Buy ICICI Bank; target of Rs 1550 Prabhudas Lilladher

Prabhudas Lilladher's research report on ICICI Bank

ICICIB saw a good quarter yet again with core PAT beat of 4.2% as better opex, provisions and fees more than offset lower NII. Loan growth was a tad softer at 2.9% QoQ due to slowdown in retail led by muted offtake in housing, PL, CC and auto. However, credit flow in corporate/BuB was healthy. While deposit growth was weaker at 1.5% QoQ due to rise in lower priced borrowings and CRR cut, balance sheet liquidity was intact as LCR improved QoQ by 180bps to 122.5%. Despite of elevated interest rates and tight liquidity, CASA ratio has improved by 86bps YoY to 40.5%; private peers have seen CASA share fall YoY by 260-540bps. Asset quality is best-in-class; provisions for 9MFY25 were 41bps (private peers at 45-85bps).

Outlook

Our SOTP based TP reduces to Rs1,550 from Rs1,640 since (1) we trim multiple to 2.9x from 3.0x on Sep’26 core ABV due to tough macros and (2) subsidiaries have corrected. Reiterate ‘BUY’.