Q1 Results: Brokerages Raise Target Price For ICICI Bank As Asset Quality Improves
Most analysts have raised their target price for ICICI Bank Ltd. as the private lender’s asset quality improved and provisions fell in the June quarter. They also expect the bank’s credit costs to moderate and return ratios to improve going ahead.
The bank’s gross non-performing assets ratio fell to 6.49 percent in June quarter from 6.7 percent in the March quarter. Net NPAs contracted to 1.77 percent sequentially from 2.06 percent. Its provisions fell to Rs 3,495.7 crore sequentially from Rs 5,451 crore. The bank’s profit during the period, too, met estimates.
Here’s what the brokerages have to say after ICICI Bank’s Q1 Results 2019-20:
- Target raised to Rs 480 from Rs 455 apiece.
- Growth improved; liability franchise strong.
- Bank maintains a cautious approach towards corporates and hence, doesn’t have significant residual exposure to recent defaults—DHFL, Essel Group or Anil Ambani’s Reliance Group.
- Exposure to Jet Airways already slipped to ‘BB & below’ book.
- Costs were up about 27 percent over the last year; bank to continue investing in branches, people, technology, among others.
- Cuts EPS estimate by about 11 percent for FY20 factoring in higher provision coverage, building nearly 140-basis-point credit cost for FY20 compared with guided 1.2-1.3 percent.
- Faster-than-expected IBC recovery could surprise positively.
- Has a ‘Buy’ rating on the stock and will maintain bullish rating.
- At the current market price, stock is trading at about 1.7 times its estimated FY21 adjusted book value.
- Robust performance on all parameters.
- One of the highest advances and deposit growth.
- Gross and net NPAs improved on lower slippages.
- No new meaningful addition from corporate NPA during the June quarter.
- Bank will continue to witness Kisan credit card slippage in the third quarter of the ongoing financial year and first and third quarters of the next fiscal.
- Hikes target by 10 percent to Rs 525 apiece.
- Sees a sharp turnaround in earnings.
- Expects return-on-equity of 15 percent by FY21.
- Acceleration in earnings, strong capital adequacy ratio will drive the stock’s re-rating.
- Maintains ‘Buy’ with a target of Rs 500 apiece.
- Strong all-round performance.
- Management sounded confident and expects to do calibrated business growth.
- Asset quality has come well under control.
- Bank remains top pick, raises target price by 10 percent to Rs 540 apiece.
- There’s a lot to like about the bank.
- Bank reported in line numbers, driven by strong margin.
- Consolidated profit healthy at Rs 2,500 crore against Rs 50 crore a year ago.
- Maintains ‘Buy’ with a target price of Rs 520 apiece.
- Operating performance strong, provisioning coverage improves further.
- With asset quality stabilising, credit cost will moderate meaningfully in FY20/21.
- Expects bank to deliver an annualised loan growth of 17 percent over FY19-21E, and estimates core return on assets/return on equity to improve to 1.5/15.5 percent.