ICICI Bank: Motilal Oswal reiterates 'buy' on the private lender, sees over 15% upside – 6 key reasons why

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₹1,350 (premised on 2.5x FY26E ABV). This indicates an over 15 percent potential upside.The stock hit its record high of ₹1,199.35 and its market cap crossed $100 billion in intra-day deals today. The stock has now risen over 33 percent from its 52-week low of ₹898.85, hit on October 26, 2023."While we estimate margins to remain range-bound in the near term, the operating leverage is emerging as a lever to support earnings growth.

The bank is witnessing healthy deposit inflow, while a benign CD ratio (lowest among large private banks) places it well to focus on profitable growth. The asset quality outlook remains robust as the bank maintains strong PCR and a high contingency buffer (1.1% of loans)," explained the brokerage. It estimates ICICI Bank will deliver a PPoP/PAT CAGR of 16.7 percent/13.7 percent over FY24-26E, leading to RoA/RoE of 2.2 percent/17.7 percent.ICICI Bank has already gained almost 29 percent in the last 1 year and 20 percent in 2024 YTD.

The stock has given positive returns in 5 of the 6 months so far this year. It rose 6.7 percent in June to date after a 2.5 percent fall in May. But, it was in the green for the first 4 months of 2024.

Meanwhile, in the long term - 3 years - as well, the stock has surged over 84 percent.Loan growth to remain robust: The brokerage noted that ICICI Bank is consistently outpacing system credit growth, driven by higher growth in retail and SME segments, while wholesale growth remains modest. The bank reported a 17 percent CAGR in loans over FY22-24, with a diversified and granular portfolio. Data analytics-driven processes for onboarding, credit assessment, and customer monitoring support this growth.