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Research
Views on ICICI Bank 2QFY2016 Result: Angel Broking
Posted On : 2015-10-30 20:25:54( TIMEZONE : IST )
Views of Mr. Vaibhav Agrawal (VP Research - Banking, Angel Broking) on ICICI Bank 2QFY2016 Results:
"ICICI Bank reported a decent set of number for 2QFY2016 results with PAT growth of 11.9% YoY to INR 3,030cr in 2QFY2016 which was in-line with our expectations. NII grew at steady pace of 12.8% YoY which was in-line with the expectations likely due to growth in advances at 13.3% YoY as well as flat margins sequentially. The bank managed to keep the operating expenses under check which grew 15.0% YoY on a low base of the same quarter last year; below our estimates. The provisions saw a decline of 1.4% QoQ which was below our expectations.
The bank continues to grow its retail franchise and has seen healthy growth in retail loan book at 25% YoY which now constituted about 44% of the loan portfolio of the bank as of September 30, 2015. Also, the growing retail franchise is visible in CASA ratio which came at 45.1% as against 43.7% in the year ago period.
The country's largest private sector lender today approved sale of 9.0% stake in insurance company ICICI Lombard to Fairfax Financial Holdings Limited at a valuation of INR 17,225cr which was higher than our estimates. Incorporating the implied value from this stake sale, our SOTP based value for the non-life business will increase by INR 10 per share.
Asset quality was in-line with our expectations since the management has guided for more additions to stressed assets during the year. The Gross NPA ratio rose by 9bp QoQ to 3.77% while the Net NPA ratio rose by 7bps QoQ to 1.65% in 2QFY2016. However, we would wait for more clarity on the stress assets additions during the year. At CMP, the bank's core banking business (after adjusting INR 58/share towards value of subsidiaries) is trading at 1.5x FY2017E ABV. We recommend BUY rating on the stock."
Shares of ICICI BANK LTD. was last trading in BSE at Rs.277 as compared to the previous close of Rs. 271.45. The total number of shares traded during the day was 1986439 in over 18422 trades.
The stock hit an intraday high of Rs. 279.6 and intraday low of 270.5. The net turnover during the day was Rs. 547254761.
