#ICICIBANK Bank Q1FY23 Concall Update
(Nirmal Bang Securities)

Strong performance on all counts

Outlook: Positive

• Slippage ratio came at 2.6% vs QoQ 2.0% (expectation was 1.9%). Avg Slippages were at 2.3% for FY19 & 20.
• Retail slippages were at 3.6% vs QoQ 2.8%.
• Corporate + SME slippages were at 1.1% vs QoQ 0.7%.
• GNPA came at Rs. 33163 Cr vs QoQ Rs. 33920 Cr at 3.41% vs QoQ 3.6%. GNPA declined due to recoveries and upgrades of Rs. 5443 Cr vs QoQ Rs. 4693 Cr and also due to write off of Rs. 1126 Cr vs QoQ Rs. 2644 Cr.
• NNPAs declined further by 6 bps QoQ to 70 bps. PCR remains strong at ~80%.
• O/s Restructured book stood at Rs. 7376 Cr vs QoQ Rs. 8267 Cr at 0.82% vs QoQ 0.96%. The Bank holds provisions amounting to Rs. 2,290 crore (31% PCR) against these borrowers under resolution. Over 95% of them are secured loans.
• After many years of being sticky at 2-3% levels, the BB & Below book declined below 1% to 0.9% vs QoQ 1.3% & YoY 1.9%. The upgrades and net reduction during Q1FY23 was mainly due to reduction in outstanding to a borrower in the telecom sector and upgrades of a few accounts in power and construction sectors.
• Provisions came at Rs. 1144 Cr vs expectation of Rs. 1568 Cr, YoY Rs. 2852 Cr, QoQ Rs. 1069 Cr. Provisions include contingent provisions of Rs. 1050 Cr with which the bank further beefed up its contingent provisions to Rs. 8,500 Cr (0.95%).
• Credit cost came at 0.5% for second consecutive qtr against previous guidance of 1.25%.
• NIM was stable at 4.01% vs QoQ 4.00% & YoY 3.89%.
• Cost of deposits continues to be one of the lowest at 3.46% vs QoQ 3.48%.
• Total advances increased by 21% year-on-year and 4% sequentially to Rs. 8.95 Lac Cr.
• The retail loan portfolio, excluding rural loans, grew by 24% year-on-year and 5% sequentially, and comprised 53% of the total loan portfolio.
• The business banking portfolio grew by 45% year-on-year and 7% sequentially. The SME business, comprising borrowers with a turnover of less than Rs. 250 crore, grew by 32% year-on-year and 3% sequentially. Most of the lending here is towards working capital loans.
• Growth in the domestic wholesale banking portfolio was 14% year-on-year & 4% sequentially.
• Core profit before provisioning growth (excl. treasury income) was healthy at 19% YoY.
• ROA remained close to 2% level for 2nd consecutive qtr at 1.98% and ROE was healthy at 15.9%.

Stock is trading at P/E of 13.9x FY24E EPS & 2.6x trailing P/Adj. BV (post adjusting for Subsidiary value)