ICICI Bank (Buy) - Avendus

We marginally lower our FY14f-FY16f PAT forecast (up to c1%) and estimate a stable NIM in FY14f; however, the management has guided to a 10-bp expansion in FY14f. We raise our assumption for the incremental NPL by 10-bp to 0.50% in FY14f. The trend of a rise in the slippage ratio and fall in PCR in the Jun13 quarter is likely to extend during the next few quarters. Net outstanding restructured loans rose 20-bp sequentially to 1.7% of the customer assets at the end of Jun13. While an INR8.23bn addition was higher than the preceding three quarters, the Sep13 quarter pipeline remains higher than INR11bn. The rise in RoE is likely to sustain over FY14f-FY16f, driven by NII/assets, despite the rise in NPL provisions/assets. The stock has underperformed the broader market by c16% but outperformed the Bankex by 3%. We rollover the TP to Sep14 and raise it marginally to INR1,200. The TP values the stock at a one-year forward adjusted P/B of 1.69x (consolidated). We maintain a Buy rating.

Source : Equity Bulls

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