Motilal Oswal is bullish on ICICI Bank has recommended buy rating on the stock with a target price of Rs 475 in its research report dated May 10, 2020.
Motilal Oswal 's research report on ICICI Bank
The bank has created higher than the required provisions toward COVID19 which affected earnings. On the other hand, operating performance remains strong, supported by robust NII at 17% YoY, despite higher tax refunds in 4QFY19. On the asset quality front, slippages remain elevated, led by one healthcare and one oil trading account, although higher writeoffs have led to GNPA improvement. ~30% of the loan book has availed moratorium, with a higher incidence of the CV, 2-Wheeler, and Rural portfolios.
We thus estimate ICICIBC to deliver RoA/RoE of 1.3%/12.4% in FY22. Maintain Buy, with an SOTP-based target price of INR475 (1.9x FY22 ABV for the bank).
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