Five reasons why Motilal Oswal sees 41% upside in ICICI Bank shares

Shares of ICICI Bank Ltd. have recovered from the day's low on Thursday, June 4, and are trading with gains. In a note, brokerage firm Motilal Oswal Financial Services has projected a 41% upside on the country's second-largest private lender

Motilal Oswal has a "buy" rating on ICICI Bank with a price target of ₹1,750 per share.

Here are five reasons behind the brokerage's bullish stance:

Sustaining Growth Momentum

The brokerage said the lender is well-positioned to sustain its growth momentum while maintaining profitability benchmarks.

It expects ICICI Bank to deliver compound annual loan growth rate (CAGR) of 16% over financial year 2026 and 2028, led by growth in business banking and personal lending. The corporate segment is also expected to see healthy traction, supported by working capital demand.

Best In-Class Liability Franchise

Motilal Oswal said ICICI Bank's liability franchise continues to remain best-in-class, supported by diversified acquisition engines and a rapidly expanding physical network.

With a domestic cash deposit ratio of 85.5% and a liquid cash ratio of 126%, the lender is well-placed to capitalise on growth opportunities compared to peers, the note added.

Continued Cost Leadership

The bank is likely to maintain cost leadership despite meaningful investments in technology, customer delivery, analytics and talent. Motilal Oswal estimates the cost-to-income ratio to range between 39% and 38% over financial year 2027 and 2028 respectively.

Robust Asset Quality

Motilal Oswal said ICICI Bank's asset quality remains robust, supported by disciplined underwriting, continued monitoring and strong recoveries, while the lender maintains a healthy contingency buffer (0.9% of loans).

Currently, the bank does not face additional portfolio stress from the West Asia crisis or ECL transition, it said.

Hence, its credit costs are expected to remain contained with the gross non performing assets (GNPA) and net NPA estimated to improve to 1.4% and 0.3% by financial year 2028, respectively.

Gradual Re-Rating In The Works

The brokerage said ICICI bank delivered a tepid performance over the past year, reflecting broader de-rating across large banking stocks amid persistent foreign institutional investor selling. However, with operating performance holding strong and sustained market share gains across key lending segments, Motilal Oswal expects a gradual rerating.

Of the 50 analysts who have coverage on the ICICI Bank stock, 48 have a "buy" rating and two have a "hold" rating.n

Shares of ICICI Bank are trading 0.4% higher on Thursday after recovering from opening lows at ₹1,247.2. The stock is down 7% so far this year.

From its 52-week high level of ₹1,500, the stock is down 17%.

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