10 May 2020
4QFY20 Results Update | Sector: Financials
ICICI Bank
Estimate change
TP change
Rating change
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
ICICIBC IN
6,470
2180.2 / 29.2
552 / 269
-1/-7/5
11312
CMP: INR338
TP: INR475 (+41%)
Buy
Stable operating performance; COVID-19 drags down
earnings, tempers growth outlook
High moratorium places asset quality as key monitorable
Financials & valuations (INR b)
Y/E March
FY20 FY21E
NII
332.7 376.6
OP
281.0 312.6
NP
79.3 122.2
NIM (%)
3.7
3.7
EPS (INR)
12.3
18.9
EPS Gr (%)
135.0
53.8
ABV/Sh. (INR)
152.1 167.0
Cons. BV/Sh. (INR) 191.3 211.0
Ratios
RoE (%)
7.2
10.3
RoA (%)
0.8
1.1
Valuations
P/BV (x) (Cons)
1.8
1.6
P/ABV (x)
1.5
1.4
P/E (x)
19.2
12.5
Div. Yield (%)
0.0
0.5
*Adjusted for Investment in Subs
FY22E
424.7
347.4
163.5
3.7
25.3
33.8
193.0
234.4
12.4
1.3
1.4
1.2
9.3
0.6
The bank has created higher than the required provisions toward COVID-
19 which affected earnings. On the other hand, operating performance
remains strong, supported by robust NII at 17% YoY, despite higher tax
refunds in 4QFY19. On the asset quality front, slippages remain elevated,
led by one healthcare and one oil trading account, although higher write-
offs have led to GNPA improvement. ~30% of the loan book has availed
moratorium, with a higher incidence of the CV, 2-Wheeler, and Rural
portfolios.
We cut our FY21/22 PAT estimate by 8%/3% as we factor in higher credit
cost and moderation in fee growth. Maintain
Buy.
COVID-19 provisions drag down earnings; Slippages stand elevated
due to select corporate accounts
Shareholding pattern (%)
As On
Mar-20 Dec-19 Mar-19
Promoter
0.0
0.0
0.0
DII
36.4
34.4
34.4
FII
54.5
57.2
57.2
Others
9.1
8.4
8.4
FII Includes depository receipts
PAT grew 26% YoY to INR12.2b (71% QoQ decline; MOSLe: INR26.7b),
affected by higher provisions (INR59.7b), as the bank made COVID-19
provisions of INR27.25b, higher than the requirement as per RBI
guidelines.
NII grew 17% YoY to INR89.3b, led by ~16% YoY growth in retail loans and
10bp QoQ expansion in margins to 3.87%. In FY20, NII/PPoP/PAT grew at
23%/20%/136% YoY.
Other income rose 18% YoY, with core fees growing 13% YoY to ~INR36b
(retail forms 75% of the total fees). Opex grew 16% YoY to INR57.9b,
resulting in PPoP growth of 19% YoY to INR73.9b (8% beat).
Advances grew 10% YoY, with the domestic book growing at 13% YoY
(~16% YoY growth in retail), while the overseas loan mix declined to
8.4%. Deposit growth came in strong at 18% YoY, led by term deposits
growing ~29% YoY. The avg. CASA mix stood at 42.3% v/s 42.8% in
3QFY20.
Fresh slippages increased to INR53.1b, led by one healthcare and one oil
trading account, resulting in corporate and SME slippages of INR40.1b,
and retail slippages at INR12.9b. Overdue loans (90+ dpd) worth
INR13.1b were not classified as GNPA as the bank availed RBI relaxation,
which otherwise would have impacted GNPA by 18bp. Higher write-offs
(INR54.5b) led to improvement in the GNPA/NNPA ratio by 42bp/8bp
QoQ to 5.5%/1.4%. PCR stood largely stable at 75.6%.
The BB and below book declined to INR166.7b (v/s INR174b in 3QFY20).
Downgrades in the BB and below pool have come from certain accounts
in the CRE sector.
Research Analyst: Nitin Aggarwal
(Nitin.Aggarwal@MotilalOswal.com); +91 22 6129 1542 |
Himanshu Taluja
(Himanshu.Taluja@motilaloswal.com)
Alpesh Mehta
(Alpesh.Mehta@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
January 2020
14
Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
1
 Motilal Oswal Financial Services
ICICI Bank
Highlights from management commentary
COVID-19 impact:
As of April’20, ~30% of the portfolio had availed moratorium.
High moratorium was availed in the CV, 2-Wheeler, and Rural portfolios.
COVID-19 provisions were predominantly toward retail loans. INR12b (10%
provisions) was towards overdue accounts, as per RBI guidelines.
Valuation and view
We expect loan growth to moderate given the weak macro environment, weighed
by the COVID-19 outbreak. The BB and below pool is likely to increase, while a high
share of loans under moratorium would result in elevated slippages over FY21E. As a
prudent measure, the bank has made additional provisions of INR27.2b toward
COVID-19-related stress; furthermore, lower exposure to the SME segment (3.5% of
loans) and high granularity in the BB and below book provides some comfort.
Nevertheless, we increase our credit cost estimate to 2.2% in FY21E and cut
FY21/22E earnings by 8%/3%. We thus estimate ICICIBC to deliver RoA/RoE of
1.3%/12.4% in FY22. Maintain
Buy,
with an SOTP-based target price of INR475 (1.9x
FY22 ABV for the bank).
