ICICI Bank shares drop 3% amid moderate loan growth in Q2: Here's what analysts say

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26 Aug, 2025 12:21

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The shares of ICICI Bank dropped more than 3 percent on October 20 after the private lender released its results for the second quarter of the financial year 2026. The shares of the company closed at Rs 1,393 apiece.

The company had released its results for the July-September quarter of the financial year 2026 on Saturday, October 18.

ICICI Bank Q2 Results:

The private lender reported a standalone net profit of Rs 12,358.9 crore for Q2 FY26. This marks a 5.2 percent year-on-year (YoY) rise from the Rs 11,745.9 crore net profit reported in the same period last year. This was higher than the Moneycontrol poll estimate of 2.3 percent increase to Rs 12,024 crore.

ICICI Bank's net interest income (NII) rose 7.4 percent YoY increase to Rs 21,529.5 crore during the quarter under review. It had earlier reported a NII of Rs 20,048 crore in Q2 FY25. Provisions and contingencies for the quarter fell nearly 26 percent to Rs 914 crore from Rs 1,233 crore a year earlier. The capital adequacy ratio (Basel III) improved to 15.76 percent, compared with 15.35 percent a year ago.

Asset quality improved, with gross NPA ratio easing to 1.58 percent from 1.97 percent, while the net NPA ratio reduced marginally to 0.39 percent.

ICICI Bank share price: Buy, sell or hold?

HSBC held a 'Buy' rating on the stock, with a target price of Rs 1,680 per share. This implies an upside potential of nearly 17 percent from the stock's previous closing price. The brokerage said that the company's operating performance was underscored by stronger-than-estimated NIM, credit costs and fees, according to CNBC-TV18.

The analysts at the brokerage tweaked earnings marginally, as slower loan growth and higher operating cost was offset by stronger NIM and lower credit costs. They however noted that premium valuations should sustain.

CLSA said it was a good, but not a great quarter for the Indian private lender. The brokerage kept a target price of Rs 1,700 per share for the stock, implying an upside potential of more than 18 percent from the stock's previous closing price.

While highlighting some improving aspects in the results, the international brokerage noted that the management is itself not guiding for NIM improvement in H2 FY26, unlike other banks. This could be because some lumpy high-cost deposits could have repriced in Q2, leaving little repricing left for the second half of the financial year, CNBC-TV18 reported.

Morgan Stanley kept an 'Overweight' call on the stock, with a target price of Rs 1,800 apiece, implying an upside potential of more than 25 percent from the stock’s previous closing price.

Emkay Global says soft credit growth and lower treasury gains caused a slight 3 percent earnings miss at Rs 13,700 ($1.56 billion). It added that credit growth moderated to a four-year low of 10 percent YoY due to de-acceleration in small and medium business segment and persistent drag in retail segment.

Phillip Capital says bank needs to accelerate growth to sustain its superior valuation multiple. Bob Capital Markets highlights net interest margin decline was smaller than expected.

Also read: Our LIVE blog on stock market updates

(With inputs from Reuters)

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.