ICICI Bank share: Sandeep Bakhshi's extension as MD & CEO removes key overhang

ICICI Bank Ltd reported a mixed set of December quarter results, with its profit falling 4 per cent year-on-year (YoY) due to one-off provisions. Stock analysts, however, maintained 'Buy' rating on the stock, as they believe a fresh two-year term for MD & CEO Sandeep Bakhshi removed a key overhang on the counter.

MOFSL said ICICI Bank December quarter profit missed its estimates by 9 per cent amid provisions related to Agri assets. NII, PPoP, and Adj PAT came in line with expectations, alongside stable margins. The ICICI Bank board has approved a fresh two-year term as MD & CEO for Sandeep Bakhshi, which removes a key overhang on the stock, it said.

"We fine-tune our earnings and estimate FY27E RoA and RoE of 2.3 per cent and 16.1 per cent. ICICI Bank remains our top 'Buy' in the sector with a revised target of Rs 1,750," MOFSL said.

Nuvama said unlike Axis Bank, ICICI Bank did not have to declassify the priority status of impacted loans and is working towards regularising the portfolio.

"The ICICI Bank board has re-appointed Mr Bakhshi as CEO till October 2028. This is a big positive as it removes a key overhang on the stock. Maintain ‘BUY’ as we expect asset growth to accelerate, stable NIM and superior asset quality. We are cutting TP to INR1,670/2.8x FY27E BV from Rs 1,750," Nuvama said.

Elara Securities said while ICICI Bank's core PPoP (ex-treasury) was ahead of its estimates, lower treasury (loss) and higher credit cost (one-off item) fed into lower Q3 PAT. 

The key highlight, it said, was better-than-expected growth momentum, controlled slippages, and stability across key metrics. 

However, uncharacteristically, the bank was asked to make one-time standard provisions by the RBI, which hurt profitability. 

"We believe the bank has strong underlying and has levers to continue delivering better risk-adjusted return, even on high base, and thus the risk of an earnings disappointment is rather low. We believe the bank has all it takes to be an industry benchmark this cycle, thereby sustaining and improving valuation premium," it said. 

Elara also retained 'Buy' on the stock with a target of Rs 1,783 as it rolled forward its valuation assumptions to December 2027E, which are adjusted for subsidiary valuation.

Nirmal Bang said ICICI Bank’s third quarter performance was in line with its expectations at the NII level and below its expectations by 4.7 per cent and 4.9 per cent at PPOP and PAT level. This brokerage maintained 'Buy' and a target of Rs 1,705 on the stock.