EUR 120.00 For Business Accounts Only

MOSL: Morning India (26/July/21): 1. ICICI Bank (Steady quarter; earnings progression to remain strong); 2. Reliance Industries; 3. ITC; 4. JSW Steel; 5. SBI Cards and Payment Services; 6. Ambuja Cements; 7. Un

MOrning India (26/July/21): 1. ICICI Bank (Steady quarter; earnings progression to remain strong); 2. Reliance Industries; 3. ITC; 4. JSW Steel; 5. SBI Cards and Payment Services; 6. Ambuja Cements; 7. United Spirits; 8. Biocon

 

Today’s top research idea

ICICI Bank: Steady quarter; earnings progression to remain strong

• ICICIBC reported strong earnings performance, led by robust core PPOP, aided by healthy NII growth (5bp NIM expansion). Also, lower provisions (23% below our estimate) drove the earnings beat v/s our estimate. The bank is thus progressing well towards earnings normalization.
• Fresh slippages stood elevated at INR72.3b (annualized ~4% of loans), pre-dominantly from the Retail/Business Banking portfolio. However, this was partially compensated by higher recoveries and upgrades. The GNPA/NNPA ratio grew by 19bp/2bp QoQ to 5.15%/1.16%. PCR remains stable at 78.4%, the highest in the industry. Restructured loans stood controlled at 0.7% of loans (v/s 0.5% in FY21).
• ICICIBC holds COVID-19 related provisions of INR64.25b (~0.9% of loans), despite utilizing provisions of INR10.5b in 1QFY22. It guided at improved asset quality trends mainly from 2HFY22 providing comfort on normalization in credit cost. We expect RoA/RoE to improve to 1.8%/15.3% for FY23E. We maintain Buy with a SoTP-based TP of INR835/share (2.6x FY23E ABV for the bank).

Piping hot news

About 90% Indian consumers willing to pay a premium for buying EV: Survey

With global electric vehicles (EVs) sales expected to boom in the next 12 months, nearly 90 per cent of consumers in India are willing to pay a premium for buying an EV, according to a survey by consultancy firm EY. The EY Mobility Consumer Index (MCI), a survey of more than 9,000 respondents from 13 countries, including 1,000 respondents from India, also found that 40 per cent of the respondents were ready to pay a premium of up to 20 per cent. The survey concluded in the second half of July.