ICICI Bank rises ahead of Q4 results

Stock up 3% to Rs 865

ICICI Bank is trading higher by 3% to Rs 865 ahead of its financial results for the fourth quarter ended March 2012, schedule to declare today.

According to analyst at Motilal Oswal "ICICI Bank will deliver another quarter of over 20% year-on-year (y-o-y) growth (the bank maintained this trend in FY12) led by better margins and lower credit costs. While expect earnings to grow by 18% in FY13, this could see upgrade as loan growth picks-up.”

“Asset quality will continue to remain robust, with restructuring of Rs 1,300-1,500 crore expected in Q4FY12 in line with management guidance. Fee income growth adjusted for dividend from subsidiaries will continue to remain muted with flat y-o-y core fees expected in Q4FY12. Domestic and retail loan growth could pick up marginally but overall FX adjusted loan growth will remain muted,” said analyst at Prabhudas Lilladher in its recent report.

 

The analyst believes in a re-rating for ICICI’s lending business due to improving core return-on-equities (ROEs). However, stronger top-line momentum will be the key catalyst. Q4FY12 is unlikely to provide any positive surprise on top-line performance but a smaller base will most likely aid a recovery in FY13, especially in fee income, he added.

The stock opened at Rs 846 and hit a high of Rs 866 on the National Stock Exchange. A combined 3.22 million shares have changed hands on the counter till noon trades on both the exchanges.