KR Choksey recommended accumulate rating on ICICI Bank with a target price of Rs 440 in its research report dated May 08, 2019.
KR Choksey's research report on ICICI Bank
ICICI Bank delivered 14.5% YoY growth in advances while deposit mobilization clocked a solid 16.4% YoY growth in Q4 FY19. Domestic loan book growth of 16.9% YoY was primarily driven by Retail loans which grew 21.7% YoY and accounted for 60% of the total advances. NII stood at INR 27,015 Cr., up 17.3% YoY for FY19 and for Q4FY19, the NII came at INR 7,620 Cr., up by 26% YoY/+10% QoQ. NIMs at 3.58% in Q4FY19 expanded 45 bps YoY (up 18bps QoQ). Retail business supported the bank’s asset yields (+72 bps YoY) in Q4FY19 at 8.12% for Q4 FY19 while cost of funds declined by 25 bps sequentially to 4.76% on account of higher CASA deposits. Bank’s asset quality improved with GNPA levels down to 6.7% in Q4 FY19, reducing by 214 bps/49 bps on a YoY/QoQ basis, respectively. Overall, PPOP at INR 23,438 Cr. was down 7.7% YoY for FY19 due to high operating expenses while PAT almost halved to INR3,363 Cr on higher provisions.
Outlook
We use SOTP approach (adding for its subsidiaries/holdings) to arrive at a target price of INR 440 per share, an upside of 13.9% over the CMP. Accordingly, we assign an “Accumulate” rating.
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