Buy ICICI Bank; target of Rs 950: Prabhudas Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on ICICI Bank

ICICIBC earnings surprised positively with PAT at Rs70bn [PLe Rs64.2bn] led by better asset quality and stronger NII due to higher margins. Sequential credit flow was healthy driven by retail (mortgages, PL/CC), business banking and SME. As per the bank, loan growth may sustain as focused micro markets are underpenetrated although growth would be in a risk calibrated manner. Balance sheet further strengthened as asset quality materially improved with GNPA reducing by 53bps QoQ mainly led by higher recoveries, while buffer provisions increased and OTR/BB & below pool reduced. CAR is strong with CET-1 at 17.6%. ICICIBC has consistently outperformed with earnings quality improving each quarter.

Outlook

We envisage a RoE of 15.6% for ICICIB in FY24E (16.8% for HDFCB) and valuation discount to HDFCB should narrow from 12% to 7%. Valuation at 2.2x FY24E core ABV is attractive and assigning a 3.0x multiple we revise SOTP based TP to Rs950 (from Rs906). Reiterate BUY.

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