Buy ICICI Bank; target of Rs 630: Prabhudas Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on ICICI Bank

ICICIBC reported a strong earnings of Rs49.4bn (PLe: Rs40.9bn) led by all round performance on core operations and slightly lower provisioning. Asset quality on pro-forma basis was quite steady with controlled slippages, maintained PCR of 77% and restructuring of 40bps of loans. BB & below rated book saw increase from 2.4% to 2.6% although overlap with pro-forma NPA or restructuring kept stress at similar levels. Collection efficiency has improved especially in retail with overdue less than 90dpd was 1% compared to 4% as higher part post morat ending has moved to either restructuring or NPA. Strong provision buffer, improving operating profitability, much better loan growth and strong deposit franchise should help ROE to sustainably improve +15% by FY23 with delta from improving credit cost outlook.

Outlook

We retain BUY with revised TP of Rs630 (from Rs616) based on 2.0x Mar FY23 with tweaks to loan growth/fees & slightly lower slippages.

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