Accumulate ICICI Bank; target of Rs 365: Dolat Capital

Dolat Capital's research report on ICICI Bank

ICICI reported a quarter better than expectation with 1) an advance growth of 12% YoY, 2) NIM expansion by 14bps QoQ to 3.3%, 3) growth in core profits by 10% YoY, 4) lower credit cost coupled with compression in GNPA by 27 bps to 8.5% coupled with improving coverage, 5) favorable credit risk profile, with A- and above book increasing to 65.5% vs 63.3%, fall in BB and below by 12% QoQ and in drill down list as well. With robust momentum in retail advance growth, increasing in pricing power and largely at the end of the provision cycle of its legacy bad book, it is well placed than its corporate peers.

Outlook

However, a substantial improvement in profitability is expected to be driven by material recoveries.