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ICICI Bank reports a robust growth in Q2FY22 however margins still remain under pressure

by 5paisa Research Team 25/10/2021

ICICI bank reported robust growth in the recently announced Q2 results, the overall business grew by 19% YoY as the net profit grew to Rs. 55.1bn, NIM grew by 4.0% (up by 11bp QoQ), loan growth stood at 17% YoY and 4% QoQ, NII grew by 25% YoY, fee income increased by 21% YoY which led to an increase of 23% YoY in core operating profit. Slippages clocked at Rs. 55.8bn (3.5% of loans), and the annualized retail slippage ratio stood at 4.3%. 

The growth and better-than-expected margins were driven by improvement in yields, reduction in cost of funds, and good business in SME and retail loans. This growth is estimated to stay consistently favorable. Other factors driving the growth were superior asset quality performance, improved earnings, wholesale segment improved contribution, newfound growth drivers in the retail segment (personal loans, credit cards), ability to reign in cost ratios gradually and significant reduction in incremental credit costs. The RoE stood at 14.1% and exit RoA stood at 1.8% in Q2FY22. 

Bank’s NIM stands muted and may continue the trend due to difficulty in sustaining the levels due to low interest reversals and high CASA ratio driven improvement in funding costs. The NIM may also get affected if the Bank plans to slash interest rates even lower in order to maintain market share and beat competition. 

The bank’s retail portfolio business strategy based on proprietary data and analytics by utilizing the existing customer database for sourcing retail products through cross-sell and up-sell has served well in growing the business segment. The bank has witnessed a significant growth in SME and business banking, in payment transactions from features like ‘Pay to Contact’ and ‘Scan to Pay’, and number of credit enquiries on its digital offerings and platforms like InstaBIZ. Monitoring these, the bank strategizes to grow its margins by programme-based lending rather than diluting margins. 

The bank registered less than 1% overdue in performing its corporate portfolio. One of the segments that is still under stress is the Commercial Vehicle Loans segment. The net slippage and overdues (without the Commercial vehicle segment) were back at March2021 levels. 

There seems to be no concentration risk in Restructuring under 2.0 and the quantum seems to be under Rs. 10bn while some accounts are still under resolution.
Thus, the risks that the bank may endure would be the deteriorating asset quality, slower economic recovery, higher credit costs, higher slippages and the NIM margins which still remain under tension. 


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Multibagger stock: An investment of Rs 1 lakh a year back gave 313% price returns

Multibagger stock: An investment of Rs 1 lakh a year back gave 313% price returns
by 5paisa Research Team 25/10/2021

The lesser-known company under the umbrella of Jubilant Group of companies is all set to give multi-bagger returns.

Amid the swinging sentiment in the hitherto bull rally, the markets are finally coming to wake up to the perils of exorbitant valuations (P/E ratio), which seems unjustified and unsustainable.

The likes of IRCTC, Asian Paints bore the brunt in the last few trading session.

The world is suddenly realizing the virtues of Value Investing.

One such value pick is Jubilant Industries which has given multibagger returns in the last one year of 313%.

The multibagger stock of 2021 has risen from Rs 129.35 to Rs 539 in the last one year, logging around a 313% rise in this period. Likewise in year-to-date time, this multibagger stock has risen from Rs 235 levels logging around 129 per cent rise in 2021. 

Just within the time frame of a year, an investment of Rs 1 lakh would have become Rs 3.13 lakhs approx. Amazingly, this is just the beginning of the growth story of this Agricultural and Performance Polymers business of the Jubilant Bhartia group.

The Company’s diversified portfolio of Agri products(46% share of revenue), Performance Polymers (54% share of revenue) and IMFL businesses delivers a broad range of technology-based products and solutions to customers in India as well as globally. Over the years, this business has attained a significant size in India and the company aims at scaling up its business in global markets.

  1. JIL is established as number one in India and globally within the top 3, for manufacturing VP latex used in the dipping of tyre cord and conveyor belt fabric.

