Sharekhan sees over 20% upside in ICICI Bank, says lender is consistently sustaining its growth leadership

​ICICI Bank share price: Domestic brokerage Sharekhan has upgraded its target price on ICICI Bank as the private sector lender, the brokerage notes, has consistently sustained its growth leadership while simultaneously managing superior asset quality. The brokerage has maintained a 'buy' call and has revised the target price to Rs 1,300, which accounts for a 20.5 per cent upside from the previous close. 

ICICI Bank remains Sharekhan's top pick among large private banks, as the brokerage says it is well-positioned to deliver superior performance despite cyclical headwinds. As per the report, a consistent, healthy loan growth trajectory and strong asset quality are helping the bank sustain strong performance despite net interest margin (NIM) compression. 

Even though the NIM outlook remains negative, it will be offset by contained opex growth, Sharekhan says. For ICICI Bank, the loan growth outlook is expected to remain healthy, and deposit growth is seen in line with loan growth.

Furthermore, the overall asset quality outlook is expected to remain stable.

"the asset quality outlook continues to remain stable, along with higher contingent provisions, which should keep credit costs lower. We believe the bank is likely to sustain RoA at over 2 per cent in the near to medium term despite cyclical headwinds," the report read.

On the valuation front, ICICI Bank currently trades at 2.3x/1.9x its FY2025E/FY2026E core book value estimates and is on the path of delivering a sustainable and predictable earnings growth trajectory. 

Brokerage firm Nomura has also maintained a 'buy' on ICICI Bank and has given a target of Rs 1,225 apiece. Similarly, Morgan Stanley has maintained an 'overweight' rating and raised its target to Rs 1,400 from Rs 1,350.

ICICI Bank Q3 performance 

ICICI Bank reported a 23.6 per cent year-on-year increase in standalone net profit to Rs 10,271.5 crore for the October-December period. 

Its net interest income (NII), or the difference between interest earned and interest paid, grew 13.4 per cent to Rs 18,678.6 crore for the fiscal third quarter, according to a regulatory filing.

ICICI Bank share price: Past performance

In a year, ICICI Bank shares have gained over 29 per cent against Nifty50's rise of over 29 per cent.

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