Buy ICICI Bank; target of Rs 345: HDFC Securities

HDFC Securities' research report on ICICI Bank

ICICIBC’s 4Q results were a pleasant surprise, with (1) A sharp drop in net stressed assets, (2) Healthy domestic loan growth at 14%, led by retail, (3) NIM improvement, (4) Controlled opex (+2% QoQ), (5) Sustained momentum in CASA and (6) In-line net earnings, despite reversals of Rs 2.9bn towards foreign currency translation gains.

Outlook

However, we remain admirers of ICICIBC’s rising granularity in the B/S and P&L (fees), healthy capital position and expected value unlocking in subs. Maintain BUY with a SOTP of Rs 345 (1.75x Mar-19E ABV of Rs 146 + Rs 89 from subs).