Broker's call: ICICI Bank (Buy)

Updated on: Dec 07, 2021

IDBI Capital

ICICI Bank (Buy)

Target: ₹945

CMP: ₹710.05

We attended virtual Analyst Day hosted by ICICI Bank which showcased the digital strategy of each business segment and data analytics are the key drivers to focus on the strategy from recognised as from a Bank to BankTech. ICICI Bank re-iterates its strategy of ‘One Bank, One ROE, and providing 360 degree solutions.

Management highlighted that the focus is on the data to maximise operating profits. It also highlighted that the culture in an organisation is the key differentiator as technology and digitisation can be replicated in any organisation (Banking).

ICICI Bank has embraced open architecture in banking. The open architecture network is being used for iMobile Pay, in digital partnerships and co-creation, in ecosystems for distribution. The bank mentions that home loans, personal loans, auto loans and overdraft on FD has increased by 2.5x, 1.7x, 4.2x and 5.0x y-o-y, respectively.

Digital sourcing contribution was 92 per cent in Q2-FY21, 96 per cent in October and 100 per cent from November. Digital sourcing implies Insta, which is fully self-serviced loans, as well as digitally processed and physically assisted. Around 26 per cent of the customers were given credit cards through Insta flow in October. We re-iterate ‘Buy’ with a target price of ₹945, valuing parent business at ₹799 (2.3X P/ABV FY24) and rest for the subsidiaries.

Published on December 06, 2021

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