Buy ICICI Bank; target of Rs 444: YES Securities

YES Securities' research report on ICICI Bank

ICICI Bank delivered a better-than-expected core operating performance (adj. for treasury/lumpy income and int. on IT refund). Core NII grew 24% yoy and core PPOP grew 25% yoy on a balance sheet growth of 14% yoy. Fees grew 13% despite Covid impact. Liability-side strength was reflected in deposit mobilization (up 8% qoq and 18% yoy), texture (avg. CASA stable at 42%) and funding cost (fell 50bps qoq on computed basis). Reported NIM was at multi-year high of 3.9%, up 10 bps qoq.

Outlook

Retain BUY with a 12m TP of Rs.444. Expect bank to deliver 13-14% RoE in FY22 with healthy capital levels if the Covid spread peaks soon. Stand-alone bank trades at 1.2x/8x FY22 ABV/EPS.