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Informist, Friday, Jul. 17, 2026

 

By Aaryan Khanna

 

NEW DELHI – Strong business growth will help ICICI Bank post an on-year rise in net profit for the June quarter. However, the bottom line is expected to grow slower than net interest income with the overhang of a large treasury income a year ago, though provisions should fall.

The private sector lender's net profit is expected to rise only 5% on year to INR 134.11 billion in the June quarter, according to the average of estimates from 16 brokerages. The net profit estimates ranged from JM Financial Institutional Securities Pvt. Ltd.'s INR 141.00 billion to a low of INR 123.17 billion from Prabhudas Lilladher Pvt. Ltd.

 

While provisions will fall from INR 18.1 billion in the year-ago quarter, analysts expect contingencies to rise sharply from an extremely low base of INR 1.0 billion in the March quarter. Estimates for provisions in the reporting quarter range from INR 13.69 billion to INR 15.9 billion. Sequentially, the net profit is seen marginally lower than Jan-Mar's INR 137.02 billion, with 10 of the 16 brokerages expecting a fall.

 

ICICI Bank's net interest income is seen rising nearly 10% on year and 3.4% on quarter to INR 237.66 billion in the June quarter, according to the average of the 16 estimates. The lender has not released provisional data on advances and deposits. The brokerages' estimates for loan growth range from 15-18.5%, with the robust growth helping the net profit. ICICI Bank's total advances at the end of the March quarter were INR 15.54 trillion, up 16% on year and 6% on quarter.

 

"We expect NII (net interest income) to grow 8% YoY (year-on-year), supported by healthy loan growth and NIM are stable at 4.4%, due to lower funding cost," IDBI Capital Market Services Ltd. said in its pre-earnings note.

 

Even with high loan growth, the bank is expected to keep asset quality stellar, with non-performing assets to remain low despite a seasonal increase from farm loan slippages in the June quarter. ICICI Bank's gross and net NPA ratios were at 1.4% and 0.3%, respectively, as of Mar. 31. IDBI Capital Markets said it was focusing on the outlook for the sustainability of the asset-quality at multi-year lows, led by recoveries in the corporate loanbook. 

 

"We expect lower credit costs (0.4%) with no new surprises on provisions. We are building slippages of ~1.7% (~INR 68 billion)," Kotak Securities Ltd. Ltd. wrote in its pre-earnings note. "We don't expect any negative commentary on asset quality."

 

While bad loans and provisioning are not seen a problem, treasury income and other income may see a sharp decline. Kotak Securities pencilled in treasury income of INR 3 billion in the reporting quarter, against INR 12.4 billion a year ago. Motilal Oswal Financial Services Ltd. projected other income down INR 7 billion on year in the June quarter at INR 77.9 billion.

 

Sequentially, however, the commentary changes substantially. The treasury posted a loss in the March quarter and is expected to return to profit, while the low provisions in Jan-Mar will skew the quarterly profit readings. However, there was divergence on whether the bank has managed to protect its margins from the 4.3% seen in the March quarter or whether it would see a decline.

 

Systematix Shares and Stocks (India) Ltd. said the fall in yield on advances in the June quarter will not be entirely offset by the fall in the cost of deposits. Others noted that competitive intensity was high for certain segments of advances, while both term deposit rates and bulk deposit rates remained high nearly throughout the June quarter, dealers said. YES Securities Ltd. and Prabhudas Lilladher were outliers in forecast stability in the margin sequentially.

 

"NII (net interest income) growth will be in line with average loan growth as the rise in yield on advances to be in tandem with rise in cost of deposits," YES Securities Ltd. said in its pre-earnings note. "Consequently, NIM (net interest margin) will be stable sequentially."

 

ICICI Bank will announce its financial results for the June quarter on Saturday. Analysts will look out for the management's guidance on foreign currency non-resident deposit accretion and commentary on its net interest margin after the earnings. On Friday, shares of the bank closed 1.8% higher at INR 1,444.30 apiece on the National Stock Exchange. The stock is up over 7.2% since Apr. 18, when the bank announced its results for the March quarter.

 

Despite the expected sluggish growth in net profit, eight of the 16 brokerages with earnings estimates pegged it as their preferred or top pick among banks in their pre-earnings notes. All the 17 brokerage reports on the company available with Informist have a "buy" recommendation on the stock with an average target price of INR 1,683 per share. This is nearly 17% higher than the current market price.

 

Following are the June quarter earnings estimates of ICICI Bank from 16 brokerages, in descending order of the estimate of net profit, in INR billion:

 

BROKERAGE	NET INTEREST INCOME	NET PROFIT
JM Financial Institutional Securities Pvt. Ltd.	239.50	141.00
IDBI Capital Market Services Ltd.	233.75	139.82
PhillipCapital (India) Pvt Ltd.	237.90	138.24
Elara Securities (India) Pvt Ltd.	239.96	137.93
Anand Rathi Share and Stock Brokers Ltd.	238.75	137.81
YES Securities (India) Ltd.	237.83	137.57
Nuvama Wealth Management Ltd.	238.36	134.90
Dolat Capital Market Pvt Ltd.	235.60	134.70
Nirmal Bang Equities Pvt Ltd.	240.91	134.53
Bank of America Global Research	242.98	134.37
Motilal Oswal Financial Services Ltd.	239.12	131.62
Kotak Securities Ltd.	235.18	130.70
SMIFS Ltd.	237.00	130.00
Systematix Shares and Stocks (India) Ltd.	237.20	129.80
Nomura Equity Research	235.70	129.60
Prabhudas Lilladher Pvt. Ltd.	232.84	123.17
Average	237.66	134.11

 

End

 

Edited by Avishek Dutta

 

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