ICICIBank

Our analysis of ICICI Banks Annual report shows that operationally FY13 will be
oneofthestrongestafterFY08(PPOPgrowthof+20%),withsecuritisationrelated
losses peaking in FY1112. Inline with the system, Infra growth has moderated
significantly (<20% v/s ~60% in FY11) but a marginal red flag is ~27% growth in
sectors (excl. Infra) facing some stress. At 1.4x FY13 book, market is completely
disregarding ICICIs recent corporate asset quality performance in a challenging
environment and with operating performance expected to improve, we maintain
ourpositiveview.KeyAnnualreporthighlightsbelow:

May28,2012
Adarsh Parasrampuria
adarshparasrampuria@plindia.com
+91-22-66322236
Parul Gulati
parulgulati@plindia.com
+91-22-66322242
Rating
Price
Target Price
Implied Upside
Sensex
Nifty

BUY
Rs815
Rs1,050
28.8%
16,218
4,920

(PricesasonMay25,2012)
Tradingdata
Market Cap. (Rs bn)
Shares o/s (m)
3M Avg. Daily value (Rs m)
Majorshareholders
Promoters
Foreign
Domestic Inst.
Public & Other
StockPerformance
(%)
1M
6M
Absolute
(2.8)
13.4
Relative
2.6
10.1
HowwedifferfromConsensus
EPS(Rs)
PL
Cons.
2013
66.2
77.3
2014
78.0
93.8

Exposureanalysis:Infra growth has moderated significantly to <20% from +60%

over FY09-11 with similar growth in the power portfolio. Though underwriting in
the corporate book has been robust as reflected in asset quality over the last 4-6
quarters, high growth in stress sectors (~30% in FY12) led by ~70% growth in the
coal/mining portfolio is a concern. Credit derivative book continues to run down
(US$200m from ~US$1.5bn in FY09), reducing potential risks.

Recurring losses peaking Expect +20% PPOP growth in FY13: Losses on

security receipts portfolio have peaked in FY12 (Rs4bn) and with no sale of NPAs
over the last two years, we expect losses to come off substantially. Also,
securitisation-related losses have come down to Rs2bn from Rs5bn in FY12 and
we expect a complete rundown in FY13. Insurance-related fees have also
bottomed out. Thus, despite muted loan growth assumptions, we expect ~22%
PPOP growth in FY13, partly driven by significant reduction in recurring losses.

Other highlights: (1) Accretion to PSL book has come off to Rs30bn from
>Rs50bn over FY09-11. However, given some growth in the balance sheet, ICICI
has run a shortfall in the overall PSL target in FY12, achieving only 95% of its
requirement (2) Run-off in the securitised book will not only lower losses but
also releasecapitalwithTier1deduction on securitisation down from Rs24bn
to Rs12bn in FY12.

941.0
1,155.2
4706.5
0.00%
35.81%
26.75%
37.44%
12M
(19.2)
(10.1)
%Diff.
14.4
16.8

PricePerformance(RIC:ICBK.BO,BB:ICICIBCIN)
(Rs)
1,200

Keyfinancials(Y/eMarch)
Net interest income (Rs m)
Growth(%)
Operating profit (Rs m)
PAT (Rs m)
EPS (Rs)
Growth(%)
Net DPS (Rs)

2011
90,169
11.1
90,476
51,514
44.7
23.9
14.0

2012
107,342
19.0
103,865
64,653
56.0
25.1
14.0

2013E
128,532
19.7
127,206
76,506
66.2
18.3
16.6

2014E
153,438
19.4
152,941
90,129
78.0
17.8
19.5

2011
2.34
9.7
1.34
1.7
1.7
18.2
1.7

2012
2.44
11.2
1.47
1.6
1.6
14.6
1.7

2013E
2.57
12.1
1.53
1.4
1.4
12.3
2.0

2014E
2.67
13.1
1.57
1.3
1.3
10.4
2.4

1,000
800
600
400
200

Source:Bloomberg

May-12

Mar-12

Jan-12

Nov-11

Sep-11

Jul-11

May-11

Profitability&Valuation
NIM(%)
RoAE(%)
RoAA(%)
P / BV (x)
P / ABV (x)
PE (x)
Netdividendyield(%)
Source:CompanyData;PLResearch

Prabhudas Lilladher Pvt. Ltd. and/or its associates (the 'Firm') does and/or seeks to do business with companies covered in its research reports. As a result investors should be aware that
the Firm may have a conflict of interest that could affect the objectivity of the report. Investors should consider this report as only a single factor in making their investment decision.
Please refer to important disclosures and disclaimers at the end of the report

