Dolat Capital Market has given Buy recommendation for ICICI Bank with a target price of Rs. 700 in its research report issued on Apr 24, 2021
Dolat Capital Market’s research report on ICICI Bank
ICICI bank reported an impressive set of numbers with NII and core PPoP growing by 17% and 20% respectively. Pro forma gross NPAs improved by 46 bps QoQ to 4.96%, led by lower than expected slippages at 3.2% and higher upgrades during Q4. Slippages were contained at 2.5% for FY21 against 2.45% in FY20. Sequential improvement in NIM by over 15 bps to 3.84% despite taking the impact of compound interest waiver was encouraging. NIM benefitted from a continued decline in CoF and further reduction in overseas book. The bank made additional COVID related contingency provisions of Rs10bn in 4QFY21 and has not utilized earlier buffers during the quarter. Consequently, standard provision buffers (ex of general provisions but includes other std provisions) improved to Rs89bn as of Mar-21, or 1.2% of advances against 1% in previous quarter.
We maintain our BUY recommendation on the stock with a SOTP-based TP of Rs700 (from Rs640 earlier), valuing the standalone bank at 2.2x Mar-23E book, which including the value of subsidiaries implies 2.7x P/ABV.