Motilal Oswal Financial Services

27 July 2019

1QFY20 Results Update | Sector: Financials - Banks

ICICI Bank

Buy

BSE SENSEX

37,883

S&P CNX

11,284

CMP: INR416



TP: INR520 (+25%)

Motilal Oswal values your support in

the Asiamoney Brokers Poll 2019 for

India Research, Sales and Trading

team. We

request your ballot.

Operating performance strong; Provision coverage improves further

ICICIBC’s 1QFY20 PAT of INR19.1b (est. of INR21.2b), was led by strong NII and

controlled opex. Core PPoP grew a healthy 21% YoY (in-line).

NII grew 27% YoY to INR77.3b, led by healthy loan growth with additional boost

from interest on IT refunds. NIMs stood at 3.62% v/s 3.72% in 4QFY19 including

9bp impact on IT refund (INR1.8b) and 8bp impact due to interest collection from

NPLs. On a like-to-like basis, margins moderated marginally by 3bp QoQ.

Other income declined 11% YoY as 1QFY19 had stake sale gain from IPRU while

core fee income grew ~10% YoY (retail forms 72% of total fees). Total income,

thus, was up 12% YoY to INR111.6b (in-line). Opex grew 18% YoY due to higher

employee expense growth of 29% YoY (due to higher retirement led provisions).

Advances grew 15% YoY with domestic book growing 18% YoY (~22% YoY

growth in retail), while overseas loan mix declined further to 10.1%. Deposit

growth stood healthy at 20.8% YoY. Term deposits grew 34% YoY, resulting

in moderation in average CASA mix to 43.4% v/s 44.6% in 4QFY19.

Fresh slippages stood at INR27.8b even as retail slippages increased to

INR15.1b (including INR4.5b agri slippages from Kisan Credit portfolio).

GNPL/NNPL ratios improved 20bp/30bp QoQ to 6.5%/1.8%. PCR improved

340bp QoQ to 74.1% (83.4% including TWO).

Other highlights:

(a) Retail loan mix increased 120bp QoQ to 61.4%, (b)

Quantum of BB and below assets declined to INR153.6b (-12% QoQ), (c)

Cons.

performance:

ICICIBC reported PAT of INR25.1b v/s INR50m in 1QFY19.

Valuation and view:

ICICIBC has delivered steady operating performance and is set

to see earnings normalization. With asset quality stabilizing, credit cost will

moderate meaningfully in FY20E/21E, thus, boosting return ratios. For FY20/FY21,

we have fine-tuned our estimates slightly and changed our tax assumption, thus,

lowering PAT estimate by ~3%/4%. We expect the bank to deliver loan CAGR of 17%

over FY19-21E, and estimate core RoA/RoE to improve to 1.5%/15.5%. Maintain

Buy

with a revised SOTP-based TP of INR520 (2.2x FY21E ABV for the bank). ICICI remains

our top pick in the sector.

v/s

Est.

-11%

-2%

10%

-4%

13%

-10%

(94)

(50)

309

Bloomberg

Equity Shares (m)

M.Cap.(INRb)/(USDb)

52-Week Range (INR)

1, 6, 12 Rel. Per (%)

12M Avg Val (INR M)

Free float (%)

ICICIBC IN

6,447



2681.2 / 38.9

444 / 273

-1/11/43

7313



100.0

Financials & Valuations (INR b)

Y/E March

FY19 FY20E FY21E

NII

270.1 326.8 387.2

234.4 269.8 324.4



33.6 132.3 174.7

NIM (%)

3.4

3.6

3.7

EPS (INR)

5.2

20.5

27.1

EPS Gr (%)

-52.8 292.8

32.0

BV/Sh (INR)

165.5 180.5 201.0



ABV/Sh (INR)

135.5 153.8 174.9

Cons. BV/Sh (INR)

177.2 186.0 198.4

Cons. ABV/Sh (INR) 147.3 159.3 172.3



RoE (%)

3.2

12.0

14.4

RoA (%)

0.4

1.3

1.5

Valuations

P/BV (x) (Cons)

2.3

2.2

2.1

P/ABV (x) (Cons)

2.8

2.6

2.4

P/ABV (x)

2.1

1.8

1.6

P/E (x)

54.4

13.9

10.5

Div. Yield (%)

0.4

1.3

1.6

*Adjusted for investment in subsidiaries

Quarterly performance

61,019

38,518

99,537

41,453

58,084

59,713

-1,629

-434

-1,196

-105.8

5,469

5,163

8.8

4.2

54.8

FY19

FY20E

FY19

FY20E

FY20

2QE

3QE

4QE

1QE

64,176 68,753 76,201 77,374 78,439 83,996 87,022 270,148 326,831 71,987

31,565 38,829 36,210 34,254 36,118 37,746 39,906 145,122 148,024 38,537

95,741 107,581 112,411 111,629 114,557 121,742 126,927 415,270 474,855 110,524

43,244 46,117 50,077 48,744 51,004 51,655 53,692 180,891 205,095 49,536

52,497 61,464 62,334 62,885 63,554 70,087 73,236 234,379 269,760 60,988

39,943 42,442 54,514 34,957 20,671 13,260

9,114 196,611 78,003 31,900

12,554 19,023

7,820 27,927 42,883 56,826 64,121 37,768 191,758 29,089

3,465

2,974

-1,871

8,847 13,294 17,616 19,688

4,135 59,445

7,854

9,089 16,049

9,691 19,080 29,589 39,210 44,433 33,633 132,313 21,235

-55.8

-2.7

-5.0 -1,696.0

225.6

144.3

358.5

-50.4

293.4 -1,876.2

5,587

5,445

8.5

3.7

59.5

6,068

5,643

7.8

2.6

68.5

6,529

5,866

6.7

2.1

70.7

6,607

5,924

6.5

1.8

74.1

6,738

6,054

7.0

2.1

71.4

7,260

6,524

6.4

1.9

71.5

7,574

6,805

6.0

1.7

73.8

6,529

5,866

7.5

2.3

70.7

7,574

6,805

6.0

1.7

73.8

6,477

5,820

7.4

2.3

71.0

Net Interest Income

Other Income

Total Income

Operating Expenses

Operating Profit

Provisions

Profit before Tax

Tax

Net Profit

% Change (YoY)

