Buy ICICI Bank; target of Rs 1568: Geojit Financial Services

Geojit Financial Services research report on ICICI Bank

ICICI Bank has a pan-India footprint. It specializes in retail and corporate banking as well as foreign exchange (forex) and treasury operations. ICICI Bank also offers investment banking, insurance and financial services. ICICI Bank’s standalone interest income rose 3.0% YoY to Rs. 41,758cr in Q2FY26, primarily driven by a 10.3% YoY increase in total advances. Interest expenses fell 1.3% YoY to Rs. 20,228cr as the cost of deposits dropped to 4.64% (-20 bps YoY). Consequently, net interest income grew 7.4% YoY to Rs. 21,529cr. Net interest margin (NIM) expanded 3 bps YoY to 4.3%, influenced by lower deposit rates and cost of borrowing, combined with the beneficial effects of repricing external benchmark-linked loans and investments. Pre-provision operating profit (PPOP) soared 3.4% YoY to Rs. 17,298cr, fuelled by an increase in the total income (+3.4% YoY), offsetting the impact of elevated operating expenses (+17.3% YoY). Reported PAT rose 5.2% YoY to Rs. 12,359cr owing to decreased provisions and contingencies in Q2FY26 (-25.9% YoY, -49.6% QoQ). Provisions declined sequentially because of seasonal trends in the Kisan Credit Card (KCC) business and the overall healthy asset quality across segments.

Outlook

Its strategic focus on risk-calibrated profitable growth positions the bank for long-term scalability. Stable asset quality, better unsecured cohort and smother regulatory transitions are expected to strengthen future performance. Hence, we upgrade our rating on stock from HOLD to BUY, based on sum-of-the-parts (SOTP) valuation, with a revised target price of Rs 1,568.

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