Motilal Oswal's research report on ICICI Bank
We attended ICICIBC analyst day, where the management highlighted how the strengthening of its digital capabilities is helping transform the bank and increase throughput rates, while offering customers a superior experience. The bank is capable of building and scaling digital capabilities like the best of the FinTechs, though agility, constant innovation, and customer focus remains the key to success. ICICIBC has been reporting strong growth in Retail advances, supported by an impressive share of digital originations, while SME/Business Banking growth has been robust, aided by various digital applications. With a resilient asset quality and an improving economic environment (as reflected by key economic indicators – GST collections, GDP growth, and PMI), it appears firmly positioned to deliver healthy sustainable growth.
Outlook
We estimate ICICIBC to deliver ~25% earnings CAGR over FY22-24E, while RoA/RoE improves to 2%/16.6% in FY24E. ICICIBC remains our top pick in the sector. We reiterate a Buy with a SoTP based TP of INR1,000 (2.8x Sep’23E ABV).
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