icici bank absolute : relative : overweight long 2qfy19...

October 27, 2018 Analyst: Rohan Mandora [email protected] (+91-79-61909529)/Shreepal Doshi [email protected] of 14

Before reading this report, you must refer to the disclaimer on the last page.

ICICI Bank Absolute :LONG

Relative : Overweight

2QFY19 Result: Est. (), Target (↑), Rating () Regular Coverage 20% ATR in 11 months

Treading on an improving trajectory — retain LONG BFSI

© 2018EquirusAll rights reserved

Rating Information

Price (Rs) 316

Target Price (Rs) 371

Target Date 30th Sep ‘19

Target Set On 27th Oct ‘18

Implied yrs of growth (ERE) 20

Fair Value (SOTP) 371

Fair Value (DDM) NA

Ind Benchmark BANKEX

Model Portfolio Position -

Stock Information

Market Cap (Rs mn) 20,31,408

Free Float (%) 100.00 %

52 Wk H/L (Rs) 365.7/256.5

Avg Daily Volume (1yr) 2,09,88,440

Avg Daily Value (Rs mn) 6,407

Equity Cap (Rs Mn) 12,871

Face Value (Rs) 2

Bloomberg Code ICICIBC IN

Ownership Recent 3M 12M %

Promoters 0.0 % 0.0 % 0.0 %

DII 44.2 % 1.8 % 1.7 %

FII 45.3 % -1.6 % -0.6 %

Public 10.5 % -0.2 % -1.1 %

Price % 1M% 3M% 12M%

Absolute 0.8 % 10.5 % 5.5 %

Vs Industry 5.3 % 21.2 % 9.6 %

HDFCBANK -0.4 % -10.6 % 9.2 %

AXISBANK -12.9 % -0.7 % 11.0 %

Standalone Quarterly EPS forecast

Rs/Share 1Q 2Q 3Q 4Q

EPS (18A) 3.5 3.2 2.6 1.6

EPS (19E) -0.2 1.4 2.9 4.3

2QFY19 was a quarter of improvements for ICICIBC with higher NIMs (3.33%, +14bp qoq;

domestic NIMs at 3.7%), better GNPA/NNPA ratios (8.54%/3.65% vs. 8.81%/4.19% in 1Q),

lower slippages (Rs 31bn vs. Rs 40bn qoq) and domestic/retail loan growth at 16%/21%

yoy. With good recoveries from a couple of NCLT-1 accounts and a current PCR of ~60%,

FY20E provisions will likely trend down. Sharpened focusing on risk-calibrated growth led

to a better overall risk profile, with ‘A & above’ loans touching 66% (63% as of Mar’18).

With a reducing stressed asset pool, a good CASA (50.8%) and a healthy tier-1 (15.4%),

ICICIBC is well-poised for strong growth in a rising interest rate scenario. We tweak our

fee income estimates, leading to a 3%/6% cut in FY19E/FY20E PAT. Retain LONG with a

SOTP-based Sep’19 TP of Rs 371 (Rs 356 earlier), with subsidiaries valued at Rs 90. Potential standard watchlist/stress at 4% of advances: ‘BB’ and below-rated exposures

for ICICIBC improved to 4% vs. 4.8%, as loans worth Rs 18.7bn were upgraded from the

drilldown list. The bank has ~Rs 23bn of admitted claims on its exposure to Essar Steel,

where healthy recoveries are expected. Moreover, the share of ‘BB & below’ rated

exposures (excl. NPAs) has improved to 2.7% vs 4%. ICICIBC has been prudentially

improving its customer profile and we believe fresh slippages will trend materially lower

next year. We are building in FY19E/FY20E LLP/avg. loans of 330bps/170bps.

Retail loan share at 57%, domestic loan growth at 16% yoy: Share of retail loans stands

at a healthy 57%. Retail/SME loans grew by 21%/22% yoy. Overseas book increased by 7%

qoq primarily due to INR depreciation. ICICIBC’s total exposure to NBFCs (incl. HFCs)

stood at 5.4% of the loan book. The bank has downgraded its internal rating on its IL&FS

exposure to ‘BB & below’. We expect FY19E/FY20E loan growth of 13%/15 driven by the

retail segment. On deposits, ICICIBC is not chasing wholesale deposits, but has increased

its retail TD rates in September. A healthy avg. CASA ratio at 47.1% (+100bps qoq) should

contain the pace of increase in cost of funds for ICICIBC.

Domestic NIMs improve 14bps qoq, GNPA/NNPA ratio at 8.5%/3.7%: Domestic NIMs

were strong at 3.7% (+17bps qoq) while international NIMs remained weak at 0.05% due

to lower interest collection from NPAs. Slippages of Rs 31bn included (a) Rs 13bn due

to increase in O/S to existing NPAs(incl. NR depreciation), (b) Rs 8.3bn of slippages

from ‘BB & below’ rated corporates and (c) retail slippages of Rs 7.6bn.

Key risks: A protracted slowdown, non-resolution of stressed assets and adverse

regulatory guidelines are key risks to our estimates. We have not incorporated any

impact of IND-AS, and one-time provisioning remains a key risk to our FY19E estimates.