CompanyUpdate

AnnualReportAnalysis Amixedbag

ICICI Bank

Exhibit1: Exposuredetails:Infragrowthslowsbutgrowthhighinstresssectors
Growth
FY10
FY11
FY12
Loanbook(Rsbn)
FY10
FY11
FY12
(%) mix(%) Mix(%) Mix(%)
Services - Finance
65
161
156
3%
3.4%
7.2%
6.0%
Power
Highgrowthinminingloanbook

Infra (excl. Power)

Mining

56

98

141

44%

3.0%

4.4%

5.4%

104

130

182

40%

5.5%

5.8%

6.9%

41

84

103%

0.2%

1.8%

3.2%

18

36

58

59%

1.0%

1.6%

2.2%

1,873

2,244

2,621

Services - finance

247

366

417

Services - Non-finance

243

260

Power

111

188

Infra (excl. Power)

122

194

Construction
Total loans

17% 100.0% 100.0% 100.0%

GrowthinstresssectorslikeMining/
Steel/Textiles/Shipping/Construction,up
27%YoY

Fundedexposure(Rsbn)
14%

7.4%

9.7%

9.7%

283

9%

7.3%

6.9%

6.6%

235

25%

3.3%

5.0%

5.4%

246

27%

3.6%

5.1%

5.7%

Construction

28

67

80

18%

0.8%

1.8%

1.8%

Iron and Steel

114

139

175

26%

3.4%

3.7%

4.1%

3356

3786

4311

Total

14% 100.0% 100.0% 100.0%

Unfundedexposure(Rsbn)
Services - finance

96

113

151

34%

4.5%

4.5%

5.0%

Services - Non-finance

132

130

150

15%

6.3%

5.2%

5.0%

Power

112

185

219

19%

5.3%

7.3%

7.2%

Infra (excl. Power)

214

180

163

9%

10.2%

7.1%

5.4%

Construction

123

179

227

27%

5.8%

7.1%

7.5%

Iron and Steel

123

172

199

15%

5.8%

6.8%

6.6%

2110

2522

3020

Total

20% 100.0% 100.0% 100.0%

Source:CompanyData,PLResearch
Exhibit2: GrowthfromInfrabookmoderates
70%
60%
50%

GrowthintheInfrabookhasmoderated,

40%

with~25%growthinfundedexposure;
however,nonfundbasedexposuregrew

30%

byjust9%YoY

20%
10%

0%
FY08

FY09

FY11

FY12

Source:CompanyData,PLResearch

May 28, 2012

ICICI Bank

Exhibit3: ARCIL book down to <Rs20bn; No fresh sales/investments Exhibit4: Losses have inched up in FY12 to Rs4bn but will come off
overthelastoneyear
substantiallyinFY13onwards(impactsotherincome)
Security receipts- (Rs bn)

40.0

Security receipts-Loss on portfolio (Rs bn)

5.0
4.0

30.0

3.0
20.0

2.0
10.0

1.0
-

FY08

FY09

FY10

FY11

FY08

FY12

FY09

FY10

FY11

FY12

Source:CompanyData,PLResearch

Source:CompanyData,PLResearch

Exhibit5: Securitisedpooldownby~90%fromFY09levels

Exhibit6: LossesfromsecuritisedpoolrunningofffromH2FY12

Stock of securitised pool (Rs bn)

150.0

Securitised pool losses (Rs bn)

6.00
5.00
4.00

100.0

3.00
2.00

50.0

1.00
-

FY09

FY10

FY11

FY09

FY12

Source:CompanyData,PLResearch

FY10

FY11

FY12

Source:CompanyData,PLResearch
Exhibit7: Sizeofcreditderivativeportfoliodownto<$200mfrom~US$1.5bninFY08
Credit derivative portfolio (Rs bn)

70.0
60.0
50.0
40.0
30.0
20.0
10.0
FY08

FY09

FY10

FY11

FY12

Source:CompanyData,PLResearch

May 28, 2012

ICICI Bank

Exhibit8: RIDFbookupfromRs150bntoRs180bn
RIDF investments (Rs bn)

200.0
150.0

AccretiontotheRIDFbooklowinFY12at
Rs30bnv/sRs50bninFY0911....

