ICICI Bank Ltd. share price target

Formalisation of our economy ultimately concentrates share of profits towards larger companies in various sectors and the two big reforms mentioned above only accelerates that process. Demonetisation has accentuated formalisation of savings away from physical towards financial savings as savers seek to compound their money which is a key reason for us to pick a large private sector bank, a public sector bank and an NBFC so as to play the theme of financialisation of savings....

ICICI Bank Limited is an Indian multinational banking and financial services company headquartered in Mumbai.

ICICI Bank is a leading private sector bank in India .Bank currently has a network of 5,275 branches and 15,589 ATMs across India. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels...

The bank's loans and advances grew 12.6% YoY to Rs. 635,654cr, primarily fueled by growth in domestic retail loan book (+19.3% YoY). Net Interest Income increased 24.3% YoY, as Net interest margin expanded 37bps to 3.77% in Q3FY20. Asset quality improved significantly with GNPA/NNPA ratio at 5.9%/1.5% in Q3FY20 (vs. 7.7%/2.6% in Q3FY19). Given the robust quarter, improving asset quality and healthy capital position, company's outlook remain positive. We reiterate our BUY...

has continued to support strong growth in net interest income. The bank has continued to record healthy growth in the core fee income, while also exhibited improvement in cost-toincome ratio in Q3FY2019. The loan growth of the bank was steady at 13%, while the bank has further raised the share of retail loans to 62.6% end December 2019. The bank also exhibited healthy improvement in asset quality, despite increase in fresh slippages of loans. Bank has exhibited improvement in the CASA ratio on sequential basis in Q3FY2020. Bank has continued to expand its distribution network. Asset quality improves: Bank has exhibited healthy improvement in asset quality with strong...

Favourable structural changes at ICICIBC continue (better quality corporate underwriting, balance sheet retailisation and P&L fortification). While the pace of asset quality improvement may slow in the near term, as with some of its peers, the broader trajectory remains unchanged. Improving asset quality, moderating LLPs and better growth trends underpin our stance. A sustained improvement could trigger further re-rating. ICICBC reported an inline qtr across all parameters. PAT jumped on a/c of lower provisions. Reported asset quality improved slightly, as a result of higher recoveries, even as slippages saw a rise. The 8% QoQ rise in exposure to BB and below rated a/cs was not too surprising. Maintain BUY with an SoTP of Rs 587 (2.2x Dec-21E core ABV of Rs 202 and sub-value of Rs 142).

ICICI Bank Ltd reported better than expected set of numbers in its Q3FY20 results.

ICICI Bank's (ICICIBC) Q3FY20 PAT at Rs 41bn was driven by 24% YoY growth in NII and lower provisions.

Loan growth in chosen business segments (Retail, Business Banking & SME) remained buoyant, while deposits growth moderated in the quarter. Slippages adjusted for the two corporate accounts were on track, while retail slippages rose due to seasonal weakness in agri segment. We expect the operating performance to remain healthy, while high PCR and limited exposure to stress names will keep credit cost under control. Maintain Buy. PAT increased 158% YoY to INR41.5b (5% beat), led by strong NII and lower provisions. NII was up 24% YoY to INR85.5b (3% beat), led by ~13% YoY loan growth and 13bp QoQ margin expansion (10bp benefit due to interest recoveries from steel account). Other income was up 18% YoY, led by core fee income growth of ~17% YoY YoY at INR5.3b. Opex increased 21% YoY to INR55.7b (in-line), resulting in PPoP growth of 23% YoY to INR75.5b (6% beat). Core PPoP was up 24% YoY.

ICICI Bank continues to be our preferred pick and is among the best plays on the improving trend in asset-quality issues. Revival of earnings growth and improvement in advances book and return ratios (ROEs to improve to 15% in FY2022E from ~3% in FY2019A) are key re-rating triggers for the stock. In this note, we have introduced FY2022E earnings estimates and are accordingly rolling over our price target (PT) on FY2022E book value estimates. We retain our Buy rating on the stock with a revised PT of Rs. 630 (2.3x its standalone...