ICICI Bank Ltd. share price target

ICICI Bank Ltd reported a stellar set of numbers in its Q1FY20 results, beating our and consensus estimates on all parameters.

As structural changes become more entrenched at the bank (retail loans are ~61% of book, improving corporate asset quality), ICICIBC's reported financials will improve and stabilise. It is the cheapest large PVT bank. Continuous stability/improvement in core parameters underpin our thesis of its trajectory towards normalised earnings/RoAAs. The recent slew of defaults and weakening macros pose some risk on this path. ICICIBCs 1QFY20 show was mildly ahead of estimates. Our healing thesis is mostly playing out (slippages and credit costs continue to moderate, coverage is now best-in class). Maintain BUY with an SOTP of Rs 492 (2.0x Jun-21E core ABV of Rs 189 and sub-value of Rs 113).

income and on stress side over BB & below is gradually moving down which is currently at 2.5% (from 3.0% in Q4). With pick-up in business with high yielding loan share & lost cost funding should help NIMs improvement, while normalizing credit cost should help strong recovery in earnings. We retain...

ICICIBC's 1QFY20 PAT of INR19.1b (est. of INR21.2b), was led by strong NII and controlled opex. Core PPoP grew a healthy 21% YoY (in-line). NII grew 27% YoY to INR77.3b, led by healthy loan growth with additional boost from interest on IT refunds. NIMs stood at 3.62% v/s 3.72% in 4QFY19 including 9bp impact on IT refund (INR1.8b) and 8bp impact due to interest collection from NPLs. On a like-to-like basis, margins moderated marginally by 3bp QoQ. Other income declined 11% YoY as 1QFY19 had stake sale gain from IPRU while core fee income grew ~10% YoY (retail forms 72% of total fees). Total income,...

ICICI Bank's (ICICIBC) Q1FY20 PAT at Rs 19.1bn was above our estimate due to below-expected provisions.

We initiate with a BUY for a 24 months price target of Rs.566, representing an upside of 30% from the CMP of Rs.439

ICICI Bank (ICICIBC) reported a healthy core performance in Q4FY19. While loan and NII growth was healthy, net profit growth was lower due to a spike in provision costs. NIM increased by 32bps QoQ to 3.72% owing to interest on income tax refund and interest received on NPA a/cs.

Structural changes at the bank are increasingly evident, as the bank continues to re-orient itself towards retail lending (~60% of the book). Shrinking pools of identified stress and low rated corporate loans will insulate the bank from asset quality shocks. A consistent improvement in core operating parameters (growth, NIMs, CASA) give us confidence that the bank is put, on its revival (of sorts) trajectory. The spurt of credit downgrades, may throw only a temporary spanner in its works. Its creditable franchise and reach gives it an edge over its peers. While slippages for the qtr were higher vs. expected, the overall stress declined, keeping the banks prospects remain largely unchanged. Maintain (2.0x Mar-21 core ABV of Rs 172 and sub-value of Rs 109).

Operating performance marred by Credit costs. Maintain Accumulate. The bank reported a 5% YoY lower profit (missed our estimates), due to higher credit costs of 230 bps (our estimate was 160 bps). This is despite a lower accretion in GNPA (ex of special cases) and improved asset quality by 105 bps to 6.7%. In other parameters, results were strong with NIM expansion, 17% deposits growth, robust domestic and retail advance growth of 17% at 21% YoY respectively. We expect the operating performance to remain strong but marred by credit costs in near term. At...

US & UK yields rose as US GDP, payroll and consumer confidence data surprised positively and BoE delivered hawkish comments. Crude prices fell after US inventories rose. Global currencies appreciated against the US$ and equity markets were stable. However, volatility to markets might return as US may soon impose US$ 200bn tariffs on Chinese imports. Indian equity markets fell led by consumer, auto and IT stocks. Consumer firms reported sharp deceleration in rural volume. We expect muted growth in H1FY20....