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India Equity Research Reports, IPO and Stock News
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Remarks: ICICI Bank is back on growth path as its advances are growing at a healthy rate (up 19.1% YoY and 5.2% QoQ in
Q3FY2012). We expect the advances of the bank to grow by 18% CAGR over FY2011-13. This should lead to a 15%
CAGR growth in the net interest income in the same period.
ICICI Bank’s asset quality has shown a turnaround as its NPAs have continued to decline over the last six
quarters led by contraction in slippages. This has led to a sharp reduction in the provisions and an increase in
the profitability. Going forward, we expect the NPAs to decline further which will lead to lower NPA provisions
and hence aid the profit growth.
With a pick-up in the business growth and an improvement in the margins the RoEs are likely to expand to
about 12% over the next two years while the RoA would improve to 1.4%. This would be driven by a 17% CAGR
in profits over FY2011-13.
Despite the run-up in the stock over the past two months it trades at 1.6x FY2013E book value. We expect the
stock to re-rate, given the improvement in the profitability led by lower NPA provisions, a healthy growth in
the core income and improved operating metrics. We recommend Buy with a price target of Rs1,070.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Remarks: ICICI Bank is back on growth path as its advances are growing at a healthy rate (up 19.1% YoY and 5.2% QoQ in
Q3FY2012). We expect the advances of the bank to grow by 18% CAGR over FY2011-13. This should lead to a 15%
CAGR growth in the net interest income in the same period.
ICICI Bank’s asset quality has shown a turnaround as its NPAs have continued to decline over the last six
quarters led by contraction in slippages. This has led to a sharp reduction in the provisions and an increase in
the profitability. Going forward, we expect the NPAs to decline further which will lead to lower NPA provisions
and hence aid the profit growth.
With a pick-up in the business growth and an improvement in the margins the RoEs are likely to expand to
about 12% over the next two years while the RoA would improve to 1.4%. This would be driven by a 17% CAGR
in profits over FY2011-13.
Despite the run-up in the stock over the past two months it trades at 1.6x FY2013E book value. We expect the
stock to re-rate, given the improvement in the profitability led by lower NPA provisions, a healthy growth in
the core income and improved operating metrics. We recommend Buy with a price target of Rs1,070.
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