ICICI Bank shares fall over 5 per cent on bad loans worry; should you invest?

By: |
Updated: August 1, 2016 4:03:20 PM

ICICI Bank shares slumped after the private lender posted 25 per cent fall in net profit at Rs 2232.35 crore for the quarter ended June 30, 2016.

ICICI Bank sharesICICI Bank shares slumped after the private lender posted 25 per cent fall in net profit at Rs 2232.35 crore for the quarter ended June 30, 2016. (PTI)

ICICI Bank shares slumped over 5 per cent on Monday after the private lender posted 25 per cent fall in net profit at Rs 2232.35 crore for the quarter ended June 30, 2016. The company had posted net profit of Rs 2976.16 crore in the corresponding quarter a year ago. The bank’s gross non-performing assets (NPA) moved up to 5.87 per cent of gross advances in April-June quarter against 5.82 per cent in the sequential quarter ended March 31, 2016. In the year-ago period, it was 3.68 per cent. The net NPAs of the bank stood at 3.35 per cent in comparison to 2.98 per cent in Jan-March 2016 quarter.

At 9.46 am, ICICI Bank shares were trading 1.18 per cent down at Rs 259.75. The scrip opened at Rs 257 and has touched a high and low of Rs 261.45 and Rs 256, respectively, in trade so far. The share price of the company closed 5.19 per cent down at Rs 249.20.

Analysts have said the ICICI Bank’s first quarter results was in line with estimates and have given an ‘Accumulate’ rating on the stock. They hav added that the bank reported a poor net interest income(NII), which stood at Rs 5158.52 crore, up 0.85 per cent, against Rs 5115.09 crore in the same quarter a year ago.

Siddharth Purohit, senior equity research analyst- banking, Angel Broking said, “ICICI Bank reported mixed set of results for the quarter, while the PAT number was on expected line, this has come on the back of higher other income backed by trading gains and lower than expected provisions due to utilisation of Rs 800 cr from the contingency provisions. On NII front the bank has disappointed which remained flat.”

While maintaining a cautious outlook, KR Choksey reiterated ‘Accumulate’ rating on the stock and said,”reporting mixed set of performance in Q1FY17, ICICI Bank PAT was a beat on our estimates with robust retail asset accretion, sequential flat gross NPAs and reduction in stressed watch-list exposure. However, poor NII, elevated slippages and declining PCR marred the operating metrics of the bank for the quarter. Moreover, slippages at INR 82.5 bn stood higher Q-o-Q (70 bn – Q4FY16), the watch-list slippages were reported at Rs 4,560 cr.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.