ICICI Bank share prices rallied most in 6 months even as the private lender reported a steep 45 per cent drop in March quarter net at Rs 1,142 crore, driven down by fresh slippages of around Rs 10,000 crore due to changes in asset classification norms. On a standalone basis, the bank, currently grappling with allegations of conflicts of interest involving chief executive Chanda Kochhar, saw its net profit halving to Rs 1,020 crore. 

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Reacting to its March quarter numbers, the stock spiked as much as 7.68 per cent to Rs 311.65 on the BSE. Global brokerage Morgan Stanley believes the worst quarter for this cycle doesn't look so bad. MS has an overweight rating on the stock with a target price of Rs 425, an upside of 47 per cent from its Monday's close. 

"Focus for the quarter was on asset quality given RBI's move on classifying stressed loans as NPLs. Slippages were Rs 15700 crore (MSE of Rs 13500 crore) and drilldown list declined Rs 14300 crore QoQ. Core PPoP was 8 per cent ahead of our estimate, surprising on margins, fee growth and opex. Maintain OW," said Morgan Stanley. 

Brokerage Edelweiss Securities has a buy rating on the stock with a target price of Rs 370. ICICI Bank’s franchise prowess, soft FY18 notwithstanding, will enable it to deliver healthy returns by FY20. We maintain ‘BUY/SO’ on consistent value accretion in subsidiaries; and focus on containing cost & building granular franchise leading to steady‐state RoA/RoE of >2%/15% by FY20E. The stock is trading at 0.85x FY20E P/ABV (core)," the brokerage said in a results review report. 

In a conference call following the earnings announcement, Kochhar responded to questions on Videocon case, saying she has nothing more to add to the board's existing public stance.

On bad loans, she said the focus was turning to recovery and resolution and the bank would aim to lower its net non-performing loan ratio to 1.5 per cent in two years from 4.77 percent at the end of March.

"We believe that since a lot of the stress has already been recognised, going forward, in fact, our focus will be on recovery and resolution," Kochhar said.

Chanda Kochhar outlined other medium-term goals for the bank such as growing retail loans to more than 60 percent of total loans, bringing down overseas loans to less than 10 percent, and boosting the provision coverage ratio of the bank to 70 per cent by March 2020.