February 10, 2018 . Equities Desk

Tide set to turn favourably…

ICICI Bank is India’s largest private sector bank with a network of 4,860 Branches and 14,262 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: We like ICICI bank given its improving B/S mix with higher contribution from granular business (Retail) coupled with strong capitalization. Further, the bank’s low divergence is a strong positive as it reflects that corporate healing is underway. The bank has also managed the volatility in stressed loans much better than any other private corporate bank. Hence, we maintain BUY rating on the stock with a target price (TP) of Rs382 using sum of the part (SOTP) methodology, where we value its standalone business at Rs280 (P/ABV of 1.8x for FY20E) and subsidiaries at Rs102.

Research Report – ICICI Bank Ltd.

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