Well-positioned to sustain sector leadership
Growth outlook healthy; asset quality robust
ICICI Bank (ICICIBC) is well-positioned to sustain its growth momentum while maintaining profitability benchmarks. We expect the bank to deliver a 16% loan CAGR over FY26-FY28, led by strong growth in Business Banking and PL, while the corporate segment is also expected to witness healthy traction, supported by working capital demand.
The liability franchise continues to remain best-in-class, supported by diversified acquisition engines and a rapidly expanding physical network. With a domestic CD ratio of 85.5% and LCR of ~126%, the bank is well placed to capitalize on growth opportunities compared to peers.
ICICIBC is likely to maintain cost leadership despite meaningful investments in technology, customer delivery, analytics, and talent. We estimate the C/I ratio to range ~39%/38% over FY27/28, respectively.
ICICIBC’s asset quality remains robust, supported by disciplined underwriting, continued monitoring, and strong recoveries, while the bank maintains a healthy contingency buffer (0.9% of loans). The bank currently does not face additional portfolio stress from the West Asia crisis or ECL transition. Credit costs are, thus, expected to remain contained, with GNPA/NNPA improving to ~1.4%/0.3% by FY28E.
The stock has delivered tepid performance over the past year, reflecting broader derating across large banking stocks amid persistent FII selling. However, with operating performance holding strong and sustained market share gains across key lending segments, we expect a gradual rerating.
We build in FY28E RoA/RoE of 2.3%/16.2%. ICICIBC remains our top BUY within the banking sector, with a TP of INR1,750 (2.5x Sep’27E standalone ABV).
