LKP Research's research report on ICICI Bank
ICICI Bank reported a strong quarterly performance supported by healthy loan growth, robust asset quality, and improved profitability. The bank continued to maintain stable NIM despite higher cost of funds, however, it is expected to remain under pressure in the near term due to potential rate cut. Additionally, the bank’s enhanced operating leverage is emerging as a key driver for earnings growth. Moreover, ICICI bank with robust deposit inflows and a favorable credit-deposit (CD) ratio -the lowest among large private banks is well-positioned for profitable growth.
Outlook
Its asset quality outlook remains steady, supported by robust underwriting standards and prudent provisioning policies. Hence, with a recent price correction, we assign a BUY rating on the stock, with a Sum-of-the-Parts (SOTP)-based target price of ₹1,470.
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