Hold ICICI Bank; target of Rs 284: Reliance Securities

Reliance Securities' research report on ICICI Bank

ICICI Bank continued to report a subdued performance on operating and business growth front in 1QFY18. Its operating profit declined by 0.6% YoY and grew by mere 1.4% QoQ to Rs51.8bn due to subdued sequential growth in NII (+8.4% YoY & -6.2% QoQ to Rs55.9bn) and core fee income (+10.3% YoY & -2.8%QoQ to Rs23.8bn). On sequential comparison, the Bank’s loan book growth remained flat on the back of 6.3%, 4.4% and 1.9% QoQ decline in SME, international and domestic corporate loan book, respectively.

Outlook

Hence, we maintain our HOLD recommendation on the stock with a revised Target Price of Rs284 (valuing parent at 1.5x FY19 Adj. BV and valuing subsidiaries at Rs71 after 15% holding company discount).