ICICI Bank shares gains 3% after Q1 results. Will it outperform peers?

Analysts maintain their 'Buy' ratings on the stock, with price targets suggesting up to 20% potential upside. Here is all you need to know:

In Short

• ICICI Bank viewed as a potential re-rating candidate by brokerages
• Analysts maintain 'Buy' ratings with up to 20% upside
• Bank praised for consistent core earnings and growth

ICICI Bank Ltd is being viewed as a potential re-rating candidate by domestic brokerages, following its consistent performance in recent quarters.

Analysts maintain their 'Buy' ratings on the stock, with price targets suggesting up to 20% potential upside. They believe ICICI Bank should continue to command premium valuations over other large peers.

Nuvama Institutional Equities highlighted ICICI Bank as the most consistent lender in delivering core earnings and granular growth.

Unlike its peers, ICICI Bank's earnings are free from the issues that affected others in Q1FY25, which supports the argument for a stock re-rating.

"ICICI Bank turned in strong earnings and outperformed on three key concerns plaguing its peers in Q1FY25: asset quality, LDR, and NIM. Loans grew 15% YoY/3% QoQ, while the 4bp QoQ dip in NIM is lower than expected. The QoQ increase in slippage of 11% YoY is also lower than peers and expectations," said Nuvama, suggesting a target of Rs 1,450 for the stock.

Motilal Oswal Securities also praised ICICI Bank for reporting a steady quarter, unlike many of its large peers. The bank's NII growth has been consistent, the pace of NIM compression has slowed, and operating expenses have been well-controlled, even after accounting for employee increments in Q1.

"The bank's substantial investment in technology offers some cushion against opex costs. A stable mix of a high-yielding portfolio (Retail/Business Banking) and ongoing growth in Business Banking, SME, and secured retail segments are driving broad-based growth, helping the bank maintain healthy business diversification," noted Motilal Oswal.

The brokerage expects ICICI Bank to sustain a 12% CAGR in profit after tax over FY24-26E and reiterated their 'Buy' rating with a revised target price of Rs 1,400, up from Rs 1,350.

Nirmal Bang Institutional Equities valued ICICI Bank at 2.8 times June 2026 ABV.

Adding the subsidiary value per share of Rs 181, the brokerage derived a target price of Rs 1,450, up from Rs 1,412.

"Our target multiple is at an 8.1% premium to the past 5-year average multiple of 2.6 times, which adequately captures an earnings CAGR of 13.9% over FY24-FY26E. Earnings will be driven by a loan CAGR of 15.6%, stable NIM of 4.4%, improvement in opex ratios, and an average credit cost of 55bps, thereby leading to an average RoA of 2.3% during FY24-FY26E," Nirmal Bang said.

Nuvama further added that ICICI Bank continues to deliver consistent performance even in seasonally weak quarters, contrasting with the rising earnings volatility among its peers.

Given this context, they argued that ICICI's premium over peers should expand further, it added.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)