August 11, 2016 . Equities Desk

ICICI Bank is India’s largest private sector bank with total assets of Rs720,695cr as of FY16 and profit after tax of Rs9,726cr in FY16. It currently has a network of 4,451 Branches and 14,073 ATM’s across India. The bank has  achieved consistent growth over the last 5 years with a CAGR (FY11-16) of 12% in total assets, 13% in total deposits, 15% in total advances and 14% in net profit.

View and Valuation 

Even though the bank has high exposure towards some of the stressed industries, we believe that strong growth in retail advances, higher CASA ratio, adequate CAR and substantial value unlocking of some subsidiaries will continue to support the bank in maintaining its return ratios at healthy levels. We initiate coverage with ‘BUY’ rating on the stock with target price of Rs295 using SOTP Valuation. At CMP of Rs246, ICICI Bank (standalone) is trading at P/ABV of 1.8x & 1.6x for FY17E and FY18E, respectively.

Research Report ICICI Bank Ltd

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