Buy ICICI Bank; target of Rs 815: Prabhudas Lilladher

Prabhudas Lilladher's research report on ICICI Bank

ICICIBC operationally reported in-line performance with PAT of Rs46.2bn [PLe: Rs46.8bn] with a strong NII growth of 18% YoY (best in industry so far) followed through a strong core PPOP growth of 23% YoY. Small setback was on higher slippages of Rs72.3bn (annualized 4% of loans) given the severity of wave two. Although, otherwise asset quality metrics have held up well with strong recovery/upgrades, PCR maintained at 78%, 90bps of COVID contingency provisions (despite utilizing Rs10bn) and restructuring book lower than 100bps as yet. Strong franchise strength is reflecting in strong growth path both in liabilities & assets with much better managed risk which keep ROEs to move towards 15-16% in FY23. Maintain conviction BUY with revised TP of Rs815 (from Rs750) based on 2.4x Sep-23 ABV (rolled from Mar-23) and subs value of Rs181 (from Rs164).

Outlook

Maintain conviction BUY with revised TP of Rs815 (from Rs750) based on 2.4x Sep-23 ABV (rolled from Mar-23) and subs value of Rs181 (from Rs164).

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