Operating Parameters

Deposit (INR b)

Loan (INR b)

Asset Quality

Gross NPA (%)

Net NPA (%)

PCR (%)

Research Analyst: Nitin Aggarwal

(Nitin.Aggarwal@MotilalOswal.com); +91 22 6129 1542 |

Parth Gutka

(Parth.Gutka@motilaloswal.com)

Alpesh Mehta

(Alpesh.Mehta@MotilalOswal.com);

Himanshu Taluja

(Himanshu.Taluja@motilaloswal.com);

Yash Agarwal

(Yash.Agarwal@motilaloswal.com)

Investors are advised to refer through important disclosures made at the last page of the Research Report.

Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

ICICI Bank

Exhibit 1: Quarterly Snapshot

FY18

INR m

Profit and Loss

Net Interest Income

Other Income

Trading profits

Fee Income

Miscellaneous Income

Total Income

Operating Expenses

Employee

Others

Operating Profits

Core Operating Profits

Provisions

PBT

Taxes

PAT

Asset Quality (INR b)

GNPA

NNPA

Ratios

Asset Quality Ratios (%)

GNPA

NNPA

PCR (Calculated)

Credit Cost

Business Ratios (%)

Fees to Total Income

Cost to Core Income

Tax Rate

CASA

Dom. Loan/Deposit (Rep)

Loan / Deposit

Profitability Ratios (%)

Yield on loans

Yield On Investments

Yield on Funds

Cost of funds

Margins

RoA (cal)

RoE (Cal)

Other Details

Branches

ATM

55,898

33,879

8,580

23,770

1,529

89,778

37,944

15,112

22,833

51,833

43,253

26,087

25,746

5,256

20,490

431

253

8.0

5.5

41.4

2.2

26.5

46.7

20.4

49.0

81.8

95.4

8.7

6.5

7.9

5.2

3.3

1.1

8.2

4,852

13,780

57,091

51,862

21,930

25,700

4,232

108,953

39,088

15,141

23,948

69,865

47,935

45,029

24,836

4,254

20,582

445

241

FY18

7.9

4.4

45.8

3.8

23.6

44.9

17.1

49.5

82.4

96.8

8.7

6.7

7.8

5.0

3.3

1.1

8.0

4,856

13,792

7.8

4.2

48.3

2.9

29.7

43.3

-10.9

50.4

84.0

97.7

8.5

6.4

7.5

4.9

3.1

0.8

6.3

4,860

14,262

8.8

4.8

48.4

5.2

23.5

46.4

-14.8

51.7

79.8

91.3

8.7

6.3

7.7

4.9

3.2

0.5

3.9

4,867

14,367

8.8

4.2

54.8

4.6

27.7

45.1

26.6

50.5

82.6

94.4

8.7

6.4

7.7

5.0

3.2

-0.1

0.0

4,867

14,394

8.5

3.7

59.5

3.0

31.3

45.0

27.6

50.8

85.1

97.5

8.8

6.6

7.9

5.0

3.3

0.4

3.4

4,867

14,417

57,053

31,669

660

26,390

4,619

88,721

38,144

13,626

24,518

50,578

49,918

35,696

14,882

-1,621

16,502

460

238

60,217

56,786

26,850

27,550

2,386

117,003

41,863

15,262

26,601

75,140

48,290

66,258

8,882

-1,318

10,200

541

279

61,019

38,518

7,660

27,540

3,318

99,537

41,453

15,139

26,315

58,084

50,424

59,713

-1,629

-434

-1,196

535

242

64,176

31,565

-350

29,950

1,965

95,741

43,244

16,614

26,630

52,497

52,847

39,943

12,554

3,465

9,089

545

221

FY19

68,753

38,829

4,790

30,620

3,419

107,581

46,117

17,340

28,777

61,464

56,674

42,442

19,023

2,974

16,049

516

163

FY19

7.8

2.6

68.5

3.1

28.5

44.9

15.6

49.3

81.9

93.0

9.0

6.7

8.1

5.1

3.4

0.7

6.0

4,867

14,944

76,201

36,210

1,560

31,780

2,870

112,411

50,077

18,990

31,087

62,334

60,774

54,514

7,820

-1,871

9,691

463

136

6.7

2.1

70.7

3.8

28.3

45.2

-23.9

49.6

80.2

89.8

9.3

6.6

8.5

5.2

3.7

0.4

3.6

4,874

14,987

FY20

77,374

34,254

1,790

30,390

2,074

111,629

48,744

19,533

29,211

62,885

61,095

34,957

27,927

8,847

19,080

458

119

FY20

6.5

1.8

74.1

2.4

27.2

44.4

31.7

45.2

80.6

89.7

9.4

6.8

8.4

5.2

3.6

0.8

7.0

4,882

15,101

Change (%)

YoY

QoQ

-11

-77

-37

-41

-5

-4

-28

-1

-3

-6

-36

257

-573

-14

-1

-51

-13

Change (bp)

