Buy ICICI Bank; target of Rs 417: Edelweiss

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26 Aug, 2025 12:21

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Edelweiss' report on ICICI Bank
"ICICI Bank’s (ICICI) Q1FY16 PAT at INR29.8bn (up 12% YoY) came marginally below our estimate on slower revenue momentum. Key highlights: 1) while incremental stress creation was optically lower (3.6% versus 4.7% in Q4FY15), it must be seen with respect to elevated stress in Q4FY15. While lumpy exposure in some stressed segments keeps us vigilant, given adequate asset cover and tier-1 we expect ultimate loss to be curtailed. Management maintained its credit cost guidance of 90-95bps for FY16; 2) while revenue momentum was modest, curtailed opex (up <9% YoY), aided operating profitability; and 3) average CASA improved further to >41% (up 20bps QoQ). Multiple levers of RoRWA expansion, triggers from non-banking subsidiaries and current banking business valuations of 1.5x FY17E render favourable risk-reward. Maintain ‘BUY’ with TP of INR417", says Edelweiss research report.

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