ICICI Bank, Buy :: Kotak Securities

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RECOMMENDATION: BUY
TARGET PRICE: RS.390 FY16E P/E: 14.9X, P/ABV: 2.2X
Our recent interaction with the management of ICICI bank reinforces our
positive outlook on the stock. We believe management's focus on stable
growth with improving structural profitability is likely to continue. ICICI
Bank has continued to demonstrate its prowess in improving ALM,
maintaining robust liability franchise, managing asset quality risk along
with conserving capital. Retail segment has continued to show healthy
growth while SME and domestic corporate books have seen calibrated
growth. Its asset quality has stabilized; fresh loan impairments have also
remained within the management's guidance. At CMP, stock trades at
reasonable valuation (1.7x FY16E ABV), after stripping the value for
subsidiaries. We have marginally revised earnings upward for FY15/16E
along with assigning higher multiples for its core business as well as
subsidiaries on improving macros. We reiterate BUY on the stock with
revised TP of Rs.390 (Rs.364) using SOTP method, where the value of its
standalone business comes to Rs.314 (2.0x FY16E ABV) and the value of
subsidiaries at Rs.76 (holding company discount: 20% to the fair value of its
subsidiaries at Rs.94)

LINK
http://www.kotaksecurities.com/pdf/pdfs/FUNDICICIBANK12122014093743.pdf