(Rsbn) Revised Estimates % Change

FY19E FY20E FY19E FY20E

NII 265.4 297.9 2.5% 1.3%

Other Inc 156.8 178.7 -5.3% -5.3%

Provisions 180.0 106.2 0.0% 1.4%

PAT 54.2 130.0 -3.1% -5.8%

Advances 5,790.1 6,658.6 0.0% 1.8%

Deposits 6,170.7 7,034.6 -3.5% -3.5%

Standalone Financials

Rs. Bn YE Mar FY18A FY19E FY20E FY21E

NII 230 265 298 354

Other Income 174 157 179 204

Total Income 404 422 477 558

Operating Exp 305 331 372 420

PPoP 247 248 279 335

Provisions 173 180 106 91

PAT 68 54 130 183

Adj PAT 68 54 130 183

Loan and Advances 5,124 5,790 6,659 7,724

Deposits 5,610 6,171 7,035 8,019

Net Worth 1,052 1,091 1,207 1,376

NIM 3.02 % 3.12 % 3.14 % 3.30 %

Credit Cost 3.54 % 3.30 % 1.71 % 1.26 %

Rs Per Share FY18A FY19E FY20E FY21E

EPS 11.1 8.4 20.2 28.5

Book Value 163.6 169.7 187.7 214.0

Adjusted BVPS 100.3 122.7 151.9 185.9

P/ABV (x) 2.2 1.8 1.5 1.2

DPS 3.0 2.0 2.0 2.0

P/E (x) 20.4 26.7 11.1 7.9

ROE (%) 6.7 % 5.2% 11.7% 14.7%

RoA (%) 0.8 % 0.6 % 1.3 % 1.6 %

Tier 1 Ratio (%) 15.9 % 15.2 % 14.9 % 14.8 %

*P/E, P/ABV adjusted for subsidiary valuation

ICICI Bank Absolute – LONG Relative – OverWeight 20% ATR in 11 Months


Quarterly performance

Particulars

%Variation

P&L Statement (Rs mn) 2QFY19 2QFY19E 1QFY19 2QFY18 2QFY19E 1QFY19 2QFY18

Net interest income (NII) 64,176 61,683 61,019 57,091 4.0% 5.2% 12.4%

Other income 31,565 33,575 38,518 51,862 -6.0% -18.1% -39.1%

Total income 95,741 95,258 99,537 108,953 0.5% -3.8% -12.1%

Operating expenses 43,244 43,111 41,453 39,088 0.3% 4.3% 10.6%

Staff expenses 16,614 15,744 15,139 15,141 5.5% 9.7% 9.7%

Other expenses 26,630 27,367 26,315 23,948 -2.7% 1.2% 11.2%

Operating profit 52,497 52,146 58,084 69,865 0.7% -9.6% -24.9%

Total provisions 39,943 34,542 59,713 45,029 15.6% -33.1% -11.3%

Profit before tax 12,554 17,604 (1,629) 24,836 -28.7% -870.6% -49.5%

Tax 3,465 3,521 (434) 4,254 -1.6% -899.2% -18.5%

Profit after tax 9,089 14,083 (1,196) 20,582 -35.5% -860.3% -55.8%

Balance sheet (Rsmn) 2QFY19 2QFY19E 1QFY19 2QFY18 % change vs Est % change q-o-q % change y-o-y

Deposits 5,586,689 5,742,224 5,468,784 4,986,428 -2.7% 2.2% 12.0%

Current Account 760,720 - 766,890 683,960 -0.8% 11.2%

Saving Account 2,074,760 - 1,996,040 1,784,800 3.9% 16.2%

Advances 5,444,866 5,369,403 5,162,887 4,827,801 1.4% 5.5% 12.8%

Investment 1,875,003 1,919,513 1,863,605 1,799,352 -2.3% 0.6% 4.2%

Gross NPL (Rsmn) 544,890 539,996 534,649 444,885 0.9% 1.9% 22.5%

Net NPL (Rsmn) 220,857 234,450 241,701 241,298 -5.8% -8.6% -8.5%

Particulars 2QFY19 2QFY19E 1QFY19 2QFY18

bp change q-q bp change y-y

Profitability ratios Yield on Advances 8.8%

8.7% 8.7%

8 12

Cost of Funds 5.0%

5.0% 5.1%

1 (5)

NIM 3.33%

3.19% 3.3%

14 6

RoaA 0.4%

-0.1% 1.1%

49 (65)

RoaE 3.5%

NM 8.0%

#VALUE! (455)

Asset Quality

Gross NPL ratio 8.54%

8.81% 7.87%

(27) 67

Net NPL ratio 3.65%

4.19% 4.43%

(54) (78)

Coverage ratio 59.5%

54.8% 45.8%

467 1,371

Business & Other Ratios

CASA 50.8%

50.5% 49.5%

30 130

Cost-income ratio 45.2%

41.6% 35.9%

352 929

Non int. inc / total income 33.0%

38.7% 47.6%

(573) (1,463)

Credit deposit ratio 97.5%

94.4% 96.8%

305 64

CAR 17.8%

18.4% 17.6%

(51) 28

Tier-I 15.4%

15.8% 14.5%

(46) 88 Source: Company Filings, Equirus Securities



Exhibit 1: CASA ratio stands at 50.8%

Source: Bank, Equirus Securities

Exhibit 2:Retail advances constitute ~57.3% of the total loan book


Exhibit 3: Slippage ratio declines to 2.4% vs. 3.1 in 1QFY19


Exhibit 4:NIMs improve 14bps to 3.33% vs. 3.19% in 1QFY19


42%

44%

46%

48%

50%

52%

54%

0%

20%

40%

60%

80%

100%

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

Current (%) Saving (%) Term (%) CASA (%)

0%

15%

30%

45%

60%

75%

500

1,000

1,500

2,000

2,500

3,000

3,500

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

Total Retail Advances (Rs. Bn) YoY Gr in Retail Adv. (%) - RHS

Retail adv. / Total adv. (%) - RHS

0%

2%

4%

6%

8%

10%

12%

14%

0

25,000

50,000

75,000

100,000

125,000

150,000

175,000

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

Slippages (Rs Mn) Slippages (%)

3.0%

3.2%

3.4%

3.6%

3.8%

4.0%

4%

5%

6%

7%

8%

9%

10%

11%

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

Yield on Advances (%) Cost of Funds (%) NIM - RHS (%)



Exhibit 5:Fresh slippages decline to Rs 31.2bn vs. Rs 40.4bn in 1QFY19

NPA movement (Rsmn) 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19

Opening Gross NPA 152,420 152,860 160,060 213,560 267,210 275,630 325,480 380,850 425,520 431,480 444,890 460,390 540,630 534,650

Fresh Slippages 16,720 22,420 65,440 70,030 82,490 80,290 70,370 112,890 49,760 46,740 43,800 157,370 40,360 31,170

- of which slippage from restructured 2,920 9,310 13,550 27,240 13,210 12,310 2,390 18,030 14,760 3,720 1,970 3,270 820 540

- of which Slippages from exposure to ‘below

investment grade’ companies in key sectors reported - - - - 45,590 45,550 29,430 79,570 3,590 2,560 6,140 117,760 3,030 -

- of which slippage from Non key sector Below

Investment Grade/Non Restructured 13,800 13,110 51,890 42,790 23,690 22,430 38,550 15,290 31,410 40,460 35,690 36,340 36,510 30,630

Upgrades & recoveries 5,440 7,090 5,000 7,810 7,920 8,000 6,250 14,130 27,750 10,290 11,080 42,340 20,360 10,060

