Buy ICICI Bank; target of Rs 1204: Firstcall Research

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

“ICICI Bank is India's second-largest bank with total assets of Rs. 4,062.34 billion (US$ 91 billion) at March 31, 2011 and profit after tax Rs. 51.51 billion (US$ 1,155 million) for the year ended March 31, 2011. The Bank has a network of 2,772 branches and 10,006 ATMs in India, and has a presence in 19 countries, including India. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries in the areas of investment banking, life and non-life insurance, venture capital and asset management. The Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar & Dubai International Finance Centre and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia.”

“The company’s net profit jumps to Rs. 19561.10 million as against Rs. 15031.90 million in the corresponding quarter ending of previous year, an increase of 30.13%. Revenue for the quarter rose 22.91% to Rs. 100263.30 million from Rs. 81576.20 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs. 16.96 a share during the quarter, registering 30.06% an increase over previous year period. EBITDA is Rs. 54142.00 millions as against Rs. 42459.90 millions in the corresponding period of the previous year. At September 30, 2012, the Bank had 2,772 branches, the largest branch network among private sector banks in the country. The Bank has also increased its ATM network to 10,006 ATMs at September 30, 2012 as compared to 6,913 at September 30, 2011.”

“At the current market price of Rs.1085.00, the stock P/E ratio is at 15.85 x FY13E and 13.95 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs. 68.46 and Rs.77.77 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 22% and 20% over 2011 to 2014E respectively. On the basis of Debt Equity Ratio, the stock trades at 2.84 x for FY13E and 2.89 x for FY14E. Price to Book Value of the stock is expected to be at 1.83 x and 1.62 x for FY13E and FY14E 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. 1204 for medium to long term investment,” says Firstcall Research report.

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