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Last Updated : May 07, 2019 12:46 PM IST | Source: Moneycontrol.com

Buy ICICI Bank; target of Rs 470: Motilal Oswal

Motilal Oswal is bullish on ICICI Bank has recommended buy rating on the stock with a target price of Rs 470 in its research report dated May 06, 2019.

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Motilal Oswal's research report on ICICI Bank


ICICIBC reported PAT of INR9.7b (significantly below our estimate) in 4QFY19, mainly due to higher provisions of INR54.5b (our estimate: INR33.9b). For FY19, NII grew 17%, while PAT declined 50% YoY to INR33.6b owing to higher provisions (credit cost of ~3.6%). NII increased 26.5% YoY to INR76.2b in the quarter, led by a 32bp QoQ improvement in the margin to 3.72%. The NIM was driven by a one-off impact of (a) 20bp on account of income tax refund (INR4.1b) and (b) 5bp due to interest collection from NPLs. On a like-to-like basis, the margin improved 25bp QoQ. Core fee income grew ~15% YoY, with retail forming 74% of total fees. Advances rose 14.5% YoY, with domestic book growing by 17% YoY (~22% YoY growth in retail), while the overseas loan mix declined to 10.7%. Deposit growth was healthy at 16.4% YoY. CASA ratio stood at 49.6% v/s 49.3% in 3QFY19, while the average CASA mix stood at 44.6% v/s 46% in 3QFY19 and 45.9% in 4QFY18.


Outlook


We fine tune our FY20/21 earnings estimates and expect ~1.5% RoA by FY21. We maintain our SOTP-based PT of INR470 (2.0x FY21E ABV).


For all recommendations report, click here


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First Published on May 7, 2019 12:46 pm
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