Buy ICICI Bank; target of Rs 1330: Emkay Global Financial

Emkay Global Financial is bullish on ICICI Bank has recommended buy rating on the stock with a target price of Rs 1330 in its research report dated July 23, 2023.

Broker Research

July 25, 2023 / 11:08 IST

Buy

26 Aug, 2025 12:21

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Emkay Global Financial's research report on ICICI Bank

ICICI Bank continues to report strong profitability — Rs97bn/40% YoY, led by system-beating credit growth @18% YoY and NII growth @38% YoY as well as lower LLP, as Bank pauses to shore-up the already high contingent buffer (1.2% of loans). We expect NIMs to moderate QoQ (down 12bps QoQ in 1Q), as costs catch up, but should be still up 15-20bps for full year in FY24E, as the pace of fall should be slower vs the rise in FY23. Factoring-in the healthy NIMs, coupled with fees/lower LLP, we revise earnings for FY24-26E by 3-7% and expect Bank to deliver superior RoA of ~2.2-2.3%/RoE of ~18% over the same period.

Outlook

We retain BUY, with revised TP of Rs1,330/share, valuing the core bank at 3x its Jun-25E ABV (assigning a slight premium over HDFCB) and subsidiaries at Rs170/share. Our 12-Jul-2023 sector note The Old Order Changeth, Yielding place to New highlighted the rising mid/senior Management attrition across banks, as also for ICICIB. However, we take comfort from the strong leadership back-up at ICICIB and are hopeful that the bank remains adaptive to limit the unwarranted attrition/business dislocation, as it aspires to build up into a “sustainable & profitable bank” in the long run.

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