ICICI Bank (one of our top picks) reported strong set of numbers with a) stable asset quality (Proforma), b) Restructured book at 0.4% and c) PAT growth at 19% YoY (up 16% QoQ) during toughest quarter Q3FY21. Asset quality on Proforma basis remains stable with GNPA at 5.42% versus 5.36% QoQ; however slippage ratio was higher on sequential basis, said IDBI Capital in its research report.

Restructuring under RBI resolution framework stood at 0.5% of advances, including corporate cases and company guided for less than 1% of advances for FY21. Management said collection efficiency has improved during Q3FY21 versus 97% of pre-covid levels for retail portfolio (Q2FY21). NII grew by 16% YoY against a loan growth of 10% YoY; margins improved sequentially. PPoP grew by 17% YoY as cost to income ratio improved (40% vs 42.5% YoY). Strong liability franchise and higher Tier I capital ratio will advantage bank when the economy growth recovers, it added.

"We re-iterate "Buy" with a new TP of Rs. 670 (earlier Rs.580), valuing parent business at Rs.547 (2.1X P/ABV FY23E vs earlier at 1.8X as Covid impact was lower than estimated) and rest for the subsidiaries," the broking firm stated.

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