NPA Written off 10,840 8,130 6,940 8,570 66,150 72,290 64,120 98,760 22,010 36,450 17,220 34,790 25,980 10,870

Closing Gross NPA 152,860 160,060 213,560 267,210 275,630 275,630 325,480 380,850 425,520 431,480 460,390 540,630 534,650 544,890


Exhibit 6:ICICIBC’s subsidiaries: financial snapshot

Profit After Tax (Rsmn) 2QFY19 1QFY19 2QFY18 YoY Growth QoQ Growth FY17 FY18 YoY Growth

Domestic Subsidiaries

ICICI Life 3,010 2,820 4,210 -28.5% 6.7% 16,820 16,200 -3.7%

ICICI General 2,930 2,890 2,040 43.6% 1.4% 7,020 8,620 22.8%

ICICI Pru AMC 1,960 800 1,560 25.6% 145.0% 4,800 6,260 30.4%

ICICI Sec Primary Dealership (430) (360) 520 -182.7% 19.4% 4,120 1,120 -72.8%

ICICI Sec (Consl.) 1,340 1,340 1,310 2.3% 0.0% 3,390 5,580 64.6%

ICICI Venture (40) 30 (10) 300.0% -233.3% 90 110 22.2%

ICICI Home Finance 110 140 140 -21.4% -21.4% 1,830 640 -65.0%

Overseas Subsidiaries

ICICI Bank UK (1,088) 133 178 -712.5% -916.7% (1,191) (1,887) 58.4%

ICICI Bank Canada 691 780 704 -1.9% -11.4% (1,839) 2,463 -233.9%

Reported Consolidated PAT 1,205 50 20,710 -94.2% 2310.0% 101,880 77,120 -24.3%




Exhibit 7:SOTP valuation

Base Case

Value per share (Rs) Holding (%) Multiple Basis Value

ICICI Standalone 100 1.9x FY19 BV Excess RoE 280.7

Subsidiaries / Others

ICICI Bank UK 100 0.7x BV 3.8

ICICI Bank Canada 100 0.7x BV 4.6

Life Insurance 53 25% holding company disc. 36.4

General Insurance 56 25% holding company disc. 23.1

Asset Management 51 4.0% AUM 8.3

Home Finance 100 1.0x BV 2.4

ICICI Securities 79 based on mkt value 25% holding company disc. 9.4

Other Subs 100 1x BV 2.4

Total subsidiaries' value 90.3

% contribution of Subsidiaries / Others

Total fair value per share 371

Source: Bank, EquirusSecurities



Earnings call takeaways

Business update

NIMs improved qoq due to no increase in cost of funds vis-à-vis an improvement in

yields.

Management expects overseas margins to be volatile owing to timing of collection of

interest from NPA accounts.

Management stated that the liquidity condition in the economy is tight and expects

funding costs to go up (including for ICICIBC), which would be passed on to customers.

The bank has seen good traction in retail TD in the past 2-3 quarters; it has stayed

away from higher-cost wholesale deposits.

Loan book

ICICIBC’s total exposure towards NBFCs (Rs 242bn) and HFCs (~Rs 125bn) is ~5.4%

(~Rs 367bn) of the total loan book.

The builder portfolio accounts for Rs 184bn of the loan book.

Total exposure to the power sector at 2QFY19-end stood at Rs 481.5bn. Of this,

about 30% was either non-performing restructured or a part of the drilldown list

under an RBI revolution scheme. Of the remaining 70%, 53% was to the private sector

and 47% to public sector companies.

Exposure to public sector companies includes about Rs 16.14bn to state electricity

boards. Also, of the balance 70% of exposure excluding state electricity boards, ~90%

was rated ‘A minus & above’.

Unsecured retail loans are largely towards existing customers for which the bank has

greater comfort. In the secured retail, approvals are cash-flow driven backed by

collateral (either residential or commercial). Delta is high for unsecured products.

Ticket size in business banking is Rs 10mn-Rs 15mn and largely all the business

banking loans are backed by cash-flow abilities and collateral.

Asset quality

Total downgrades during the quarter stood at Rs 22.76bn, of which Rs 8.21bn came

from the drilldown list (from power, infrastructure and EPC businesses).

One large steel account was upgraded during the quarter whereas other upgrades

were across various industries.

Overseas book increased qoq in rupee terms due to rupee depreciation.

Of the corporate and SME gross NPA additions of Rs 23.6bn, about Rs 13bn

represented the impact of rupee depreciation on existing foreign currency NPA. The

balance slippage of Rs 10.5bn was largely from the ‘BB & below’ portfolio.

O/S drilldown list stood at Rs 32.83bn vs. Rs 440.65bn in 4QFY16.

As of 2QFY19, fund-based and non-fund based o/s standard borrowers rated ‘BB &

below’ stood at Rs 217.9bn.

NCLT list 1 exposure of Rs 40.28bn included outstanding loans and non-funded

exposure. The bank is carrying 89.7% provision coverage as on 2QFY19.

For NCLT list 2, ICICIBC has a total exposure of Rs 101.5bn including outstanding

loans and non-funded exposure for which it has a PCR of 62.1%.

Data points

NIMs for 2QFY19 stood at 3.33% vs. 3.19% in 1QFY19.

CASA ratio stood at 50.8%.

Gross NPA addition during the quarter was at Rs 31.2bn.

Recoveries and upgrades for the quarter came in at Rs 10.1bn.

Provision coverage ratio stood at 69.4% (including technical/prudential write-offs).

International loans constitute 12.7% of total loans.

ICICIBC is currently maintaining a liquidity coverage ratio of 110% against the RBI

requirement of 90%.

Employee count was at 83,927 as of 2QFY19.

Guidance

ICICIBC has set a RoE target of 15% by Jun’20.

Management reiterated to achieve 70% PCR by Mar’20.

Management expects provisions to be higher in 2HFY19, but sees significantly lower

NPA slippages during the years.

Management stated cases in NCLT list-2 will take a longer time for resolution.

ICICIBC indicated normalized credit cost of ~100bps by FY21 or earlier (depending

upon IFRS implementation).



