Buy ICICI Bank; target of Rs 1700: Motilal Oswal

Motilal Oswal's research report on ICICI Bank

ICICI Bank (ICICIBC) continues to deliver an exemplary performance, rising above all sectoral challenges, as it sustains RoA in the range of 2.3-2.4%, which is even beyond the aspirational level for most banks. Moreover, the bank has maintained a strong balance sheet as provisions declined 26% YoY/50% QoQ, placing the bank well on track to comfortably beat its credit cost guidance. Notwithstanding the scale of the franchise, the pace at which the bank has reduced its deposit cost over the past two quarters (down 36bp in 1HFY26) demonstrates remarkable agility and leadership execution. This has enabled the bank to deliver 3bp QoQ expansion in adjusted NIMs vs. our consensus expectation of a decline. The bank remains focused on delivering superior risk-adjusted returns, supported by
prudent underwriting practices and strong credit discipline.

Outlook

We maintain our earnings estimates and expect FY27E RoA/RoE of 2.3%/17.0%. ICICIBC remains our preferred BUY in the sector with a revised TP of NR1,700 (2.8x FY27E ABV).