Quarterly performance
1Q
61.0
9.2
38.5
99.5
41.5
58.1
12.1
59.7
-1.6
-0.4
-1.2
NM
5,469
5,163
12.5
11.3
8.8
4.2
54.8
FY19
2Q
3Q
64.2
68.8
12.4
20.5
31.6
38.8
95.7
107.6
43.2
46.1
52.5
61.5
-24.9
21.5
39.9
42.4
12.6
19.0
3.5
3.0
9.1
16.0
-55.8
-2.7
5,587
5,445
12.0
12.8
8.5
3.7
59.5
6,068
5,643
17.3
11.7
7.8
2.6
68.5
4Q
76.2
26.5
36.2
112.4
50.1
62.3
-17.0
54.5
7.8
-1.9
9.7
-5.0
6,529
5,866
16.4
14.5
6.7
2.1
70.7
1Q
77.4
26.8
34.3
111.6
48.7
62.9
8.3
35.0
27.9
8.8
19.1
NM
6,607
5,924
20.8
14.7
6.5
1.8
74.1
FY20
2Q
3Q
80.6
85.5
25.6
24.3
41.9
45.7
122.5 131.2
53.8
55.7
68.7
75.5
30.9
22.8
25.1
20.8
43.7
54.7
37.1
13.2
6.5
41.5
-27.9 158.4
6,963
6,134
24.6
12.6
6.4
1.6
76.1
7,163
6,357
18.1
12.6
6.0
1.5
76.1
FY19
4Q
89.3
17.1
42.5
131.8
57.9
73.9
18.6
59.7
14.2
2.0
12.2
26.0
7,710
6,453
18.1
10.0
5.5
1.4
75.6
270.1
17.3
145.1
415.3
180.9
234.4
-5.3
196.6
37.8
4.1
33.6
-50.4
6,529
5,866
16.4
14.5
6.7
2.1
70.7
FY20
332.7
23.1
164.5
497.2
216.1
281.0
19.9
140.5
140.5
61.2
79.3
135.8
7,710
6,453
18.1
10.0
5.5
1.4
75.6
(INR b)
FY20 v/s
4QE Est
81.4 10%
6.9
42.1 1%
123.5 7%
53.6 8%
69.8 6%
12.0
34.2 74%
35.6 -60%
8.9 -77%
26.7 -54%
175.8
7,378 4%
6,541 -1%
13.0 508
11.5 (150)
6.3
1.7
74.2
(73)
(29)
140
Net Interest Income
% Change (YoY)
Other Income
Total Income
Operating Expenses
Operating Profit
% Change (YoY)
Provisions
Profit before Tax
Tax
Net Profit
% Change (YoY)
Operating Parameters
Deposit
Loan
Deposit Growth (%)
Loan Growth (%)
Asset Quality
Gross NPA (%)
Net NPA (%)
PCR (%)
E:MOFSL Estimates
10 May 2020
2
 Motilal Oswal Financial Services
ICICI Bank
Quarterly snapshot
FY18
1Q
Profit and Loss (INRb)
Interest Income
Loans
Investment
Interest Expenses
Net Interest Income
Other Income
Trading profits
Fee Income
Others
Total Income
Operating Expenses
Employee
Others
Operating Profits
Core PPoP
Provisions
PBT
Taxes
PAT
Balance Sheet (INR b)
Loans
Investments
Deposits
Borrowings
Total Assets
Asset Quality (INR b)
GNPA
NNPA
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 (%)
SME Loans
Corporate Loans
Retails
International Loans
134.6
98.5
28.3
78.7
55.9
33.9
8.6
23.8
1.5
89.8
37.9
15.1
22.8
51.8
43.3
26.1
25.7
5.3
20.5
4,641
1,992
4,863
1,411
7,609
431.5
253.1
2,380
49
1,700
35
681
14
2,482
51
2Q
135.8
100.9
28.8
78.7
57.1
51.9
21.9
25.7
4.2
109.0
39.1
15.1
23.9
69.9
47.9
45.0
24.8
4.3
20.6
4,828
1,799
4,986
1,507
7,878
444.9
241.3
2,469
50
1,785
36
684
14
2,518
50
3Q
136.7
102.4
28.6
79.6
57.1
31.7
0.7
26.4
4.6
88.7
38.1
13.6
24.5
50.6
49.9
35.7
14.9
-1.6
16.5
5,054
1,798
5,174
1,582
8,135
460.4
238.1
2,606
50
1,859
36
748
14
2,568
50
4Q
142.6
106.9
30.0
82.4
60.2
56.8
26.9
27.6
2.4
117.0
41.9
15.3
26.6
75.1
48.3
66.3
8.9
-1.3
10.2
5,124
2,030
5,610
1,829
8,792
540.6
278.9
2,899
52
2,010
36
890
16
2,711
48
1Q
147.2
109.8
31.4
86.2
61.0
38.5
7.7
27.5
3.3
99.5
41.5
15.1
26.3
58.1
50.4
59.7
-1.6
-0.4
-1.2
5,163
1,864
5,469
1,620
8,451
534.6
241.7
2,763
51
1,996
36
767
14
2,706
49
2Q
151.1
115.1
30.9
86.9
64.2
31.6
-0.4
30.0
2.0
95.7
43.2
16.6
26.6
52.5
52.8
39.9
12.6
3.5
9.1
5,445
1,875
5,587
1,747
8,743
544.9
220.9
2,835
51
2,075
37
761
14
2,751
49
FY19
3Q
162.8
125.2
32.4
94.1
68.8
38.8
4.8
30.6
3.4
107.6
46.1
17.3
28.8
61.5
56.7
42.4
19.0
3.0
16.0
5,643
1,977
6,068
1,643
9,124
