Anand Rathi Maintains BUY Rating on ICICI Bank with Target Price of ₹1,713
Anand Rathi maintains BUY rating on ICICI Bank with ₹1,713 target price, valuing core bank at 2.5x FY28e P/ABV. The bank showed core PPoP growth of 6.9% y/y and 3.4% q/q, with credit growth accelerating to 11.5% y/y from 10.3% in Q2FY26. Asset quality remained stable despite seasonal weakness, and management guided for further credit growth acceleration.
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Anand Rathi has issued a positive outlook on ICICI Bank , maintaining its BUY rating with a target price of ₹1,713. The brokerage firm's assessment comes after analyzing the bank's recent performance trends and strategic positioning in the competitive banking sector.
Financial Performance Analysis
The bank's core financial metrics demonstrated steady progress during the reporting period. Key performance indicators showed consistent growth across multiple parameters:
| Metric | Performance | Growth Rate |
|---|---|---|
| Core PPoP (Y/Y) | In-line with expectations | 6.9% |
| Core PPoP (Q/Q) | Sequential growth | 3.4% |
| Credit Growth (Y/Y) | Accelerated momentum | 11.5% |
| Previous Quarter Credit Growth | Q2FY26 comparison | 10.3% |
Excluding one-time items, the bank's operational trends aligned with market expectations. The core pre-provision operating profit growth of 6.9% year-on-year, coupled with a 3.4% quarter-on-quarter increase, reflects the bank's operational efficiency.
Credit Growth and Asset Quality
Credit growth emerged as a significant highlight, accelerating to 11.5% year-on-year compared to 10.3% year-on-year in Q2FY26. This acceleration indicates strengthening loan demand and the bank's ability to capture market opportunities effectively.
Despite the seasonal challenges typically associated with the reporting quarter, asset quality remained stable. Net interest margins also maintained their stability, demonstrating the bank's pricing discipline and portfolio management capabilities.
Leadership and Strategic Outlook
A notable corporate development was the board's decision to re-appoint Mr. Bakhshi as CEO until October 2028. Anand Rathi views this leadership continuity as a positive development for the bank's strategic direction and operational consistency.
Management has provided guidance indicating an acceleration in credit growth going forward, suggesting confidence in the bank's growth trajectory and market positioning.
Valuation and Investment Rationale
Anand Rathi's target price methodology incorporates comprehensive valuation parameters:
| Valuation Component | Details |
|---|---|
| Target Price | ₹1,713 |
| Core Bank Valuation | 2.5x FY28e P/ABV |
| Subsidiary Value | ₹240 per share |
| Expected RoE | >15% |
The brokerage expects further acceleration in retail-led growth and stable asset quality, projecting the return on equity to remain above 15%. This expectation underpins their positive investment thesis and preference for ICICI Bank over HDFC Bank.
Competitive Positioning
Anand Rathi maintains its preference for ICICI Bank over HDFC Bank, citing the former's relatively better positioning to manage the growth-margin trade-off. This strategic advantage is expected to help ICICI Bank maintain its return on equity differential over HDFC Bank, supporting the positive investment recommendation.
Historical Stock Returns for ICICI Bank
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +1.51% | +2.12% | -1.38% | +2.90% | -1.46% | +91.96% |
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