ICICI Bank Ltd - Ventura

For the past few years ICICI Bank was in a consolidation phase and during this time it has managed to reduce NPA's and improve asset quality. Having achieved its objective the bank is now well placed to embark on the next phase of expansion. However the next phase of expansion would see emphasis being laid on asset quality and quality of earnings rather than balance sheet growth.

Led by improving asset quality, higher NIM's due to longer maturity of deposits and well diversified loan book, we expect the Net Interest Income and earnings to post a CAGR of 14.2% and 6.5% to Rs.14,003.2 crore and Rs.7,335 crore respectively over FY12-14. We value ICICI Bank based on a SOTP valuation based Price Objective of Rs.1,270. At CMP of Rs.1,051, the stock is trading at 1.9x and 1.8x its Adj B/V for FY13E & FY14E respectively, representing a potential upside of ~20.8% over a period of 15 months.

Source : Equity Bulls

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