515.9
162.5
2,994
49
2,108
35
886
15
3,074
51
4Q
172.9
129.3
33.4
96.7
76.2
36.2
1.6
31.8
2.9
112.4
50.1
19.0
31.1
62.3
60.8
54.5
7.8
-1.9
9.7
5,866
2,077
6,529
1,653
9,645
462.9
135.8
3,239
50
2,277
35
963
15
3,290
50
1Q
179.8
136.2
36.5
102.4
77.4
34.3
1.8
30.4
2.1
111.6
48.7
19.5
29.2
62.9
61.1
35.0
27.9
8.8
19.1
5,924
2,200
6,607
1,567
9,638
FY20
2Q
3Q
185.7
143.0
37.3
105.1
80.6
41.9
3.4
34.8
3.8
122.5
53.8
21.4
32.4
68.7
65.3
25.1
43.7
37.1
6.5
190.6
148.0
36.8
105.2
85.5
45.7
5.3
36.0
4.5
131.2
55.7
19.4
36.3
75.5
70.2
20.8
54.7
13.2
41.5
4Q
191.9
148.4
36.2
102.6
89.3
42.5
2.4
36.0
4.1
131.8
57.9
22.3
35.6
73.9
71.5
59.7
14.2
2.0
12.2
6,453
2,495
7,710
1,629
10,984
414.1
101.1
3,478
45
2,456
32
1,022
13
4,232
55
Change (%)
YoY QoQ
11
15
9
6
17
18
55
13
45
17
16
18
14
19
18
9
82
-208
26
10
20
18
-1
14
-11
-26
7
8
6
29
1
0
-2
-2
4
-7
-54
0
-7
0
4
15
-2
-2
2
186
-74
-85
-71
2
10
8
19
9
-5
-3
3
4
1
11
6,134 6,357
2,234 2,275
6,963 7,163
1,510 1,374
9,970 10,071
434.5
103.9
3,364
47
2,354
33
1,010
14
3,799
53
457.6 456.4
118.6 109.2
2,989
45
2,185
33
804
12
3,619
55
3,250
47
2,306
33
944
14
3,713
53
209
1,242
2,475
1,327
151
82
916
715
4.5
26.8
53.3
15.4
208
1,313
2,588
1,384
166
83
955
719
4.3
27.2
53.6
14.9
248
1,359
2,739
1,449
186
90
1,014
708
4.9
26.9
54.2
14.0
256
1,322
2,900
1,499
209
93
1,099
646
5.0
25.8
56.6
12.6
239
1,309
2,970
1,545
223
104
1,099
644
4.6
25.4
57.5
12.5
147
1,490
3,118
1,609
249
106
1,154
691
2.7
27.4
57.3
12.7
162
1,477
3,332
1,713
277
113
1,230
672
2.9
26.2
59.0
11.9
179
1,529
3,528
1,782
310
123
1,313
630
3.1
26.1
60.1
10.7
177
1,515
3,636
1,840
345
138
1,313
596
3.0
25.6
61.4
10.1
191
1,533
3,810
1,909
377
149
1,375
600
3.1
25.0
62.1
9.8
216
1,595
3,979
1,966
422
163
1,429
566
3.4
25.1
62.6
8.9
226
1,607
4,078
2,002
453
155
1,468
542
3.5
24.9
63.2
8.4
26
5
16
5
1
2
12
2
46
7
25
-5
12
3
-14
-4
Change (bps)
45
10
-116
-20
306
60
-234
-50
10 May 2020
3
 Motilal Oswal Financial Services
ICICI Bank
FY18
1Q
2Q
3Q
4Q
1Q
2Q
FY19
3Q
4Q
1Q
FY20
2Q
3Q
4Q
Change (%)
YoY QoQ
Ratios (%)
Asset Quality Ratios
GNPA
8.0
7.9
7.8
8.8
8.8
8.5
7.8
6.7
6.5
6.4
6.0
5.5
-117
-42
NNPA
5.5
4.4
4.2
4.8
4.2
3.7
2.6
2.1
1.8
1.6
1.5
1.4
-65
-8
PCR (Calculated)
41.4
45.8
48.3
48.4
54.8
59.5
68.5
70.7
74.1
76.1
76.1
75.6
491
-52
Credit Cost
2.2
3.8
2.9
5.2
4.6
3.0
3.1
3.8
2.4
1.7
1.3
3.7
-6
239
Business Ratios
Fees to Total Income
26.5
23.6
29.7
23.5
27.7
31.3
28.5
28.3
27.2
28.4
27.4
27.3
-98
-11
Cost to Core Income
46.7
44.9
43.3
46.4
45.1
45.0
44.9
45.2
44.4
45.1
44.3
44.8
-42
51
Tax Rate
20.4
17.1
-10.9 -14.8
26.6
27.6
15.6
-23.9
31.7
85.0
24.1
14.1 3,807 -998
CASA
49.0
49.5
50.4
51.7
50.5
50.8
49.3
49.6
45.2
46.7
47.0
45.1 -450 -190
Dom. Loan/Deposit
81.8
82.4
84.0
79.8
82.6
85.1
81.9
80.2
80.6
79.5
80.8
76.7 -353 -417
Loan / Deposit
95.4
96.8
97.7
91.3
94.4
97.5
93.0
89.8
89.7
88.1
88.7
83.7 -615 -504
Profitability Ratios
Yield on loans
8.7
8.7
8.5
8.7
8.7
8.8
9.0
9.3
9.4
9.5
9.5
9.4
12
-11
Yield On Investments
6.5
6.7
6.4
6.3
6.4
6.6
6.7
6.6
6.8
6.7
6.5
6.1
-51
-45
Yield on Funds
7.9
7.8
7.5
7.7
7.7
7.9
8.1
8.5
8.4
8.4
8.4
8.3
-13
-8
Cost of funds
5.2
5.0
4.9
4.9
5.0
5.0
5.1
5.2
5.2
5.2
5.1
4.9
-28
-14
Margins
3.3
3.3
3.1
3.2
3.2
3.3
3.4
3.7
3.6
3.6
3.8
3.9
15
10
RoA (cal.)
