ICICI Bank Q4 Review: Earnings Quality Continues To Remain Superior; PL Capital Maintains 'Buy', Hikes TP

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PL Capital Report

ICICI Bank Ltd. saw yet another good quarter with core PAT beating our estimate by 3.7% due to better asset quality; core pre-provision operating profit was in-line at Rs 166 billion. While loan growth was softer at 2.1% QoQ due to pricing pressure and slower system growth, reported net interest margin adjusted for tax refund of 2 bps improved by 14 bps QoQ to 4.4% despite tight liquidity.

Due to RBI accommodative stance, overall repo rate cut is likely to be between 75-100 bps compared to our estimates of 50bps. We revise our repo rate cut assumption to 75 bps and trim NIM for FY26/27E by 9/7 bps; however overall NII/core PAT would not change materially due to change in balance sheet base.

While we are budgeting opex CAGR of ~12.5%, it can surprise positively as opex is likely to remain soft in a falling NIM scenario.

We maintain multiple at 2.9x but our SOTP based target price increases to Rs 1,700 from Rs 1,550 as we roll forward to Mar’27 core ABV. Reiterate ‘Buy’

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