Earnings Visual: Next Week is Make or Break for ICICI Bank Share

The Q4 results of ICICI Bank were keenly awaited by investors on Dalal Street, in a bid to understand the impact of prevailing high deposit rates and its impact on operational parameters like net interest margins (NIMs), amongst other things.

The share price of ICICI Bank hit a 52-week high of Rs 1,125 earlier in the week before declaring its Q4 report card.

Key Takeaways from ICICI Bank's March 2024 Results

Along with results, the lender's board declared a dividend of Rs 10 per share for the financial year ended 31 March 2024.

ICICI Bank's NIMs was 4.4% in the March 2024 quarter vis-a-vis 4.43% in the December 2023 quarter and 4.9% in the March 2023 quarter.

Its larger rival, HDFC Bank reported NIMs of 3.63% in the March 2024 quarter on interest earning assets and broadly similar to the levels reported on a sequential and year-on-year basis.

Meanwhile, ICICI Bank's net domestic advances grew 16.8% y-o-y to Rs 12.6 lakh crore in the fourth quarter of FY24.

This was powered by its retail loan portfolio that grew 19.4% y-o-y in the quarter under review.

Though the bank's credit asset quality has been fairly steady - percentage of net non-performing customer assets to net customer assets was 0.42% in the March 2024 quarter vis-a-vis 0.48% a year ago.

Rival HDFC Bank was at 0.33% for percentage of net NPAs to net advances in the March 2024 quarter.

ICICI Bank reported a net profit of Rs 107.1 billion (bn) in the fourth quarter, a growth of 17.4% on a y-o-y basis and it broadly trailed estimates of large brokerage houses.

The bank has highlighted a treasury loss of Rs 2.8 bn in the quarter under review owing to transfer of negative balance of Rs 3.4 bn in foreign currency translation reserve related to bank's offshore unit in Mumbai.

Outlook for ICICI Bank

Interest rate cuts are still 6-9 months away given the volatility in global oil markets and the RBI trying to keep inflation under check.

ICICI Bank has over 6,500 branches spread across the country, and they will remain key to mobilizing low-cost savings and current account deposits, going forward.

This could just as well be the key to improving ICICI Bank's NIMs.

The domestic economy is expected to grow 7% during FY25 and that is expected to ensure strong demand for credit for leading banks like ICICI Bank.

How ICICI Bank Share Price has Performed Recently

The results were declared on Saturday last week and on Friday's trade, ICICI Bank stock ended 0.5% lower at Rs 1,107.

In the past one year, ICICI Bank shares are up 22% while in 2024 so far, ICICI Bank share price is up 12%.

ICICI Bank trades at a P/E of nearly 16 times estimated standalone FY25 earnings while HDFC Bank trades at 15 times estimated standalone FY25 earnings.

HDFC Bank is currently in the midst of deriving operational synergies for the merged entity.

Here's a table comparing ICICI Bank with its peers -

Comparative Analysis

Company	ICICI Bank	Axis Bank	HDFC Bank	IndusInd Bank	Kotak Bank
ROE (%)	17.7	8.8	17.2	14.5	14.2
ROCE (%)	15.3	9.3	15.3	13.1	13.9
Latest EPS (Rs)	60.4	85.5	84.3	115.3	87.7
TTM PE (x)	18.3	13.2	17.9	12.5	18.3
TTM Price to book (x)	3.3	2.2	2.5	1.8	2.6
Dividend yield (%)	0.9	0.1	1.3	1.1	0.1
Industry PE	16.4
Industry PB	2.4

Data Source: Ace Equity, Equitymaster

Looking ahead, the private lender is well-poised to capitalize on opportunities for risk-calibrated, profitable growth.

The company aims to boost market share across key segments given its strong franchise, internal collaboration and digital innovations.

Happy Investing.

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