ICICI Bank stock: Brokerages bullish after Q2 earnings beat, raise targets; Goldman Sachs sees 45% upside

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Global brokerages remain bullish on ICICI Bank following its better-than-expected second-quarter earnings, with JPMorgan and Nomura raising their target prices and several others maintaining Buy or equivalent ratings. Goldman Sachs sees the highest potential upside among the brokerages covered, with its target price of Rs 2,025 implying a gain of nearly 45 percent from Friday's closing price of Rs 1,397.

JPMorgan raised its target price to Rs 1,800 from Rs 1,735, while Nomura increased its target to Rs 1,740. Citi, Jefferies and Bernstein also maintained positive recommendations, citing robust loan growth, healthy profitability and improving asset quality. However, some brokerages cautioned that the sharp increase in foreign currency non-resident (FCNR-B) deposits could weigh on net interest margins (NIMs) in the near term.

ICICI Bank reported a 20.1 percent year-on-year rise in standalone net profit to Rs 14,843 crore for the September quarter, beating the CNBC TV18 poll estimate of Rs 14,280 crore. Net interest income (NII) increased 17.7 percent to Rs 25,339 crore, exceeding the estimate of Rs 24,811 crore.

The bank's NIM stood at 4.18 percent, compared with 4.36 percent in the preceding quarter and 4.30 percent a year earlier. Total advances grew 30 percent year-on-year to Rs 18.32 lakh crore, while deposits increased 27.1 percent to Rs 20.50 lakh crore. Excluding FCNR-B-related balances, loan and deposit growth stood at 24.1 percent and 17 percent, respectively.

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Goldman Sachs sees 45% upside

Goldman Sachs maintained its Buy rating with a target price of Rs 2,025, citing an earnings beat across loan growth, core revenue, NIM and core operating profit. It highlighted underlying loan growth of 24 percent and core revenue growth of 18 percent.

The brokerage said core NIM declined by just 10 basis points sequentially despite substantial FCNR-B deposit mobilisation. It also noted that the bank's loan-to-deposit ratio of 85 percent provides room for medium-term earnings growth.

JPMorgan raises target, expects margin recovery; Nomura raises earnings estimate

JPMorgan maintained its Overweight rating and raised its target price to Rs 1,800 from Rs 1,735, implying approximately 29 percent upside. It highlighted a broad-based earnings beat, strong balance-sheet growth and an improving retail loan mix. The brokerage expects FCNR-B deposits to weigh on margins in the December quarter but sees scope for NIM expansion in Q4 and FY28, noting that 57 percent of the loan book is linked to the repo rate.

Nomura maintained its Buy rating and raised its target price to Rs 1,740, implying nearly 25 percent upside. It also increased its FY27 and FY28 earnings-per-share estimates by 3 percent and 7 percent, respectively. The brokerage highlighted adjusted NII growth of 18 percent year-on-year and 6 percent sequentially, about 2 percent above estimates. It noted that the bank mobilised Rs 1.6 lakh crore in FCNR-B deposits and plans to deploy the liquidity over the next two quarters.

Citi, Jefferies positive on growth and asset quality

Citi maintained its Buy rating with a target price of Rs 1,770, implying approximately 27 percent upside. It described ICICI Bank as an emerging growth leader, supported by wholesale and business banking, and expects NIM to bottom out in Q3 before recovering. Strong asset quality and recoveries should help contain credit costs.

Jefferies maintained its Buy recommendation with a target price of Rs 1,750, implying around 25 percent upside. It highlighted stronger NII growth, healthy asset quality and lower credit costs, while expecting normalisation of the asset mix to support margins.

Bernstein calls ICICI Bank a standout performer

Bernstein maintained its Outperform rating with a target price of Rs 1,800, implying approximately 29 percent upside. It described ICICI Bank as the fastest-growing large private sector bank, supported by broad-based lending growth across corporate, business banking and retail segments. The brokerage said margin compression was broadly in line with peers, while controlled operating expenses and lower credit costs supported profitability despite treasury losses.

ICICI Bank share price

ICICI Bank shares closed at Rs 1,397 on Friday, October 16, up 0.55 percent. The stock has gained 4.4 percent year-to-date, outperforming the Nifty 50, which has declined 11.5 percent over the same period. The bank's market capitalisation stood at approximately Rs 10.03 lakh crore.