  1. It is one of the leading manufacturers of Single Super Phosphate (SSP) in India which is also the largest selling product under the Ramban Umbrella.

  1. The Consumer Products business is focused on providing customers with a complete range of woodworking solutions ie adhesives and wood finishes, footwear adhesives and epoxy sealants. With a nationwide network and brand presence, they represent as brand name of 'JIVANJOR'.

  1. Under the food polymer segment, Vamipol is a major raw material for making gum base for chewing gum and bubble gum. Jubilant is one of the three major global suppliers of Solid Poly Vinyl Acetate (SPVA).Suppliers to market leaders worldwide - The WM Wrigley Jr. Company, Cadbury (The Kraft foods Company) & Perfetti Van Melle Co.

The company has shown considerable traction in its topline performance by way of expanding into new markets and launching new products. The company has logged a YoY growth of 89% in its net sales in the recently reported Q2 FY 2022 numbers. Operational efficiencies have led to Core EBITDA to grow at 112 and Net Profit increased by 106% on a YoY basis. The company is available at a reasonable Price Earning multiple of 25x as compared to other players in the segments.

With the fast recovery in the real estate sector, the company is expected to register good growth. The Brand “Jivanjor” which competes with the market leader “Fevicol” is gaining a strong presence. Also, the demand outburst seen in the Automobile sector is set to boost the demand for the latex segment.

The company continues to be a multibagger for coming quarters on the underscore of a strong revival of demand, its innovative product launches and deeper penetration in new markets.

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Stock in focus: Is RBL Bank ready for a trend reversal?

Stock in focus: Is RBL Bank ready for a trend reversal?
by 5paisa Research Team 25/10/2021

RBL Bank has been on a rough path since May 2019. But is it signalling towards change in trend? Let’s find out.

Quarter ended September 30, 2021, RBL bank’s total deposits jumped 17% to Rs 75,588 crore as compared to Rs 64,506 crore in the same quarter last year. Their Current Account-Savings Account (CASA) ascended by 33% Year-on-Year (YoY) to Rs 26,734 crore in the recent quarter. The Q1 FY22 numbers of RBL Bank were not so enticing. In Q1 FY22 RBL Bank's net loss on a standalone basis stood at Rs 459 crore as against a net profit of Rs 141 crore in Q1 FY21. On the other hand, its total income in Q1 FY22 jumped 4.92% to Rs 2,721 crore from Rs 2,592.73 crore in the same quarter last year.

Having said that, the stock has been on a rough path since May 2019. However, the stock currently is trading near its downward trendline, breaching and thereby sustaining would mean trend reversal. Even if the price breaches this downward trendline, two major resistances are waiting to welcome the price. The immediate resistance is placed at 226.40, one at 246.65 which is also 23.6% Fibonacci level and finally at 274.30. Breaching these resistances would mean more bullishness in this stock.

Looking at the momentum indicator Relative Strength Index (RSI), then it is comfortably trading above 50, whereas its 20-Week Exponential Moving average (EMA) is at 46.82. Rate of Change (ROC) seems to be in full action breaking its three-month-old down trendline. However, if we look at Moving Average Convergence Divergence (MACD), then it is still into negative territory, but quite near the neutral line. Moreover, it has also given positive crossover last month in the negative territory.

RBL Bank today opened at 205, made a high and low of 207.4 and 200, respectively. At the time of writing RBL Bank was trading near its high.

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Stocks having a golden crossover in October 2021

Stocks having a golden crossover in October 2021
by 5paisa Research Team 25/10/2021

 Nifty 50 had its golden crossover in November 2020. Here is the list of stocks having golden crossover this month.

In October 2021, Nifty 50 saw a good jump of around 6.6% to start the month. However, in the second innings of the month, Nifty 50 washed away almost 50% of the gain that it made in October 2021.

It was sectoral indices that had a good play in the month of October 2021. Sectors such as power, PSU (Public Sector Undertaking) and Banks were among the top sectors bagging double-digit returns. In fact, in the last three months, power, PSU and Banking sectors gave returns close to 28%, 15% and 20%, respectively.