1.1
1.1
0.8
0.5
-0.1
0.4
0.7
0.4
0.8
0.3
1.7
0.5
6
-119
RoE (Cal)
8.2
8.0
6.3
3.9
0.0
3.4
6.0
3.6
7.0
2.4
14.6
4.2
60 -1,040
Other Details
Branches
4,852 4,856 4,860 4,867 4,867 4,867 4,867 4,874 4,882 5,228 5,275 5,324 450
49
ATM
13,780 13,792 14,262 14,367 14,394 14,417 14,944 14,987 15,101 15,159 15,589 15,688 701
99
Highlights from management commentary
COVID-19 related
As of April’20, ~30% of the total portfolio had availed moratorium.
The bank highlighted several good corporate customers had availed the
moratorium to preserve liquidity.
The bank witnessed a higher number of borrowers avail moratorium in the CV,
2-Wheeler, and Rural portfolios. This forms ~10–11% of the total portfolio.
Loans overdue for more than 90 days, but not yet classified as NPA due to the
relaxation given by the RBI stand at INR13.1b. The impact on the GNPA ratio
would have been ~18bps.
The bank has created total provisions of ~INR27b toward the COVID-19 impact,
predominantly toward retail loans. Of this, ~INR12b is towards overdue
accounts, while the remaining INR15b would serve as contingent provisions.
Business segments
Home Loans:
This category has an avg. ticket size of INR3m, which is
geographically well-diversified. The avg. LTV is ~65%. The LAP portfolio is based
on cash flows, with avg. LTV at 55%.
Auto Loans:
This category is currently witnessing higher delinquency trends in
the CV portfolio, and this is expected to increase further. Also, the CE portfolio is
likely to face certain challenges.
Unsecured Loans:
85% of the portfolio consists of salaried customers.
10 May 2020
4
 Motilal Oswal Financial Services
ICICI Bank
75% of these salaried customers are employed at well-rated entities (MNCs
and government agencies); however, delinquency trends were marginally
higher in the rest of the Salaried portfolio.
70% of the Personal & Credit Cards portfolios are from the bank’s existing
customer base.
The bank has reduced credit card limits to lower the risk threshold.
15% of the Unsecured portfolio is toward the self-employed. This segment is
expected to be slightly more vulnerable.
Kisan Credit Card:
The bank has witnessed higher delinquency trends in this
portfolio in the past few quarters.
Business Banking:
The avg. ticket size ranges between INR10–15m.
85% of the portfolio has a collateral cover of more than 100%, while 87% of
the lending is classified as PSL.
The bank has been witnessing lower delinquency trends in this portfolio.
SME:
This comprises customers with turnover of INR2.5b. The bank has
witnessed higher NPAs in the past and thus realigned its strategy toward
granulizing the portfolio.
International:
~63% of the portfolio is toward Indian companies and their joint ventures,
~7% is owned by NRIs, whereas ~16% is toward non-Indian companies (with
India-linked businesses).
The BB and below portfolio stands at INR6b.
Builder:
The Retail Estate portfolio has been under stress since before the
COVID-19 outbreak due to funding issues, low sales volumes, and cash flow
constraints. The bank’s portfolio is quite granular, with large exposure to well-
established builders.
NBFC:
Exposure to below-rated entities is just ~2%.
Non-fund based exposure:
The proportion of LC & BG has declined, and stands
at ~22% of the total advances v/s 34% in FY16.
Corporate portfolio:
90% of the fresh disbursements are toward clients rated A-
and above, with a focus on reducing concentration risk. Barring the three
accounts (Telecom, Power, and Construction), the maximum exposure to the BB
and below portfolio is less than INR6b.
P&L and balance sheet related
The impact of income tax refunds on margins stood at 4bp v/s 10bp in 3QFY20.
Dividend income from subsidiaries is expected to reduce over FY21E.
On the cost side,
the hiring rate would slow in the near term, while investments
toward digital infrastructure would continue. The focus would be on maximizing
core operating profit in a risk-calibrated manner.
If at this point customers move from the MCLR regime to external
benchmarking, it would be margin-dilutive for the bank.
Avg. CA growth, which stands at 17% YoY, is much higher than that of other
banks. TD growth has been robust despite interest rates being cut. Overall, cost
of deposits has been improving, thereby supporting margins.
10 May 2020
5
 Motilal Oswal Financial Services
ICICI Bank
Asset quality
The bank has additional provisions of INR79.4b, which are not considered in the
PCR. Of this amount, INR27.25b is toward the COVID-19 crisis, INR34.45b toward
general provisions, INR11.8b toward non-fund based o/s to NPAs, and INR5.88b
toward standard assets.
Corporate slippages came from one healthcare and one oil trading account.
Certain downgrades in the BB and below pool include those from the
Commercial Real Estate sector.
Guidance
ROE guidance of 15% by 1QFY21 would be delayed by some quarters, with the
near-term focus likely to be on preserving the balance sheet.
