ICICI Bank (ICICIBC IN) – Q2FY26 Result Update – Focus remains on profitability compared to peers – BUY
Published on 19 Oct 2025
ICICIB saw a good quarter due to better NIM and lower provisions that led to core PAT beat of 4.2%. Adjusted for IT refund of 7bps in Q1FY26, reported NIM movement for Q2FY26 was superior to peers since it was up 3bps QoQ to 4.3%. HDFCB/AXSB saw a decline of 8/7bps QoQ. While bank expects NIM to remain stable in H2FY27, we expect it to improve owing to deposit repricing and CRR reduction. Quality of loan growth QoQ was also better as it was retail/SME led, while HDFCB/AXSB saw strong corporate growth. Loan accretion improved to 3.2% QoQ (1.7% in Q1’26) mainly led by BuB/retail while within retail, unsecured growth picked up to 3.6% QoQ. Bank expects healthy growth in retail/SME to sustain and has a positive outlook on overall loan growth. With industry best expected core RoA of 2.1% for FY27E, we maintain multiple at 2.9x but increase TP to Rs1,800 from Rs1,730 as we roll forward to Sep’27 core ABV. Retain ‘BUY’.
