Buy ICICI Bank; target of Rs 1204: Microsec

Microsec is bullish on ICICI Bank and has recommended buy rating on the stock with a target Rs 1204 in its October 30, 2012 research report.

“ICICI Bank is the largest Private Sector Bank and the second largest bank in the Indian Banking Industry. Presently, bank’s balance sheet size crossed over Rs6 trillions with strong distribution network of 2772 branches and 9363 ATMs in India and also has a strong presence in 19 countries. The bank differentiated itself from other players in the industry through its unique ‘5Cs Strategy', Innovative use of technology and its customer unique and hassle free services couple with its ubiquitous branches and ATMs. ICICI Bank is one of the few Indian banks, who have smartly managed to transform itself into a true financial conglomerate with a presence in Life Insurance, General Insurance, Asset Management, Broking, Home Finance.”

“We Initiate Coverage on ICICI Bank with a buy rating. Our rating corroborates bank’s Strong Business Momentum, Diversified Revenue Stream, Improving Asset Quality with healthy Provision Coverage Ratio (PCR), Strong Risk Management, Bank’s In-depth Assessment of Capital with Strong Capital Adequacy Ratio (CAR), Improving Cost Efficiency which leads to improve Return Ratios, Innovative Use of Technologies, Strong CASA Deposits driven by bank’s ubiquitous Branches and ATMs, Improving Core Income or Net Interest Income (NII), which leads to improve Net Interest Margin (NIM) and last but not least Growing Contribution of Subsidiaries.”

“At the CMP of Rs1044, stock is trading at FY12 P/BV of 1.96x. The current valuation of 1.75x FY13E and 1.55x FY14E Book Value look attractive. We recommend a BUY on the stock with a target price of Rs1204.67 (1.79x FY14E BV) with an upside of ~15% from the current level with an investment horizon of 12 months. We have already issued Pre-Initiating Coverage report on ICICI Bank, dated 14th September 2012 with a target price of Rs1204.67 with an upside of ~20%,” says Microsec research report. 

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