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Spark Capital: 4QFY13 Result reviews of ICICI Bank




Spark Capital Advisors(India) Private Limited


30 Apr 2013





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ICICI Bank: Numbers in line, Asset Quality problems resurfacing; Maintain BUY ICICI Bank’s reported numbers were largely in line with our expectations led by 18% loan growth in domestic book and >3% margins. However, fee income (up 2.7% yoy) and asset quality disappointed us marginally with spike in restructured assets on qoq basis. We flag off a key risk of sizable chunky exposures in becoming an NPA/getting restructured especially in the power sector (~5.4% of funded exposures) in the near term. We see these risks coming from operating assets especially in gas based power projects, a case in point being Ratnagiri power project (Dabhol) where media reports are suggesting that production has almost stopped due to non-availability of gas. Despite the above concerns we continue to retain our positive stance on the stock as we continue to see notable improvement in the form of improving margin profile, repatriation of capital from international subsidiaries and improving core-profitability of the business ( Refer our note “ ICICI Then & Now” ). We retain our BUY stance on the stock with a TP of Rs. 1324 valuing the business at 2XFY14E ABV

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