That said, from an investment point of view, a golden crossover is one such chart pattern that is widely used by many investors. This is referred to as a bullish breakout pattern which is formed when a relatively short-term moving average breaches a long-term moving average from below. The short-term and long-term moving average would depend on different traders and investors. But usually, as a thumb rule, the cross is considered golden when a 50 Day Moving Average crosses 200 Day Moving Average from below. Here is the list of stocks that had a golden crossover this month.


Last Traded Price  

Per cent Change  

SMA 50  

SMA 200  

Crossover Date  

Mahindra & Mahindra Ltd.  





Oct 21, 2021  

Punjab National Bank  





Oct 19, 2021  

Indus Towers Ltd.  





Oct 11, 2021  

Karnataka Bank Ltd.  





Oct 08, 2021  

Blue Star Ltd.  





Oct 08, 2021  

Kotak Mahindra Bank Ltd.  





Oct 06, 2021  

Bosch Ltd.  





Oct 06, 2021  

NLC India Ltd.  





Oct 05, 2021 


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ICICI Bank shares hit new record after Q2 earnings. Is there more upside left?

by 5paisa Research Team 25/10/2021

ICICI Bank’s shares zoomed to a record high on Monday after India’s second-largest private-sector lender exceeded market estimates for quarterly earnings, and analysts said the stock still has some room for growth.

Shares of ICICI Bank surged 13% to a new peak of Rs 859.70 apiece on the BSE, before cooling off a tad to Rs 847. The shares are now up almost 120% from their one-year low of Rs 388.10 in October 2020.

The gains came after the bank reported a 30% growth in net profit for the second quarter through September to Rs 5,511 crore from Rs 4,251 crore a year earlier.

ICICI Bank also said its domestic loan book grew 19% on a year-on-year basis while the ratio of non-performing assets, or bad loans on the bank’s books, came down to 4.82% from 5.15% three months before. 

This helped the bank pare down its provisioning to Rs 2,713 crore from Rs 2,852 crore the previous quarter. 

The bank said that with economic activity rising, loan disbursements across all retail products increased sequentially. Mortgage disbursements were close to the level seen in the quarter ended March 2021, reflecting the increase in demand. Disbursements of personal loans and auto loans were also close to those levels, the lender said. 

ICICI Bank Q2: More highlights

1) Total advances grew 17% year-on-year to Rs 7.64 lakh crore in Q2.

2) Banking portfolio grew 43% year-on-year. SME segment registered 42% YoY growth.

3) ICICI Bank’s deposits increased 17% year-on-year to Rs 9.77 lakh crore in Q2.

4) Net NPAs declined 12% to Rs 8,161 crore as of September-end from Rs 9,306 crore in June 2021.

5) Recoveries and upgrades of NPAs, excluding write-offs and sale, increased to Rs 5,482 crore from Rs 3,627 crore on sequential basis.

6) Consolidated profit after tax, which included subsidiaries and associates, rose to Rs 6,092 crore from Rs 4,882 crore.

What do analysts say?

Many analysts and brokerage houses feel there is still some upside left for the ICICI Bank stock. CLSA, for instance, has revised its target on ICICI Bank to Rs 1,100 from Rs 1,000. Jefferies and Motilal Oswal expect the stock to touch Rs 1,000 while JM Financial has a price target of Rs 1,010 on the stock.

Motilal Oswal said after the results that ICICI Bank holds Covid-19 related provisions of Rs 6,425 crore. This gives it comfort on stable credit cost trends. The brokerage increased its estimates for FY22 and FY23 by 5% and 2.5%, and projects Return on Assets and Return on Equity of 2% and 16.6% by FY24.

Emkay said that the bank has been delivering strong retail growth of 20% year-on-year, while growth in the SME segment is also robust albeit on a low base. Corporate growth should revive soon, too, it said.

