ICICI Bank Sees Buy Recommendation from Prabhudas Lilladher, Target Price at Rs 1825

ICICI Bank Sees Improved Loan Growth and Asset Quality in Recent Quarter

ICICI Bank has reported a strong quarter, driven by better loan growth and asset quality. The bank's loan accretion was higher at 6.0% quarter-over-quarter (QoQ), surpassing Prabhudas Lilladher's estimate of 4.5%. This growth was broad-based, indicating a consistent improvement in the bank's loan portfolio.

The bank's cautious approach to loan growth in the first half of CY26 has paid off, as growth has consistently improved after navigating falling interest rates. Lower net slippages and corporate recoveries also led to a sharp fall in provisions QoQ, resulting in a core profit after tax (PAT) beat of 10%. Core profit per share (PPoP) was in-line with expectations.

Key Highlights

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The bank's balance sheet remains strong, with a common equity tier-1 (CET-1) ratio of 16.4%, a liquidity coverage ratio (LCR) of 126%, and a provision buffer of 84bps. Prabhudas Lilladher has raised its loan compound annual growth rate (CAGR) over FY26-28E by 100bps to 14%. The research firm has also raised its estimate of core PAT by an average of 3.2% and trimmed its multiple to 2.7x from 2.9x, while rolling forward to FY28 core adjusted book value (ABV). The target price has been tweaked to INR 1,825 from INR 1,800.

The research firm has retained its 'BUY' recommendation for ICICI Bank, citing its strong balance sheet and improving loan growth.