ICICI Bank Q4 Results Review: Motilal Oswal Hikes Target Price; Stock Remains Preferred 'Buy'

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Motilal Oswal Report

ICICI Bank Ltd. yet again has reported a healthy performance despite the prevailing challenging environment, led by a robust net interest margin expansion, healthy other income, contained opex, and controlled provisions. NIM expansion was strong and significantly ahead of our estimates, driving a beat in net interest income.

The bank’s continuous investment in technology has enabled consistent productivity gains, thus helping the bank maintain cost ratios. The business mix has tilted toward the high-yielding portfolio, with the bank maintaining a balanced growth across the segments.

Secured asset quality remained stable (excl. agri) with no signs of stress, leading to an improvement in the gross non-performing asset ratio. The contingency provisioning buffer of Rs 131 billion (1.0% of loans) provides further comfort in case of any future cyclical stress.

We upgrade our earnings estimates by 2.5%/4.2% for FY26/FY27 on the back of positive NIM surprise and controlled credit cost. We thus estimate RoA/RoE of 2.3%/17.5% in FY27. ICICI Bank remains our top preference in the sector. Reiterate Buy with a revised target price of Rs 1,650 (premised on 2.7x FY27E adjusted book value).

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