PAT Grew 59% YoY Of This Bank, Buy This Stock For 40% Return: Yes Securities

Brokerage firm Yes Securities has recommended investors to buy the stock of ICICI Bank for a 40% return in 1 year. The bank's profit after tax stood at Rs. 70,187, growing by 13.3% QoQ and 59.4% YoY, according to its recently published quarterly result.

Target Price

The Current Market Price (CMP) of ICICI Bank is Rs. 748. Yes Securities has estimated a Target Price for the stock at Rs. 1043. The stock is expected to offer a 40% upside, in 1 year.

Stock Outlook
Current Market Price (CMP)	Rs. 748
Target Price	Rs. 1043
1 year return	40.00%

Company performance

Gross NPA additions amounted to Rs. 42.04bn for the quarter, translating to an annualized slippage ratio of 1.9% in 4QFY22. NIM at 4.0% was up 4 bps QoQ, as an increase in yield on advances outpaced the increase in the cost of funds. Advances grew 5.5%/17.1% QoQ/YoY driven by healthy growth in Retail, Business Banking, and SME loans. Total OPEX de-grew/grew -0.4%/17.4% QoQ/YoY, Emp. exp. de#grew/grew -2.3%/20.9% QoQ/YoY and other exp. rose 0.7%/15.7% QoQ/YoY. Fee income rose 1.7%/14.4% QoQ/YoY driven by sequential traction across fee income streams.

Comments by Yes Securities

According to Yes Securities, "Overall retail loan growth (including rural loans) was 5.8% QoQ. Specifically, for credit cards, while the revolving rate is still lower than pre-pandemic levels, there has been a gradual improvement. Credit card dues grew 9.9% QoQ whereas personal loans grew 10.4% QoQ. In SME and business banking, the growth has not been driven by ticket size change but by enhancement of coverage. SME and business banking growth has been 11.3% QoQ and 10.2% QoQ, respectively. The impact from income tax refund amounted to 1 bp in 4QFY22, 6 bps in 3QFY22, and 1 bp in 4QFY21."

About the company

ICICI Bank is a leading private sector bank in India. The Bank's consolidated total assets stood at Rs. 14.76 trillion at September 30, 2020. ICICI Bank currently has a network of 5,418 branches and 13,626 ATMs across India. In 4QFY22 core net interest margin has remained stable sequentially after factoring in the impact of an income tax refund. Head of Wholesale Banking, Vishakha Mulye departs and Anup Bagchi is to take over from her, and Rakesh Jha has been appointed as Executive Director of the bank and will take over from Anup Bagchi.

Disclaimer

The above stock was picked from the brokerage report of Yes Securities. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.