Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    
Google
Web www.equitybulls.com
Research

| More

ICICI Bank - Well placed for a bumpy ride - Q4FY20 Result Review - HDFC Securities

Posted On: 2020-05-12 14:44:42


ICICIBC's 4Q PPOP was in line with estimates, although NIM expansion surprised. PAT registered a sharp QoQ fall on the back of COVID-19 related provisions (similar to peers') and was lower than expected. COVID-19 will impact growth and asset quality across the board. However, a stronger b/s (granular, sticky liability base, lower stress levels, higher PCR and adequate CAR), improved underwriting practices and lower exposure to contextually vulnerable products will help ICICIBC emerge stronger. ICICIBC remains our preferred. Maintain BUY (TP of Rs 442, 1.6x core FY22E ABV+ Rs 126 for subs).

Strong funding profile: Deposits grew 18/8%, led by 29/11% growth in term deposits. CASA growth at just 7/3% (avg. CASA grew 12%) was slower than one might expect. Nevertheless, ICICIBC has one of the best in class CASA at 45.1%. ICICIBC's deposit profile is fairly granular and the bank stands to benefit from the growing polarisation of deposit flows. Additionally, CRAR at 16.1% (Tier 1 at 14.7%) provides comfort in uncertain times.

GNPA growth curtailed optically: GNPAs dipped ~5% QoQ to Rs 414bn (5.53%) led by higher w/os (Rs 54.7bn, 2.2x QoQ) even as slippages were elevated at Rs 53.1bn (3.3% ann., ~Rs 13bn lower due to standstill classification). Corp & SME (+47/62%) a/c for ~80% of gross slippages. While, COVID-19 will adversely impact asset quality, we derive some comfort from (1) recent underwriting improvements (70.2% of loans rated A- & above, vs. 67.1% YoY), (2) limited SME (3.5% of loans), and unsecured retail (9.4% of loans) exposure.

Loan growth: The retail segment (+16/3%) drove overall growth (+10/1.5%). Within the retail book, unsecured loans - PL (+46/8%) and CC (+27/-4%) grew the fastest. This segment showed slowing growth trends, accentuated by COVID-19 related disruptions. De-growth in the international book (8.4%, -14.4/-4.6%) persisted. We expect loan growth of ~10% over FY20-22E.

COVID-19 related commentary: ~30% of borrowers (by value) availed of the moratorium as at Apr-20. Like its peers did, ICICIBC offered this facility on an 'opt-in' basis to corp and SME borrowers and on an 'opt-out' basis to retail borrowers. Consequently, retail segments (CV, rural and 2w) saw a higher proportion of borrowers availing of the moratorium. The standstill classification of a/cs had an 18bps impact on GNPLs. 85% of PL & CC loans are to salaried individuals. Of the remaining 15% (self employed), the bank's exposure to travel and hotel sectors is limited. LAP forms 30% of the bank's mortgages portfolio. LTVs here are 55%.

Shares of ICICI BANK LTD. was last trading in BSE at Rs.320.1 as compared to the previous close of Rs. 337.75. The total number of shares traded during the day was 3216480 in over 47120 trades.

The stock hit an intraday high of Rs. 344.9 and intraday low of 318.15. The net turnover during the day was Rs. 1056384623.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com


Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.





Other Headlines:

Real Estate (Sector Update) - Greenshoots visible - HDFC Securities

Cement (Sector Update) - Prices, retail sales hold up despite COVID - HDFC Securities

TCI Express - Branch economics, cost levers as margin tailwinds - ICICI Securities

Mishra Dhatu Nigam - Space order inflow may slow down in FY21 - ICICI Securities

Century Plyboards - Compelling BUY; top pick in building materials - ICICI Securities

Building material - Sector Update - ICICI Securities

ISGEC Heavy Engineering - On a strong footing despite macro headwinds - ICICI Securities

Telecom - Growth breaks due to Covid-19 crisis - ICICI Securities

Pfizer Ltd - Company Update - ICICI Securities

Petronet LNG - Quant Pick - ICICI Securities

Earnings Wrap Q4FY20: Quarter end lockdown takes toll, one-offs rule Q4FY20

Autos & Transportation Sector Update Report - Focus on '3Cs' - HDFC Securities

Banking Sector Credit Trends - Weakness building - HDFC Securities

India Equity Strategy Report - Back to pre-covid levels - HDFC Securities

Strategy: Cyclicals to lead earnings recovery over FY20-22 - ICICI Securities

JK Cement - Ripe for re-rating - ICICI Securities

Phillips Carbon Black - Company Update - ICICI Securities

Information Technology - Q1FY21 Result Preview - ICICI Securities

Motherson Sumi Systems Ltd - Company Update - ICICI Securities

HDFC Ltd - Quant Pick - ICICI Securities

Auto Sales Data for June 2020 - Angel Broking

FMCG - Sector Review 4QFY20 - Disruption visible, growth divergence increases - HDFC Securities

Maintain ADD on ONGC - Impairment loss drags earnings - HDFC Securities

Maintain BUY on Ahluwalia Contracts - Looking ahead - HDFC Securities

RIL-Intel Deal - Angel Broking

Strategy: 'Out of turn' change in NIFTY50 due to Vedanta delisting - ICICI Securities

Time Technoplast - Q4FY20 Result Update - ICICI Securities

Monthly Auto Volumes - July 2020 - ICICI Securities

Oil & Natural Gas Corporation - Q4FY20 Result Update - ICICI Securities

Minda Industries - Q4 FY20 Result Update - ICICI Securities

Auto Sales - June 2020 - Acuité Ratings & Research

Bharat Electronics - Q4FY20 Result Update - ICICI Securities

Petronet LNG - Q4FY20 Result Update - ICICI Securities

Tata Steel - Q4FY20 Result Update - ICICI Securities

Phoenix Mills - Q4FY20 Result Update - ICICI Securities

Jun-20 Volumes expectations: Sales to rise over 2x from May-20 levels for Hero, Maruti - HDFC Securities

Maintain REDUCE on RBL Bank - Risks more evident - HDFC Securities

Maintain ADD on Subros - Expect market share gains to continue - HDFC Securities

Maintain ADD on Petronet LNG - One offs in opex drag profitability - HDFC Securities

Siyaram Silk Mills - Company Update - ICICI Securities

Vardhman Textiles - Company Update - ICICI Securities

Bharat Forge - Q4FY20 Result Update - ICICI Securities

CESC - Q4FY20 Result Update - ICICI Securities

Star Cement - Company Update - ICICI Securities

BUY on GIC Reinsurance - Arduous Road Ahead - HDFC Securities

ADD on Oil India - Excess provisions drag EBITDA - HDFC Securities

Maintain BUY on Sobha - Well placed for recovery - HDFC Securities

Maintain REDUCE on Emami - Miss on all fronts - HDFC Securities

BUY on Galaxy Surfactants - Higher per unit EBITDA leads profitability - ICICI Securities

Maintain BUY on J. Kumar Infraprojects - Migration headwinds - HDFC Securities







Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2019