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ICICI Bank Ltd. | Q1FY14 First Cut Analysis




IndiaNivesh Securities Pvt Ltd


01 Aug 2013





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ICICI Bank Ltd. | Q1FY14 First Cut Analysis | Performance meets expectations.. Net Interest Income (NII) of ICICI Bank increased 20% y-o-y to Rs 38 bn in Q1FY14. It was on account of 9% y-o-y (1% q-o-q) increase in interest income and 4% y-o-y (1% q-o-q) increase in interest expense to Rs 104 bn and Rs 66 bn respectively. Non Interest Income reported healthy growth of 32% y-o-y (13% q-o-q) to Rs 25 bn mainly due to four times y-o-y growth in treasury income. Treasury income grew to Rs 4 bn in against loss of Rs 0.2 bn in Q1FY13 (profit of Rs 1 bn in Q4FY13). Operating expenses increased 17% y-o-y (3% q-o-q) to Rs 25 bn in Q1FY14. NIM (Net Interest Margin) of the bank was stable at 3.27% against 3.33% in Q4FY13 (3.01% in Q1FY13) Total Provisions increased by 29% q-o-q (27% y-o-y) to Rs 6 bn against Rs 5 bn in Q4FY13. Net profit of ICICI bank increased 25% y-o-y (down 1% q-o-q) to Rs 23 bn in Q1FY14.Valuation: Healthy NIMs, strong capital adequacy (18.4% at Q1FY14-end), stable asset quality numbers and strong return profile comforts us to maintain our positive view towards ICICI bank. With healthy advances growth, stable NIMs, increasing CASA share and improving efficiency, we expect the banks overall performance to continue to improve from current levels. At CMP of Rs 909, ICICI Bank is trading at consolidated P/ABV of 1.6x & 1.4x for FY14E and FY15E, respectively. We maintain BUY rating on the stock with revised target price of Rs 1,226 at P/ABV of 2.0x for FY15E (earlier target price of Rs 1329).

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