KR Choksey has given Accumulate recommendation for ICICI Bank with a target price of Rs. 955 in its research report issued on Oct 26, 2021

KR Choksey’s research report on ICICI Bank

Net interest income (NII) increased by 25% YoY to INR 11,690 Cr in Q2FY22 from INR 9,366 Cr in Q2FY21. The net interest margin was 4.0% in Q2FY22 vs 3.57% in Q2FY21. Fee income grew by 21% YoY to INR 3,811 Cr in Q2FY22 from INR 3,139 Cr in Q2FY21. Provisions (excluding provision for tax) declined by 9% YoY to INR 2,713 Cr in Q2FY22 from INR 2,995 Cr in Q2FY21. The profit after tax grew by 30% YoY to INR 5,511 Cr in Q2FY22 compared to INR 4,251 Cr in Q2FY21. Total deposits increased by 17% YoY and 6% sequentially to INR 977,449 Cr as on September 30, 2021. Growth in the advances was 17% YoY at INR 7,64,937 Cr as on 30th September,2021. GNPA/NNPA for Q2FY22 stood at 4.82%/0.99%, respectively vs. 5.15%/ 1.16% in Q1FY22.

Outlook

We are rolling forward our target multiple for the standalone banking business to FY24E, applying a P/ABV multiple of 2.5x to the FY24E ABV of INR 314.8 per share, implying a SOTP valuation of INR 955 per share (previously INR 787 per share). It has a potential upside of 12.8% at the CMP of INR 847 per share. As a result, we retain our “ACCUMULATE” rating on ICICI Bank’s shares.

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