Buy ICICI Bank; target of Rs 1700: Prabhudas Lilladher

Prabhudas Lilladher's research report on ICICI Bank

ICICIB saw yet another good quarter with core PAT beating PLe by 3.7% due to better asset quality; core PPoP was in-line at Rs166bn. While loan growth was softer at 2.1% QoQ due to pricing pressure and slower system growth, reported NIM adjusted for tax refund of 2bps improved by 14bps QoQ to 4.4% despite tight liquidity. Due to RBI accommodative stance, overall repo rate cut is likely to be between 75-100bps compared to our estimates of 50bps. We revise our repo rate cut assumption to 75bps and trim NIM for FY26/27E by 9/7bps.

Outlook

however overall NII/core PAT would not change materially due to change in balance sheet base. While we are budgeting opex CAGR of ~12.5%, it can surprise positively as opex is likely to remain soft in a falling NIM scenario. We maintain multiple at 2.9x but our SOTP based TP increases to Rs 1,700 from Rs1,550 as we roll forward to Mar’27 core ABV. Reiterate ‘BUY’.