Broker’s call: ICICI Bank (Buy)

Posted on by

Target: ₹1,350

CMP: ₹1,199.05

We met with the top management team of ICICI Bank, represented by Sandeep Bakhshi, MD & CEO, Abhinek Bhargava, Head-IR, and select business heads to discuss the bank’s business outlook and other key focus areas.

ICICI Bank is well positioned to deliver a superior performance characterised by healthy loan growth, strong asset quality and industry-leading return ratios. With a focus on building a diversified and granular portfolio, ICICI Bank reported a about 17 per cent CAGR in loans over FY22-24. The bank has adopted data analytics-driven processes for onboarding, credit assessment, and customer monitoring.

While we estimate margins to remain range-bound in the near term, the operating leverage is emerging as a lever to support earnings growth. The bank is witnessing healthy deposit inflow, while a benign CD ratio (lowest among large private banks) places it well to focus on profitable growth. The asset quality outlook remains robust as the bank maintains strong PCR and a high contingency buffer (1.1 per cent of loans).

We thus estimate ICICI Bank to deliver a PPoP/PATCAGR of 16.7/13.7 per cent over FY24-26E, leading to RoA/RoE of 2.2/17.7 per cent. Reiterate BUY with a TP of ₹1,350 (premised on 2.5x FY26E ABV).