YoY

QoQ

-232

-21

-242

-29

1,930

342

-227

-142

-44

-74

506

-530

-200

-475

700

707

-105

-80

5,560

-440

-19

-5

-11

340

114

Source: MOFSL, Company

27 July 2019

ICICI Bank

Exhibit 2: Quarterly snapshot continued

FY18

INR b

Balance Sheet

Loans

Investments

Deposits

Borrowings

Total Assets

Deposits Break Up

CASA Deposits

% of total Deposits

Savings

% of total Deposits

Current

% of total Deposits

Term Deposits

% of total Deposits

Loan Break Up

Agriculture

SME Loans

Corporate Loans

Retail Loans

of which

-Housing

-Personal Loans

-Credit Cards

-Others

International Loans

Loan Mix (%)

Agriculture

SME Loans

Corporate Loans

Retails

International Loans

Subsidiaries PAT (INR m)

I Sec

I Sec PD

I Venture

Pru AMC

ICICI Home Finance

ICIC Life Insurance

ICICI General Insurance

Consolidation adjustment

Subsidiaries PAT

ICICI Bank

Consol Profit

4,641

1,992

4,863

1,411

7,609

2,380

1,700

681

2,482

4,828

1,799

4,986

1,507

7,878

2,469

1,785

684

2,518

5,054

1,798

5,174

1,582

8,135

2,606

1,859

748

2,568

5,124

2,030

5,610

1,829

8,792

2,899

2,010

890

2,711

5,163

1,864

5,469

1,620

8,451

2,763

1,996

767

2,706

5,445

1,875

5,587

1,747

8,743

2,835

2,075

761

2,751

FY19

5,643

1,977

6,068

1,643

9,124

2,994

2,108

886

3,074

5,866

2,077

6,529

1,653

9,645

3,239

2,277

963

3,290

FY20

5,924

2,200

6,607

1,567

9,638

2,989

2,185

804

3,619

Change (%)/Bp

YoY

QoQ

-3

-5

-8

-4

-16

209

1,242

2,475

1,327

151

916

715

208

1,313

2,588

1,384

166

955

719

248

1,359

2,739

1,449

186

1,014

708

256

1,322

2,900

1,499

209

1,099

646

237

1,311

2,969

1,544

223

104

1,098

645

250

1,383

3,120

1,610

250

106

1,154

691

277

1,360

3,329

1,711

276

113

1,229

672

305

1,402

3,532

1,783

311

124

1,314

628

290

1,398

3,637

1,841

346

138

1,313

598

-7

-5

4.5

26.8

53.3

15.4

1,150

660

1,410

190

4,060

2,150

-4,060

5,560

20,490

26,050

4.3

27.2

53.6

14.9

1,310

520

1,560

140

4,210

2,040

-9,652

128

20,582

20,710

4.9

26.9

54.2

14.0

1,530

-310

1,610

300

4,520

2,320

-7,552

2,438

16,502

18,940

5.0

25.8

56.6

12.6

1,590

240

110

1,670

3,410

2,120

-7,940

1,220

10,200

11,420

4.6

25.4

57.5

12.5

1,340

-330

760

230

2,820

2,890

-6,495

1,246

-1,196

4.6

25.4

57.3

12.7

1,340

-430

-40

1,960

110

3,010

2,930

-5,919

2,961

9,089

12,050

4.9

24.1

59.0

11.9

1,010

1,230

-20

1,930

-30

2,970

2,390

-6,789

2,691

16,049

18,740

5.2

23.9

60.2

10.7

1,220

240

690

2,170

-30

2,610

2,280

-7,171

2,009

9,691

11,700

4.9

23.6

61.4

10.1

1,140

690

220

2,190

-60

2,850

3,100

-4,070

6,060

19,080

25,140

-180

390

-240

-15

633

188

387

50,180

-30

120

-60

-7

188

-68

202

115

Source: Company, MOFSL

27 July 2019

ICICI Bank

Exhibit 3:

Quarterly performance v/s our estimates — Higher provisions affect earnings

Y/E March (INRm)

Net Interest Income

% Change (YoY)

Other Income

Total Income

Operating Expenses

Operating Profit

% Change (YoY)

Provisions

Profit before Tax

Tax

Net Profit

% Change (YoY)

1QFY20A

77,374

34,254

111,629

48,744

62,885

34,957

27,927

8,847

19,080

1QFY20E

71,987

38,537

110,524

49,536

60,988

31,900

29,089

7,854

21,235

Var. (%)

-11

-2

-4

-10

Comments

Beat in NII further boosted by interest on IT refunds and interest

collections from NPL

Lower treasury gains than expected

Beat in PPOP largely due to beat in NII

Provisions were higher as bank continued to increase coverage

Higher then expected provisions affect earnings

Source: MOFSL, Company

Deposits growth led by term deposits; Margins excluding one-offs largely

stable

Deposits growth led by

~34%/10% YoY/QoQ growth

in term deposits.



Deposits grew at 21%/1% YoY/QoQ toINR6.6t led by healthy growth in term

deposits which grew at 34%/10% YoY/QoQ while CASA deposits growth

moderated at 8% YoY (~7.7%QoQ decline) led by ~16% QoQ decline in CA

deposits and 4% QoQ decline in SA deposits. Thus, CASA ratio declined by 440bp

QoQ to 45.2% however average CASA mix declined by 120bp QoQ to 43.4% vs

44.6% in FY19.

NIMs stood at 3.62% vs 3.72% in 4QFY19 including 9bps impact on account of

income tax refund (INR1.8b) and 8bps impact due to interest collection from

NPLs compared

to total 25bp one-off impact in the last quarter.