Exhibit 8: RoA-RoE Tree

Particulars (Rs mn) FY18A FY19E FY20E FY21E

Yield on Loans and Advances 8.4% 8.6% 9.0% 9.3%

Yield on Investments 6.8% 6.8% 7.0% 7.1%

Cost of Funds 4.6% 4.7% 5.0% 5.1%

Advances (A) 51,23,953 57,90,067 66,58,577 77,23,949

Investments (B) 20,29,942 22,04,266 24,22,792 25,87,963

Cash and Balances with RBI (C) 3,31,024 4,09,943 4,17,764 4,73,377

Balances with Bank (D) 5,10,670 3,36,153 3,80,629 4,31,299

Interest Earning Assets (A+B+C+D) 79,95,588 87,40,429 98,79,761 1,12,16,587

Average Interest Earning Assets 75,05,053 83,68,009 93,10,095 1,05,48,174

NII/AvgInt Earning Assets 3.1% 3.2% 3.2% 3.4%

Non IntInc/AvgInt Earning Assets 2.3% 1.9% 1.9% 1.9%

Total Income/AvgInt Earning Assets 5.4% 5.0% 5.1% 5.3%

Op. Costs/AvgInt Earning Assets 2.1% 2.1% 2.1% 2.1%

PPI/AvgInt Earning Assets 3.3% 3.0% 3.0% 3.2%

Provisions/AvgInt Earning Assets 2.3% 2.2% 1.1% 0.9%

Taxes/AvgInt Earning Assets 0.1% 0.2% 0.5% 0.6%

Return on AvgInt Earning Assets 0.9% 0.6% 1.4% 1.7%

Extraordinary item 0.0% 0.0% 0.0% 0.0%

Adj Return on AvgInt Earning Assets 0.9% 0.6% 1.4% 1.7%

Productivity (AvgInt Earning Assets/Avg

Total Assets) 90.9% 90.9% 91.1% 91.3%

Return on Average Total Assets 0.8% 0.6% 1.3% 1.6%

Leverage (Average Total

Assets/Average Equity) 8.2 8.7 9.0 9.1

Return on Average Equity 6.7% 5.1% 11.5% 14.4%

Source: Bank, EquirusSecurities



Snapshot How we differ from Consensus

- Equirus Consensus % Diff Comment

EPS FY19E 8.4 11.5 -26 %

We expect consensus estimates to be

revised. However, our provision

estimates have been higher than

consensus

FY20E 20.2 22.5 -10 %

NII +

Other

Inc

FY19E 422 416 1 %

FY20E 477 475 0 %

PAT FY19E 54 72 -25 %

FY20E 130 145 -10 % Our Key Investment arguments: (1) Expected improvement in ROE with mid-teen RoEs in

FY21.(2) Fresh NPL creations to moderate from FY19E.(3) Resolution of stressed assets to

contain eventual losses.

Key Assumptions 2017A 2018A 2019E 2020E 2021E

Net Interest Income (Rsmn) 217.4 230.3 265.4 297.9 353.9

Net interest margin (%) 3.2% 3.0% 3.1% 3.1% 3.3%

Other Income (Rsmn) 195.0 174.2 156.8 178.7 203.7

Total Income (Rsmn) 412.4 404.5 422.2 476.6 557.7

Operating Expense (Rsmn) 147.6 157.0 174.3 197.2 223.1

Cost to Income Ratio (%) 35.8% 38.8% 41.3% 41.4% 40.0%

Credit Cost (%) 3.4% 3.5% 3.3% 1.7% 1.3%

PAT (Rsmn) 98.0 67.8 54.2 130.0 183.0

Advances Growth (%) 6.7% 10.4% 13.0% 15.0% 16.0%

Deposits Growth (%) 16.3% 14.5% 10.0% 14.0% 14.0%

Key Risks: Protracted slowdown, non-resolution of stressed assets and adverse regulatory

guidelines are key risks.

Key Triggers: Improvement in adj. ROEs, economic recovery, development of ARCs,

support from management of stressed accounts for early resolution.

Sensitivity to Key Variables % Change % Impact on EPS

Net Interest Income 10% 17.2%

Provisioning Costs 10% -6.5%

Loans & Advances Growth 10% 0.9%

ERoE Valuations & Assumptions

Rf Ke Term. Growth RoE in Terminal Yr

7.9 % 15.1% 5.0 % 16.3 %

-

FY19E FY20-23E FY24-28E FY29-38E

PAT Growth

15.3% 28.8% 14.7% 14.7%

Dividend Payout (%)

26.0% 14.7% 16.0% 16.0%

BV growth

3.8% 14.7% 14.7% 14.7%

RoE (%)

5.1% 15.1% 16.3% 16.3%

Years of strong growth

1 5 10 20

Valuation as on date (Rs)

-24 207 225 260

Valuation as of 30th Sep’19

-26 222 242 281

We value the bank’s standalone operations at Rs 280.7 based on 1.9x FY19E ABV. We

value ICICIBC at Rs 371 on SOTP basis (Exhibit 7), with the standalone bank at Rs 281 and

subsidiaries at Rs 90.

Company Description:

ICICIBC is the largest private sector bank in India on a consolidated basis with its

specialized subsidiaries offering services across life and general insurance, asset

management, securities broking as well as private equity products and services. Its

primary business consists of commercial banking operations for retail and corporate

customers and it provides a range of products like loan products, deposits, forex services

as well as agricultural and rural banking products. As on Sep’18, it had a network of

4,867 branches and 14,417 ATMs.

Comparable valuation Mkt Cap

Rs. Bn.

Price

Target

Target

Date

P/E P/B BPS RoE Divi Yield

Company Reco. CMP FY18A FY19E FY20E FY18A FY19E FY20E FY19E FY17A FY18E FY19E FY17A FY18E FY19A

ICICI Bank LONG 316 2,031 371 Sep-19 28.5x 47.3x 16.7x 3.1x 2.6x 2.1x 120.9 6.7% 4.1% 10.7% 1.0% 0.6% 0.6%

HDFC Bank LONG 1,961 5,330 2,340 Sep-19 28.9x 24.9x 21.3x 5.1x 3.8x 3.4x 512.2 17.9% 16.5% 15.8% 0.7% 0.7% 0.9%

Axis Bank NR 538 1,382 NR NR NM 24.8x 13.6x 2.0x 2.0x 1.8x 263.3 0.5% 8.6% 14.0% 0.0% 0.9% 1.2%



Standalone Quarterly Earnings Forecast and Key Drivers Rs in Mn 1Q18A 2Q18A 3Q18A 4Q18A 1Q19A 2Q19A 3Q19E 4Q19E 1Q20E 2Q20E 3Q20E 4Q20E FY18A FY19E FY20E FY21E

