Buy ICICI Bank; target of Rs 1670: Motilal Oswal

Motilal Oswal's research report on ICICI Bank

ICICI Bank’s results epitomize the saying, “When the going gets tough, the tough get going.” Over the past few years, irrespective of the sectoral challenges such as unsecured asset quality issues, systemic growth moderation, liability accretion or NIM headwinds, the bank has been able to deliver a stellar performance, beating Street expectations. During 1QFY26, the controlled NIM decline of 7bp (half of our estimate) was another solid beat in that series, compared to a double-digit contraction reported by many peers. The bank continues to focus on superior risk-adjusted returns, underpinned by prudent underwriting and strong credit discipline. 1Q PAT grew 15.5% YoY to INR127.6b (6% beat), aided by resilient margins, controlled opex and healthy treasury gains. NII rose 11% YoY/2% QoQ to INR216.3b (3% beat). NIM contracted by a marginal 7bp QoQ to 4.34%. Treasury gains stood at INR12.4b vs. INR2.4b in 4QFY25.

Outlook

We maintain our earnings estimates and expect FY27E RoA/RoE at 2.3%/17.3%. ICICIBC remains our preferred BUY in the sector with a revised TP of INR1,670 (2.7x FY27E ABV).

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