Key exhibits
Exhibit 1: Net stressed loans decline to 3.4% of total loans
INR b
GNPA
Security Receipts
Others
BB and below (Fund based)
Stress loans
Less: Overlap
Gross stress loans
Specific Provisions
Net Stress loans
Gross stress loans (% of advances)
Net Stress Loans (% of advances)
1QFY19
535
34
84
199
852
85
767
293
475
14.9
9.2
2QFY19
545
34
73
171
823
73
750
324
426
13.8
7.8
3QFY19
516
33
-
137
686
4
682
353
329
12.1
5.8
4QFY19
463
33
-
116
611
4
608
327
281
10.4
4.8
1QFY20
458
33
-
101
591
2
590
339
250
10.0
4.2
2QFY20
456
33
-
109
598
2
596
347
249
9.7
4.1
3QFY20
435
21
-
122
577
2
575
331
244
9.0
3.8
4QFY20
414
19
-
102
536
2
534
313
221
8.3
3.4
Exhibit 2: A snapshot of the performances of subsidiaries
FY18
Subs PAT (INR m)
I Sec
I Sec PD
I Venture
Pru AMC
ICICI Home Finance
ICIC Life Insurance
ICICI Gen. Insurance
Consol. adjustment
Subsidiaries PAT
ICICI Bank
Consol. Profit
1Q
1,150
660
0
1,410
190
4,060
2,150
-4,060
5,560
20,490
26,050
2Q
1,310
520
0
1,560
140
4,210
2,040
-9,652
128
20,582
20,710
3Q
1,530
-310
20
1,610
300
4,520
2,320
-7,552
2,438
16,502
18,940
4Q
1,590
240
110
1,670
20
3,410
2,120
-7,940
1,220
10,200
11,420
FY19
1Q
2Q
3Q
4Q
1,340 1,340 1,010 1,220
-330
-430 1,190
240
30
-40
20
690
760
1,960 1,960 2,170
230
110
90
-30
2,820 3,010 2,970 2,610
2,890 2,930 2,390 2,280
-6,494 -5,919 -6,939 -7,171
1,246 2,961 2,691 2,009
-1,196 9,089 16,049 9,691
50
12,050 18,740 11,700
1Q
1,140
690
220
2,190
-60
2,850
3,100
-4,070
6,060
19,080
25,140
FY20
2Q
1,350
1,400
-40
3,050
-610
3,020
3,080
-6,490
4,760
6,550
11,310
3Q
1,370
970
30
3,050
30
3,020
2,940
-6,175
5,235
41,465
46,700
4Q
1,560
260
-70
2,170
640
1,790
2,820
-8,874
296
12,214
12,510
Change (%)
YoY QoQ
28
14
8
-73
-110 -333
0
-29
NM
NM
-31
-41
24
-4
24
44
-85
-94
26
-71
7
-73
Deposit growth led by term deposits; Margins expand 10bp QoQ
Deposit growth was led by
~29%YoY / ~11% QoQ
growth in term deposits
Deposits grew 18%/8% YoY/QoQ toINR7.7t, led by healthy growth in term
deposits. These grew at ~29%/~11% YoY/QoQ, while growth in CASA deposits
moderated at ~7% YoY (+3% QoQ). The CASA mix declined 190bp QoQ to 45.1%
v/s 47.0% in 3QFY20 (50bp decline on an average basis).
NIMs expanded 10bp QoQ to 3.87%, led by moderation in cost of deposits,
which stood at 4.9% (4bp QoQ). The domestic margin improved 10bp QoQ to
6
10 May 2020
 Motilal Oswal Financial Services
ICICI Bank
4.14% (v/s 4.04% in 3QFY20), while overseas NIMs declined to 0.28% v/s 0.38%
in 3QFY20.
Loan growth moderates from COVID-19 impact; Retail loans grow 16% YoY
Domestic loan growth came
in at ~13% YoY, led by ~16%
growth in the retail book,
which now forms 63.2% of
the total loans
Overall loan growth moderated to ~10%/1.5% YoY/QoQ to INR6.5t, driven by a
16% YoY increase in retail loans. Domestic loans rose ~13% YoY, while
international loans declined ~14% YoY. The proportion of international loans in
overall loans further declined to 8.4% (v/s 8.9% in 3QFY20).
Retail loans grew ~16% YoY, within which home loans increased ~12% YoY; on
the other hand, personal loans grew ~46% YoY and business banking ~42% YoY.
The Credit Cards book also grew robustly at ~26% YoY. However, vehicle loan
growth moderated at 4.6% YoY.
SME loans grew 26% YoY and form 3.5% of the total loans.
Overall corporate loans grew 5% YoY and performing domestic corporate loans
9.3% YoY.
BB and below pool (incl. non-fund based) stable at 2.6% of total loans; PCR
stable at 75.6%
Quantum of BB and below
exposure reduced to
INR166.7b (2.6% of loans)
Total slippages elevated to INR53.1b, affected by two accounts (an oil trading
account and a healthcare account). Retail slippages came in at INR12.9b, and
corporate and SME slippages at 40.1b. ~INR4.7b worth of corporate slippages
were due to the impact of INR depreciation on foreign currency NPAs.
Absolute GNPA declined 4.7% QoQ to INR414.1b at 5.53% (42bp QoQ decline) of
customer assets, and NNPA 2.6% QoQ to INR101.1b at 1.41% (-8bp QoQ) of
customer assets. Calculated PCR stood stable at 75.6%, while PCR incl. TWO
improved 110bp QoQ to 86.8%.
In addition to the reported PCR, the bank has an additional provision of
INR79.4b (1.2% of loans), of which INR27.25n is put toward COVID-19-related
issues, while INR11.8b is on a non-fund based o/s to NPAs. INR34.45b is a
general provision on standard assets, while INR5.88 is categorized under ‘other
provision’ on standard assets.
