Purchase ICICI Financial institution; goal of Rs 1150: Motilal Oswal

Motilal Oswal’s analysis report on ICICI Financial institution

ICICI Financial institution (ICICIBC) has reported one other strong quarter with earnings in-line with expectations (RoA of two.4%). That is regardless of making contingent provisions of INR16b as core credit score price stays insignificant (destructive for FY23). Core PPoP grew 36% YoY, whereas NIMs expanded by a wholesome 25bp QoQ to 4.9%. Enterprise development was sturdy with general loans rising 19% YoY. Asset high quality was strong because the GNPA/NNPA ratios and PCR improved additional. The financial institution now has a complete contingency buffer of INR131b. ICICI Financial institution is properly positioned to ship regular earnings, supported by pristine asset high quality and robust momentum in enterprise development. We estimate ICICI to ship RoA/RoE of two.2%/17.6% in FY25. We reiterate our BUY score on the inventory.

Outlook

The extra Covid-related provision buffer (1.3% of loans) offers additional consolation. We estimate ICICBC to ship RoA/RoE of two.2%/17.6% in FY25. We reiterate our Purchase score with our SoTP-based TP of INR 1,150 (2.9x Sep’24E ABV).

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ICICI Financial institution – 24 -04 – 2023 – moti