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ICICI Bank Ltd. | Q2FY14 Result Update




IndiaNivesh Securities Pvt Ltd


28 Oct 2013





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ICICI Bank Ltd. | Q2FY14 Result Update Good set of numbers.. Performance beats expectations.. Advances grew at moderate pace of 16% y-o-y (5% q-o-q) to Rs 3,178 bn, mainly driven by domestic corporate advances. Deposits grew slowler than advances at 10% y-o-y (6%q-o-q) to Rs 3,090 bn. CASA deposits of the bank increased by 10 bps q-o-q (260 bps y-o-y) to 43.3%. NIMs (Net Interest Margins) improved by 4 bps q-o-q (31 bps y-o-y) to 3.31%. Net interest income (NII) increased at a healthy pace of 20% y-o-y (6% q-o-q) to Rs 40 bn. Asset quality improved as Gross NPA decreased by 15 bps q-o-q (46 bps y-o-y) to 3.08% whereas Net NPA increased marginally by 3 bps q-o-q (7 bps y-o-y) to 0.85%. However, PCR (Provision Coverage Ratio) was down by 230 bps q-o-q (560 bps y-o-y) and stood at 73.10% in Q2FY14. Outlook and Valuation: Healthy NIMs, strong capital adequacy (16.5% at Q2FY14-end), improving asset quality and strong return profile comforts us to maintain our buy recommendation on 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 1022, ICICI Bank is trading at consolidated P/ABV of 1.7x & 1.6x for FY14E and FY15E, respectively. We maintain BUY rating on the stock with target price of Rs 1,226 at P/ABV of 2.0x for FY15E.

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