ICICI Bank Ltd. share price target

ICICI Bank (ICICIBC) reported a mixed Q3. PAT at Rs 16.5 bn (down 32.4% YoY) was lower than expected despite a tax write-back. Loan growth accelerated to 10% YoY and asset quality improved marginally (GNPAs down 5 bps QoQ at 7.82%) with higher PCR (up 160 bps QoQ at 60.9%).

ICICI Bank Ltd Q3FY18 results comment NII fell to Rs. 5705.27 Cr in Q3FY18 compared to Rs. 5709.07 Cr in Q2FY18. NII rose by 6.38% ( Rs. 341.92 Cr ) when compared with the same period last year

Maintain BUY with a SOTP of Rs 390 (1.9x Dec-19 core ABV of Rs 141 and sub-value of Rs 121. As seen in 2Q, ICICIBC persisted on its road to recovery. Domestic loans grew 16% YoY with retail loans (+22% YoY) being the key driver. Robust CASA accretion (+12% YoY) despite the high base, control on costs (up merely 1% YoY) and slippages (3.55% ann.) at a 9 quarter low were key positives. However, the tepid NIM performance, especially in international operations (NIM of merely 29bps) was a key disappointment.

Stability gains further traction, recovery imminent!: We assess the 3QFY18 performance as positive. The asset quality pain though elevated was contained to the guided stress list--cementing our visibility on thestress and credit cost going ahead. Further, the key positive being that RBI Review report didnt had any material negative impact on the asset quality.

Credit demand from corporates remains muted and the management is not seeing any signs of capex revival. Resolution of NCLT referred cases would give more clarity on capex pickup and asset quality outlook. ICICIBC is aiming for ~15% growth in domestic corporate portfolio (excluding restructured loans and loans to companies included in the drill down list) even as the overall corporate loan growth remains a muted 4% YoY. Retail loan growth,however, is holding up well and the bank maintained its retail loan growth guidance of 18-20% for FY18, led by continued traction across product lines. Unsecured retail loans have increased to 9.6% of total retail loans and largely pertain to the bank???s existing customers

ICICI Banks Q2 PAT at Rs 20.6 bn was below our estimate on lower-than-expected non-interest income and higher provisions.

HSL PCG ICICI Bank - Q2FY18 Update HSL PCG ICICI Bank - Q2FY18 Update

We expect the Bank's stressed assets and credit cost to rise significantly in 2HFY18, as divergence is likely to be much higher and in-line with other private corporate lenders i.e. Yes Bank & Axis Bank. Its stressed asset portfolio remains uncomfortable at high level of 12.4%, which is one of the highest among large private sector peers. Further, 4.1% of stressed loans are from drilldown list and standard restructured portfolios on which the Bank holds lower PCR. Its specific PCR on gross NPA portfolio also remains lower at 45.8%. Thus, we expect credit cost to remain elevated, which would keep its earnings and return ratio subdued over next 4-6 quarters. Hence, we maintain our HOLD recommendation on the stock with an unrevised...

We retain BUY on ICICI Bank with SOTP based TP unchanged at Rs340. Q2'18 results saw yet another quarter of strong earnings (NII up 8.7% YoY / NIM +14bps YoY to 3.27%), accelerated loan growth (domestic loans up 13.2% YoY) and sequential decline in slippages (3.9% of loans). Drill-down list has more than halved over FY16-Q2FY18 (4.5% of loans). Commentary on overall NPA accretion remains soothing; resolutions in certain large NPA cases could add positively to overall NPA trend. Capital position remains strong while subsidiaries stay profitable. Valuations continue to remain undemanding. Prefer ICICI Bank over...