ICICI Bank Ltd. share price target

ICICIBC showcased strong earnings beating estimates on back of better NII & fees/treasury, while bank did keep higher provisions rate but it helped improve PCR by 900bps QoQ to 68.5%. Slippages of Rs20.9bn was multi quarter lows and much below expectations, while large recovery helped asset quality ratios to improve substantially and also see benefit in margins. Overall stress levels are also reducing with much better upgrades seen in this quarter bringing down overall BB & Below book to 3.3% of loans. ICICI's franchise scores better in liabilities (both CASA/TDs), technology and products, while...

ICICI Bank reported a PPoP beat at Rs61bn (estimate: Rs58bn) on improved margins (up 7bps qoq to 3.4%), higher fees (up 16% yoy), and treasury gains (Rs4.8bn). However, higher opex/provisions restricted PAT to Rs16bn (our estimate was Rs17.5bn). GNPA ratio declined sharply by 75bps qoq to 7.75% led by lowest slippages in the past 14 quarters (Rs21bn) and sale of NPA, while non-technical PCR rose to a high of 69%....

ICICI Bank is India's largest private sector bank with network of 4,867 Branches and 14,394 ATM's across India. Asset quality improvement on track Fresh slippages trend has eased as slippages declined by 23% QoQ and 33% YoY to Rs3,117cr (the lowest in the past eight quarters). Notably, 42% of total slippages was contributed by rupee depreciation (international book) and 32% was from the stressed book (BB and below portfolio). As a result, Gross non-performing asset (NPA) and Net NPA ratios declined by 35 bps and 62 bps sequentially to 9.3% and 4.1%, respectively. Provision coverage ratio (PCR) also improved remarkably by 330 bps QoQ to 69.4%....

Recovery & Stability at the core: The performance continues to underlie the traction in recovery & stability in the core operating matrix. Headline loan growth numbers showed improvement as the quarter saw lesser drag from stressed book and the healthy part continues to grow.

ICICI Bank reported net profit of `909cr in 2QFY2019, driven by strong growth in pre-provision profit (PPP). PPA was helped by strong uptick in margins (+14bps qoq) to 3.3%. Moreover, credit cost continued to moderate for ICICI (3.01% in 2QFY2019), with total provisions down 33% qoq to `3,994cr. Slippages were multi quarter low at `3,117c..

ff The Management maintained, that the worst of loan rating downgrade cycle by the Bank is over, which may further normalise in coming quarters. However, the Management expects provisioning to remain elevated in coming quarters due to ageing of existing NPAs along...

Recovery & Stability at the core The performance continues to underlie the traction in recovery & stability in thecore operating matrix.

Maintain BUY with a TP of Rs 418 (2.0x Sept-20 core ABV of Rs 158 and sub-value of Rs 103). Barring the tepid profitability, it was a quarter full of positives for ICICIBC as the uptick in growth (domestic loans grew ~16% YoY) and NIMs (3.33%, +11bps QoQ) sustained. Robust fee growth (+17% YoY), curtailed costs (Core C-I ratio flat YoY/QoQ) and lower provisions led to a strong operating performance despite the treasury loss.

Quarter better than expected, Core profits up 10% YoY ICICI reported a quarter better than expectation with 1) an advance growth of 12% YoY, 2) NIM expansion by 14bps QoQ to 3.3%, 3) growth in core profits by 10% YoY, 4) lower credit cost coupled with compression in GNPA by 27 bps to 8.5% coupled with improving coverage, 5) favorable credit risk profile, with A- and above book increasing to 65.5% vs 63.3%, fall in BB and below by 12% QoQ and in drill down list as well. With robust momentum in retail advance growth, increasing pricing power and largely at the end of...