Prabhudas Lilladher has given Buy recommendation for ICICI Bank with a target price of Rs. 906 in its research report issued on Jan 23, 2022

Prabhudas Lilladher’s research report on ICICI Bank

ICICIBC reported marginally higher performance with PAT growth of Rs61.9bn [PLe: Rs60.7bn] and strong NII growth of 23% YoY, led by a solid core PPOP growth of 25% YoY. We believe that bank’s growth momentum will continue in 4Q as well given 1) Lower slippages of Rs40.2bn (annualized 2.1% of loans) were reported with improvement in economic activity, 2) Asset quality metrics have held up well with strong recovery/upgrades, PCR maintained at 80%, 80bps of COVID contingency provisions (despite w.back Rs10.5bn) and restructuring book at 120bps, and 3) Strong franchise strength is reflected via solid growth both in liabilities & assets with much better managed risk, which keeps ROEs to move towards +15% in FY23 & FY24.

Outlook

We maintain our conviction at ‘BUY’ with revised TP of Rs. 906 (from Rs.819) based on 2.6x Sep-23 ABV and subs value of Rs186 (from Rs.181).

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