Buy ICICI Bank; Target Of Rs 600: Emkay Global Financial

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Emkay Global Financial's report on ICICI Bank

Our Digi-Banking Conference on November 26 emphasized that the Digital thrust is turbocharged due to Covid-19, while digitization and ‘fintegration’ are the way forward for incumbents. Over the years, ICICI has been evolving into a full-stack digital bank with endto-end digital solutions across businesses and is well-poised to ride the digital boom. ICICI Bank has made adequate investments in digital platforms, leading to virtually no outages - unlike its large peers that have recently faced regulatory ire - and better customer wallet share/profitability. The bank believes that its focus on balanced ‘Phygital strategy’ and customer life-cycle banking should lead to better revenues, cost savings - boosting core-profitability in the long run. Although the discussions were centered around digital initiatives, management reassured its long-standing risk-calibrated growth strategy, focus on customer-level profitability and better asset-quality experience in the current cycle with adequate provisioning buffers in place.

Outlook

We believe that ICICI’s likely strong delivery on growth, asset quality and return ratios despite the Covid-induced disruption, coupled with its evolution as a strong retail-cumdigital bank, will call for a re-rating. Retain Buy/OW in EAP with a revised TP of Rs600.

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