ICICI Bank stock eyes further gains as all-around Q4 show lifts target prices

The March quarter results of ICICI Bank Ltd beat analyst estimates across key parameters, resulting in revisions in price targets that suggest the Street is willing to give ICICI Bank a higher premium as compared to its historical price-to-book average. 

ICICI Bank reported loan and deposit growth of 13.3 per cent YoY and 14 per cent YoY,  respectively, which was better than industry growth of 11 per cent YoY and 10.3 per cent YoY, respectively. It also beat analyst estimates on net interest income (NII), pre-provision operating profit (PPoP) and profit after tax (PAT) by 3-14 per cent. 

"We have valued ICICI Bank at 2.9 times March 2027E ABV, which results in a standalone value per share of Rs1,443. Adding subsidiary value per share of Rs 206 (net of holding company discount of 15 per cent), we derive a target price of Rs 1,649 (vs Rs 1,578 earlier). Our target multiple is at a 10.2 per cent premium to the past 5-year average multiple of 2.6 times," Nirmal Bang said.

Jefferies retained its 'Buy' on ICICI Bank and upped its price target to Rs 1,710 per share from Rs 1,575 per share earlier. Nomura India also suggested a 'Buy' on ICICI Bank and upped its target on the stock to Rs 1,700 from Rs 1,600 earlier. CLSA maintained 'Accumulate' but raised its target on ICICI Bank to Rs 1,700 from Rs 1,600.

ICICI Bank shares are up 9 per cent in the past one week and 29.48 per cent in the past one year.

"Seldom does a bank of the size of ICICI Bank surprise with its operating performance the way this bank has done, that too amid a volatile macro environment, elevated competition for deposits, and ongoing normalization in asset quality," said MOFSL.

The brokerage noted that ICICI Bank had earlier delivered earnings beats despite making large contingent provisions, though it was in a benign operating environment compared to what is prevailing currently. 

"Our estimate of a modest NIM expansion in 4Q was not easy to achieve given the ongoing rate-cut cycle, but delivering a 16bp NIM expansion, which has covered the margin fall over the entire year and taken NIMs back to the level seen in 4QFY24, was indeed very commendable," it said while revising its target price to Rs 1,650 on the stock. 

ICICI Bank continues to deliver strong and above-expected earnings growth even in a volatile macro environment, said Nuvama. "We reckon the stock’s premium to peers shall expand, based on its strong delivery. We reiterate it as our top pick," it said while suggesting a target price of Rs 1,630 on the stock.