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

While the bank’s performance was impacted by higher stress, our analysis of FY17 20F filing indicates that it is currently treading the right track. It has prudently sharpened focus on: a) pruning concentration risk (exposure to top-20 lenders down to 13.2% from >16.0% in FY15); b) targeting credit mix on incremental lending (investment grade now >85.0% versus 80.8% in FY16); and c) strengthening credit monitoring. These measures are envisaged to equip the bank to successfully progress through the next cycle.

Outlook

These are challenging times manifested in temporary lull in earnings. However, ICICI Bank’s strong franchise will enable it to deliver healthy normalised returns post short term hiccups. It is trading at 1.1x FY19E P/ABV. Maintain ‘BUY/SO’ with SoTP of INR 362.

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