Target: ₹1,350
CMP: ₹1,199.05
We met with the top management team of ICICI Bank, represented by Sandeep Bakhshi, MD & CEO, Abhinek Bhargava, Head-IR, and select business heads to discuss the bank’s business outlook and other key focus areas.
ICICI Bank is well positioned to deliver a superior performance characterised by healthy loan growth, strong asset quality and industry-leading return ratios. With a focus on building a diversified and granular portfolio, ICICI Bank reported a about 17 per cent CAGR in loans over FY22-24. The bank has adopted data analytics-driven processes for onboarding, credit assessment, and customer monitoring.
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 CD 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 PCR and a high contingency buffer (1.1 per cent of loans).
We thus estimate ICICI Bank to deliver a PPoP/PATCAGR of 16.7/13.7 per cent over FY24-26E, leading to RoA/RoE of 2.2/17.7 per cent. Reiterate BUY with a TP of ₹1,350 (premised on 2.5x FY26E ABV).
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.