Experts see Rs 370 as fair value for ICICI Bank

Analysing the first quarter numbers of ICICI Bank, Vaibhav Agrawal of Angel Broking in an interview to CNBC-TV18 said while one would look out for management commentary in terms of restructuring and refinancing numbers, overall it does look do like the slippages have been contained because net non performing assets (NPAs) have not gone up and even the provisioning is more or less in line. ICICI Bank's standalone net profit met street expectations on Friday, rising 12 percent year-on-year to Rs 2,976 crore in June quarter. Strong retail loan book growth, other income and operating profit boosted the overall profitability. The share price surged 6 percent on strong credit growth and improvement in asset quality.When asked if he expected the stock to correct if the slippages are lesser than refinancing number, he said slippages versus refinancing cannot be painted with the same brush but as of now it does look like slippages would come in lower than Rs 3000 crore unless there are some very large recoveries or sale to asset restructuring companies (ARCs).He is very bullish on the stock with a target price of Rs 370 and expects the current rally to sustain.Meanwhile, Suruchi Jain of Morningstar India said although then numbers overall were slightly better than expectation, but if one were to compare them to other private sector lenders like HDFC Bank, Kotak Mahindra and IndusInd Bank, then brokerage house  prefers the others over ICICI Bank in terms of asset quality and more granular loans.When asked if she saw the valuation gap now narrowing between ICICI Bank and Axis Bank, she said one quarter of good non performing assets (NPA) number doesn’t mean the trend has reversed for good. “If you look at quality of loan books and NPAs ICICI has been doing worst than Axis Bank and much of the other retail lenders be it HDFC Bank, Kotak or IndusInd Bank,” she said.Even in terms of stock price there is more volatility in ICICI Bank than there is in an Axis Bank or HDFC Bank, she added.So, nothing changes in terms of forecast or fair value basis for ICICI Bank nor does it come on the top of the pecking list as yet, she said. The fair value for the stock remains at Rs 327, said Jain.