ICICI Bank Emerges as Top Pick Among Lenders, Asset Quality Remains Resilient: Motilal Oswal
Motilal Oswal Maintains 'Buy' Rating on ICICI Bank with Target Price of Rs 1,750
ICICI Bank Remains Top Pick for Motilal Oswal Financial Services
ICICI Bank has been identified as the top banking pick by Motilal Oswal Financial Services, supported by its consistent operating performance and strong execution across loan growth, margins, and asset quality. In its latest report, the brokerage highlighted the lender’s healthy asset quality profile, backed by low credit costs and robust provisioning. ICICI Bank continues to expand its market share through a calibrated approach to risk, and the brokerage expects the lender’s net profit to grow at a compound annual rate of 15% between FY26 and FY28.
Key Projections and Expectations
| Metric | FY26E | FY27E | FY28E |
|---|---|---|---|
| Net Profit Growth | 15% CAGR | ||
| Return on Assets | 2.3% | ||
| Return on Equity | 16.2% | ||
| Gross Non-Performing Assets | 1.4% | ||
| Net NPAs | 0.3% | 0.4% |
The brokerage also expects the bank to sustain strong growth in both deposits and advances while maintaining cost discipline. Over the medium term, stronger customer engagement, strategic partnerships, and improved productivity from its branch network are expected to support deposit mobilisation. Motilal Oswal forecasts deposits to grow at a CAGR of 15% during FY26-FY28, while loan growth is estimated at 16% over the same period.
Business Segments Driving Growth
The bank’s business banking and personal loan portfolios are likely to drive growth in the coming years. Fee income growth, aided by deeper customer engagement and a stronger supply-chain ecosystem, is also expected to bolster overall revenues. ICICI Bank’s cost-to-income ratio is projected to remain around 40% and could improve to nearly 38% as business volumes increase.
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Asset Quality and Margins
ICICI Bank’s asset quality remains robust, supported by disciplined underwriting, continued monitoring, and strong recoveries. The bank maintains a healthy contingency buffer (0.9% of loans) and does not face additional portfolio stress from the West Asia crisis or ECL transition. Credit costs are expected to remain contained, with GNPA/NNPA improving to 1.4%/0.3% by FY28E. On margins, Motilal Oswal believes that the bank’s pricing power will support an upward bias, despite the benefits of deposit repricing having largely played out.
Target Price and Rating
Motilal Oswal has maintained its ‘buy’ rating on ICICI Bank with a target price of Rs 1,750, implying an upside of nearly 40% from current levels. At 1:46 pm, the stock was trading about 1% higher at Rs 1,252.30 on the NSE.
Investor Takeaway
Investors should consider ICICI Bank as a top pick among lenders due to its strong execution and resilient asset quality.
