Prabhudas Lilladher is bullish on ICICI Bank and has recommended buy rating on the stock with a target of Rs 1325 in its January 31, 2013 research report.
“ICICI reported a very stable Q3FY13 and management commentary on B/S growth, margins and fee income growth was positive. The quantum of margin expansion over the last 12 months has surprised and despite cyclical NIM headwinds, margin outlook continued to remain sanguine. Also, management expects core fee income growth to pick up with B/S growth in FY14 after two years of muted performance and this, coupled with stable asset quality, could drive a ROA surprise in FY14. We expect core banking ROEs to inch upto ~16-16.5% by FY15, warranting a higher than historic average multiples. We retain .BUY. with a PT of Rs1,325/share.”
“ICICI reported robust trends in domestic loan book (21% YoY growth), with corporate book continuing to grow at ~24% YoY and growth on the retail side accelerating to ~17% YoY growth driven by a pick-up in most segments, except for CVs. Management remained confident of delivering higher than system domestic loan growth, with retail growth expected to inch up to +20%. NIMs inched up ~7bps QoQ driven by +10bps improvement in the international book as excess liquidity got deployed. Despite some pressure from falling rates, the management expressed their positive bias on margins which will be driven by a further catch up in international margins (from 1.3 to 1.4-1.5%) in the near term and mix improvement over the medium term (higher share of domestic loans).”
“Asset quality trend remained stable, with ~Rs12bn of impairment (Rs8.5bn of slippages +Rs3.5bn of restructuring). With recoveries/upgrades of Rs5.5bn in Q3FY13, credit costs at ~50bps were lower than expected and with just Rs9bn of restructuring pipeline, we believe, ICICI could under-shoot on credit costs in the near term,” says Prabhudas Lilladher research report.
Public holding more than 90% in Indian cos
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