ICICI Bank Q1 Preview: Strong loan growth to aid PAT; NIM may compress

economictimes.indiatimes.com:

ICICI Bank for the quarter ended June, which will somewhat offset the compression in margins that the lender will see for the first time in three quarters. The private sector lender’s net profit for the June quarter is seen rising a sharp 32% YoY to Rs 9,120 crore, according to the average of estimates given by 14 brokerages. Net interest income is seen growing 35% YoY to Rs 17,850.3 crore.

India’s second largest private sector lender is set to detail its earnings on Saturday. Sequentially, the net profit growth is seen flat, and net interest income up just 1%. After reporting strong net interest margin for three quarters, analysts expect the profitability to soften, given that the interest rate cycle is no more favourble for the industry.

However, analysts remain bullish on the growth prospects of ICICI Bank and the stock remains among the top picks in the private banking space. “ICICI Bank has room for re-rating as it continues to deliver solid return ratios and sustainable growth, led by its focus on core operating performance,” Motilal Oswal Securities said in its report. Year-to-date, shares of the lender rose more than 11%, outperforming the index by 2%.Here is a summary of analysts’ expectations from ICICI Bank on Q1 earnings:Motilal Oswal Securities Expect loan growth to remain healthy, led by retail and SME segments.

Expect credit costs to remain under control, supported by adequate contingency buffers. Margin trajectory is likely to reverse. Traction in opex, deposit growth to be key monitorables.Kotak Institutional Equities Expect PPoP or pre-provision operating profit to grow at 30% YoY, as most operating metrics remain stable to marginally negative.