EUR 120.00 For Business Accounts Only

MOSL: ICICI BANK (Buy)-Growth momentum robust-technology remains a key business enabler

ICICI BANK: Growth momentum robust; technology remains a key business enablerICICI BANK: Growth momentum robust; technology remains a key business enabler(ICICIBC IN, Mkt Cap USD45.9b, CMP INR509, TP INR625, 23% Upside, Buy)
We attended ICICI Bank’s (ICICIBC) analyst day, wherein the bank highlighted the progress that its different businesses are making and how well it is positioned to capitalize on the exciting opportunities in financial services. The topics of discussion ranged around (a) management’s efforts to build a strong bank with best-in-class digital capabilities, (b) the usage of technology to accelerate growth across business verticals and maintain healthy operating metrics, (c) collaboration with start-ups to offer improved customer proposition, penetrate newer markets and reduce operating costs, and (d) maximizing the risk calibrated core operating profit as it follows ‘One Bank One RoE’ approach.
ICICIBC has historically been a technology savvy bank with several innovations to its credit. However, asset quality challenges over the past few years have taken the center stage and many digital capabilities were not getting duly appreciated. Over the past few years, the bank has been reporting strong growth in retail advances, supported by an impressive share of digital originations across key product lines. With asset quality issues getting sorted, ICICIBC appears firmly positioned to deliver healthy sustainable growth, led by continued investments in technology and further expansion in digital offerings. We thus estimate RoA/RoE of 1.6%/15.7% in FY21. Reiterate Buy with a revised SOTP-based target price of INR625 (2.5x Sep’21E ABV).