On a like-to-like

basis the margins moderated marginally by 3bp QoQ.

Domestic margins including one-off impact (17bp) stood at 3.93% (vs 4.12% in

4QFY19) while excluding the one-offs stood at 3.76% (vs 3.87% in 4QFY19) while

Overseas NIMs improved significantly by 30bp QoQ to 0.33%.

Domestic loan growth came

in at ~18% YoY led by ~22%

growth in retail book, which

now forms 61.4% of total

loans.

Loan growth remains strong; driven by strong retail performance



Overall loan growth stood strong at ~15%/1.0% YoY/QoQ to INR5.9t led by

continued traction in retail loans. Domestic loans grew ~18% YoY, while

international loans were down 7.5% YoY. Proportion of international loan in

overall loans stood at 10.1% (vs 10.7% as on FY19).

Retail loans grew by ~22% YoY primarily led by 19% YoY growth in home loans,

54% YoY in personal loans and 46% YoY in business banking. Credit cards book

also grew healthy at ~33% YoY. Also, retail loans include buyouts of INR84.3b

during the quarter.

Domestic corporate loans grew ~7% YoY while excluding NPLs and restructured

book, loans grew 13% YoY.

27 July 2019

ICICI Bank

BB & Below pool (incl. non-fund based) declines to 2.6% of total loans; PCR

improves to 74.1%



Quantum of BB and below

exposure declined to

INR153.5b.



Total slippages stood at INR27.8bn of which retail slippages came in at INR15.1b

while corporate and SME slippages came only at 12.68b primarily came from BB

& below pool.

Absolute GNPA declined 1% QoQ to INR457.6b at 6.49% (21bp QoQ decline) of

customer assets while NNPA declined 13% QoQ to INR118.6b at 1.77% (-29bp

QoQ) of customer assets. Calculated PCR improved 342bp QoQ to 74.1% while

PCR (incl TWO) improved 270bp to 83.4%.

BB & below book declined 12% QoQ to INR154b (2.6% of the loans) vs INR246b

(4.8% of the loans) in 1QFY19. SR portfolio stands at INR32.80b.

Exhibit 4: ICICIBC total exposure – BB and below also trending down

INR b

Gross restructured loans

Non-fund o/s to restructured loans

Non-fund o/s to non-performing loans

Borrowers with o/s greater than INR1b

Borrowers with o/s less than INR1b

BB and below outstanding

2QFY19

14.4

1.3

30.5

107.5

64.3

217.9

3QFY19

3.9

1.8

34.1

97.4

51.0

188.1

4QFY19

3.5

2.2

42.2

78.0

49.4

175.3

1QFY20

1.5

0.9

36.3

71.9

43.0

153.6

Of the other borrowers,

~80% was rated A- and

above (excluding exposure

to State Electricity Boards).

Exhibit 5: Power sector exposure

INRb

Gross restructured loans

Other borrowers*

Total Power sector exposure

1QFY19

140

326

466

2QFY19

144

338

481

3QFY19

149

313

461

4QFY19

114

260

374

1QFY20

112 29%

279 71%

391 100%

27 July 2019

ICICI Bank

1QFY20 Conference call highlights

Balance sheet and P&L related



Focusing on the SME portfolio both from the asset and liability perspective.



Business banking consists of small ticket sized secured portfolio.



Gold loans/KCC forms ~2%/~3% of the total rural portfolio.



Interest on the income tax refund on NIM was 9bp v/s 20bp last quarter.



Bank has reduced its MCLR by 10bp recently.



Lower fees from third party distribution led to lower fee income. Excluding

mutual fund distribution fee, core fee income grew 14% YoY.



~94,057 employees as of 1QFY20.



Peak interest rates on TD were reduced by 20bp to 7.3%.



Kisan Credit Card (KCC) loans are priced adequately to take care of the credit

losses.



Banks would prefer doing NBFC/HFC portfolio very selectively.



Tax rate in the previous years was lower due to subsidiary stake sale (which

attracts lower tax rate).



40% of the SA deposits are from semi urban/rural areas.



Within the international book, management is focused more on cash

management and remittance business rather than term loans.

Asset Quality related



Recoveries were lower due to delayed resolution of a steel account.



Upgrade in the BB and below pool is from the iron and steel sector.



Bank is expecting slippages from the KCC portfolio in 3QFY20 to be higher than

1QFY20.



Coverage has increased this quarter as some of the NPAs moved to D3 bucket,

which requires higher provisions.



Unsecured portfolio:

(a) Penetration within internal customers is at low level,

and (b) according to the Credit Bureau, bank’s portfolio doesn’t look concerning.



KCC slippages in 1QFY19: INR3.3b.



Builder Finance portfolio:

(a) Bank has been cautious on the portfolio since last

couple of years, and (b) exposure has been spread across top rated borrowers.

Guidance



Expect credit cost for FY20E to be in the range of 1.2-1.3% (~ 20% of the core

operating profit).



Not targeting any loan growth; focusing on core operating profit.



Management is planning to add ~400-500 branches over the next one year.

27 July 2019

ICICI Bank

Story in charts

Exhibit 6: Domestic NIM declined 19bp QoQ to 3.93%

Blended NIMs

Domestic

Exhibit 7: Average daily CASA ratio declined 120bp QoQ

Source: MOFSL, Company

Exhibit 8: Fee income grew at 10% YoY

Fee Inc. (INR b)

% to Avg. Assets

Exhibit 9: Core operating performance showed healthy

growth

Core Op. Profit (INR b)

YoY Gr (%)

35 36 41 41 41 42 44 46 42 39 39 41 45 42 44 45 46 47 51 53 58 59

Source: MOFSL, Company

Exhibit 10: Overall loan growth stood at 14.7% YoY

Loans (INR b)

YoY Gr. (%)

Exhibit 11: Retail loans continue to drive loan growth

Intl

Unsec Ret.

