Buy ICICI Bank; target of Rs 1650: Sharekhan

Sharekhan's research report on ICICI Bank

ICICI Bank reported yet another steady Q4, with earnings beating estimates (up 18% y-o-y) on better NIMs and stable asset quality. Yet, the RBI’s repo rate cuts would pinch NIMs going ahead. Core operating profits grew by 13% y-o-y (better than estimates). Credit cost (27 bps annualised) continued to remain lower. Net slippage ratio was at 0.4% annualised versus 0.9% q-o-q. Loan growth was modest at 2% q-o-q, while deposit growth rose 6% q-o-q due to seasonality, but avg. deposit growth was subdued at 2% q-o-q. The bank expects better deposit growth and is reasonably confident to report 15-16% RoE over the next 2 years.

Outlook

We maintain a Buy with a revised PT of Rs. 1,650. Stock trades at 2.4x/2.1x its FY2026E/ FY2027E core BV estimates.

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