ICICI Bank Ltd. share price target

ICICIBC has started offering online credit cards to pre-approved customers, while the effective use of technology has facilitated a significant improvement in opex and delinquency trends across key product segments. ICICIBC suggested for robust traction in its unsecured loans business it has reported a 41% CAGR since FY15 and will continue growing strongly as the market share in these segments is not very high. ICICIBC has built customized digital solutions to accelerate growth in business banking and expects this segment to grow at 35-40% over the next few years. The bank follows four levers of business based on risks, (ii) customized product offering, (iii) partnership with fin techs and (iv) strong distribution. ICICI Bank ICICIBC is engaging with various start-ups to provide improved customer proposition, penetrate into newer markets and reduce operating costs across product segments. It is making equity investments into high growth and disruptive fintech start-ups which helps build cutting-edge customized banking solutions for customers and improves competitive positioning.

We forsee a big turnaround in the earnings on the back of lower credit cost of 1.5% in FY20e and 1% in longer term, gradual margin improvement and pickup in the loan growth. We expect ROE to improve to 15% in FY22e from 3.9% in FY19. Unlike in the past during FY15-19 where PAT had degrown at a CAGR of 22%, we expect PAT to grow by 141% in FY20e, 63% in FY21e and 24% in FY22e i.e. at a CAGR of ~70% over FY19-22e. Comfortable CAR 13.2% and high PCR of >70% reduces any immediate risk of dilution. Subsidiaries are increasing in size and stature gaining market share...

In Q2FY20 ICICI Bank (ICICIBC) continued to improve on its asset quality supported by stable NIMs and steady loan growth. Bank reported 25% YoY growth in NII led by NIMs, up 34bps YoY, and decent loan book growth of ~13%.

Gross loans grew 12.6% YoY to Rs. 613,359cr, driven by home loans (up 18.6% YoY) and personal loans (up 50.6% YoY). Net Interest Margin was at 3.64% in Q2FY20 up 31 bps YoY. GNPA/NNPA ratio stood at 6.4%/1.6% in Q1FY20 (vs. 8.5%/3.7% in Q2FY19) signaling improving asset quality. Slippages were as per expectations with total slippages for Q2FY20 at Rs. 2,482cr (vs. Rs. 2,779cr in Q1FY20). On a healthy capital position, strong digital growth and improving asset...

of accumulated deferred tax asset of Rs 2920 crore. However, excluding the impact of one-time additional charge due to re-measurement of accumulated deferred tax asset, profit after tax would have been Rs 3575 crore in Q2FY2020. The bank has exhibited healthy performance across various parameters including net interest income growth of 26%, fee income growth of 16%, higher net interest margins of 3.64%,...

ICICI Bank has reported a healthy operating performance in 2QFY20 with NII and PPoP growing by 26% and 31%, respectively. Whilst higher-than-expected provisioning and one-time impact of DTA write-down impacted its bottom-line performance, improved fee-based income and higher treasury gain aided its other income. Asset quality parameters continued to improve with 12bps QoQ reduction in GNPA ratio to 6.4%, moderate annualised slippages at 1.6% and 160bps QoQ rise in PCR to 76%. However, the Bank's BB and below book remained sequentially stable at 2.6% of loans, mainly due to higher downgrades. CET 1 benefitted by ~25bps owing to the...

ICICI Bank Ltd reported better than expected set of numbers in its Q2FY20 results, beating our estimates for all parameters with only loan book growth marginally down (12.6% YoY vs our est. of 14%).

We continue to like to the structural change in the bank's B/S (increasing retailisation) and P&L fortification (better margins, lower LLPs due to better coverage). These trends appear sustainable and are likely to persist over the medium term. Our estimates did factor a slight increase in stress in the near term, hence they have not changed significantly. Limited exposure to known stressed names gives us some comfort and we believe the worst in terms of asset quality is long past ICICIBC. Maintain BUY. ICICBCs 2Q was ahead of our estimates. Reported asset quality was stable. The higher influx into the BB and below rated pool disappointed mildly. This was expected, given the spate of downgrades and peer commentary in 1Q. Maintain BUY with an SOTP of Rs 510 (2.0x Sept-21E core ABV of Rs 193 and sub-value of Rs 125).

26 October 2019 ICICIBC reported 2QFY20 PAT of INR6.5b (-28% YoY), higher than our estimate of INR4.5b, led by strong NII and other income. Adjusted for the DTA reversal of INR29.2b, PAT would have been INR35.8b. PPoP grew 19% YoY to INR131.6b, while PAT came in at INR25.6b compared to INR7.9b in 1HFY19. NII increased 25.6% YoY to INR80.5b, led by 12.