ICICI Bank - Well Poised To Sustain Best-In-Class Performance: Motilal Oswal

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Motilal Oswal Report

ICICI Bank Ltd. is well positioned to deliver a superior performance characterized by healthy loan growth, strong asset quality and industry-leading return ratios. While we estimate margins to remain range-bound in the near term, the operating leverage is emerging as a lever to support earnings growth.

The bank is witnessing healthy deposit inflow, while a benign credit-deposit ratio (lowest among large private banks) places it well to focus on profitable growth.

The asset quality outlook remains robust as the bank maintains strong provision coverage ratio and a high contingency buffer (1.1% of loans).

We thus estimate ICICI Bank to deliver a pre-provision operating profit/profit after tax compound annual growth rate of 16.7%/13.7% over FY24-26E, leading to return on asset/return on equity of 2.2%/17.7%. Reiterate Buy with a target price of Rs 1,350 (premised on 2.5 times FY26E adjusted book value).

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