InvestorQ : Do you see good price prospects after the ICICI Bank results for the Dec-20 quarter?
Mahima Roy made post

Do you see good price prospects after the ICICI Bank results for the Dec-20 quarter?

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4 months ago
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Let us look at the numbers of ICICI Bank first. Net profit for the Dec-20 quarter were up 17.7% at Rs.5,498 crore due to lower interest cost in the midst of falling rates in the market and a boost from the insurance business of Lombard and Prudential, thanks largely to the impact of COVID.

ICICI Bank reported 5.43% growth in total revenues at Rs.40,454 crore for the Dec-20 quarter. Retail banking posted growth in revenues while Treasury and wholesale banking revenues were lower. Life and health insurance also gave a major revenue thrust. Operating profits were up 15.3% at Rs.10,258 crore helped by NIMs improving to 3.67%. OPM expanded from 23.2% in Dec-19 to 25.4% in Dec-20 quarter.

Provisions were higher on a yoy basis but lower on QOQ basis. PAT margins improved to a lesser extent compared to OPM as it grew from 12.17% to 13.59% yoy. Gross NPAs were lower at 4.38% but high on absolute basis. However, net NPAs at 0.63% indicate that most risk is provided for.

The annualized ROA at 1.70% is attractive even as the capital adequacy is comfortable at above 18%. Overall, a list of brokers have already upgraded ICICI Bank and it looks like the stock could see higher levels in the medium term outlook.

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