Centrum Research's research report on ICICI Bank
We retain BUY on ICICI Bank with SOTP based TP unchanged at Rs360. Q1’19 results were broadly in-line with our estimates on operational / asset quality front. Core operating profit remains healthy (+13% YoY); new NPA addition moderates (slippages at 3.1% of loans) and loan growth (+11% YoY) gathers pace. Drill-down list (<1% of loans) coupled with BB and below-rated portfolio (5% of loans) remain the new watch-list. We see provisions remain elevated in the near term (FY19E); however draw comfort in pace of resolution and ~69% coverage ratio (combined) against list-1 and list-2 IBC accounts. Capital position remains healthy; subsidiaries remain profitable. Valuations continue to remain undemanding.
Outlook
We have tweaked our FY19E/FY20E estimates on other income / credit cost front. Our SOTP-based TP, however remains unchanged at Rs360 (valued core business at 2x FY20E ABV and other business accordingly).
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