Angel Broking has a buy call on ICICI Bank with a target price of Rs 416.
The current market price of ICICI Bank is Rs 292.70.
Time period given by the brokerage firm is one year when ICICI Bank price can reach defined target.
ICICI bank has taken a slew of steps to strengthen its balance sheet.
Measures such as Incremental lending to higher rated corporates, reducing concentration in few stressed sectors and building up the retail loan book.
The share of retail loans in overall loans increased to 54 per cent (Q3FY18) from 38 per cent in FY12.
ICICI bank’s slippages remained high during FY17 and hence GNPA went up to 8 per cent vs. 5.8 per cent in FY16.
Angel Broking expects addition to stress assets to reduce and credit costs to further decline owing to incremental lending to higher rated corporates and faster resolution in Accounts referred to NCLT under IBC.
The gradual improvement in recovery of bad loans would reduce credit costs, that would help to improve return ratio.
The strength of the liability franchise, shift in loan mix towards retail assets and better rated companies, and improvement in bad loans would be a key trigger for multiple expansion.