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Research
ICICI Bank - 2QFY2016 Result Update - Angel Broking
Posted On : 2015-11-03 21:34:02( TIMEZONE : IST )
ICICI Bank reported a decent set of number for 2QFY2016, with PAT growth of 11.9% yoy to Rs. 3,030cr (in-line with our expectation).
Healthy growth in retail advances
During 2QFY2016, the bank's advances grew by 13.3% yoy (2.5% qoq), aided by healthy retail loan book growth of 25.2% yoy. The main drivers leading to the growth in the retail loan book were Personal loans and Home loans, which grew by 56% and 25% yoy respectively. Retail contribution to total loans increased to 44.0% as compared to 39.8% in the corresponding quarter of the previous year. The corporate book grew 7.2% yoy. Advances were made mainly towards working capital requirements while some of the incremental lending was done to PSU companies and other better rated companies.
Deposits growth was modest at 9.2% yoy, while CASA deposits saw a moderate growth of 12.9% yoy, resulting in improvement in CASA ratio by 144bp yoy to 45.1%. The Reported NIM fell by 2bp qoq to 3.52%, with domestic NIM at 3.84% as compared to 3.90% in 1QFY2016. The non-interest income (excluding treasury) for the bank grew 7.1% yoy.
On the asset quality front, the bank witnessed slippages during the quarter to the tune of Rs. 2,242cr (annualized slippage ratio at 2.3%) as compared to Rs. 1,672cr in the sequential previous quarter (annualized slippage ratio at 1.73%), with slippage from restructuring at Rs. 931cr. The Gross NPA ratio increased 9bp sequentially to 3.77%, whereas the Net NPA rose 7bp qoq to1.65%. The bank refinanced ~Rs. 2,000cr under the 5:25 scheme. The Management has guided for lower addition to NPA and restructuring in FY2016 as against FY2015.
Outlook and valuation: At the current market price, the bank's core banking business (after adjusting Rs. 58/share towards value of subsidiaries) is trading at 1.5x FY2017E ABV. The valuation discount in our view vis-Ã -vis other private banks adequately factors in the relatively higher stressed assets in the bank's books. We recommend a Buy rating on the stock, with a target price of Rs. 348.
Shares of ICICI BANK LTD. was last trading in BSE at Rs.279.15 as compared to the previous close of Rs. 279.3. The total number of shares traded during the day was 405942 in over 5756 trades.
The stock hit an intraday high of Rs. 282.7 and intraday low of 277.6. The net turnover during the day was Rs. 113884043.