The BB and below book declined 4% QoQ to INR166.7b (2.6% of loans) v/s
INR174.0b (2.7% of loans) in 3QFY20. The SR portfolio stands at INR19.3b.
The provision of INR11.82b
was held against non-fund
o/s to NPLs
Exhibit 3: ICICIBC’s total exposure: BB and below stands at 2.7% of total loans
INR b
2QFY19 3QFY19 4QFY19 1QFY20 2QFY20 3QFY20 4QFY20
Gross restructured loans
14.4
3.9
3.5
1.5
2.2
2.0
1.8
Non-fund o/s to restructured loans
1.3
1.8
2.2
0.9
Non-fund o/s to non-performing loans
30.5
34.1
42.2
36.3
33.7
39.2
50.6
Borrowers with o/s greater than INR1b 107.5
97.4
78.0
71.9
85.9
98.7
81.3
Borrowers with o/s <INR1b
64.3
51.0
49.4
43.0
38.9
34.2
32.9
BB and below outstanding
217.9 188.1 175.3 153.6 160.7
174 166.7
Of the other borrowers,
~85% were rated A- and
above (excluding exposure
to state electricity boards)
Exhibit 4: Power sector exposure stands at INR380b
INRb
Gross restructured loans
Other borrowers*
Total Power sector exposure
4QFY19
114
260
374
1QFY20
112
279
391
2QFY20
110.4
223.7
334.1
3QFY20
92.2
229.9
322.1
4QFY20
92.3
288.0
380.3
%
24
76
100
10 May 2020
7
 Motilal Oswal Financial Services
ICICI Bank
Valuation view
Liability franchise remains robust:
ICICIBC continues to see strong growth in
retail deposits and has succeeded in building a robust liability franchise over the
past few years. The bank’s total deposits witnessed ~16% CAGR over FY15–20,
with CASA at ~16% CAGR, thus enabling the bank to have one of the highest
CASA mixes among peers. ICICIBC has one of the lowest funding costs among
private banks, enabling it to underwrite profitable business without taking
undue balance sheet risks.
Asset quality to remain under pressure:
The impact of COVID-19 would have a
severe impact across multiple segments due to the contagion effect. We expect
a potential increase in delinquencies in the SME/Business Loans, Auto, Builder,
Kisan Credit Card, and Unsecured Retail portfolios, among others. We expect
the BB and below pool to grow in the coming quarters; thus, slippage trends
would remain elevated. Overall, estimated credit cost would remain elevated at
2.2% for FY21E.
Retail fees form ~75% of the bank’s fees, signifying the granularity in fee
income. However, due to the slowdown in consumption spending in the near
term, we expect fee growth trends to moderate.
Buy, with target price of INR475:
We expect loan growth to moderate given the
weak macro environment, weighed by the COVID-19 outbreak. The BB and
below pool is likely to increase, while a high share of loans under moratorium
would result in elevated slippages over FY21E. As a prudent measure, the bank
has made additional provisions of INR27.2b toward COVID-19-related stress;
also, lower exposure to the SME segment (3.5% of loans) and high granularity in
the BB and below book provide some comfort. Nevertheless, we increase our
credit cost estimate to 2.2% in FY21E and cut FY21/22E earnings by 8%/3%. We
thus estimate ICICIBC to deliver RoA/RoE of 1.3%/12.4% in FY22. Maintain
Buy,
with SOTP-based target price of INR475 (1.9x FY22 ABV for the bank).
Exhibit 5: SOTP-based pricing
Stake Total Value
(%)
INR b
100
2,412
53
56
51
79
100
100
100
353
180
120
65
25
29
55
827
165
662
3,074
Value Per
Share INR
373
55
28
19
10
4
5
8
128
26
102
475
% of
Rationale
Total Value
1.9x FY22E ABV
78.5
2.2x FY22 Embedded Value
11.5
5.8
3.9
2.1
0.8
1.0
1.8
26.9
5.4
21.5
20x FY22E PAT
20x FY22E PAT
12x FY22E PAT
0.8x FY22E Net-worth
0.8x FY22E Net-worth
10% FY22E AUM for ventures,
0.6x/1x FY22E Net-worth for Home finance/PD
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 Ventures (Post Hold Co. Disc)
Target Price Post 20% Holding Co. Disc.
10 May 2020
8
 Motilal Oswal Financial Services
ICICI Bank
Exhibit 6: We cut our estimates for FY21/22 by 8%/3% as we factor in lower fee income and higher credit cost
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
BV
ABV
FY21
356.6
186.9
543.6
244.0
299.6
124.3
175.2
42.1
133.2
7,359
8,411
3.67
1.74
1.21
11.5
20.7
188.6
156.2
Old Est.
FY22
405.0
216.9
621.9
277.6
344.3
122.3
222.0
53.3
168.7
8,389
9,673
3.70
1.50
1.36
13.3
26.2
208.2
177.2
Revised Est.