Interest Income 1,34,593 1,35,771 1,36,65

4 1,42,64

4 1,47,22

4 1,51,05

6 1,60,02

7 1,70,860 1,74,729 1,82,353 1,85,487 1,91,540 5,49,659 6,29,167 7,34,108 8,55,908

Interest Expense 78,693 78,680 79,601 82,427 86,205 86,881 92,641 98,056 1,03,688 1,08,873 1,09,961 1,13,665 3,19,400 3,63,782 4,36,187 5,01,990

Net Interest Income 55,900 57,091 57,053 60,217 61,019 64,176 67,385 72,804 71,040 73,480 75,526 77,875 2,30,258 2,65,384 2,97,921 3,53,918

Non Interest Income 33,879 51,862 31,669 56,786 38,518 31,565 41,110 45,584 42,046 43,022 45,067 48,591 1,74,196 1,56,777 1,78,725 2,03,747

Total Income 89,779 1,08,953 88,721 1,17,00

3 99,537 95,741

1,08,495

1,18,388 1,13,086 1,16,502 1,20,592 1,26,466 4,04,455 4,22,161 4,76,646 5,57,665

Operating and Other Expenses 37,944 39,088 38,144 41,863 41,453 43,244 44,209 45,442 47,006 48,528 49,922 51,731 3,04,590 3,31,387 3,71,535 4,20,310 Staff Cost 15,112 15,141 13,626 15,262 15,139 16,614 16,780 17,704 17,881 18,239 18,421 18,319 59,140 66,236 72,860 80,146 Other Operating Expenses 22,833 23,948 24,518 26,601 26,315 26,630 27,429 27,738 29,125 30,290 31,501 33,412 97,900 1,08,111 1,24,328 1,42,977 Pre-Provision Income 51,835 69,865 50,578 75,140 58,084 52,497 64,286 72,946 66,081 67,974 70,670 74,735 2,47,415 2,47,814 2,79,459 3,34,542 Provisions and Write-offs 26,087 45,029 35,696 66,258 59,713 39,943 40,742 39,620 27,767 27,226 26,695 24,487 1,73,070 1,80,017 1,06,175 90,557 PBT 25,748 24,836 14,882 8,882 -1,629 12,554 23,545 33,327 38,314 40,748 43,975 50,247 74,346 67,796 1,73,284 2,43,986 TAX 5,256 4,254 -1,621 -1,318 -434 3,465 4,709 5,819 9,578 10,187 10,994 12,562 6,571 13,559 43,321 60,996 Extraordinary 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 PAT 20,492 20,582 16,502 10,200 -1,196 9,089 18,836 27,508 28,735 30,561 32,981 37,685 67,774 54,237 1,29,963 1,82,989 EPS 4 3 3 2 0 1 3 4 4 5 5 6 11 8 20 28 Key Drivers - - - - - - - - - - - - - - - - YoA 8.7 % 8.7 % 8.5 % 8.7 % 8.7 % 8.8 % 8.7 % 8.6 % 9.0 % 9.2 % 9.0 % 9.1 % 8.4 % 8.6 % 9.0 % 9.3 % YoI 6.5 % 6.3 % 6.4 % 6.3 % 6.4 % 6.6 % 7.0 % 7.9 % 7.0 % 7.0 % 7.0 % 5.7 % 6.8 % 6.8 % 7.0 % 7.1 % CoF 5.2 % 5.1 % 4.9 % 4.9 % 5.0 % 5.0 % 5.0 % 5.0 % 5.0 % 5.1 % 4.9 % 4.9 % 5.3% 5.0% 4.9% 4.9%

NIM 3.3 % 3.3 % 3.1 % 3.2 % 3.2 % 3.3 % 3.2 % 3.3 % 3.1 % 3.1 % 3.1 % 3.1 % 3.2% 3.2% 3.2% 3.3%

C/I Ratio 42 % 36 % 43 % 36 % 42 % 45 % 41 % 38 % 42 % 42 % 41 % 41 % 35.8% 40.2% 39.9% 39.4%

CD Ratio 95.4 % 96.8 % 97.7 % 91.3 % 94.4 % 97.5 % 96.5 % 93.8 % 93.8 % 93.8 % 92.0 % 94.7 % 91.3 % 93.8 % 94.7 % 96.3 % Non-Interest Income/ Total Income 37.7 % 47.6 % 35.7 % 48.5 % 38.7 % 33.0 % 37.9 % 38.5 % 37.2 % 36.9 % 37.4 % 38.4 % 47.3% 41.8% 41.8% 41.9% ROA 1.1 % 1.1 % 0.8 % 0.5 % -0.1 % 0.4 % 0.8 % 1.2 % 1.2 % 1.2 % 1.3 % 1.4 % 0.8 % 0.6 % 1.3 % 1.6 % ROE 8.2 % 8.0 % 6.3 % 3.9 % -0.5 % 3.5 % 7.1 % 10.2 % 10.4 % 10.8 % 11.3 % 12.6 % 6.7 % 5.1 % 11.3 % 14.2 % Sequential Growth (%) - - - - - - - - - - - - - - - -

NII -6.2 % 2.1 % -0.1 % 5.5 % 1.3 % 5.2 % 5.0 % 8.0 % -2.4 % 3.4 % 2.8 % 3.1 %

TI 0.0% 21.4% -18.6% 31.9% -14.9% -3.8% 6.2% 9.3% 1.0% 2.3% 3.0% 1.8%

PPI 1.4% 34.8% -27.6% 48.6% -22.7% -9.6% 9.4% 14.3% -0.7% 1.7% 3.2% 0.5% Provisions and Write-offs -10 % 73 % -21 % 86 % -10 % -33 % 2 % -3 % -30 % -2 % -2 % -8 % PAT 1 % 0 % -20 % -38 % -112 % -860 % 107 % 46 % 4 % 6 % 8 % 14 % EPS 1 % -10 % -19 % -38 % -112 % -842 % 108 % 46 % 4 % 6 % 8 % 14 % Advances 0 % 4 % 5 % 1 % 1 % 5 % 4 % 2 % 3 % 4 % 3 % 4 %

