Sharekhan's research report on ICICI Bank
We like the prudent and cautious approach of the bank in building provision buffers, cautious loan book growth, and healthy capitalisation levels, which we believe will be key for overcoming medium-term challenges. Our interactions with the management indicate a consistent business strategy and gradual resumption in activities since Q1 to August. Additional provision buffer stands at Rs. 14,368 crore (2.3% of outstanding loans; more than the NNPA), and we envisage near-term risk due to adequate provision coverage ratio and overall balance sheet strength.
We maintain our Buy rating on ICICI Bank with an unchanged SOTP-based price target (PT) of Rs. 485. Bank is adequately capitalised (after the capital raise calculated Tier-1 ratio at ~16.9%).
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