Buy ICICI Bank; target of Rs 1550: Motilal Oswal

Motilal Oswal's research report on ICICI Bank

ICICI Bank (ICICIBC) delivered another steady quarter in a highly uncertain environment as credit costs stood at just 37bp, the 3Q slippage rate came in lower than 1Q, and the reported RoA was 2.36% (2.37% for 9MFY25). The bank delivered 11% growth in advances during 9MFY25 and remains on track to beat peers and the industry. The bank’s performance amid the current challenging environment has reminded us of the famous proverb, “When the going gets tough, the tough get going!”. ICICIBC’s 3QFY25 PAT of INR117.9b (3% beat) grew 15% YoY fueled by lower-than-expected provisions.

Outlook

The contingency provisioning buffer of INR131b (1.0% of loans) provides further comfort in case of any future cyclical stress. We tweak our earnings estimates and project RoA/RoE of 2.2%/16.8% in FY27. Reiterate BUY with a revised TP of INR1,550 (based on 2.5x FY27E ABV).