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Buy ICICI Bank; target of Rs 700: Motilal Oswal

Motilal Oswal is bullish on ICICI Bank has recommended buy rating on the stock with a target price of Rs 700 in its research report dated January 30, 2021.

February 03, 2021 / 05:27 PM IST
 
 
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Motilal Oswal's research report on ICICI Bank


ICICIBC reported a strong 3QFY21, with earnings driven by steady revenue growth, controlled opex, and lower provisions. Loan growth is showing a strong revival in both Wholesale, SME, and Retail, with disbursement in many business segments crossing pre-COVID levels, led by festive demand, improving economic outlook, and strong digital ecosystem build by the bank across business segments. n On the asset quality front, controlled slippages led to a 6bp QoQ rise in the pro forma GNPA ratio, while total restructuring stood at 0.4% of loans (v/s 1% guided earlier). Pro forma PCR stood ~78%, the highest in the industry. It holds unutilized COVID provisions of INR64.7b (~1% of loans), offering comfort on normalization in credit cost. We raise our FY21E estimate by 20% due to lower credit cost while largely maintaining our FY22E/FY23E estimates. Maintain BUY.


Outlook


We expect RoA/RoE to improve to 1.8%/15.2% for FY23E. Maintain Buy with a revised SoTP-based TP of INR700/share (2.4x Sep-22E ABV for the bank).


For all recommendations report, click here


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first published: Feb 3, 2021 05:27 pm

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