ICICI Bank Q4 Results Review: Another Strong Quarter; Dolat Capital Maintains 'Buy', Hikes Target Price

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Dolat Capital Report

ICICI Bank Ltd. reported a robust quarter with low credit costs (sub 30 bps), contained opex, and steady net interest margin aiding an 18% YoY PAT growth and RoA of 2.5%. Margins at 4.4% (+16 bps QoQ) mainly benefited from the impact of fewer days in Q4, with largely stable calculated NIM (ex of KCC int reversals and interest on IT refund).

Deposit growth strengthened to 6% QoQ/14% YoY, with slightly muted loan growth at 2% (13% YoY) owing to price consciousness in a declining rate environment. Asset quality metrics continued to show strength, with 30 bps decline in GNPA% QoQ. The impact of rate cut on EBLR loans (53% mix) is expected to be visible in Q1 FY26, though some of this will be offset by recent SA rate cuts (25 bps).

We tweak estimates and maintain ‘Buy’ rating with SOTP-based target price of Rs 1680, valuing the standalone bank at 2.9x FY27E price/adjusted book value (from 2.8x earlier) against RoA/RoE of 2.1%/16%.

We expect the bank to continue attracting a valuation premium vs peers led by its superior credit costs, healthy growth and higher profitability ratios (RoA/RoE).

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