Monday, April 27, 2009

[Investors Please Listen] ICICI Bank Q4FY09 Result Update ; Earnings in line - asset worries may reduce in FY10 ; BUY ; Target : Rs720

ICICI Bank

Earnings in line – asset worries may reduce in FY10


BUY

 

CMP: Rs433                              Target Price: Rs720


ICICI Bank reported net profit of Rs7.4bn, better than our estimates driven by better than expected NII and lower costs. The NII was better than expected driven by NIM expansion of 13bps yoy and 17bps qoq, The operational performance was weakened by a sharp 30% yoy decline in fee income.

The additions to NPAs were moderate in Q4FY09 as the bank added Rs5.5bn of assets to NPAs and had Rs32bn standard assets under restructuring. We believe that with large portion of standard non-retail advances being restructured and moderate addition of NPAs during the quarter, the additions to NPAs over FY10 may reduce.

The stock is currently quoting at 8.5x FY11E FDEPS and 0.9x FY11E ABV. We maintain our BUY recommendation on the stock with price target to Rs720.


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Safe Harbor:

The information contained and provided on this Website provides Investment advice for the education of investors. The posts are an information service only. Recommendations, opinions or suggestions are given with the understanding that readers acting on this information assume all risks involved. We do not assume any responsibility or liability resulting from the use of such information, judgment and opinions for Trading or Investment purposes.
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