Buy ICICI Bank; target of Rs 359: HDFC Securities

HDFC Securities's research report on ICICI Bank

After the rough FY18 ride, 1QFY19 saw ICICIBC reporting its first ever net loss (~Rs 2.3bn). The earnings miss was largely owing to elevated provisions (~Rs 59.7bn, 2.3x YoY) even as the stake sale in ICICI Pru (~Rs 11.1bn) provided some respite. The one-off interest income (on a steel a/c recovery) cushioned the NIM dip (3.19%, down 5bps). Retail loans pushed growth up to ~11% as the corporate slack (down ~1% sequentially) continued.

Outlook

Further dilution in subs and robust recoveries could push earnings upwards. Maintain BUY with a TP of Rs 359 (1.7x Mar-20 core ABV of Rs 150 and subs value of Rs 114).