ICICI Bank Share Price Target Raised To Rs 1,453 By SBI Securities, Signals 10% Upside

ICICI Bank, India's second-largest private lender, has been awarded a 'BUY' rating by SBI Securities, setting a target price of Rs 1,453, which implies a 10% upside from its current market price of Rs 1,319.

Loan Growth and Market Position
ICICI Bank exhibited a robust 14.7% year-on-year growth in domestic advances during Q3 FY25, bolstered by a substantial 32% growth in business banking advances. This segment now constitutes approximately 19% of the bank's overall lending portfolio. Analysts project a continued outpacing of industry growth at 15-16% YoY for FY26 and FY27, driven by improved liquidity facilitated by recent RBI measures.

Stable Net Interest Margins (NIM)
Maintaining a stable NIM of 4.3% as of Q3 FY25, ICICI Bank aims to sustain profitability through disciplined cost management and efficient lending practices. A balanced mix of high-yield retail loans and steady corporate segment growth is expected to bolster margins in the foreseeable future.

Robust Asset Quality
As of December 2024, ICICI Bank reported gross non-performing assets (GNPA) at 1.96% and net non-performing assets (NNPA) at 0.42%, reflecting a year-on-year improvement from 2.30% and 0.44%, respectively. The bank's credit costs remained low at approximately 40 basis points in Q3 FY25, supported by effective recovery measures and stabilization in the retail unsecured lending segment.

Efficiency and Cost Management
ICICI Bank targets an enhanced cost-to-income (C/I) ratio, which stood at 38.5% as of Q3 FY25. Leveraging digital solutions and optimizing loan origination processes are pivotal in achieving this goal, alongside robust fee income growth from cards and payments.

Valuation and Investment Outlook
Trading at a price-to-book value (P/BV) multiple of 3.3x/2.9x/2.5x for FY25E/FY26E/FY27E respectively, ICICI Bank presents an attractive valuation proposition according to Bloomberg consensus earnings. SBI Securities highlights potential risks including slower credit/margin growth, asset quality deterioration, and regulatory changes as key considerations for investors.

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