ICICI Bank reported loss of `120cr owing to MTM losses (after IPru Life stake sale) and elevated provisions (increased coverage on NCLT exposure). Net interest income grew by 9.2% and reported NIM compressed by 5bps/8bps qoq/yoy to 3.19%. Slippage for Q1FY19 was `4,036cr, which is lowest from last 11 quarter.

Outlook & Valuation: At the current market price, the bank’s core banking business (after adjusting value of subsidiaries) is trading at 1.16x FY20E ABV. We believe strength of liability franchise (CASA-50%), shift in loan mix towards retail assets and better rated companies, Strong capitalization (tier I of 14.42%), and steady improvement in stress loan and going forward quick resolution under IBC would be the key trigger for multiple expansion. We recommend a Buy rating on the stock, with a target price of `411.

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