Views on ICICI Bank Ltd 1QFY2017 Results: Angel Broking

Views of Mr. Siddharth Purohit (Sr. Equity Research Analyst- Banking, Angel Broking) on ICICI Bank Ltd 1QFY2017 Results:

"ICICI Bank reported mixed set of results for the quarter, while the PAT number was on expected line, this has come on the back of higher other income backed by trading gains and lower than expected provisions due to utilisation of INR 800 cr from the contingency provisions. On NII front the bank has disappointed which remained flat. Slippages remained elevated at INR 8249 cr, of which 55% came from the watch list of INR 44,000 cr and 16% came from the restructured loan book. Considering that the bank has sold NPAs worth Rs 2232 cr in the quarters the slippages number are higher than what we were expecting.

While the bank has not given any specific credit cost guidance we feel it will remain high. Overall loan growth remained moderate at 12% YoY, however, good part is that retail loans continued to grow strong at 22% and management expects that to accelerate in the quarters to come. We believe problem on asset quality is going to continue to impact the profitability for few more quarters and slippages other than the watch list can be a negative surprise going ahead. Key would be the timing for up gradation of the assets which has been classified as NPAs. While the bank would continue to fight NPA issues it also intends to expand the loan book selectively, from this point of view we believe the stock could remain range bound now, any corrections should be considered for accumulation. We maintain our ACCUMULATE rating on the stock."

Shares of ICICI BANK LTD. was last trading in BSE at Rs.262.85 as compared to the previous close of Rs. 272.1. The total number of shares traded during the day was 1458157 in over 13532 trades.

The stock hit an intraday high of Rs. 271.2 and intraday low of 262. The net turnover during the day was Rs. 386143414.

Source : Equity Bulls

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