Sec Retail

SME

Corp / others

30 30 30 29 29 29 28 29 28 28 28 28 27 27 27 27 26 25 25 24 24 24

4 5 4 4 4 5 5 5 4 5 5 5 5 5 5 5

4 4 5 4 4 4

37 37 37 38 40 40 41 41 43 43 44 45 47 48 48 49 51 51 51 52 53 53

2 2 2 3 3 3 3 3 4 4

4 4 5 5 5

5 6 6 7 7 7 8

27 26 26 26 24 24 23 23 22 21 20

18 16 15 15 14 13 13 13 12 11 10

Source: MOFSL, Company

27 July 2019

ICICI Bank

Exhibit 13: GNPA/NNPA ratio declined 21bp/29bp QoQ,

calculated PCR increased to 74.1% (+342bp QoQ)

GNPA (%)

NNPA (%)

PCR (%)

68 71

47.1

44.5 49.4

41.4 46

Exhibit 12: Credit cost came in at 2.4%

40.2

Source: MOFSL, Company

Exhibit 14: Share of retail loans in overall loans increased to

~61% of overall loans

Exhibit 15: Share of international loans in overall loans

stood at 10.1% of overall loans

Share of international loans (%)

24 23 23

22 21 20

16 15 15

14 13 13 13

12 11 10

Source: MOFSL, Company

27 July 2019

ICICI Bank

Exhibit 16: For FY20/FY21, we slightly fine-tune earnings and change tax assumption, thus, revising PAT estimates by ~3%/4%

INR b

Net Interest Income

Other Income

Total Income

Operating Expenses

Operating Profits

Provisions

PBT

Tax

PAT

Loans

Deposits

Margins (%)

Credit Cost (%)

RoA (%)

RoE (%)

EPS

ABV

Old Est.

FY20

313.0

164.0

477.0

204.4

272.6

86.2

186.4

50.3

136.1

6,805

7,574

3.46

1.30

1.31

12.3

21.1

181.1

153.2

FY21

369.7

188.6

558.3

232.9

325.4

75.4

250.0

67.5

182.5

8,030

8,899

3.50

0.95

1.53

14.9

28.3

202.9

176.2

Revised Est.

FY20

FY21

326.8

387.2

148.0

168.7

474.9

556.0

205.1

231.6

269.8

324.4

78.0

71.2

191.8

253.2

59.4

78.5

132.3

174.7

6,805

8,030

7,574

8,899

3.62

3.67

1.20

0.90

1.28

1.47

12.0

14.4

20.5

27.1

180.5

201.0

153.8

174.9

Chg (%)/bps

FY20

FY21

4.4

4.7

-9.7

-10.5

-0.4

0.4

-0.6

-1.0

-0.3

-9.5

-5.5

2.9

1.3

18.1

16.3

-2.8

-4.3

0.0

0.15

0.17

(0.10)

(0.05)

(0.03)

(0.06)

(0.31)

(0.54)

-2.8

-4.3

-0.3

-0.9

0.4

-0.7

Source: MOFSL, Company

Buy with SOTP-based TP of

INR520 (2.2x FY21E ABV for

the standalone bank).

Valuations and View



Overall pool of stress loans is showing consistent decline and bulk of the NPA

recognition is happening from the earlier disclosed BB and below pool.

Near term business growth will be driven by retail business and the share of

high profit making products (mainly by cross sell) like credit cards, personal

loans and business banking is likely to go up. Within corporate loans, working

capital related loans are likely to be the key drivers.

Retail business matrix remain healthy with a) Average CASA ratio of 43.4% b)

Contribution to fees at 72% c) Higher share of secured loans and continued

healthy growth. Structural improvement in liability and ALM profile over the last

few years has helped ICICIBC to gradually improve NIMs, despite increasing

competition within retail business.

Strong capitalization (Tier-1 of ~14.6%), significant improvement in granularity

of book and sustained improvement in liability profile (helping to de-risk

business) are the key positives.

ICICIBC has delivered steady operating performance and is set to see earnings

normalization. With asset quality stabilizing, credit cost will moderate

meaningfully in FY20E/21E, thus, boosting return ratios. For FY20/FY21, we have

fine-tuned our estimates slightly and changed our tax assumption, thus,

lowering PAT estimate by ~3%/4%. We expect the bank to deliver loan CAGR of

17% over FY19-21E, and estimate core RoA/RoE to improve to 1.5%/15.5%.

Maintain

Buy

with an unchanged SOTP-based TP of INR520 (2.2x FY21E ABV for

the bank). ICICI remains our top pick in the sector.

27 July 2019

ICICI Bank

Exhibit 17: ICICI Bank — SOTP-based FY21E

Stake (%)

ICICI Bank

ICICI Pru Life Insurance

ICICI Lombard Gen. Ins

ICICI Pru AMC

ICICI Securities

ICICI Bank UK

ICICI Bank Canada

Others (Ventures, Home Finance, PD)

Total Value of Ventures

Less: 20% holding Discount

Value of Key Ventures (Post Holding Co.

Disc)

Target Price Post 20% Holding Co. Disc.

