Buy ICICI Bank; target of Rs 362: Edelweiss

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26 Aug, 2025 12:21

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Edelweiss' research report on ICICI Bank

Slippages were high at INR 113bn, largely flowing from corporate/SME (>85% from earlier watch-list, restructured book) segments, while retail slippages (INR 4.4bn) were on track. However, higher write-offs (INR 54bn versus past 6 quarters’ run rate of INR 20bn) restricted GNPLs to INR 425bn (up <12% QoQ). FY17 was the year of recognition as reflected in potential stress (viz., restructured book, 5:25, SDR, watchlist) which reduced from >INR 500bn in FY16 to <INR 260bn in FY17.

Outlook

We maintain ‘BUY/SO’ given: a) >30% of current price reflects stable value of subsidiaries (which could significantly benefit from formalisation of financial savings); b) stable RoA/RoE (2%/16%, despite higher credit cost); and c) strengthening franchise. The stock is trading at 1.2x FY19E P/ABV. Our SoTP target price is pegged at INR 362.

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