Buy ICICI Bank; target of Rs 1878: Angel Broking

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26 Aug, 2025 12:21

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Angel Broking`s research report on ICICI Bank“ICICI Bank reported a healthy set of numbers for 2QFY2015 with NII and net profit growth of 15.2% and 15.2% yoy, respectively. During 2QFY2015, the bank’s advances grew by 13.8% yoy (4.2% qoq), aided by healthy retail loan book growth of 25.2% yoy. Secured products like mortgage loans and auto loans grew by 26% and 38% yoy respectively, and these were the major drivers of the retail loan book growth. Retail contribution to total loans grew to 39.8% for the quarter as compared to 36.2% in 2QFY2014. Branch expansion coupled with strong capital adequacy will enable the bank to grow its retail book for the next couple of years. Deposits for the quarter grew by 13.9% yoy, with CASA deposits growing by 14.8% yoy. As a result, the CASA ratio improved by 34bp yoy to 43.7% for 2QFY2015. The Reported NIM improved by 15bp yoy to 3.42%, with domestic NIM at 3.84% as compared to 3.65% in 2QFY2014, due to lower cost of funds. The Management mentioned that its long term objective is to increase domestic NIM to 3.8-4%. International NIM fell to 1.58% as compared to 1.8% in 2QFY2014, due to bond issue expenses. The non-interest income (excluding treasury) for the bank grew at 15.9% yoy. Growth in income under the ‘others’ head (which mainly includes dividend from subsidiaries) came in strong even as fee income grew at a moderate pace.” “On asset quality front, the bank witnessed higher slippages of Rs1,673cr as compared to Rs1,195cr in the previous quarter, with around 50% of slippages coming in from the restructured portfolio. The Gross NPA ratio increased by 7bp sequentially to 3.1%, whereas Net NPA increased by 10bp qoq to 1.1%. Fresh restructuring for the quarter was Rs830cr; the bank has a pipeline of Rs1,800cr for 3QFY2015. The bank has given a guidance that its incremental stressed assets in this fiscal year will be lower than in FY2014.” “At the current market price, the bank’s core banking business (after adjusting Rs206/share towards value of subsidiaries) is trading at 2.1x FY2016E ABV. From a structural point of view, keeping in mind its robust franchise and capital adequacy position, the bank is well positioned to grow by at least a few percentage points higher than the average industry growth, as and when the business environment turns conducive. We maintain our Buy recommendation on the bank with a price target of Rs1,878,” says Angel Broking research report.  

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