100

Total Value Value Per

INR b

Share INR

2,515

390

361

309

131

1,015

203

812

3,327

163

130

520

Source: MOFSL, Company

% of Total

Value

74.9

11.8

9.2

3.9

2.4

1.1

1.8

31.3

6.3

25.1

Rationale



2.2x FY21E ABV

2.3x FY21 Embedded Value

35x FY21E PAT

6.0% FY21E AUM

15x FY21E PAT

1.2x FY21E Net-worth

1x FY21E Net-worth

10% FY21E AUM for ventures, 1.5x/1x FY21E

Net-worth for Home finance/PD

Exhibit 18: DuPont Analysis — Return ratio to pick up over FY20/FY21E

Y/E March

Interest Income

Interest Expense

Net Interest Income

Core Fee Income

Trading and others

Non Interest income

Total Income

Operating Expenses

Employee cost

Others

Operating Profits

Core operating Profits

Provisions

NPA

Others

PBT

Tax

RoA

Leverage

RoE

Core RoE

FY15

7.91

4.84

3.07

1.56

0.41

1.96

5.03

1.85

0.77

1.09

3.18

2.77

0.63

0.51

0.12

2.55

0.75

1.80

8.1

14.5

17.2

FY16

7.72

4.61

3.11

1.56

0.69

2.24

5.35

1.86

0.73

1.12

3.49

2.80

1.71

1.06

0.65

1.78

0.36

1.42

8.2

11.6

13.4

FY17

7.26

4.34

2.91

1.54

1.07

2.61

5.53

1.98

0.77

1.21

3.55

2.48

2.04

1.97

0.07

1.51

0.20

1.31

8.1

10.7

12.1

FY18

6.66

3.87

2.79

1.32

0.79

2.11

4.90

1.90

0.72

1.19

3.00

2.21

2.10

1.73

0.37

0.90

0.08

0.82

8.3

6.8

7.6

FY19

6.88

3.95

2.93

1.26

0.31

1.57

4.50

1.96

0.74

1.22

2.54

2.23

2.13

1.82

0.31

0.41

0.04

0.36

8.9

3.2

3.6

FY20E

7.18

4.02

3.16

1.27

0.16

1.43

4.59

1.98

0.76

1.23

2.61

2.45

0.75

0.74

0.02

1.85

0.57

1.28

9.4

12.0

13.2

FY21E

7.29

4.04

3.25

1.11

0.31

1.42

4.66

1.94

0.74

1.20

2.72

2.41

0.60

0.56

0.04

2.12

0.66

1.47

9.8

14.4

15.5

Source: MOFSL, Company

27 July 2019

ICICI Bank

Financials and Valuations

Income Statement

Y/E March

Interest Income

Interest Expended

Net Interest Income

Growth (%)

Other Income

Total Income

Growth (%)

Operating Exp.

Operating Profits

Growth (%)

Core PPP

Growth (%)

Provisions & Cont.

PBT

Tax

Tax Rate (%)

PAT

Growth (%)

Balance Sheet

Y/E March

Equity Share Capital

Reserves & Surplus

Net Worth

Deposits

Growth (%)

Of which CASA Deposits

Growth (%)

Borrowings

Other Liabilities & Prov.

Total Liabilities

Current Assets

Investments

Growth (%)

Loans

Growth (%)

Net Fixed Assets

Other Assets

Total Assets

Asset Quality

GNPA

NNPA

GNPA Ratio (%)

NNPA Ratio (%)

Slippage Ratio (%)

Credit Cost (%)

PCR (Excl Technical write off) (%)

FY15

490,911

300,515

190,396

15.6

121,761

312,157

16.0

114,958

197,199

18.8

181,715

14.8

38,996

158,203

46,450

29.4

111,753

13.9

FY16

527,394

315,154

212,240

11.5

153,231

365,471

17.1

126,836

238,635

21.0

200,681

10.4

116,678

121,957

24,694

20.2

97,263

-13.0

FY17

541,563

324,190

217,373

2.4

195,045

412,418

12.8

147,551

264,867

11.0

178,635

-11.0

152,081

112,786

14,775

13.1

98,011

0.8

FY18

549,659

319,400

230,258

5.9

174,196

404,455

-1.9

157,039

247,415

-6.6

189,519

6.1

173,070

74,346

6,571

8.8

67,774

-30.9

FY19

634,012

363,864

270,148

17.3

145,122

415,270

2.7

180,891

234,379

-5.3

220,985

16.6

196,611

37,768

4,135

10.9

33,633

-50.4

FY20E

742,513

415,681

326,831

21.0

148,024

474,855

14.3

205,095

269,760

15.1

253,687

14.8

78,003

191,758

59,445

31.0

132,313

293.4

(INR m)

