ICICI Bank Q4 Results Review: Brokerages Bullish On Higher Operating Cost Growth
Jefferies had a bullish call on the bank as it reported a profit growth of 18% year-on-year and saw current account and savings account growth of 13%.
ICICI Bank Ltd. delivered its earnings report for the fourth quarter of financial year 2025, garnering positive reviews from CLSA and Jefferies.
Both brokerages have highlighted the bank's strong performance, with CLSA noting that ICICI Bank's pre-provision operating profit and profit after tax exceeded their estimates. Jefferies had a bullish call on the bank as it reported a profit growth of 18% year-on-year and saw current account and savings account growth of 13%.
The bank's net profit surged 18% year-on-year to Rs 12,630 crore, driven by higher net interest income and operating profit. The net non-performing assets ratio improved to 0.39% from 0.42% quarter-on-quarter, indicating better asset quality management.
Gross NPA also showed improvement, decreasing to 1.67% from 1.96% quarter-on-quarter. Net interest income grew by 11% year-on-year to Rs 21,193 crore, supported by an increase in net interest margin. Operating profit rose by 17.5% year-on-year to Rs 17,664 crore. Provisions increased by 24% year-on-year to Rs 891 crore.
Here's what brokerages had to say about the lender's Q4 performance:
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CLSA
CLSA reiterated its 'outperform' rating on the stock, highlighting that ICICI Bank's pre-provision operating profit and profit after tax exceeded their estimates by 8% and 11%, respectively.
It has increased its target price for ICICI Bank from Rs 1,600 to Rs 1,700.
The bank has focused on profitability over growth, with loan growth moderating to low-teens from mid-teens earlier, it noted.
"ICICI Bank delivered yet another strong quarter, prioritising profitability over growth," it said. However, net interest margin improved by 15 basis points quarter-on-quarter.
"We keep our estimates largely unchanged and roll forward our valuation to March 2027," the brokerage said.
CLSA also pointed out that ICICI Bank's asset quality remained intact, with improved slippage ratios and corporate recovery benefiting the bank.
Jefferies
Jefferies viewed ICICI Bank's Q4 FY25 performance as positive, maintaining its 'buy' rating. The brokerage highlighted that ICICI Bank's profit of Rs 12,630 crore, up 18% year-on-year, was a key positive trend.
Current account and savings account growth of 13% and quarter on quarter expansion of 16 basis points in NIMs were aided by fewer working days, a CRR cut, and lower KCC NPLs, Jefferies noted.
The bank's operating cost growth picked up to 11%, "reflecting an uptick in branch openings and new hiring in preparation for a better growth year".
Asset quality was holding up well, with core retail slippages down quarter-on-quarter, it said.
Jefferies has trimmed its earnings per share estimates for FY26-27 by 5% to factor in timing gaps, but retains ICICI Bank as one of its top picks with an SOTP-based price target of Rs 1,710.
"We expect the bank to deliver 12% compound annual growth rate in profit over FY25-28 with return on equity of 16% in FY26," Jefferies said.
