ICICI Bank Ltd. share price target

ICICI Bank continues to surprise negatively on both earnings and asset quality fronts in 4QFY16, primarily due to higher slippages, as the Bank recognised impairment as well as ensuing provisioning impact of asset reclassification as per the RBI's evaluation. For the first time, the Bank has disclosed total aggregate exposure (Fund based + Non Fund Based) of ~14% in stressed sector out of which 4.8% are below investment grade and may turn into NPA in coming period. Further, it has created an additional contingency provision of Rs36bn in 4QFY16 towards these exposures out of tone-time gain from stake sale in ICICI Pru Life (Rs6.5mn in 4Q and total of Rs19.5bn...

ICICIBC has used the period of moderate macroeconomic activity to build a strong retail franchise. Its average CASA ratio is ~40%, domestic NIM has expanded to ~3.9%, and share of granular secured retail loans has risen to ~40%. Rising large corporate...

Background: ICICI Bank is India's 2nd largest bank with Assets of INR ~7.5tn. Network: Branches 4052, ATMs 12811, presence in 19 countries. Focus is on retail lending representing ~40% of total loans while International and Corporate are the new growth drivers. The bank holds near market leadership in almost all its businesses including Mortgages, Auto Loans, Commercial Vehicle loans, Life Insurance, General Insurance, and Asset Management. Its subsidiaries ICICI Venture Funds, ICICI Pru...

ICICI Bank (ICICIBC) reported sharp deterioration in asset quality in 3QFY16, despite not complying fully with RBI?s stressed assets reclassification. Aggregate impairment shot up to 7.2% ann. (Rs 75.7bn). With higher slippage, GNPLs (4.7%) and NNPLs (2.3%) hit five and six-year highs. 4Q should be no better.

8 Of the total slippages, 2/3rd (one steel a/c being the biggest contributor) were recognised due to RBI's review of asset quality. Similar level of slippages could be recognised in Q4FY16 (largely slippage from restructured power sector exposure)....

Though we continue to admire core operating performance and business franchise of ICICI Bank but near term headwinds clearly indicate more downside for the stock in the coming months. We expect asset quality stress to persist for the bank over next 2-3 quarters along with elevated credit costs. This would keep RoAs muted at ~1.5-1.6% and RoEs at ~12-13% over FY16-17E. Incorporating 3Q result, we revise downward FY1617E earnings by 12-20% and introduce FY18 estimates. We cut our price assumptions for ICICI Bank due to weak assets quality performance and expect better entry level for the investors in the coming months. Hence, we recommend SELL with a revised Target Price of Rs210 (Based on SOTP valuing parent at 1.3x FY18 AdjBV implying...

Background: ICICI Bank is India's 2nd largest bank with Assets of INR ~7.5tn. Network: Branches 4052, ATMs 12811, presence in 19 countries. Focus is on retail lending representing ~40% of total loans while International and Corporate are the new growth drivers. The bank holds near market leadership in almost all its businesses including Mortgages, Auto Loans, Commercial Vehicle loans, Life Insurance, General Insurance, and Asset Management. Its subsidiaries ICICI Venture Funds, ICICI Pru...

ICICIBCs earnings were marginally ahead of estimates, led by (1) Stable NIM despite the base rate reduction, cushioned by foreign NIM, (2) Persistent growth in retail loans; 82% of the incremental domestic credit, (3) Improving liability franchise, CASA 100bps QoQ, (4) Traction in fee income, led by retail fees, and (5) Headline asset quality was optically stable given that slippages (2.2%) and restructuring under 5:25 were elevated.

ICICI bank's Q2FY16 results were in-line with estimates as the earnings grew by 12% YoY (1.8% QoQ) to Rs 30.3 bn led by stable NII growth. NII grew by 12.8% YoY (2.7% QoQ) led by 13.3% YoY (2.5% QoQ) growth in advances whereas NIMs remained stable at 3.52%. Asset quality slipped marginally as GNPA and NNPA increased to 3.77% and 1.65% vs 3.68% and 1.58% in Q1FY16. PCR dipped marginally to 57.4%.

ff Board of the bank approved sale of 9% stake in ICICI Lombard General Insurance Company to Fairfax Financial Holdings for Rs15.5bn. The proposed transaction values the general insurance subsidiary at Rs172bn, which is much above the...