Buy ICICI Bank; target of Rs 390: P Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's report on ICICI Bank

"ICICI Bank (ICICIBC) reported Q4FY15 PAT at Rs29.2bn (in line with PLe) as strong revenue growth compensated for the guided deterioration in asset quality. GNPL/NNPL increased by 15% QoQ/31% QoQ, largely led by slippages from restructured assets. However, fresh restructuring surprised positively, driving ~9% QoQ decline in restructured book. The bank guided for a decline in stressed asset formation in FY16, while it aims for 18-20% loan growth (led by retail segment) and stable margins. Declining trend in NPL formation from standard loans, higher granularity in residual restructured book, coupled with positive management guidance and reasonable valuations makes us retain our ‘BUY’ rating on the stock."

"ICICIBC is well-capitalized with Tier-I ratio of 12.8% and the given low-rate of capital burn management suggested that it won't need to raise capital for the next three years. We believe that improving asset quality trends along with robust subsidiary performance will enable ICICIBC to gradually re-rating from the current levels. We maintain ‘BUY’ with PT of Rs 390", says Prabhudas Lilladher research report.

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