Prabhudas Lilladher is bullish on ICICI Bank has recommended buy rating on the stock with a target price of Rs 436 in its research report dated May 10, 2020.
Prabhudas Lilladher's research report on ICICI Bank
ICICIBC's PPOP was good on better NII (10bps improvement in NIMs) and steady other income & costs. Although, bank missed its earnings as provisions were up on few large NPAs in corporate and provision buffer on COVID-19 related crisis. At of end Apr'20, 30% of loans were under moratorium along with Rs27.25bn of provisions (incl 5% directed by RBI). We continue to keep faith in its strong brand franchise, while high PCR of +75%, strong CASA & pricing power will help it to mitigate adverse impact from COVID-19. We are unable to foresee hits on asset quality as yet but see high probability of rising stress, hence conservatively build 2.5% slippage ratio and 180bps of credit cost in FY21 with residual flow in FY22 as well.
We retain BUY with revised TP of Rs436 (from Rs509) based on 1.8x (from 2.0x) FY22 ABV and remains best placed in amongst banking sector.
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.