100.0
50.0
FY08

FY09

FY10

FY11

FY12

Source:CompanyData,PLResearch
Exhibit9: ICICIBank:FirstshortfallinoverallPSLcomplianceinthelastfiveyears

...However,shortfallhasincreasedwith
firstshortfallinoverallPSLtargetinlast
fiveyears

PSLDetails(%ofcompliance)

FY08

FY09

FY10

FY11

FY12

Overall Priority sector

101%

101%

103%

106%

95%

94%

106%

104%

78%

75%

33%

39%

Agriculture loans
Direct Agriculture
Weaker sections

N/A but shortfall in all yrs

15%

46%

Source:CompanyData,PLResearch

May 28, 2012

ICICI Bank

Exhibit10: SectoralexposureandgrowthFundbasedandnonfundbasedexposure

Coal + Mining

60.7

FY11
NonFund
based
25.8

86.5

98.8

FY12
NonFund
based
46.3

Iron and Steel

139.2

172.4

311.6

175.4

198.7

374.1

26%

20%

Engineering
Textiles

83.0

418.4

501.5

101.8

512.0

613.7

23%

22%

30.9

7.7

38.6

32.2

16.3

48.6

4%

26%

111.7

39.1

150.7

112.9

56.7

169.5

1%

12%

Chemicals

49.8

65.7

115.5

71.4

73.2

144.6

43%

25%

Cement

62.9

33.8

96.7

55.7

31.1

86.7

-12%

-10%

Gems + Jewellery

30.0

15.0

45.0

38.6

17.3

55.9

29%

24%

Food processing

Construction

Fundbased

Total Fundbased

Growth(%)
Total

Fundbased

Total

145.1

63%

68%

67.4

179.5

246.9

79.8

227.4

307.1

18%

24%

177.3

204.5

381.8

113.9

297.6

411.6

-36%

8%

Autos

41.5

36.8

78.3

63.8

46.8

110.6

54%

41%

NBFCs

365.9

112.7

478.6

417.3

150.5

567.8

14%

19%

Trading

67.7

68.6

136.2

77.7

90.5

168.3

15%

24%

Shipping

34.6

39.5

74.1

50.3

38.4

88.7

46%

20%

Infrastructure

381.6

364.9

746.5

481.3

398.0

879.3

26%

18%

Power

187.7

184.7

372.3

234.8

234.8

469.6

25%

26%

Total

1704.1

1784.3

3488.4

1970.9

2200.8

4171.6

16%

20%

TotalFundedexposure

3786.2

2522.0

6308.2

4311.3

3019.8

7331.1

14%

16%

Domestic

2776.4

2175.6

4952.0

3115.9

2600.5

5716.4

12%

15%

International

1009.8

346.7

1356.5

1195.3

419.3

1614.7

18%

19%

362.8

439.9

802.7

475.1

544.4

1019.5

31%

27%

Petroleum

Stress sectors excl. Infra

Infra
Totalexcl.Infraandstress

381.6

364.9

746.5

481.3

398.0

879.3

26%

18%

3041.9

1717.1

4759.0

3354.9

2077.4

5432.3

10%

14%

Source:CompanyData,PLResearch

May 28, 2012

ICICI Bank
IncomeStatement(Rsm)
Y/eMarch
Int. Earned from Adv.
Int. Earned from Invt.
Others
Total Interest Income
Interest expense
NII
Growth(%)
Treasury Income
NTNII
Non Interest Income
Total Income
Growth(%)
Operating Expense
OperatingProfit
Growth(%)
NPA Provisions
Investment Provisions
Total Provisions
PBT
Tax Provisions
EffectiveTaxRate(%)
PAT
Growth(%)

BalanceSheet(Rsm)
Y/eMarch

2011

2012

2013E

2014E

164,248
79,052
16,441
259,740
169,571
90,169
11.1
(2,023)
68,501
66,479
326,219
(1.7)
66,172
90,476
(7.0)
19,769
2,038
22,868
67,607
16,093
23.8
51,514
28.0

221,299
96,840
17,287
335,427
228,085
107,342
19.0
(757)
75,784
75,028
410,454
25.8
78,504
103,865
14.8
9,932
4,132
15,891
87,973
23,321
26.5
64,653
25.5

256,392
113,397
19,016
388,805
260,273
128,532
19.7
4,000
85,627
89,627
478,431
16.6
90,953
127,206
22.5
21,404
1,000
22,404
104,803
28,297
27.0
76,506
18.3

294,194
128,608
21,739
444,541
291,103
153,438
19.4
4,500
99,584
104,084
548,625
14.7
104,581
152,941
20.2
28,476
1,000
29,476
123,464
33,335
27.0
90,129
17.8

2011

2012

2013E

2014E

Par Value
10
No. of equity shares
1,152
Equity
11,518
Networth
550,909
Adj. Networth
526,836
Deposits
2,256,021
Growth(%)
11.6
Low Cost deposits
1,016,465
%oftotaldeposits
45.1
TotalLiabilities
4,062,336
Net Advances
2,163,659
Growth(%)
19.4
Investments
1,346,859
TotalAssets
4,062,336
Source:CompanyData,PLResearch.

