Analysts have issued extremely optimistic expectations for ICICI Bank’s April-June quarter (Q1FY23) results. Four out of five brokerages, including JP Morgan, Edelweiss Securities, and Emkay Global, expect ICICI Bank’s Q1 net profit to increase by 40% to 47% year on year (YoY), reaching Rs 6,790 crore. In Q1FY22, the figure was Rs 4,616 crore.
This would be a 3.3% decrease from the Rs 7,018.7-crore profit reported in Q4FY22. BNP Paribas’ outlier estimate on the upside pegs PAT at Rs 7,806.3 crore, up a whopping 69% year on year.
On the other hand, Kotak Institutional Equities expects PAT to rise only 10% year on year to Rs 5,090.4 crore, as the bank is expected to cover massive treasury losses of Rs 2,330 crore (up from Rs 290 crore YoY).
On Saturday, July 23, the private lender will release its results.
Meanwhile, pre-provision operating profit (PPoP) is expected to increase by 15-16% year on year, reaching Rs 11,510 crore.
According to analysts, loan growth will be 20% year on year at Rs 887,600 crore, up from Rs 738,600 crore last year.
“Loan growth would be solid at 20%, led by SMEs and retailers. While we anticipate a stable net interest margin (NIM) for the quarter, we anticipate positive guidance for the next few quarters “KIE stated.
Meanwhile, deposits have increased by 17% year on year to Rs 1.08 trillion. In this context, net interest income (NII) is expected to rise by 18% to 21% year on year, between Rs 12,900 crore and Rs 13,276.4 crore.
NIM is forecast to be 4% for the current quarter, up from 3.89% year on year and stable sequentially.
“NIM will most likely grow beginning in Q2FY23. Rising rates have a marginally positive impact on NIM in Q1 because repo reset is after three months “Edelweiss Securities stated
Asset quality
KIE expects provisions to fall to less than 1% of loans because there is “negligible risk on asset quality currently.”
“We are factoring in 1.9 percent (Rs 4,000 crore) slippages, but management commentary is solid on continued recovery and less stress from asset quality,” the brokerage said.
Provisions are expected to be around Rs 1,890 crore in total. The gross NPA ratio is 3.5 percent (3.6 percent QoQ), while the NNPA ratio is 0.7%. (0.8 per cent QoQ).
“Better growth, including mortgages and unsecured loans, will almost certainly increase margins, resulting in healthy core profitability. Slippages may moderate QoQ as retail stress eases “Emkay Global stated.