ICICI Bank Ltd. Q2FY14 Result First-Cut (Recommend BUY)
Rajesh Desai
Dear Sir/Madam,
ICICI Bank Ltd. announced its Q2FY14 result on 25th October 2013.
Bank’s total income marginally down by 1.50% QoQ while up by 14.70% YoY to INR6209.99 crores. Whereas, Profit After Tax (PAT) increased by 3.42% QoQ and 20.24% YoY to INR2352.05 crores. For the half year ended H1FY14, total income increased by 19.34% YoY to INR12514.76 crores whereas, PAT increased by 22.67% YoY to INR4626.27 crores.
During the quarter, Bank’s loan book and total deposits expanded by 15.53% and 9.81% YoY to INR317786.23 and INR309046.15 crores respectively. On the asset quality front, Bank has improved its Gross NPA by 15bps QoQ and 46bps YoY to 3.08% while Net NPA increased by 3bps QoQ and 7bps YoY to 0.85%. Moreover, Bank has improved its low cost deposit (CASA) by 10bps QoQ and 260bps YoY to 43.30% which has helped it to improved its Net Interest Margin (NIM) by 4bps QoQ and 31bps YoY to 3.31%. Bank is well capitalized to support its growth trajectory, Basel III-Capital Adequacy Ratio (CAR) stood at 16.50%. Provision Coverage Ratio (PCR) healthy stood at 73.10% which positioned it to tame any time liabilities.
Valuations
At the CMP of INR1021.65, ICIC Bank is trading at TTM P/BV of 1.72x. The current valuation of 1.55x FY14E Book Value looks attractive. We have a coverage on the stock with a TP of INR1205. Although our TP was met earlier, we recommend the stock as BUY at CMP with the same TP of INR1205 with a 1-year perspective. Refer to our earlier ICR on ICICI Bank http://www.microsec.in/Static/Pdf/ICICI%20Bank%20ICR.pdf.
Q2’14 (INR Crores) |
Consensus |
Actual |
Variance % |
Total Income | 5941.50 |
6209.99 |
4.52% |
|
PAT |
2149.10 |
2352.05 |
9.44% |
ICICI Bank Ltd Q2FY14 Result-[INR-Crores] | ||||||||
DESCRIPTION |
Q2'14 |
Q1'14 |
Q2'13 |
QoQ% |
YoY% |
H1FY14 |
H1FY13 |
YoY% |
Interest Earned |
10813.27 |
10420.68 |
10026.33 |
3.77 |
7.85 |
21233.96 |
19571.98 |
8.49 |
|
Interest Expended |
6769.76 |
6600.21 |
6655.10 |
2.57 |
1.72 |
13369.97 |
13007.81 |
2.78 |
|
NII |
4043.51 |
3820.47 |
3371.23 |
5.84 |
19.94 |
7863.99 |
6564.17 |
19.80 |
|
Other Income |
2166.48 |
2484.29 |
2042.97 |
-12.79 |
6.05 |
4650.77 |
3922.89 |
18.55 |
|
Total Income |
6209.99 |
6304.76 |
5414.20 |
-1.50 |
14.70 |
12514.76 |
10487.06 |
19.34 |
|
Operating Expenses |
2322.11 |
2490.60 |
2220.90 |
-6.77 |
4.56 |
4812.71 |
4344.43 |
10.78 |
|
Operating Profit before Prov.& Cont. |
3887.88 |
3814.16 |
3193.30 |
1.93 |
21.75 |
7702.05 |
6142.63 |
25.39 |
|
Provisions and Contingencies |
624.80 |
593.18 |
507.92 |
5.33 |
23.01 |
1217.98 |
973.79 |
25.08 |
|
PBT |
3263.08 |
3220.98 |
2685.38 |
1.31 |
21.51 |
6484.07 |
5168.84 |
25.45 |
|
Tax |
911.03 |
946.77 |
729.27 |
-3.77 |
24.92 |
1857.80 |
1397.68 |
32.92 |
|
Profit After Tax |
2352.05 |
2274.21 |
1956.11 |
3.42 |
20.24 |
4626.27 |
3771.16 |
22.67 |
|
EPS |
20.38 |
19.71 |
16.97 |
3.40 |
20.09 |
40.09 |
32.71 |
22.56 |
|
Advances |
317786.23 |
301370.30 |
275075.63 |
5.45 |
15.53 |
317786.23 |
275075.63 |
15.53 |
|
Deposits |
309046.15 |
291185.04 |
281438.20 |
6.13 |
9.81 |
309046.15 |
281438.20 |
9.81 |
|
|
Q2'14 |
Q1'14 |
Q2'13 |
QoQ% |
YoY% |
H1FY14 |
H1FY13 |
YoY% |
Capital Adequacy Ratio Basel II |
16.50% |
17.04% |
N/A |
-54 |
- |
16.50% |
N/A |
- |
|
% of Net NPAs |
0.85% |
0.82% |
0.78% |
3 |
7 |
0.85% |
0.78% |
7 |
|
% of Gross NPAs |
3.08% |
3.23% |
3.54% |
-15 |
-46 |
3.08% |
3.54% |
-46 |
|
CASA% |
43.30% |
43.20% |
40.70% |
10 |
260 |
43.30% |
40.70% |
260 |
|
NIM % |
3.31% |
3.27% |
3.00% |
4 |
31 |
3.29% |
3.05% |
24 |
|
Provisions Coverage% |
73.10% |
75.40% |
78.70% |
-230 |
-560 |
73.10% |
78.70% |
-560 |
|
C/D ratio |
102.83% |
103.50% |
97.74% |
-67 |
509 |
102.83% |
97.74% |
509 |
|
C/I Ratio |
37.39% |
39.50% |
41.02% |
-211 |
-362.68 |
38.46% |
41.43% |
-297 |
|
OI/TI |
62.61% |
60.50% |
58.98% |
211 |
362.68 |
61.54% |
58.57% |
297 |
Regards,
Team Microsec Research
Microsec Capital Limited
Tel: 91 33 30512100
Fax: 91 33 30512020
CA. Rajesh Desai