Valuation and view: Reiterate BUY with a TP of INR1,550
ICICIBC is poised for a superior performance, driven by healthy loan growth, strong asset quality, and industry-leading return ratios. While we anticipate margins to remain in pressure in the near term due to a potential rate cut and rising costs of funds, the bank’s operating leverage is emerging as a key driver of earnings growth. With robust deposit inflows and a favorable CD ratio—the lowest among large private banks—ICICIBC is well-positioned for profitable growth. Its asset quality outlook remains steady, supported by robust underwriting standards, strong PCR, and a high contingency buffer of ~1% of loans. We estimate ICICIBC to achieve a CAGR of 15%/12% in PPoP/PAT over FY25-27E, leading to RoA/RoE of 2.1%/16.7% in FY27. ICICIBC remains our top buy in the sector and we reiterate our BUY rating with a TP of INR1,550, based on 2.7x Sep’26E ABV.
