ICICI Bank’s traction in business expansion, improvement in margin, reduction in credit cost
and decrease in leverage (with expansion in balance-sheet size) would yield higher return
ratios going forward
We expect credit book to expand in high teens (e e pec c ed boo o e pa d g ee s 20% CAGR during FY12-14E) driven by SME,
retail & working capital requirements
The bank would record NIM in a range of 2.8-2.9% on the back of higher yield on
investments, reduction in losses on securitized book, traction in overseas business and
stability in CASA deposit share
We expect that the bank’s other income to grow by 17% CAGR over FY12-14E on the back of
healthy core fee income
With tier I capital of 12.8% (as on end-June’12), the bank is adequately capitalized. The bank
would not be required to raise equity capital in near future
The bank quotes at cheap valuations, hence offer an opportunity to add to the positions. At
current price, the stock quotes at 1.8x and 1.7x adjusted book value (ABV) FY13 and FY14
respectively. Based on our price target of ` 1,323, the stock will trade at 2.6x and 2.3x ABV
FY13 and FY14 respectively
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