ICICI Bank Q4 Results Preview: Strong PAT Growth of 19.2% Expected On The Back of AIF Reversals

On Saturday, April 27, private lender ICICI Bank is scheduled to release its financial year 2023-24 (FY24) results for the January-March quarter (Q4). In light of the strengthening macroeconomic environment and lowering credit risk, the brokerage firm KRChoksey Research is expecting the bank to post a 19.2% YoY growth in profit after tax largely attributable to the reversal of AIF provisions for Non-Performing Assets (NPAs).

ICICI Bank's loan book is expected to expand by 2.2% QoQ and 17.7% YoY (year over year). Small and medium-sized businesses (SME) and the retail sectors are anticipated to be the main drivers of this growth, as per KRChoksey Research.

Additionally, ICICI Bank's deposits are expected to climb by 17.4% YoY and 4.0% QoQ according to KRChoksey Research who is also assuming a sequential rise in the CASA. A healthy rise in total deposits with a favourable mix of low-cost funds is indicated by the forecasted deposit growth rates and the anticipated improvement in CASA. These factors can have a good influence on the bank's financial performance and ultimately its overall profitability.

The brokerage is also expecting the bank's PPOP to grow by 7.8% YoY with a cost-to-income ratio of 41.3% vs. 39.1% in Q4FY23.

ICICI Bank is expected by brokerage company Nomura to report a net profit of Rs 10,540 crore, up 16% year-on-year from Rs 9,121.9 crore in Q4FY23. Operationally, net interest income (NII) is expected to increase to Rs 19,010 crore, which is a rise of 8% YoY and 2% QoQ. According to BNP Paribas, ICICI Bank's net profit would rise by merely 4.7% annually, or 7% on a quarter-on-quarter basis, to Rs 9,551.6 crore. It stated that PPoP and NII may go up by almost 6% each to Rs 14,666.6 crore and Rs 18,798.9 crore, respectively in the quarter under review.

Equirus Securities anticipates that ICICI Bank may announce earnings of Rs 10,571.9 crore for net profit, Rs 18,850.9 crore for NII, and Rs 14,967.5 crore for PPoP. Net interest margins (NIMs) are predicted by the brokerage to decrease by 10bps on a quarter-on-quarter basis, from 4.4% in Q3FY24 to 4.3% in Q4FY24. According to Equirus, ICICI Bank may report strong year-on-year growth in deposits and advances of 17% and 19%, respectively in Q4FY24.

Kotak Securities highlighted the primary causes of worry in ICICI Bank's Q4 2024 earnings by saying "Key concern would be the progress of NIM as the cost of funds is yet to peak, especially with slower CASA growth. Deposit mobilization is likely to be another key area of discussion."

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.