Buy ICICI Bank; target of Rs 485: Sharekhan

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26 Aug, 2025 12:21

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Sharekhan's research report on ICICI Bank

ICICI Bank posted good numbers for Q1FY2021, where operating performance was better than expectations, even though higher provisions (partly due to COVID-19) resulted in lower-than-expected PAT. Moratorium book stood at 17.5% (from 30% at Q4FY2020) which is positive. Asset quality improves with GNPA/NNPA ratio decreasing by 5 bps/18 bps, respectively, to 5.99%/1.23% vis-à-vis Q4FY2020. Even gross slippages declined significantly to Rs. 1,160 crore, which was a 20-quarter low.

Outlook

The bank is adequately capitalised (Tier-1 at 14.9%) and a successful equity-raising plan will further add to balance sheet strength. We like the prudent and cautious approach of the bank in building provision buffers, cautious loan book growth, and healthy capitalisation levels. We maintain our Buy rating on the stock with a revised SOTP-based price target (PT) of Rs. 485.

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