Buy ICICI Bank; target of Rs 377: HDFC Securities

HDFC Securities' research report on ICICI Bank

A� ballooning of GNPAs in 4QFY18 (102bps QoQ) overshadowed some significant positives for ICICIBC. Domestic loan growth sustained (+15% YoY) while NIMs improved 10bps sequentially (3.24%). The watchlist nose-dived to ~Rs 47.2bn (vs� ~Rs� 190.6bn� in 3Q) and net stress reduced substantially (~6% vs 9.9% YoY).� Creditable CASA addition (Rs 431bn in FY18), steady growth in retail loans�� (21%� YoY),� fees� (+16%)� and� controlled� opex� (+9%)� were� also encouraging.

Outlook

We expect RoAAs� to pull back 36bps over FY18-20E as a result. Maintain BUY with a TP of Rs 377 (1.7x Mar-20 core ABV of Rs 150 and sub-value of Rs 122).

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