Deposits -1 % 3 % 4 % 8 % -3 % 2 % 5 % 5 % 3 % 4 % 5 % 1 %

Total Business -0.4% 3.3% 4.2% 4.9% -1.0% 3.8% 4.5% 3.7% 3.0% 4.0% 4.0% 2.7% Yearly Growth (%) - - - - - - - - - - - - - - - - NII 8 % 9 % 6 % 1 % 9 % 12 % 18 % 21 % 16 % 14 % 12 % 7 % 2 % 6 % 15 % 12 % TI 5 % -24 % -5 % 30 % 11 % -12 % 22 % 1 % 14 % 22 % 11 % 7 % 13 % -2 % 4 % 13 % PPI -1 % -34 % -8 % 47 % 12 % -25 % 27 % -3 % 14 % 29 % 10 % 2 % 11 % -7 % 0 % 13 %

Provisions and Write-offs 4 % -36 % 32 % 129 % 129 % -11 % 14 % -40 % -53 % -32 % -34 % -38 % 30 % 14 % 4 % -41 %

PAT -8 % -34 % -32 % -50 % -106 % -56 % 14 % 170 % -2,504 % 236 % 75 % 37 % 1 % -31 % -20 % 140 % EPS -8.6% -40.4% -38.8% -54.3% -105.4% -55.8% -19.1% 112.5% -2446.0% 223.0% 134.1% 52.9% 0.5% -34.3% -39.7% 183.6% Advances 3 % 6 % 10 % 10 % 11 % 13 % 12 % 13 % 16 % 14 % 13 % 15 % 7 % 10 % 13 % 15 % Deposits 15 % 11 % 11 % 14 % 12 % 12 % 13 % 10 % 16 % 18 % 18 % 14 % 16 % 14 % 10 % 14 %

Total Business 9 % 9 % 11 % 12 % 12 % 12 % 13 % 11 % 16 % 16 % 16 % 14 % 11 % 12 % 11 % 14 %



Standalone Financials P&L (Rs bn) FY18A FY19E FY20E FY21E

Balance Sheet (Rs bn) FY18A FY19E FY20E FY21E

- FY18A FY19E FY20E FY21E

Interest Income 550 629 734 856 Capital 13 13 13 13 Asset Quality

Interest Expense 319 364 436 502 Reserves and Surplus 1,039 1,078 1,194 1,363 Gross NPA (Rs mn) 5,32,402 5,35,727 4,95,160 4,64,856

Net Interest Income 230 265 298 354 Deposits 5,610 6,171 7,035 8,019 Gross NPA (%) 9.9% 8.7% 7.0% 5.7%

% Growth 5.9% 15.3% 12.3% 18.8% Borrowings 1,829 2,028 2,249 2,500 Net NPA (Rs mn) 2,78,236 1,84,068 1,21,159 78,834

Treasury Income 78 36 38 40 Other Liabilities & Provisions 302 323 346 370 Net NPA (%) 3.0% 3.2% 1.8% 1.0%

Other Inc. 96 120 141 164 Total liabilities 8,792 9,613 10,836 12,265 % coverage of NPA 47.7% 65.6% 75.5% 83.0%

Total Income 404 422 477 558 Cash & Balances with RBI 331 410 418 473 Delinquencies (%) 5.9% 2.5% 1.5% 1.3%

Operating Expenses 157 174 197 223 Bal. with banks/ call money 511 336 381 431 Business Ratios Operating Profit 247 248 279 335 Investments 2,030 2,204 2,423 2,588 Credit / Deposit(%) 91.3% 93.8% 94.7% 96.3%

% Growth -6.6% 0.2% 12.8% 19.7% Advances 5,124 5,790 6,659 7,724 Investment / Deposit (%) 36.2% 35.7% 34.4% 32.3%

Tax 7 14 43 61 Fixed Assets 79 84 89 94 CASA (%) 51.7% 48.6% 48.6% 48.6%

Total Provisions 173 180 106 91 Other Assets 717 789 868 955 RoaA (%) 0.8% 0.6% 1.3% 1.6%

Net Profit 68 54 130 183

Total assets 8,792 9,613 10,836 12,265 RoE (%) 6.7% 5.1% 11.3% 14.2%

% Growth -30.9% -20.0% 139.6% 40.8% % Growth 13.9% 9.3% 12.7% 13.2% Adj. ROE (%) 7.5% 5.6% 12.4% 15.3%

Adj Profit 68 54 130 183 Key assumptions Capital Adequacy Ratio

Earnings Ratios Deposits RWA (Rs. bn) 6,349 7,009 7,956 9,229

Interest Inc. / Avg.assets (%) 6.7% 6.8% 7.2% 7.4% Avg deposit growth (%) 14.5% 10.0% 14.0% 14.0%

Tier I (%) 15.9% 15.2% 14.9% 14.8%

Interest Exp./ Avg. assets (%) 3.9% 4.0% 4.3% 4.3% Avg cost of deposits (%) 4.5% 4.8% 5.1% 5.2%

Tier II (%) 2.5% 2.3% 2.1% 1.9%

NIM (%) 3.0% 3.1% 3.1% 3.3% Advances Total CAR (%) 18.4% 17.5% 17.1% 16.7%

Int. exp/ Int earned (%) 58.1% 57.8% 59.4% 58.7% Avg. advances growth (%) 10.4% 13.0% 15.0% 16.0% Per Share Data Oth. Inc./ Tot. Inc. (%) 43.1% 37.1% 37.5% 36.5% Avg yield on advances (%) 8.4% 8.6% 9.0% 9.3% Book value per share, Rs 163.6 169.7 187.7 214.0

Staff exp/Total opt. exp (%) 37.7% 38.0% 36.9% 35.9% Investments Adj. BVPS, Rs. 100.3 122.7 151.9 185.9

Cost/ Income Ratio (%) 38.8% 41.3% 41.4% 40.0% Avg. investments growth (%) 25.7% 8.6% 9.9% 6.8% Price/ Adj. Book value 2.2 1.8 1.5 1.2

Prov./ Operating Profit (%) 70.0% 72.6% 38.0% 27.1%

Avg. yield on investments (%) 6.8% 6.8% 7.0% 7.1%

EPS, Rs. 11.1 8.4 20.2 28.5

Loan loss prov./Avg. loans (bps) 3.5% 3.30% 1.71% 1.3%

Dividend Yield 1.0% 0.6% 0.6% 0.6%

P/E Ratio 20.4 26.7 11.1 7.9

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Historical StandaloneFinancials