FY21E

868,887

481,679

387,208

18.5

168,747

555,955

17.1

231,555

324,401

20.3

306,721

20.9

71,212

253,189

78,488

31.0

174,700

32.0

FY15

12,762

791,532

807,794

3,615,627

8.9

1,643,799

15.5

1,720,673

317,199

6,461,293

423,046

1,581,292

-10.7

3,875,221

14.4

47,255

534,479

6,461,293

150,948

62,556

3.8

1.6

2.4

0.9

58.6

FY16

12,797

884,559

900,856

4,214,257

16.6

1,931,000

17.5

1,744,574

347,264

7,206,951

598,687

1,604,118

1.4

4,352,639

12.3

75,769

575,737

7,206,951

262,213

129,631

5.8

3.0

4.3

1.8

50.6

FY17

12,816

979,005

995,321

4,900,391

16.3

2,468,219

27.8

1,472,062

350,141

7,717,914

757,131

1,615,065

0.7

4,642,321

6.7

78,052

625,345

7,717,915

425,515

256,089

8.8

5.4

8.0

3.3

39.8

FY18

12,858

1,038,731

1,051,589

5,609,752

14.5

2,899,253

17.5

1,828,586

301,964

8,791,892

841,694

2,029,942

25.7

5,123,953

10.4

79,035

717,268

8,791,892

540,625

278,863

10.0

5.4

6.1

2.9

48.4

FY19

12,895

1,070,786

1,083,680

6,529,197

16.4

3,239,403

11.7

1,653,200

378,515

9,644,591

802,963

2,077,327

2.3

5,866,466

14.5

79,314

818,522

9,644,591

462,945

135,803

7.5

2.3

2.0

3.1

70.7

FY20E

12,895

1,167,722

1,180,616

7,573,868

16.0

3,544,570

9.4

1,860,628

423,936

11,039,049

920,823

2,388,926

15.0

6,805,100

16.0

84,866

839,333

11,039,049

430,553

112,969

6.0

1.7

1.9

1.2

73.8

FY21E

12,895

1,300,026

1,312,921

8,899,295

17.5

4,271,662

20.5

2,115,073

474,809

12,802,097

1,048,466

2,771,154

16.0

8,030,018

18.0

92,504

859,955

12,802,097

421,987

114,027

5.1

1.4

1.8

0.9

73.0

27 July 2019

ICICI Bank

Financials and Valuations

Ratios

Y/E March

Yield and Cost Ratios (%)

Avg. Yield - Earning Assets

Avg. Yield on loans

Avg. Yield on Investments

Avg. Cost-Int. Bear. Liab.

Avg. Cost of Deposits

Interest Spread

Net Interest Margin

Capitalization Ratios (%)

CAR

Tier I

Tier II

Business and Efficiency Ratios (%)

Loan/Deposit Ratio

CASA Ratio %

Cost/Assets

Cost/Total Income

Cost/Core Income

Int. Expended/Int. Earned

Other Inc./Net Income

Empl. Cost/Op. Exps.

Valuation

RoE (%)

Core RoE (%)

RoA (%)

RoRWA (%)

Book Value (INR)

BV Growth (%)

Price-BV (x)

Adjusted Book Value

ABV Growth (%)

Adjusted Price-ABV (x)

Consol Book Value (INR)

BV Growth (%)

Price-Consol BV (x)

EPS (INR)

EPS Growth (%)

Price-Earnings (x)

Dividend Per Share (INR)

Dividend Yield (%)

FY15

8.9

9.8

6.3

5.9

3.5

FY16

8.9

9.5

6.7

5.6

5.5

3.6

FY17

8.3

8.8

7.1

5.3

5.0

3.4

3.3

FY18

7.7

8.4

6.3

4.6

4.5

3.0

3.2

FY19

7.9

8.7

6.2

4.7

4.4

3.3

3.4

FY20E

8.2

8.9

6.6

4.7

4.6

3.5

3.6

FY21E

8.2

8.9

6.8

4.7

4.5

3.5

3.7

17.0

12.8

4.2

16.6

13.1

3.6

17.4

14.4

3.0

17.9

15.6

2.3

16.9

15.1

1.8

16.4

14.8

1.6

15.4

14.0

1.4

107.2

45.5

1.8

36.8

38.7

61.2

39.0

41.3

FY15

14.5

17.2

1.8

2.1

138.7

9.4

2.1

111.3

10.0

2.6

146.1

10.4

2.8

19.3

13.6

21.5

4.5

1.1

103.3

45.8

1.8

34.7

38.7

59.8

41.9

39.4

FY16

11.6

13.4

1.42

1.7

151.6

9.3

1.9

117.1

5.2

2.4

161.8

10.8

2.6

16.7

-13.3

24.8

4.5

1.1

94.7

50.4

1.9

35.8

45.2

59.9

47.3

38.9

FY17

10.7

12.1

1.31

1.6

168.7

11.3

1.7

120.2

2.7

2.4

179.6

11.0

2.3

16.8

0.5

24.7

4.0

1.0

91.3

51.7

1.8

38.8

45.3

58.1

43.1

37.7

FY18

6.8

7.6

0.82

1.1

161.0

-4.6

1.8

115.3

-4.0

2.5

172.1

-4.2

2.4

11.1

-34.3

37.6

2.3

0.5

89.8

49.6

1.9

43.6

45.0

57.4

34.9

37.6

FY19

3.2

3.6

0.36

0.5

165.5

2.8

1.7

135.5

17.5

2.1

177.2

3.0

2.3

5.2

-52.8

79.5

1.5

0.4

89.8

46.8

1.9

43.2

44.7

56.0

31.2

38.2

FY20E

12.0

13.2

1.3

1.7

180.5

9.1

1.6

153.8

13.5

1.8

186.0

5.0

2.2

20.5

292.8

20.2

5.5

1.3

90.2

48.0

1.8

41.6

43.0

55.4

30.4

38.2

FY21E

14.4

15.5

1.5

1.9

201.0

11.4

1.4

174.9

13.7

1.6

198.4

6.6

2.1

27.1

32.0

15.3

6.6

1.6

27 July 2019

ICICI Bank

Corporate

and Valtons

Financials

profile

Company description

Exhibit 1: Sensex rebased

Promoted by the erstwhile ICICI Ltd, ICICI Bank was

incorporated in 1994. Currently, the bank is India's

one of the largest private sector bank, with an asset

base of INR9.6t. ICICIBC through its subsidiaries has

NOTES

an established presence in life and general

insurance, asset management, and equity broking

segments. The bank has an established presence in

the country with 4,882 branches and 15,101 ATMs.

