Prabhudas Lilladher recommended accumulate rating on ICICI Bank with a target price of Rs 348 in its research report dated May 07, 2018.
Prabhudas Lilladher's research report on ICICI Bank
ICICIBC's earnings were better than estimates at Rs10.2bn (PLe: Rs14.1bn loss) but adjusting to one-time stake sale gains, earnings would be in-line with estimates. Beat was on NII which grew 1% YoY as against expectation of decline as NIMs improved from domestic loans. Bank recognized assets of Rs157.4bn as NPAs majorly from the drilldown list and of which majorly were from the special dispensations that RBI withdrew recently. With this recognition, drilldown list reduced significantly from 3.8% of loans to <1% of loans and the bank now has Rs133.6bn of loans at risk mainly consisting of non-fund based exposure to existing NPLs.
We continue to retain our Accumulate stance with TP of Rs348 (increased from Rs338 on rollover) despite largely completing stress recognition, as credit cost will remain high with recoveries some time away and NIMs remaining under pressure with moderate business growth.
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