P&L (Rs bn) FY15A FY16A FY17A FY18A

Balance Sheet (Rs bn) FY15A FY16A FY17A FY18A

- FY15A FY16A FY17A FY18A

Interest Income 491 527 542 550 Capital 12 12 12 13 Asset Quality

Interest Expense 301 315 324 319 Reserves and Surplus 793 886 988 1,039 Gross NPA (Rs mn) 150,947 262,213 421,594 532,402

Net Interest Income 190 212 217 230 Deposits 3,616 4,214 4,900 5,610 Gross NPA (%) 3.8% 5.8% 8.8% 9.9%

% Growth 15.6% 11.5% 2.4% 5.9% Borrowings 1,724 1,748 1,476 1,829 Net NPA (Rs mn) 62,555 129,631 252,168 278,236

Treasury Income 36 65 102 78 Other Liabilities 317 347 342 302 Net NPA (%) 1.6% 3.0% 3.0% 3.0%

Other Inc. 86 88 93 96 Total liabilities 6,461 7,207 7,718 8,792 % coverage of NPA 58.6% 50.6% 40.2% 47.7%

Total Income 312 365 412 404 Cash Balance with RBI 257 271 317 331 Delinquencies (%) 2.2% 4.1% 7.5% 5.9%

Operating Expenses 47 50 57 59 Bal. with bank 167 328 440 511 Business Ratios Operating Profit 67 77 90 98 Investments 1,581 1,604 1,615 2,030 Credit / Deposit(%) 107.2% 103.3% 94.7% 91.3%

% Growth 197 239 265 247 Advances 3,875 4,353 4,642 5,124 Investment /

Deposit (%) 43.7% 38.1% 33.0% 36.2%

Tax 18.8% 21.0% 11.0% -6.6% Fixed Assets 47 76 78 79 CASA (%) 45.5% 45.8% 50.4% 51.7%

Total Provisions 46 25 15 7 Other Assets 534 576 625 717 RoaA (%) 1.8% 1.4% 1.3% 0.8%

Net Profit 39 117 152 173 Total assets 6,461 7,207 7,718 8,792 RoE (%) 14.5% 11.5% 10.5% 6.7%

% Growth 112 97 98 68 % Growth 8.7% 11.5% 7.1% 13.9% Adjusted RoE (%) 17.2% 13.3% 11.9% 7.5%

Adj Profit 13.9% -13.0% 0.8% -30.9% Key assumptions CAR Earnings Ratios Deposits

RWA (Rs. bn) 5,449 6,071 6,248 6,349

Int Inc. / Avg.assets 7.9% 7.7% 7.3% 6.7%

Avg deposit growth 8.9% 16.6% 16.3% 14.5%

Tier I (%) 12.8% 13.1% 14.4% 15.9%

Int Exp./ Avg. assets 4.8% 4.6% 4.3% 3.9% Avg cost of deposits 5.9% 5.5% 5.0% 4.5% Tier II (%) 4.2% 3.6% 3.0% 2.5%

NIM (%) 3.4 % 3.5 % 3.2 % 3.0 % Advances Total CAR (%) 17.0% 16.6% 17.4% 18.4%

Int. exp/ Int earned 61.2% 59.8% 59.9% 58.1% Avgadv growth (%) 14.4% 12.3% 6.7% 10.4%

Per Share Data Oth. Inc./ Tot. Inc. 39.0% 41.9% 47.3% 43.1% Avg yield on adv (%) 9.8% 9.5% 8.8% 8.4% BVPS, Rs 138.7 154.3 171.6 163.6

Staff exp/Opex 41.3% 39.4% 38.9% 37.7% Investments Adj. BVPS, Rs. 108.0 108.2 105.3 100.3

Cost/ Income Ratio 36.8% 34.7% 35.8% 38.8% Avg invest growth (%) -10.7% 1.4% 0.7% 25.7% Price/ ABV 2.1 2.1 2.1 2.2

Prov./ Oper Profit 19.8% 48.9% 57.4% 70.0%

Avg yield on invest (%) 6.9% 7.3% 7.7% 6.8%

EPS, Rs. 19.3 16.7 16.8 11.1

Loan loss prov./Avg. loans

1.1% 2.8% 3.4% 3.5% Dividend Yield

1.5% 1.6% 1.6% 1.0%

P/E Ratio 11.7 13.5 13.4 20.4

*Valuation Ratios adjusted for subsidiary Valuation



Equirus Securities

Research Analysts Sector/Industry Email

Equity Sales E-mail

Abhishek Shindadkar IT Services [email protected] 91-22-43320643 Vishad Turakhia [email protected] 91-22-43320633

Ashutosh Tiwari Auto, Metals & Mining [email protected] 91-79-61909517 Subham Sinha [email protected] 91-22-43320631

Bharat Celly Healthcare [email protected] 91-79-61909524 Viral Desai [email protected] 91-22-43320635

Depesh Kashyap Mid-Caps [email protected] 91-22-43320671 Viraj Mehta [email protected] 91-22-43320634

Dhaval Dama FMCG, Mid-Caps [email protected] 91-79-61909518 Ruchi Bhadra [email protected] 91-22-43320601

Manoj Gori Consumer Durables [email protected] 91-79-61909523 Cash Dealing Room E-mail

Maulik Patel Oil and Gas [email protected] 91-79-61909519 Ashish Shah [email protected] 91-22-43320662

Pranav Mehta Building Materials [email protected] 91-79-61909514 IleshSavla [email protected] 91-22-43320666

Praful Bohra Healthcare [email protected] 91-22-43320611 Manoj Kejriwal [email protected] 91-22-43320663

Rohan Mandora Banking & Financial Services [email protected] 91-79-61909529 Dharmesh Mehta [email protected] 91-22-43320661

Associates E-mail Sarit Sanyal [email protected] 91-22-43320666

Ankit Choudhary [email protected] 91-79-61909533 Vikram Patil [email protected] 91-22-43320677

Dhairya Dhruv [email protected] 91-79-61909528 Gaurav Mehta [email protected] 91-22-43320680

Harshit Patel [email protected] 91-79-61909522 Compliance Officer E-mail

Meet Chande [email protected] 91-79-61909513 Jay Soni [email protected] 91-79-61909561

Nishant Bagrecha [email protected] 91-79-61909526 Corporate Communications E-mail

PrateekshaMalpani [email protected] 91-79-61909532 Mahdokht Bharda [email protected] 91-22-43320647

Ronak Soni [email protected] 91-79-61909525 Quant Analyst

Rushabh Shah [email protected] 91-79-61909520 Kruti Shah [email protected] 91-22-43320632