“ICICI—armed with its strong product offerings, franchise network and superior digital-banking platform—should deliver better credit growth and thus core profitability as well (21% CAGR in FY22-24E),” Emkay said.

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Investment Instruments: Mutual Funds vs National Pension Scheme

Investment Instruments: Mutual Funds vs National Pension Scheme
by 5paisa Research Team 25/10/2021

NPS and Mutual funds are the most popular investment instruments for retirement planning which deliver decent returns to their investors.

There are various investment instruments available for an individual where he can park his funds to plan for his retirement. Every investment instrument has unique features and has different riskiness. One can make investments in instruments such as equity, debt, bank fixed deposit, post office savings scheme, mutual funds, National pension schemes, Public Provident Funds, etc to execute a better financial plan. An individual can fulfil his life goals by adequately planning their investments and creating a diversified portfolio. Retirement planning is an essential aspect of every individual’s life. This life goal of an individual is a long-term goal.

So, let’s look at two different avenues that investors may consider for their retirement planning. 



National Pension Scheme (NPS)  

Mutual Fund  


National Pension Scheme is an investment instrument where an individual can invest in for their retirement. This scheme is regulated by Pension Fund Regulatory & Development Authority (PFRDA). NPS can be subscribed by any citizen of India.  

These funds are professionally managed funds which pool the corpus from investors and allocate the same across various asset classes. One can invest in these funds in order to fulfil short term as well as long term goals. Mutual funds are regulated by Securities Exchange Board of India (SEBI).  


These schemes have lower risk as compared to mutual funds and direct equity  

Mutual fund schemes are risky than NPS but less risky than direct equity  


Tier I- This is a non-withdrawable account up to the age of 60 i.e., retirement age, in which, your deposits will be deposited.    

Tier II- This is a voluntary savings account, which you can deposit as well as withdraw at any point. You cannot open a tier-II account without a tier I account.    

Swavalamban account- This type of NPS is provided for encouraging poor workers. Under this scheme, the Govt of India pays Rs 1,000 per year for 4 years of contribution.    


Mutual fund has five main categories of scheme such as:  

Equity-oriented schemes: these schemes pre-dominantly invests in equity and equity-related instruments.  

Debt-oriented schemes: these schemes chiefly invest in debt and money-market instruments.  

Hybrid schemes: These schemes invest in combination of both debt and equity instruments.  

Solution-oriented scheme: These schemes enable an individual to create a corpus for their children education or marriage, etc. and retirement.  

Other Schemes: Other schemes are divided further into two subcategories such as Index Funds/ETFs and FoFs (Overseas or Domestic)  

Tax Benefits  

Amount of deduction u/s 80CCD (1) is 1,50,000, which is a part of section 80C.    

2. The maximum deduction that one can claim is:    

Salaried employees-     

• Employees contribution, or     

• 10% of salary, whichever is lower.    

Other individuals-    

• Assessee’s contribution,  or    

• 20% of gross total income, whichever is less.    

3. Deduction u/s 80CCD (2), which does not form part of sec 80C, cover employers’ contribution towards NPS. This cannot be claimed by self-employed individuals.    

The deduction will be as follows:     

• 10% of basic pay + dearness allowance    

• 14% where contribution by the central govt as an employer.    


Equity oriented schemes:  

Short term Capital Gains – The capital gains arising within 12 months are taxed at the rate of 15%.  

Long term Capital Gains – The capital gains arising after 12 months are exempt up to ₹1 lakh and are taxed if capital gains exceed ₹1 lakh, then they are taxed at the rate of 10% without indexation benefit.  

Debt oriented Schemes:  

Short Term Capital Gains: The capital gains arising within 36 months are taxed as per income tax slab rates of an assessee.  

Long Term Capital Gains:  

The capital gains arising after 36 months are taxed at the rate of 20% with indexation benefit.  

Hybrid Funds: The proportion of equity and the equity-related instrument is more than 65%, then it will be taxed same as equity schemes, otherwise like debt schemes.    




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