisions (despite w/back Rs10.5bn) and restructuring book at 120bps, and 3) Strong franchise strength is reflected via solid growth both in liabilities & assets with much better managed risk, which keeps ROEs to move towards +15% in FY23 & FY24.

We maintain our conviction at buy with revised target price of Rs 906 (from Rs 819) based on 2.6x Sep-23 ABV and subs value of Rs 186 (from Rs 181).

Arihant Capital

We continue to maintain our positive stance on the bank led by its leveraging digital capabilities, gaining market share position, strong liability franchise, sharp reduction in NPA and faster adoption of technology.

We increase our FY22 earnings estimate by 9% to factor in the lower credit cost. We maintain our buy rating on the stock with a revised SOTP based target price of Rs 968 (Rs 942 earlier), based on 2.6x FY24E P/ABV for standalone bank and Rs 163 for subsidiaries

Motilal Oswal

The steady mix of high-yielding portfolio (Retail/Business Banking) and a low-cost liability franchise is fueling steady NII growth. The bank is seeing a strong recovery in business trends across key segments such as Retail, SME, and Business Banking.

Fresh slippages have ebbed leading to continued moderation in credit cost, while PCR remains the best in the industry at ~80%. The additional COVID-19 provision buffer (79bp of loans) renders further comfort.

We raise our FY22E/23E earnings by 3%/4% and estimate the bank to deliver an improved FY24 RoA/RoE of 2.0%/17%, respectively.

We maintain our buy rating with and SoTP-based target price of Rs 1,100 (based on 3x FY24E ABV), implying 37% potential upside. ICICI Bank remains our top pick in the sector.

LKP Research

We expect its loan book to grow at CAGR of 19% over FY21-23E, led by technology initiatives. The credit cost normalization is underway.

We estimate return ratio ROA/ROE of 1.9% and 15.8% in FY22E. We value the standalone entity at 3.3xFY23E BVPS (Rs 278) and investment in subsidiaries and JVs (Rs 127 per share); we arrive at a revised target price of Rs 1,045. We recommend a buy with a potential upside of 30%

Credit Suisse

Research house has maintained outperform call and raised the target price to Rs 930 from Rs 900 as it believes growth leadership will help company to sustain re-rating.

It raise 2022E EPS by 4.4% on lower credit costs and better fee growth and remains the preferred pick.


Foreign broking firm JPMorgan has kept overweight call on the stock with a target at Rs 930 as company can continue to drive steady low-risk returns with consistent EPS compounding.

The multiples still have room to re-rate.

Broking house raises EPS estimates by 7% for FY23/24 factoring in lower credit costs.

At 09:17 hrs ICICI Bank was quoting at Rs 805.15, up Rs 0.55, or 0.07 percent on the BSE.

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