Kotak's Perspective
Kotak Institutional Equities expressed a favorable outlook by maintaining its 'Add' rating and elevating the target price to ₹1,800 per share. They observed
that the bank's earnings decreased approximately 4 percent year-on-year in Q3 FY26, primarily due to increased one-off provisions. Kotak highlighted the CEO's extended tenure, which runs until October 2028, as a positive factor, diminishing uncertainties. Loan growth, approximately 10 percent year-on-year, and deposit growth, around 8 percent year-on-year, were indicative of consistent underlying momentum. While the operating profit growth was modest, about 3 percent year-on-year, the asset quality remained stable, and the bank's strong liability franchise was seen as a support for its long-term outlook. This analysis indicates Kotak's confidence in ICICI Bank's ability to navigate challenges and sustain growth in the long run. The positive assessment is rooted in factors such as strong deposit growth and good loan progression which should continue to improve the bank's overall position, even after the earnings dips.
Jefferies' Analysis
Jefferies also maintained a 'Buy' rating and increased the target price to ₹1,730 per share. They linked the Q3 earnings shortfall to higher agricultural provisions and costs linked to labor laws. Jefferies pointed out that loan growth improved to 12 percent, driven by corporate and mortgage loans, while unsecured retail lending saw a slowdown. They noted that asset quality stayed stable. The brokerage emphasized that the CEO's two-year extension to October 2028 provides consistency and clarity in leadership, reinforcing their positive stance. The data suggests that Jefferies is optimistic about ICICI Bank's potential to enhance its loan portfolio. Jefferies also seems encouraged by the management continuity, which could help with the effective execution of long-term strategies, giving investors confidence.
Bernstein's Cautious View
Bernstein, adopting a more cautious approach, maintained a 'Market Perform' rating with a target price of ₹1,550 per share. Although they acknowledged the CEO's reappointment reduced concerns around the stock, they noted a weaker quarterly performance. Bernstein found that loan and deposit growth lagged behind broader trends in the industry, and margins remained flat quarter-on-quarter, unlike improvements seen at other banks. Furthermore, a one-time surge in credit costs negatively affected profitability. Bernstein also pointed out the year-on-year decrease in earnings per share. This perspective suggests that while Bernstein acknowledges positive aspects like the CEO’s extension, they are wary of the bank's growth compared to its competitors. The financial figures Bernstein provided indicates the need for improved profitability to match current banking trends and maintain investor confidence.
