Sharekhan's research report on ICICI Bank
ICICI Bank has seen a significant improvement in business and financial parameters and has steered well through the pandemic. The trend was visible in strong performance in Q1FY22 and guidance for lower gross NPA additions in Q2FY22 with a meaningful decline likely from H2FY22 onwards. Conservative provisioning (high PCR of 78.4% and COVID-19 related provision buffer of 0.9% of loans), a strong capital base (CAR of 19%) and overall franchise value are positives, which will help the bank tide over medium-term challenges and support growth and valuations.
Outlook
We maintain a Buy on ICICI Bank with a revised SOTP-based price target (PT) of Rs 876. It is emerging as growth leader with improving return ratios, making it our preferred pick in the banking sector.
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