Insights

ICICI BANK Ltd.

August 26, 2017 . Equities Desk

On a path of recovery…

ICICI Bank is India’s largest private sector bank with total assets of Rs771,791cr as of FY17 and profit after tax of Rs9,801cr in FY17. It currently has a network of 4,852 Branches and 13,780 ATM’s across India. The bank has achieved consistent growth over the last 5 years with a CAGR (FY12-17) of 10% in Total Assets, 14% in Total Deposits, 13% in Total Advances and 9% in Net Profit.

Valuation: Although asset quality stress will impact near-term outlook, we expect the bank’s core performance to improve by FY19E and deliver RoE and RoA of 11% and 1.4%, respectively. Further, we like ICICI bank given its improving B/S mix with higher contribution from granular business (Retail) coupled with strong capitalization. Hence, we initiate coverage withj BUY rating on the stock with a TP of Rs325 using sum of the part (SOTP) methodology, where we value its standalone business at Rs244 (P/ABV of 1.8x for FY19E) and subsidiaries at Rs81.

Research Report ICICI Bank Ltd. (1)

Investments in equity shares, debentures, etc., are not obligations of, or guaranteed by Wealth India Financial Services Pvt. Ltd., and are subject to investment risks. Click here to read our full disclaimer.

sek