ICICI Bank has received strong analyst backing following its third quarter results, with an overwhelming majority maintaining positive ratings on the stock. The bank's performance, recent leadership developments, and forward guidance have drawn favorable commentary from major brokerages.

Analyst Rating Overview

The analyst sentiment towards ICICI Bank remains highly positive, as demonstrated by the rating distribution:

Q3 Results and Forward Guidance

The lender reported its third quarter results on Saturday, which were largely in-line with expectations. However, the bank had to make standard asset provisions based on directions given by the Reserve Bank of India. A major highlight was the two-year extension granted to Sandeep Bakhshi, the incumbent MD & CEO, who will now remain in office till October 2028.

The bank has provided forward guidance indicating expectations of stable net interest margins from Q4 FY26 amid ongoing retail deposit adjustments. Additionally, loan growth momentum, excluding credit cards, is expected to continue into Q4 FY26 following a rise in Q3.

Price Target Analysis

Brokerages have set varied price targets for ICICI Bank, with BNP Paribas leading with the most optimistic outlook:

Key Analyst Commentary

CLSA highlighted that the biggest overhang on the stock, which was Sandeep Bakhshi's tenure uncertainty, is now resolved with the two-year extension. The brokerage maintains an "outperform" rating.

Morgan Stanley emphasized that with leadership clarity now established, the focus will shift solely to loan growth where traction is improving. They maintain an "overweight" rating.

Jefferies noted that the stock's recent rise reflected anticipation of Sandeep Bakhshi's potential extension as MD & CEO. They raised their price target to ₹1,730.00 from ₹1,630.00 earlier while maintaining a "buy" rating. The brokerage expects improvement in unsecured retail lending and stable asset quality.

Bernstein, one of the two firms without a "buy" rating, believes that Sandeep Bakhshi's re-appointment lifts a key overhang and should offset an otherwise weak quarter. They maintain a "market-perform" rating.

Kotak Institutional Equities emphasized the bank's superior liability profile and its ability to deliver superior growth and profitability metrics as drivers of their positive view.

Stock Performance

Shares of ICICI Bank ended 0.40% lower on Friday at ₹1,413.00. Despite the recent decline, the stock has gained 15.00% over the last 12 months, reflecting overall positive investor sentiment.

ICICI Bank reported mixed Q3 results with net profit declining year-on-year while demonstrating improvements in asset quality and robust net interest income growth. Market experts suggest the performance reflects temporary headwinds balanced by strong operational fundamentals, though short-term stock volatility remains possible.

Financial Performance Overview

The bank's Q3 financial results present a comprehensive picture with strong revenue growth offsetting profit pressures:

The 4.02% decline in net profit to ₹11,317.86 crores was primarily driven by one-off agricultural provisioning rather than structural issues. However, the bank maintained strong operational momentum with net interest income rising 7.70% year-on-year to ₹21,932 crores, aided by steady loan growth.

Asset Quality and Provisioning Concerns

ICICI Bank demonstrated notable improvements in asset quality metrics despite higher provisioning:

The Gross Non-Performing Assets ratio improved to 1.53% from 1.58% in the previous quarter and 1.96% year-ago. However, provisions nearly doubled compared to the same quarter last year, reaching around ₹2,500-2,600 crores, primarily due to Kisan Credit Card related provisioning of approximately ₹5,300 crores.

Expert Analysis on Market Impact

Aditya Shah, Founder of Hercules Advisors, addressed concerns over the bank's quarterly performance, emphasizing that fundamentals remain intact despite potential short-term stock pressure:

"Oh, absolutely not. I am not too much concerned. The asset quality has shown a mild improvement," Shah stated, noting that the increased provisioning reflects temporary factors rather than fundamental deterioration. He highlighted that advances grew at around 11.50%, which is reasonable given system loan growth in the 10% to 15% range.

Growth Momentum and Operational Metrics

The bank maintained healthy growth across key operational parameters:

While loan and deposit growth remained robust, the return on assets declined from 2.30% to 2.10%, raising questions about near-term performance given the stock's valuation at around three times book value.

Brokerage Recommendations and Market Outlook

Leading brokerages maintain positive outlook despite the quarterly earnings miss:

Shah acknowledged the possibility of short-term stock pressure but emphasized the importance of understanding the nature of slippages. "The stronger point is loan growth is fairly okay, deposit growth is fairly okay. Given the stability at ICICI Bank, only asset quality will decide what really happens," he noted, suggesting recovery once clarity emerges from management commentary.