Target: ₹1,500

CMP: ₹1,292.65

ICICI Bank has reported six glorious years of performance since Sandeep Bakhshi took charge as MD & CEO on October 15, 2018. The bank has consistently beaten street estimates on one or the other metric, even as the macro environment changed considerably over the years.

Just when it seems that the opportunities for positive surprises are exhausted and there is an uphill climb ahead, the bank comes up with another ace up its sleeve, thereby awing everyone with its superlative performance.

During Q2-FY25, ICICI Bank reported 14.5 per cent y-o-y growth in PAT (8 per cent beat), driven by controlled provisions and further improvement in operating leverage.

Asset quality has remained stable with no signs of stress, leading to improvement in the GNPA/NNPA ratios. Contingency provisioning buffer of ₹13,100 crore (1 per cent of loans) provides further comfort in case of any future cyclical stress. We increase our EPS estimates by 2.8/1.8 per cent for FY25/FY26 and estimate RoA/RoE of 2.19%/17.4% in FY26. We expect the bank to sustain a 12 per cent CAGR in PAT over FY24-26.

We reiterate Buy with a revised SoTP-based TP of ₹1,500 (2.6x Sep26E ABV + ₹260 for subs; vs ₹1,400 earlier)