Buy ICICI Bank; target of Rs 1253: Firstcall Research

Firstcall Research is bullish on ICICI Bank and has recommended buy rating on the stock with a target price of Rs 1253 in its April 27, 2013 research report.

"ICICI Bank is India's largest private sector bank and the second largest bank in the country, with consolidated total assets of 4736.47 billion at March 31, 2013. Bank's Capital Adequacy Ratio registered at 18.74 percent as on 31.03.2013. Net interest income increased by 22 percent to Rs. 38030 mn in Q4-2013 from Rs. 31050 mn in Q4-2012. During the quarter, savings account deposits increased year-on-year to Rs. 856510 mn. The Bank has increased its ATM network to 10481 ATMs at March 31, 2013 as compared to 9006 at March 31, 2012 and the Bank had 3100 branches till the 4th Quarter 2013. The Bank has posted a net profit of Rs. 23040.70 million for the quarter ended March 31, 2013 as compared to Rs. 19017.60 million for the quarter ended March 31, 2012. ICICI Bank and Aircel announced the launch of a mobile banking service - Mobile Money. ICICI Bank and Vodafone India announced the successful launch of 'M-Pesa' Net Income and PAT of the company are expected to grow at a CAGR of 15 percent and 20 percent over 2012 to 2015E respectively.

The bank's net profit jumps to Rs. 23040.70 million as against Rs. 19017.60 million in the corresponding quarter ending of previous year, an increase of 21.15 percent. Revenue for the quarter rose 12.98 percent to Rs. 103653.30 million from Rs. 91746.40 million, when compared with the prior year period. Reported earnings per share of the bank stood at Rs. 19.97 a share during the quarter, registering 21.06 percent an increase over previous year period.

Outlook and Conclusion: At the current market price of Rs.1144.30, the stock P/E ratio is at 12.74 x FY14E and 11.23 x FY15E respectively. Earning per share (EPS) of the company for the earnings for FY14E and FY15E is seen at Rs. 85.18 and Rs.96.64 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 15 percent and 20 percent over 2012 to 2015E respectively. On the basis of Debt Equity Ratio, the stock trades at 6.58 x for FY14E and 6.61 x for FY15E. Price to Book Value of the stock is expected to be at 1.64 x and 1.43 x for FY14E and FY15E respectively. We expect that the company will keep its growth story in the coming quarters also. We recommend ‘BUY' in this particular scrip with a target price of Rs 1253 for Medium to Long term investment," says Firstcall Research report.

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