ICICI Bank Remains Motilal Oswal's Preferred 'Buy' In The Sector Post Q1 Results — Here's Why

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Motilal Oswal Report

ICICI Bank Ltd. reported another strong performance in the challenging environment, driven by healthy net interest margins, other income, contained opex and in-line provisions. The continued improvement in asset mix limited NIM compression, though the bank indicated further pressure on margins in Q2 as repricing happens fully.

The bank’s investment in technology has resulted in consistent productivity gains and steady improvement in cost ratios. Asset quality remains under control, while ICICI Bank continues to carry a contingency provisioning buffer of Rs 131 billion (1.0% of loans).

We maintain our earnings estimates and expect FY27E RoA/RoE of 2.3%/17.3%. ICICI Bank remains our preferred Buy in the sector with a revised target price of Rs 1,670 (2.7x FY27E adjusted book value).

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