ICICI Bank - Diwali Picks 2012 - Kotak

CMP - Rs.1077, Current TP - Rs.1286

- ICICI bank is better placed vis-à-vis its peers with robust liability franchise (CASA mix at ~41% at the end of Q2FY13), stable asset quality, improving NIM (3%+ during last 3 Quarters).

- Management's focus on stable growth with improving structural profitability (RoE is likely to improve further with increase in leverage in next 2-3 years) reinforces our existing positive outlook on the stock.

- Retail book, which constitutes ~35% of total loan book, has seen near nil slippage during last couple of quarters; this has made us more confident on its overall asset quality.

- After stripping off the value of subsidiaries (Rs.204), stock is trading reasonable at 1.4x its FY14 ABV.

Source : Equity Bulls

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