Buy ICICI Bank; target of Rs 365: Motilal Oswal

Motilal Oswal's research report on ICICI Bank

Slippages during the quarter were INR 112.9b, of which INR 53.8b relates to a cement account (part of the watch list), which the RBI has asked banks to recognize as NPA. Nearly half of this exposure is expected to be upgraded soon, as it is part of an impending M&A transaction.

Outlook

Strong capitalization (tier I of 14.4%), significant improvement in granularity of book (57% retail + SME) and sustained improvement in liability profile (helping to de-risk business) are the key positives. We have cut estimates by 5% to factor in NIM moderation with rising competition; reiterate Buy with SOTP of INR 365 (FY19-based).