Views on ICICI Bank 4QFY2016 Results: Angel Broking

Views of Mr. Siddharth Purohit (Sr. Equity Research Analyst- Banking, Angel Broking) on ICICI Bank 4QFY2016 Results:

"ICICI Bank's reported PAT is sharply down at INR 702cr. However, the company has made a contingency provision of INR 3,600cr, adjusting for the exceptional provision, the PAT of the company would have been in-line with our estimates.

Slippages during the quarters remained high at INR 7,000cr compared to INR 6544cr in 3QFY16 and higher than our expectations of INR 6,500 cr. However, the bank has taken into consideration all the AQR related accounts and classified them as NPAs; as a result Gross NPA ratio rose by 110bp QoQ to 5.82% while the Net NPA ratio rose by 70bps QoQ to 2.98% in 4QFY2016. On the back of the onetime provisioning the banks provisioning coverage ratio has improve to 61% from 53% in 3QFY16.We believe the additional provisions will allow the back to meet the challenges out of any incremental NPA in the coming quarter. Though asset quality pressure continues to be there, as large and troubled accounts has been recognised as NPAs and provision taken there on, the balance sheet of the bank is on the path of strengthening. Though cleaning up off the books will take couple of more quarters, the worst seems to be priced in at the current levels and we see limited down side in the stock price in the near term. At CMP, the bank's core banking business (after adjusting INR 67/share towards value of subsidiaries) is trading at 1.3x FY2017E ABV. We have an ACCMULATE rating on the stock."

Shares of ICICI BANK LTD. was last trading in BSE at Rs.236.6 as compared to the previous close of Rs. 240.15. The total number of shares traded during the day was 5765894 in over 51916 trades.

The stock hit an intraday high of Rs. 244 and intraday low of 231.4. The net turnover during the day was Rs. 1369272295.

Source : Equity Bulls

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