Buy ICICI Bank; target of Rs 1050: PLilladher

Prabhudas Lilladher is bullish on ICICI Bank and has recommended buy rating on the stock with a target of Rs 1050 in its April 27, 2012 research report.

“ICICI bank’s 4Q12 results inspire significant conficence of improving core growth trends and sustenance of robust asset quality in FY13. Higher margin domestic business will drive loan growth and low base in corporate banking fees will aid fee growth recovery. With a strong topline performance and absence of securitisation losses, we expect core PPOP growth of 22% in FY13 (first +15% PPOP growth since FY08). Inspite of conservative credit cost assumptions, core ROEs will improve from 11% in FY10 to 15.5-16% in FY14 driving lower valuation discount to peers. With ~15% correction from mid Feb-12 levels, robust asset quality and some signs of growth in the domestic book, we upgrade our recommendation again to BUY from ACCUMULATE with a Mar-13 PT of Rs1050/share (+23% upside, 1.8x Sep-13 book).”

“Domestic corporate book continues to deliver growth with 21% YoY growth in 4Q12. Growth seems to be finally picking up in the retail book with ~9% QoQ growth though some part of the growth was aided by buyouts. Reported mortgage book growth was muted at 7% YoY but disbursements have inched upto >25% indicating increased momentum in most secured retail categories along with auto loans. International book has grown by ~10% YoY adjusted for FX impact but given high repayments, management expects the overseas book to at best stay flat or contract marginally. Overall, we expect ~15% in FY13 with ~19-20% growth for domestic book and flat overseas book,” says Prabhudas Lilladher research report. 

Institutional holding more than 40% in Indian cos

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