Buy ICICI Bank with a Target Price of Rs.382

ICICI Bank closed 0.25% lower, under performing benchmark NIFTY by 0.25%. 

We expect the bank to outperform in coming period led by healthy growth in balance sheet along with strong growth in operating profit. 

Over the last few years, the bank has proven its competitive advantages over the other private banks through higher fee income generation capability, well-managed assets quality and better managed other financial business subsidiaries. 

ICICI Bank is well placed to capitalize on the expected improvement in the economic cycle as it has leadership position in both retail and corporate banking segments. These

advantages have led to a re-rating in the stock which is expected to continue in coming periods. 

We expect its valuation to move towards its historical high level over the next two years. We recommend Buy, with a  Target Price of Rs.382 wherein the standalone bank has been valued at 2x FY17E Adj. BV of Rs.3.40 and the subsidiaries fetch Rs.43/share after deducting holding company discount of 15%.