FY21
FY22
376.6
424.7
174.4
195.3
550.9
619.9
238.3
272.5
312.6
347.4
151.8
132.2
160.9
215.2
38.6
51.6
122.2
163.5
7,098
8,021
8,866
10,462
3.67
3.73
2.20
1.70
1.06
1.27
10.3
12.4
18.9
25.3
194.6
217.7
167.0
193.0
Chg. (%)/bps
FY21
FY22
5.6
4.8
-6.7
-10.0
1.4
-0.3
-2.3
-1.8
4.4
0.9
22.1
8.2
-8.2
-3.1
-8.2
-3.1
-8.2
-3.1
-3.5
-4.4
5.4
8.2
(0)
3
46
20
(14)
(9)
(124)
(95)
-8.6
-3.5
3.2
4.5
7.0
8.9
Exhibit 7: One-year forward P/B
P/B (x)
Min (x)
3.5
2.8
2.2
2.0
1.3
1.0
0.5
1.8
1.8
2.9
Avg (x)
+1SD
Max (x)
-1SD
Exhibit 8: One-year forward P/E
P/E (x)
Min (x)
70.0
57.0
54.0
38.0
22.0
6.0
20.1
8.1
9.7
15.8
30.4
Avg (x)
+1SD
Max (x)
-1SD
1.4
Source: MOFSL, Company
Source: MOFSL, Company
10 May 2020
9
 Motilal Oswal Financial Services
ICICI Bank
Story in Charts
Exhibit 9: Domestic NIM increased 10bp QoQ to 4.1%
Blended NIMs
Domestic
Exhibit 10: Average daily CASA ratio declined 50bp QoQ
CASA Ratio %
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 11: Fee income saw moderation due to COVID-19
Fee Inc. (INR b)
% to Avg. Assets
Exhibit 12: Core op. profits grew 17% YoY
Core Op. Profit (INR b)
YoY Gr (%)
42 44 46 42 39 39 41 45 42 44 45 46 47 51 53 58 59 62 66 67
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 13: Overall loan growth moderated to 10.0% YoY
Loans (INR b)
YoY Gr. (%)
Exhibit 14: Retail loans continue to drive loan growth
Intl
Unsec Ret.
Sec Retail
SME
Corp / others
29 28 29 28 28 28 28 27 27
27
27
26
25 27 26 26 26 25 25 25
5
4 5 5 5 3 3 3
3
3 3 4
4 4 5 4 4 4 5 5
40 41 41 43 43 44
45
47 48 48 49 51
51
51 52 53 53 54 53 54
3
3 3
4 4 4
4 5
24 23 23 22 21 20
18
16 5 5 5 6 6 7 7 7 8 9 9 9
15 15 14 13 12
13
12 11 10 10 9 8
Source: MOFSL, Company
Source: MOFSL, Company
10 May 2020
10
 Motilal Oswal Financial Services
ICICI Bank
Exhibit 15: Credit cost elevated to 3.7% as the bank created
COVID-19-related provisions
Exhibit 16: The GNPA/NNPA ratio declined 42bp/8bp QoQ;
PCR stood at 76%
GNPA (%)
NNPA (%)
74
PCR (%)
76
76
76
68
46
48
48 55
59
71
40.2 41.4
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 17: Share of retail loans in overall loans increased to
63.2% of total loans
Share of retail loans (%)
Exhibit 18: Share of international loans in overall loans
declined to 8.4% of total loans
Share of international loans (%)
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 19: DuPont Analysis: Return ratio to remain under pressure in near term
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
FY20
7.25
4.03
3.23
1.28
0.32
1.59
4.82
2.10
0.80
1.29
2.72
2.41
1.36
1.36
0.00
1.36
0.59
0.77
9.4
7.2
7.9
FY21E
7.23
3.96
3.28
1.29
0.23
1.52
4.79
2.07
0.81
1.26
2.72
2.49
1.32
1.30
0.02
1.40
0.34
1.06
9.7
10.3
11.1
FY22E
7.10
3.80
3.30
1.22
0.30
1.52
4.82
2.12
0.84
1.28
2.70
2.40
1.03
1.00
0.03
1.67
0.40
1.27
9.7
12.4
13.2
10 May 2020
11
 Motilal Oswal Financial Services
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
490.9
300.5
190.4
15.6
121.8
312.2
16.0
115.0
197.2
18.8
181.7
14.8
39.0
158.2
46.5
29.4
111.8
13.9
FY16
527.4
315.2
212.2
11.5
153.2
365.5
17.1
126.8
238.6
21.0
200.7
10.4
116.7
122.0
24.7
20.2
97.3
-13.0
FY17
541.6
324.2
217.4
2.4
195.0
412.4
12.8
147.6
264.9
11.0
178.6
-11.0
152.1
112.8
14.8
13.1
98.0
0.8
FY18
549.7
319.4
230.3
5.9
174.2
404.5
-1.9
157.0
247.4
-6.6
189.5
6.1
173.1
74.3
6.6
8.8
67.8
-30.9
FY19
634.0
363.9
270.1
17.3
145.1
415.3
2.7
180.9
234.4
-5.3
221.0
16.6
196.6
37.8
4.1
10.9
33.6
-50.4
FY20
748.0
415.3
332.7
23.1
164.5
497.2
19.7
216.1
281.0
19.9
264.9
19.9
140.5
140.5
61.2
43.5
79.3
135.8
FY21E
831.4
454.9
376.6
13.2
174.4
550.9
10.8
238.3
312.6
11.3
295.0
11.3
151.8
160.9
38.6
24.0
122.2
54.1
(INR b)
FY22E
914.0
489.3
424.7
12.8
195.3
619.9
12.5
272.5
347.4
11.1
328.0
11.2
132.2
215.2
51.6
24.0
163.5
33.8
FY15
12.8
791.5
807.8
3,615.6
8.9
1,643.8
15.5
1,720.7
317.2
6,461.3
423.0
1,581.3
-10.7
3,875.2
14.4
47.3
534.5
6,461.3
FY16
12.8
884.6
900.9
4,214.3
16.6
