Dolat Capital's research report on ICICI Bank
ICICI bank reported a better than expected operating performance with NII and PPoP growth of 20% and 71% respectively. PPoP grew by 24% YoY excluding one-time gain from stake sale in insurance subsidiaries (Rs30bn). Moratorium levels at 17.5% are based on opt-in from the month of June. The Bank has made additional Covid related provisions of Rs55.5 bn in 1QFY21, with standard provision buffers (ex- general provisions) at 1.6% of loans and 9% of moratorium book as of June-20. ICICI Bank’s prudent provisioning, healthy liability profile, strong digital capabilities and market leading subsidiaries remain its key strength. We nonetheless remain watchful of tail risks post moratorium, particularly from the bank’s corporate portfolio.
Outlook
We maintain our BUY recommendation on the stock with a SOTP-based Target Price of Rs500, valuing the standalone bank at 1.7x FY22E book, which including the value of subsidiaries implies 2.3x of FY22 P/ABV. ICICI Bank remains amongst our preferred picks in the sector.
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