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Last Updated : Aug 27, 2019 12:50 PM IST | Source: Moneycontrol.com

Buy ICICI Bank; target of Rs 520: Motilal Oswal

Motilal Oswal is bullish on ICICI Bank has recommended buy rating on the stock with a target price of Rs 520 in its research report dated August 23, 2019.

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Motilal Oswal 's research report on ICICI Bank


ICICI Bank's (ICICIBC) annual report reaffirms our view that the bank is progressing well in its endeavor to strengthen balance sheet with strong focus on retail franchise. While its retail portfolio has been leading overall loan growth, GNPA has remained stable at 1.7% for many years; also, retail fees contribute over 70% to total fees. Concentration of the top-20 advances/exposures improved by 206bp/208bp to 12.1%/11.9% during the year. On the liability side, concentration of the top-20 depositors improved by ~50bp to 5.7%. BB and below pool reduced to INR175b (~3.0% of total loans) while net stressed loans declined to 3.3% (excluding NNPA). During 1QFY20, the BB & below pool further reduced to INR154b (~2.6% of loans) while net stressed loans declined to 2.9% (excl. NNPA). SA per branch has improved to INR448m in 1QFY20 v/s INR354m in FY17, thus, indicating higher productivity and operational efficiency at branch level. The bank has one of the highest proportion of retail deposits with a strong CASA mix. With asset quality stabilizing, we expect credit cost to moderate sharply and estimate core RoA/RoE to improve to 1.5%/15.5% by FY21.


Outlook


Maintain Buy with SOTP-based TP of INR520 (2.2x FY21E ABV). ICICIBC remains our top pick in the sector.


For all recommendations report, click here


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First Published on Aug 27, 2019 12:50 pm
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