Buy ICICI Bk, target Rs 1590: Prabhudas Lilladher

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Buy ICICI Bk, target Rs 1590: Prabhudas Lilladher

Prabhudas Lilladher has maintained buy rating on ICICI Bank with target price of Rs 1590 implying upside potential of 63%. The surprise news of a total Rs 10 billion (USD 265 million) mark-to-market (MTM) provision related to sub-prime losses for ICICI Bank had a negative impact on the stock, which corrected by 5%.

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Prabhudas Lilladher has maintained buy rating on ICICI Bank with target price of Rs 1590 implying upside potential of 63% in its March 04, 2008 research report. "The surprise news of a total Rs 10 billion (USD 265 million) mark-to-market (MTM) provision related to sub-prime losses for ICICI Bank had a negative impact on the stock, which corrected by 5%. However, the bank has reiterated that it has no US sub-prime exposure and major portion of the expected provisions have already been provided for during 9MFY08. The bank's total credit derivative exposure stood at Rs 80 billion (USD 2.1 billion), of which Rs 65 billion (USD 1.6 billion) was in its standalone books and USD 500 million in subsidiary books of ICICI Bank UK & ICICI Bank Canada."  

" Valuation: Expectations of higher MTM provisions have weighed heavy on the stock price. We feel that the stock is likely to remain subdued due to the ongoing negative global investment sentiment and news flows. However, post the sharp correction witnessed in the last two days (down 11%), we feel the valuations at 16x FY10E EPS and 2x FY10E BV & 2.2x FY10E ABV is extremely attractive. We maintain BUY recommendation on the stock with a reduced price target of Rs 1,590 (from Rs 1,654 earlier)," according to Prabhudas Lilladher research report.

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