Shreepal Doshi [email protected] 91-79-61909541 F&O Dealing Room

Varun Baxi [email protected] 91-79-61909527 Kunal Dand [email protected] 91-22-43320678

Vikas Jain [email protected] 91-79-61909531 Dhananjay Tiwari [email protected] 91-22-43320668

Mukesh Jain [email protected] 91-22-43320667

Rating & Coverage Definitions: Absolute Rating • LONG : Over the investment horizon, ATR >= Ke for companies with Free Float market cap >Rs 5 billion and ATR >= 20% for rest of the companies • ADD: ATR >= 5% but less than Ke over investment horizon • REDUCE: ATR >= negative 10% but <5% over investment horizon • SHORT: ATR < negative 10% over investment horizon Relative Rating • OVERWEIGHT: Likely to outperform the benchmark by at least 5% over investment horizon • BENCHMARK: likely to perform in line with the benchmark • UNDERWEIGHT: likely to under-perform the benchmark by at least 5% over investment horizon Investment Horizon Investment Horizon is set at a minimum 3 months to maximum 18 months with target date falling on last day of a calendar quarter. Lite vs. Regular Coverage vs. Spot Coverage We aim to keep our rating and estimates updated at least once a quarter for Regular Coverage stocks. Generally, we would have access to the company and we would maintain detailed financial model for Regular coverage companies. We intend to publish updates on Lite coverage stocks only an opportunistic basis and subject to our ability to contact the management. Our rating and estimates for Lite coverage stocks may not be current. Spot coverage is meant for one-off coverage of a specific company and in such cases, earnings forecast and target price are optional. Spot coverage is meant to stimulate discussion rather than provide a research opinion.

Registered Office:

Equirus Securities Private Limited

Unit No. 1201, 12th Floor, C Wing, Marathon Futurex,

N M Joshi Marg, Lower Parel,

Mumbai-400013.

Tel. No: +91 – (0)22 – 4332 0600

Fax No: +91- (0)22 – 4332 0601

Corporate Office:

3rd floor, House No. 9,

Magnet Corporate Park, Near Zydus Hospital, B/H Intas Sola Bridge,

S.G. Highway Ahmedabad-380054

Gujarat

Tel. No: +91 (0)79 - 6190 9550

Fax No: +91 (0)79 – 6190 9560

mailto:[email protected]
































© 2018 Equirus Securities Private Limited. All rights reserved. For Private Circulation only. This report or any portion hereof may not

be reprinted, sold or redistributed without the written consent of Equirus Securities Private Limited

Analyst Certification

I, Rohan Mandora/Shreepal Doshi, author to this report, hereby certify that all of the views expressed in this report accurately reflect my personal views about the subject company or companies and its or their

securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

Disclosures

Equirus Securities Private Limited (ESPL) having Corporate Identification Number U65993MH2007PTC176044 is registered in India with Securities and Exchange Board of India (SEBI) as a trading member on the

Capital Market (Reg. No. INB231301731), Futures & Options Segment (Reg. No.INF231301731) of the National Stock Exchange of India Ltd. (NSE) and on Cash Segment (Reg. No.INB011301737) of Bombay Stock

Exchange Limited (BSE).ESPL is also registered with SEBI as Research Analyst under SEBI (Research Analyst) Regulations, 2014 (Reg. No. INH000001154), as a Portfolio Manager under SEBI (Portfolio Managers

Regulations, 1993 (Reg. No.INP000005216) and as a Depository Participant of the Central Depository Services (India) Limited (Reg. No.IN-DP-324-2017). There are no disciplinary actions taken by any regulatory

authority against ESPL. ESPL is a subsidiary of Equirus Capital Pvt. Ltd. (ECPL) which is registered with SEBI as Category I Merchant Banker and provides investment banking services including but not limited to

merchant banking services, private equity, mergers & acquisitions and structured finance.

As ESPL and its associates are engaged in various financial services business, it might have: - (a) received compensation (except in connection with the preparation of this report) from the subject company for

investment banking or merchant banking or brokerage services in the past twelve months;(b) managed or co-managed public offering of securities for the subject company in the past twelve months; or (c) have

received a mandate from the subject company; or (d) might have other financial, business or other interests in entities including the subject company (ies) mentioned in this Report. ESPL & its associates, their

directors and employees may from time to time have positions or options in the company and buy or sell the securities of the company (ies) mentioned herein. ESPL and its associates collectively do not own (in

their proprietary position) 1% or more of the equity securities of the subject company mentioned in the report as the last day of the month preceding the publication of the research report. ESPL or its Analyst or

Associates did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither ESPL nor

Research Analysts have any material conflict of interest at the time of publication of this report. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or

brokerage service transactions. ESPL has not been engaged in market making activity for the subject company.

The Research Analyst engaged in preparation of this Report:-

(a) has not received any compensation from the subject company in the past twelve months; (b) has not managed or co-managed public offering of securities for the subject company in the past twelve months;

(c) has not received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past twelve months; (d) has not received any compensation for products

or services other than investment banking or merchant banking or brokerage services from the subject company in the past twelve months; (e) has not received any compensation or other benefits from the

subject company or third party in connection with the research report; (f) might have served as an officer, director or employee of the subject company; (g) is not engaged in market making activity for the

subject company.

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consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. ESPL/its affiliates do and seek to do business with

companies covered in its research report. Thus, investors should be aware that the firm may have conflict of interest.



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“three years” period in the price chart).

Disclosure of Interest statement for the subject Company Yes/No If Yes, nature of such interest

Research Analyst’ or Relatives’ financial interest No

Research Analyst’ or Relatives’ actual/beneficial ownership of 1% or more No

Research Analyst’ or Relatives’ material conflict of interest No

Disclaimer for U.S. Persons

Equirus Securities Private Limited (ESPL) 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 ESPL 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 ESPL, 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., ESPL has entered into a chaperoning agreement with a U.S. registered broker-dealer name called Xtellus Capital Partners, Inc, (''XTELLUS'). Any business interaction pursuant to this report will have to be executed within the provisions of this chaperoning agreement. "U.S. Persons" are generally defined as a natural person, residing in the United States or any entity organized or incorporated under the laws of the United States. US Citizens living abroad may also be deemed "US Persons" under certain rules. 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, XTELLUS, 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.

icici bank absolute : relative : overweight long 2qfy19...

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