1,931.0
17.5
1,744.6
347.3
7,207.0
598.7
1,604.1
1.4
4,352.6
12.3
75.8
575.7
7,207.0
FY17
12.8
979.0
995.3
4,900.4
16.3
2,468.2
27.8
1,472.1
350.1
7,717.9
757.1
1,615.1
0.7
4,642.3
6.7
78.1
625.3
7,717.9
FY18
12.9
1,038.7
1,051.6
5,609.8
14.5
2,899.3
17.5
1,828.6
302.0
8,791.9
841.7
2,029.9
25.7
5,124.0
10.4
79.0
717.3
8,791.9
FY19
12.9
1,070.8
1,083.7
6,529.2
16.4
3,239.4
11.7
1,653.2
378.5
9,644.6
803.0
2,077.3
2.3
5,866.5
14.5
79.3
818.5
9,644.6
FY20
12.9
1,152.1
1,165.0
7,709.7
18.1
3,478.2
7.4
1,629.0
479.9
10,983.7
1,191.6
2,495.3
20.1
6,452.9
10.0
84.1
759.8
10,983.7
FY21E
12.9
1,263.7
1,276.6
8,866.1
15.0
4,025.2
15.7
1,268.9
590.3
12,002.0
1,189.5
2,894.6
16.0
7,098.2
10.0
90.8
728.9
12,002.0
FY22E
12.9
1,413.1
1,426.0
10,462.0
18.0
4,833.5
20.1
1,119.1
720.2
13,727.4
1,100.6
3,386.6
17.0
8,021.0
13.0
99.0
1,120.2
13,727.4
150.9
62.6
3.8
1.6
2.4
0.9
58.6
262.2
129.6
5.8
3.0
4.3
1.8
50.6
425.5
256.1
8.8
5.4
8.0
3.3
39.8
540.6
278.9
10.0
5.4
6.1
2.9
48.4
462.9
135.8
7.5
2.3
2.0
3.1
70.7
414.1
101.1
6.1
1.6
2.4
2.3
75.6
488.2
128.8
6.5
1.8
3.6
2.2
73.6
474.8
108.3
5.7
1.4
2.6
1.7
77.2
10 May 2020
12
 Motilal Oswal Financial Services
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. Liabilities
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
Emp. Cost/Op. Exp.
Valuation
RoE (%)
Core RoE (%)
RoA (%)
RoRWA (%)
Standalone ABV
ABV Growth (%)
Adjusted Price-ABV (x)
Consol. Book Value (INR)
BV Growth (%)
Price-Consol. BV (x)
EPS (INR)
EPS Growth (%)
Adj. Price-Earnings (x)
Dividend Per Share (INR)
Dividend Yield (%)
FY15
8.9
9.8
6.3
5.9
5.9
3.5
3.5
FY16
8.9
9.5
6.7
5.6
5.5
3.6
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
FY20
8.2
9.3
6.4
4.7
4.6
3.5
3.7
FY21E
8.1
9.1
6.4
4.7
4.5
3.4
3.7
FY22E
8.0
9.0
6.3
4.5
4.4
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
16.1
14.7
1.4
15.8
14.5
1.3
15.3
14.2
1.1
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
111.3
10.0
2.1
146.1
10.4
2.3
19.3
13.6
12.2
4.5
1.3
103.3
45.8
1.8
34.7
38.7
59.8
41.9
39.4
FY16
11.6
13.4
1.4
1.7
117.1
5.2
2.0
161.8
10.8
2.1
16.7
-13.3
14.1
4.5
1.3
94.7
50.4
1.9
35.8
45.2
59.9
47.3
38.9
FY17
10.7
12.1
1.3
1.6
120.2
2.7
2.0
179.6
11.0
1.9
16.8
0.5
14.0
4.0
1.2
91.3
51.7
1.8
38.8
45.3
58.1
43.1
37.7
FY18
6.8
7.6
0.8
1.1
115.3
-4.0
2.0
172.1
-4.2
2.0
11.1
-34.3
21.3
2.3
0.7
89.8
49.6
1.9
43.6
45.0
57.4
34.9
37.6
FY19
3.2
3.6
0.4
0.5
135.5
17.5
1.7
177.2
3.0
1.9
5.2
-52.8
45.1
1.5
0.4
83.7
45.1
2.0
43.5
44.9
55.5
33.1
38.3
FY20
7.2
7.9
0.8
1.1
152.1
12.2
1.5
191.3
7.9
1.8
12.3
135.0
19.2
0.0
0.0
80.1
45.4
2.0
43.3
44.7
54.7
31.6
39.2
FY21E
10.3
11.1
1.1
1.5
167.0
9.8
1.4
211.0
10.3
1.6
18.9
53.8
12.5
1.6
0.5
76.7
46.2
2.0
44.0
45.4
53.5
31.5
39.4
FY22E
12.4
13.2
1.3
1.8
193.0
15.5
1.2
234.4
11.1
1.4
25.3
33.8
9.3
2.2
0.6
10 May 2020
13
 Motilal Oswal Financial Services
ICICI Bank
NOTES
10 May 2020
14
 Motilal Oswal Financial Services
ICICI Bank
Explanation of Investment Rating
Investment Rating
BUY
SELL
NEUTRAL
UNDER REVIEW
NOT RATED
Expected return (over 12-month)
>=15%
< - 10%
< - 10 % to 15%
Rating may undergo a change
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
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such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and inform MOCMSPL.
Specific Disclosures
1 MOFSL, 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 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOFSL, 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 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
10 MOFSL has not engaged in market making activity for the subject company
********************************************************************************************************************************
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
10 May 2020
15
 Motilal Oswal Financial Services
ICICI Bank
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.
-
10 May 2020
16