ICICI Bank has clocked yet another impressive quarter, prompting Prabhudas Lilladher’s research desk to reiterate its BUY recommendation with an enhanced target price of Rs1,800 from the previous Rs1,730. The bank’s performance continues to outshine its peers, driven by robust Net Interest Margins (NIM), lower provisioning, and accelerating loan growth—particularly within retail and SME segments. Asset quality metrics have firmly improved, and the management’s guidance signals further margin stability. Key levers such as deposit repricing and the ongoing reduction in the Cash Reserve Ratio (CRR) are expected to underpin profitability in the coming quarters. Investors are encouraged to ride the secular growth trajectory of ICICI Bank, backed by stellar core Return on Assets (RoA), scalable digital frameworks, and prudent risk management.

Prabhudas Lilladher Maintains BUY: Targets Raised on Margin Expansion and Loan Growth

BUY Call Reaffirmed, Target Price Upped:
The research house Prabhudas Lilladher maintains a firm BUY call on ICICI Bank, revising its target price to Rs1,800, signaling confidence in the bank’s continued outperformance relative to sector benchmarks. ICICI Bank’s focus on profitability, margin expansion, and prudent asset-quality management stands out among its peers.

Stock Levels and Targets:

Margin Outperformance and Profitability: Ahead of the Pack

Superior Net Interest Margin (NIM):
The bank clocked a reported NIM of 4.3% in Q2FY26, up by 3 basis points sequentially, outperforming HDFC Bank and Axis Bank, which reported a decline. This margin strength is attributed to strategic loan mix adjustments and disciplined deposit repricing.

Outsized Profitability Metrics:
Operating profit registered an 11.9% growth YoY for FY27E, while core PAT rose above estimates by 4.2%. Lower provision requirements and superior fee income from retail and business segments were central to this profit beat.

Loan Growth and Business Mix: Retail and SME Lead the Charge

Differentiated Loan Book Accretion:
Loan accretion surged to 3.2% QoQ, with growth predominantly stemming from retail and SME segments; business banking alone expanded by 24.8% YoY. Mortgage and unsecured lending saw combined growth of 3.6% sequentially.

Projected Growth Ahead of Industry:
ICICI Bank projects a loan CAGR of 13.5% from FY25 to FY27E, with its healthy mix and technology-driven distribution setting the stage for sustained advances.

Asset Quality: Compelling Improvement with Strong Buffers

Sequential GNPA Reduction:
Gross Non-Performing Assets (GNPA) dropped to 1.58%, marking further progress from previous levels. Key recovery efforts, controlled slippages, and aggressive write-offs have led to improved asset quality ratios.

Provisions Steadily Lower:
Provisioning stood at Rs9.1bn—a marked reduction versus projected requirements—indicating robust underlying borrower health and strong collection dynamics.

Profitability Outlook: Enhanced RoA and Stability in Margins

Stable Returns on Assets and Equity:
The management expects core RoA to sustain at an industry-best level of about 2.1% for FY27E, with RoAE projected at 15.7%. The bank’s stable funding profile and sticky CASA (at 41%) bolster profitability visibility.

Cost Management Initiatives:
Operating expense growth is expected to be muted as retail-linked and festive marketing spends normalize, while tech investments (11% of H1FY26 opex) drive efficiency gains.

Valuation: Attractive Multiples Reflecting Execution Strength

SOTP Drives Upside Potential:
The research house values the core bank at 2.9x FY27E core adjusted book value, with the SOTP target price at Rs1,800. ICICI Bank trades at a forward price-to-adjusted-book-value multiple of 3.0x, which still offers upside given its growth and return metrics.

Key Risks: What Investors Should Monitor

Asset Quality Surprises:
Any unexpected spike in stress assets, especially within the unsecured lending or SME portfolios, could dampen the positive outlook.

Interest Rate Movements:
If deposit cost pressures or slower pass-through of policy rate cuts persist, near-term NIM stability could be at risk, moderating earnings trajectory.

Anderson’s Take: ICICI Bank Remains a Standout in Indian Banking

In summary, ICICI Bank’s quarterly performance attests to the efficacy of its strategic pivots toward profitability, technological modernization, and risk discipline. Prabhudas Lilladher’s elevated target signals enduring confidence in the bank’s structural growth. Investors should view any market-induced volatility as an opportunity to accumulate—a stock with healthy return matrices, improving asset quality, and scalable banking practices is rarely on sale for long.

Levels for Investors:

Current Market Price: Rs1,437

Buy Zone: Rs1,400–1,460

First Target: Rs1,650

Extended Target: Rs1,800

Stop Loss: Rs1,340

Bottomline for Investors
The evidence is clear—ICICI Bank asserts itself as the bellwether of Indian private sector banking, combining conservative asset management with forward-looking growth strategies. The investment case remains robust; long-term investors are advised to BUY and stay the course for significant value creation as the Indian banking supercycle unfolds.