Buy ICICI Bank; target of Rs 1550: Sharekhan

Sharekhan is bullish on ICICI Bank has recommended buy rating on the stock with a target price of Rs 1550 in its research report dated January 25, 2025.

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January 28, 2025 / 12:41 IST

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26 Aug, 2025 12:21

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Sharekhan's research report on ICICI Bank

Core operating profits grew by 15% y-o-y /4% q-o-q (better than estimates) led by strong fee income and contained opex growth. Credit costs stayed lower led by few write-backs at 38 bps annualised versus 39 bps q-o-q and 37 bps y-o-y resulting in steady state RoA at ~2.4%. The bank is reasonably confident of credit cost to be within 50 bps on an overall basis in the near term. Overall secured portfolio is exhibiting stable asset quality trends except seasonality seen in the agri-loan portfolio and recoveries are healthy. Incremental delinquencies are stablising in unsecured retail segment and continues to be better than industry. NIMs were broadly stable q-o-q at 4.25%. Loan growth at (+3% q-o-q) outpaced deposit growth at (+2% q-o-q) resulting in slight uptick in LDR at 86% versus 85% q-o-q.

Outlook

We maintain a Buy with an unchanged PT of Rs. 1,550 as the bank continues to outperform peers on most key operating metrics, exhibiting strong franchise strength and thus current valuation premium to peers is likely to sustain. Stock trades at 2.4x/2.0x/1.7x its FY2025E/FY2026E/ FY2027E core BV estimates.

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