Source: MOFSL/Bloomberg

Exhibit 2: Shareholding pattern (%)

Jun-19

DII

FII

Others

0.0

34.8

56.8

Mar-19

0.0

34.4

57.2

Jun-18

0.0

32.0

60.0

Source: Capitaline

Exhibit 3: Top holders

Holder Name

LIFE INSURANCE CORPORATION OF INDIA

HDFC TRUSTEE CO LTD (VARIOUS MUTUAL

FUND ACCOUNTS)

DODGE & COX INTERNATIONAL STOCK FUND

SBI MUTUAL FUND (VARIOUS MUTUAL

FUND ACCOUNTS)

ICICI PRUDENTIAL MUTUAL FUND (VARIOUS

MUTUAL FUND ACCOUNTS)

% Holding

7.9

4.0

3.7

2.8

2.3

Source: Capitaline

Note: FII Includes depository receipts

Exhibit 4: Top management

Name

Girish Chandra Chaturvedi

Sandeep Bakhshi

Anup Bagchi

Vishakha Mulye

Rakesh Jha

Designation

Chairman

MD & CEO

Executive Director

CFO

Exhibit 5: Directors

Name

S Madhavan

Uday Chitale

Lalit Kumar Chandel

B Sriram

Name

Neelam Dhawan

Rama Bijapurkar

Radhakrishnan Nair

Hari L. Mundra

Source: Capitaline

Exhibit 6: Auditors

Name

Walker Chandiok & Co LLP

Type

Statutory

Exhibit 7: MOFSL forecast v/s consensus (Standalone bank)

EPS

(INR)

FY20

FY21

MOFSL

forecast

20.5

27.1

Consensus

forecast

21.5

27.7

Variation (%)

-4.7

-2.2

Source: Bloomberg

Source: Capitaline

27 July 2019

ICICI Bank

NOTES

27 July 2019

ICICI Bank

Explanation of Investment Rating

Investment Rating

Expected return (over 12-month)

BUY

>=15%

SELL

< - 10%

NEUTRAL

< - 10 % to 15%

UNDER REVIEW

Rating may undergo a change

NOT RATED

We have forward looking estimates for the stock but we refrain from assigning recommendation

*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within

following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.

Disclosures

The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).

Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the

Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial

products. MOFSL is a subsidiary company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are

available on www.motilaloswal.com. MOFSL (erstwhile Motilal Oswal Securities Limited - MOSL) is registered with the Securities & Exchange Board of India (SEBI) and is a

registered Trading Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and

National Commodity & Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National

Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance

Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance products.

Details of associate entities of Motilal Oswal Financial Services Limited are

available on the website at

http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf

MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and

buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other

compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have

any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the

specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even

though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report

MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report

should be aware that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific

merchant banking, investment banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the

website at

https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx

A graph of daily closing prices of securities is available at

www.nseindia.com, www.bseindia.com.

Research Analyst views on Subject Company may vary based on Fundamental

research and Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated

from MOFSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.

Regional Disclosures (outside India)

This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability

or use would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.

For Hong Kong:

This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong

Kong Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst

Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of

research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity

to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these

securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not

located in Hong Kong & are not conducting Research Analysis in Hong Kong.

For U.S.

Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under

applicable state laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers

Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any

brokerage and investment services provided by MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is

intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as

"major institutional investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which

this document relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration

provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange

Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a chaperoning agreement with a U.S. registered broker-

dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this

chaperoning agreement.

The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.

registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public

appearances and trading securities held by a research analyst account.

For Singapore

In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets

services license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and

Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL

in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”,

of which some of whom may consist of "accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the

SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and

inform MOCMSPL.

Specific Disclosures

1 MOSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.

2 MOSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company

3 MOSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months

4 MOSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report

5 Research Analyst has not served as director/officer/employee in the subject company

6 MOSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months

7 MOSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months

8 MOSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months

9 MOSL has not received any compensation or other benefits from third party in connection with the research report

10 MOSL has not engaged in market making activity for the subject company

27 July 2019

ICICI Bank

********************************************************************************************************************************

The associates of MOFSL may have:

- financial interest in the subject company

- actual/beneficial ownership of 1% or more securities in the subject company

- received compensation/other benefits from the subject company in the past 12 months

- other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the

specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even

though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.

- acted as a manager or co-manager of public offering of securities of the subject company in past 12 months

- be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the

company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies)

- received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.

The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report

Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not

consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from

clients which are not considered in above disclosures.

Analyst Certification

The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the

research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.

Terms & Conditions:

This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and

may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent

of MOFSL. The report is based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in

nature. The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty,

representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The

report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial

instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as

customers by virtue of their receiving this report.

Disclaimer:

The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or

distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for

informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing

in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances.

The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment

objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this

document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this

document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views

expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade

securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of

the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and

should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make

modifications and alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and the employees may from

time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to

perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a

separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of

information that is already available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or

may not subscribe to all the views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on,

directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or

entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law,

regulation or which would subject MOFSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in

all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.

Neither the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost

revenue or lost profits that may arise from or in connection with the use of the information.

The person accessing this information specifically agrees to exempt MOFSL or any of its

affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOFSL or any of its affiliates or employees responsible for any such

misuse and further agrees to hold MOFSL or any of its affiliates or employees free and harmless from all losses, costs, damages,

expenses that may be suffered by the person

accessing this information due to any errors and delays.

Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263;

Website

www.motilaloswal.com.CIN

no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road,

Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.

Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst:

INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company

Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth

Management Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is

a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt.

Ltd. which is a group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL.

Research & Advisory services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no

assurance or guarantee of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance

Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.

* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National

Company Law Tribunal, Mumbai Bench.

27 July 2019