Views on ICICI Bank 3QFY2014 results - Angel Broking

Views of Mr. Vaibhav Agrawal (VP- Research – Banking, Angel Broking) on ICICI Bank 3QFY2014 results:

"ICICI Bank reported healthy operating performance during the quarter, while asset quality performance was in-line with expectations. NII for the bank grew at healthy pace of 22% to Rs. 4,255cr, aided by healthy loan book growth of 16% (which was led by 22% growth in retail portfolio) and sequentially stable margins.

Non-interest income grew by 27% yoy (higher than our estimates; we await management clarity on the same) to Rs. 2,801cr. The bank reported healthy pre-provisioning profit growth of 29% yoy. Earnings for the bank grew at moderate 13% yoy to Rs. 2,532cr (excluding the impact of special provision of Rs. 215cr for deferred tax liability on special reserve, PAT growth would have been 22% yoy). On the asset quality front, absolute Gross NPAs increased marginally by 4% qoq, while net NPAs increased 16% qoq (as PCR came off by 310bp qoq to 70%). Additionally, the bank's outstanding restructured book increased by around Rs. 1,800cr during the quarter, largely on guided lines. Overall, the bank's asset quality performance during the quarter, was reasonable in light of prevailing macro environment. Though near term outlook for the bank remains challenging, given the current macro environment, from a structural point-of-view compared to peers, keeping in mind its robust franchise and capital adequacy(Total CAR at 16.8% and Tier-I at 11.5%), it remains one of the preferred banks, in our view, from a medium term perspective. We maintain Buy with a price target of Rs. 1,366."

ICICI Bank 3QFY2014 Result Update (CMP: Rs. 1,029, Target Price: Rs. 1,366, Recommendation: Buy)

Source : Equity Bulls

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