ICICI Bank rallied as much as 3 per cent early Monday even as the lender reported its first ever quarterly loss.
On Friday, it reported a net loss of Rs 120 crore on a standalone basis for the first quarter of 2018-19 due to additional provisions on existing non-performing assets (NPAs).The lender had made a net profit of Rs 2,049 crore during the same period of 2017-18.Most of the brokerages continued to maintain their bullish stance on ICICI Bank post Q1 numbers.
Jefferies said the loss is driven by higher provisions owing to ageing non-performing loans.
Return on equity is seen to improve by FY21.
While maintaining its Buy rating on ICICI Bank, the brokerage revised target price to Rs 365, from the Rs 380 earlier.A 129 per cent increase in provisions to Rs 5,971.29 crore on a jump in stressed assets admitted for resolution to the NCLT and ageing of existing non-performing assets (NPAs) were the primary reasons for the loss.The bank, which recently saw the induction of ICICI Prudential Life MD and CEO Sandeep Bakhshi as the chief operating officer, decided to increase its provision coverage ratio for sour assets by over five percentage points during the quarter to 66.1 per cent.The brokerage firm also maintained Buy call on ICICI Bank with a target price of Rs 370.
Core PPOP growth was reasonably strong.
RoE to witness a sharp recovery over FY19-21, IIFL said.Morgan Stanley retained Overweight stance on ICICI Bank with a target price of Rs 425 while Credit Suisse maintained Outperform with a target of Rs 357.Loan growth was in-line at 11 per cent on a year-on-year basis.
RoE is expected to improve to double digits in FY20, Credit Suisse said.ICICI Bank is among preferred picks of Macquarie in the asset recovery theme.
The brokerage has Outperform rating on ICICI Bank with a target price of Rs 416.CLSA said: NPL formation stablises, but high provisions pushed the bank into losses.
It also added that ICICI Bank was among its top picks in the sector with a target price of Rs 430.