Motilal Oswal Sees ICICI Bank Soaring to Rs 1750

Motilal Oswal Research Report: ICICI Bank Poised for Sustained Growth

ICICI Bank (ICICIBC) is well-positioned to maintain its growth momentum while upholding profitability benchmarks. The bank is expected to deliver a 16% loan Compound Annual Growth Rate (CAGR) over the fiscal years 2026-2028, driven by strong growth in Business Banking and Priority Lending (PL), with the corporate segment also anticipated to witness healthy traction, supported by working capital demand.

ICICI Bank's liability franchise continues to be best-in-class, supported by diversified acquisition engines and a rapidly expanding physical network. With a domestic Cash Deposit (CD) ratio of 85.5% and Liquidity Coverage Ratio (LCR) of approximately 126%, the bank is well-placed to capitalize on growth opportunities compared to its peers. ICICIBC is likely to maintain cost leadership despite significant investments in technology, customer delivery, analytics, and talent. The bank's Cost-to-Income (C/I) ratio is estimated to range from 39% to 38% over the fiscal years 2027 and 2028, respectively.

ICICI Bank's asset quality remains robust, supported by disciplined underwriting, continued monitoring, and strong recoveries, while the bank maintains a healthy contingency buffer of 0.9% of loans. The bank currently does not face additional portfolio stress from the West Asia crisis or ECL transition. As a result, credit costs are expected to remain contained, with Gross Non-Performing Assets (GNPA) and Net Non-Performing Assets (NNPA) improving to approximately 1.4% and 0.3% by the fiscal year 2028.

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Outlook and Recommendation

We build in a Return on Assets (RoA) and Return on Equity (RoE) of 2.3% and 16.2% for the fiscal year 2028. ICICI Bank remains our top BUY recommendation within the banking sector, with a Target Price (TP) of INR1,750 (2.5x September 2027 Estimated standalone Asset-Based Value).