ICICI Bank shares at record high. Brokerages remain bullish, give 4-digit target price

ICICI Bank has been reporting a robust performance, led by a strong core PPOP, controlled provisions, and steady asset quality. A healthy mix of a high yielding portfolio (Retail/Business Banking) and a low-cost liability franchise is aiding margin expansion.

“With asset quality holding strong, loan growth getting broad-based, and margin likely to improve, aided by the recent RBI rate hikes, we estimate RoA/RoE to improve to 2.1%/17.1% by FY24. We maintain our Buy rating with a SoTP-based target price of ₹1,050,” said Motilal Oswal. ICICI Bank remains its top stock pick in the banking sector.

ICICI Bank’s FY22 annual report indicates that cost of PSL compliance on agri-loans is high with doubling of PSL cost (4% of PBT) & rise in NPL ratio to 5.3%, highlighted global brokerage Jefferies. 

“Having successfully ramped up SME & unsecured retail loans and improving asset quality, the bank has buffers to invest in deeper markets where it lagged peers – branches up 11% in 4yrs vs. ~30% for Axis & HDFCB. Deposit franchise & ALM are strong & RWA/asset fell to 63%. We see healthy growth & ROE. We expect ICICI Bank to deliver 17% CAGR in profit over FY22-25 and ROE of 16%. Valuations look attractive even in the context of global banks,” the brokerage said while maintaining Buy rating on ICICI Bank shares with a target price of ₹1,100 apiece.

The bank is witnessing a strong recovery across key segments such as Retail, SME, and Business Banking. The lender’s asset quality trends remain steady, while provision coverage ratio (PCR) remains one of the best in the industry, Jefferies’ note added. 

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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