ICICI Bank Q1 results preview: Analysts expect profit to rise 40-47% YoY, NII 21%

Q1 preview: Analysts have put out extremely optimistic expectations for ICICI Bank’s April-June quarter (Q1FY23) results. Four out of five brokerages, including JP Morgan, Edelweiss Securities, and Emkay Global, expect ICICI Bank’s Q1 net profit to soar between 40 per cent and 47 per cent on a year-on-year (YoY) basis, up to Rs 6,790 crore. The same was Rs 4,616 crore in Q1FY22.

Sequentially, this would be a dip of 3.3 per cent from Rs 7,018.7-crore profit reported in Q4FY22. An outlier estimate on the upside by BNP Paribas pegs PAT at Rs 7,806.3 crore, up whopping 69 per cent YoY.

On the flipside, Kotak Institutional Equities expects PAT to rise just 10 per cent on year to Rs 5,090.4 crore, as it expects the bank to provide for massive treasury losses of Rs 2,330 crore (up from Rs 290 crore YoY).

The private lender is scheduled to announce its numbers on Saturday, July 23.

Pre-provision operating profit (PPoP), meanwhile, is expected to grow around 15-16 per cent YoY, up to Rs 11,510 crore.

and NII

Analysts expect loan growth to be at 20 per cent YoY at Rs 887,600 crore, up from Rs 738,600 crore last year.

“Loan growth would be solid at 20 per cent led by SME and retail. While we expect a stable net interest margin (NIM) for the quarter, the guidance is likely to be positive for the next few quarters,” said KIE.

Deposits, meanwhile, are seeing swelling to 17 per cent YoY to Rs 1.08 trillion. Against this backdrop, net interest income (NII) is expected to rise in the range of 18 per cent to 21 per cent YoY, between Rs 12,900 crore and Rs 13,276.4 crore.

NIM is pegged at 4 per cent for the quarter under review, up from 3.89 per cent YoY and stable sequentially.

“NIM will likely expand from Q2FY23. There is a very marginal positive impact of rising rates on NIM in Q1 as repo reset is after three months,” said Edelweiss Securities.

Asset quality

KIE expects provisions to slide down to less than 1 per cent of as there is “negligible risk on asset quality currently”.

“We are building in slippages of around 1.9 per cent (Rs 4,000 crore), but we see management commentary to be solid on continued recovery, and less stress coming from asset quality,” the brokerage said.

Overall, provisions are anticipated to be around Rs 1,890 crore. Gross NPA ratio is pegged at 3.5 per cent (3.6 per cent QoQ), while NNPA ratio is seen at 0.7 per cent (0.8 per cent QoQ).

“Better growth, including mortgages and unsecured loans, will likely drive-up margins, leading to healthy core profitability. Slippages may moderate QoQ with retail stress receding,” said Emkay Global.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Source link

Comments are closed.