10
1,155
11,552
604,052
585,444
2,555,000
13.3
1,110,194
43.5
4,736,471
2,537,277
17.3
1,595,600
4,736,471

10
1,155
11,552
658,168
636,993
2,998,255
17.3
1,305,794
43.6
5,273,971
2,917,868
15.0
1,702,701
5,273,971

10
1,155
11,552
721,919
696,614
3,631,203
21.1
1,585,086
43.7
6,209,743
3,443,084
18.0
1,984,316
6,209,743

QuarterlyFinancials(Rsm)
Y/eMarch
Q1FY12

Q2FY12

Q3FY12

Q4FY12

76,185
52,076
24,109
16,429
16,679
(250)
40,538
18,198
7,329
10,869
22,340
22,590
4,539

17,802
4,480
13,322

13,322

81,576
56,512
25,064
17,396
18,200
(800)
42,460
18,922
8,427
10,495
23,538
24,338
3,188

20,350
5,318
15,032

15,032

85,919
58,799
27,120
18,919
19,570
(650)
46,039
19,168
8,366
10,495
26,871
27,521
3,411

23,460
6,179
17,281

17,281

91,746
60,699
31,048
22,285
20,700
1,580
53,332
22,216
11,031
11,185
31,116
29,536
4,693

26,423
7,405
19,018

19,018

2011

2012

2013E

2014E

815
1,152
938,273
23.1
44.7
478
478
18.2
1.7
1.7
14.0
1.7

815
1,155
940,988
19.9
56.0
523
523
14.6
1.6
1.6
14.0
1.7

815
1,155
940,988
17.8
66.2
570
570
12.3
1.4
1.4
16.6
2.0

815
1,155
940,988
15.2
78.0
625
625
10.4
1.3
1.3
19.5
2.4

2011

2012

2013E

2014E

2.3
1.3
9.7

2.4
1.5
11.2

2.6
1.5
12.1

2.7
1.6
13.1

Efficiency
Y/eMarch

2011

2012

2013E

2014E

CostIncomeRatio(%)
CDRatio(%)
Business per Emp. (Rs m)
Profit per Emp. (Rs m)
Business per Branch (Rs m)
Profit per Branch (Rs m)

42.2
95.9
78
9
1,748
20

43.0
99.3
78
10
1,751
22

41.7
97.3
79
10
1,769
23

40.6
94.8
82
10
1,839
23

AssetQuality
Y/eMarch

2011

2012

2013E

2014E

Gross NPAs (Rs m)

100,333
Net NPAs (Rs m)
24,074
Gr.NPAstoGrossAdv.(%)
4.6
NetNPAstoNetAdv.(%)
1.1
NPACoverage(%)
76.0
Source:CompanyData,PLResearch.

94,744
18,608
3.7
0.7
80.4

107,811
21,175
3.7
0.7
80.4

128,842
25,306
3.7
0.7
80.4

Interest Income
Interest Expense
NetInterestIncome
Non Interest Income
CEB
Treasury
NetTotalIncome
Operating Expenses
Employee Expenses
Other Expenses
OperatingProfit
Core Operating Profit
Provisions
Loan loss provisions
Investment Depreciation
Profitbeforetax
Tax
PATbeforeEO
Extraordinary item
PAT

KeyRatios
Y/eMarch
CMP (Rs)
Equity Shrs. Os. (m)
Market Cap (Rs m)
M/CaptoAUM(%)
EPS (Rs)
Book Value (Rs)
Adj. BV (75%) (Rs)
P/E (x)
P/BV (x)
P/ABV (x)
DPS (Rs)
DividendYield(%)

Profitability(%)
Y/eMarch
NIM
RoAA
RoAE

May 28, 2012

ICICI Bank

Prabhudas Lilladher Pvt. Ltd.

3rd Floor, Sadhana House, 570, P. B. Marg, Worli, Mumbai-400 018, India
Tel: (91 22) 6632 2222 Fax: (91 22) 6632 2209
RatingDistributionofResearchCoverage

%ofTotalCoverage

60%

53.6%

50%
40%
30%

23.2%

21.9%

20%
10%

1.3%

0%
BUY

Accumulate

Reduce

PLsRecommendationNomenclature

Sell

BUY

Over 15% Outperformance to Sensex over 12-months

Accumulate

Outperformance to Sensex over 12-months

Reduce

Underperformance to Sensex over 12-months

Sell

Over 15% underperformance to Sensex over 12-months

TradingBuy

Over 10% absolute upside in 1-month

TradingSell

Over 10% absolute decline in 1-month

NotRated(NR)

No specific call on the stock

UnderReview(UR)

Rating likely to change shortly

This document has been prepared by the Research Division of Prabhudas Lilladher Pvt. Ltd. Mumbai, India (PL) and is meant for use by the recipient only as
information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of PL. It should not be
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or completeness of the same. Neither PL nor any of its affiliates, its directors or its employees accept any responsibility of whatsoever nature for the information,
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May 28, 2012