Axis Direct's research report on ICICI Bank
ICICI Bank’s (ICICIBC) Q2 PAT at Rs 20.6 bn was below our estimate on lower-than-expected non-interest income and higher provisions. Slippages declined to Rs 46.7 bn (vs. ~Rs 50 bn in Q1), while the drill down list was down 3% QoQ to Rs 196 bn. ICICIBC has exposure worth Rs 119 bn (98.7% classified as NPA) to the 2nd list of cases referred to NCLT for resolution, while report on RBI’s inspection of its asset quality divergence is expected in Q3FY18 (key risk).
Outlook
We cut our FY18E/FY19E earnings by ~19% to factor in higher provisions, but derive comfort from reducing slippages, potential resolution of lumpy cases, improving growth and superior subsidiary valuations. However, we will be watchful of RBI divergence numbers and resolution of NCLT cases. The stock trades at 1.6x/1.4x FY18E/19E P/ABV (adjusted for cost and value of subsidiaries).
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. ICICI_BANK-08112017
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
