Buy ICICI Bank; target of Rs 1500: KR Choksey

KR Choksey's research report on ICICI Bank

Net interest income (NII) grew 9.1% YoY (+1.6% QoQ) to INR 203,706 Mn in Q3FY25. NII was 2.3% lower than our estimates. Pre-Provision Operating Profit (PPOP) for Q3FY25 grew 14.7% YoY (+1.0% QoQ) to INR 168,866 Mn. The profit after tax surged 14.8% YoY (+0.4% QoQ) to INR 117,924 Mn in Q3FY25. The net profit was 4.9% higher than our estimates, and it was led by lower-than-expected provisions. Provisions were INR 12,267 Mn, lower by 0.5% QoQ (+16.9% YoY). ICICI Bank has strengthened its position in the competitive Indian banking landscape, driven by consistent growth in its loan and best-inclass asset quality.

Outlook

We have rolled over our valuation to FY27E for the standalone banking business, assigning a multiple of 2.4x (down from 2.8x for FY26E) to FY27E ABV of INR 542.3 per share. Thus, including the subsidiary value of INR 199 per share, our SOTP valuation stands at INR 1,500 per share, reflecting a 22.2% potential upside. Given the bank’s strong fundamentals and growth trajectory, we maintain our BUY rating on the stock.

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