Earnings Outlook
Higher provisions to limit ICICI Bank's PAT in Oct-Dec
This story was originally published at 21:55 IST on 23 January 2025
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By Kshipra Petkar
MUMBAI – The net profit for ICICI Bank is seen falling 2.4% on a sequential basis, despite a higher growth in income mainly due to rising provisions, analysts said in their pre-earnings report. The bottom line is seen rising 11.6% on year to INR 114.61 billion for the quarter ended December, according to the average of estimates from 16 brokerages. The bottom line for the bank is seen in the range of INR 111.40 billion–INR 118.64 billion in Oct-Dec.
The net interest income is expected to rise 10.4% on year and 2.9% on quarter to INR 206.20 billion for Oct-Dec. The growth in the net interest income is seen a tad lower than the loan growth due to the rising cost of deposits and outpacing the yield on advances, YES Securities said in its report. In Jul-Sept, the net interest income of the bank grew 9.5% on year to INR 200.48 billion.
The net interest margins of the bank are expected to moderate marginally on a quarter-on-quarter basis. Elara Securities expects the net interest margin to decline by 3-4 basis points on quarter. Axis securities has a slight negative bias on the margins for the bank.
"NIM compression cycle is behind which most of the changes coming from mix change, if any," Kotak Institutional Equities said in its report. In the previous quarter, the bank's net interest margins stood at 4.27%, compared with 4.36% reported in Apr-Jun.
The bank's loans are expected to rise 15% on year and the deposit growth is expected to be higher at 16% as per brokerage reports. Analysts expect the bank to reduce its growth in the unsecured book in the reporting quarter. "Yet another steady quarter, with steady loan growth and deposit growth. The drift towards higher retail TD (term deposit) growth may push CASA ratio down, in turn impacting deposit cost as well," Elara Securities said in its report. As of Sept. 30, the total deposits rose 15.7% on year and total advances grew 15% on year.
Analysts do not expect the bank to face any major challenge on its asset quality. They either see the asset quality stable or inching up marginally. As of Sept. 30, the net NPA ratio stood at 0.42% and the gross NPA ratio stood at 1.97%. Some analysts expect slippages to rise due to defaults in agricultural loans due to seasonality. The gross additions of the bank in the previous quarter fell to INR 50.73 billion from INR 59.16 billion reported in Apr-Jun.
The bank will announce its results on Saturday. On the National Stock Exchange, the shares of the bank closed 0.1% higher at INR 1201.75 on Thursday. Shares of the bank have fallen nearly 7?ter the bank had reported its earnings for Jul-Sept, on Oct. 26.
Following are the Oct-Dec earnings estimates for ICICI Bank based on reports from 16 brokerage firms in descending order by the estimate of net profit:
| Brokerages | Net Interest Income (in INR million) | Net Profit (in INR million) |
| YES Securities (India) Ltd | 2,07,884.00 | 1,18,644.00 |
| Anand Rathi Share and Stock Brokers Ltd | 2,06,940.00 | 1,18,384.00 |
| Systematix Shares and Stocks (India) Ltd | 2,06,582.00 | 1,17,159.00 |
| Emkay Global Financial Services Ltd | 2,07,154.00 | 1,16,834.00 |
| Nuvama Wealth Management Ltd | 2,05,100.00 | 1,16,200.00 |
| Sharekhan Ltd | 2,06,520.00 | 1,14,970.00 |
| JM Financial Institutional Securities Pvt Ltd | 2,06,525.00 | 1,14,841.00 |
| Nirmal Bang Equities Pvt Ltd | 2,07,268.00 | 1,14,781.00 |
| Axis Securities Ltd | 2,06,630.00 | 1,14,480.00 |
| Elara Securities (India) Pvt Ltd | 2,05,459.00 | 1,14,460.00 |
| Motilal Oswal Financial Services Ltd | 2,07,058.00 | 1,14,222.00 |
| KR Choksey Research | 2,08,506.00 | 1,12,440.00 |
| Prabhudas Lilladher Pvt Ltd | 2,06,300.00 | 1,11,800.00 |
| Kotak Institutional Equities | 2,04,215.00 | 1,11,649.00 |
| IDBI Capital Market Services Ltd | 2,02,578.00 | 1,11,553.00 |
| Nomura Equity Research | 2,04,500.00 | 1,11,400.00 |
| Average | 2,06,201.19 | 1,14,613.56 |
End
Edited by Akul Nishant Akhoury
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