ICICIBC reported earnings of Rs6.55bn (PLe: Rs0.25bn) as it marked down DTA of ~Rs29.0bn, while all round contribution to PBT was from strong NII growth, other income and comparatively lower provisions. Bank enhanced its PCR further by 200bps QoQ to 76% (85% incl. technical w.off) and is best in industry, while lower slippages helped asset quality improvement. BB & Below is steady at 2.6% of loans. Improving NIMs, strong PCR with lowering asset quality risks and control on opex keeps the bank on path of strong recovery in earnings leading to 16-17% ROE for s'lone entity by FY22.
OutlookWe retain strong conviction BUY with revised TP of Rs541 (from Rs518) based on 2.1x Sep-21 ABV & and higher insurance value derived from rollover. We value the stock at 40xSept21 EPS and arrive at target price of Rs1753 (Rs1688 earlier on 40xJune21 EPS). Retain BUY.
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