Brokerage firm Prabhudas Lilladher has increased its target price for ICICI Bank to ₹1,850, citing strong quarterly earnings and consistent loan growth. The report highlights that the bank's core profit outpaced operating expenses, signaling high-quality revenue generation compared to other lenders. Investors may track the bank's future loan book expansion and its ability to maintain fee income momentum amid evolving credit loss provisions.
Prabhudas Lilladher has updated its outlook on ICICI Bank, raising the target price to ₹1,850 from the previous ₹1,825. This adjustment follows the bank's latest quarterly performance, which the brokerage described as strong, driven by growth in both core interest income and fees from business segments.
Earnings Quality and Core Profit Growth
A central focus of the brokerage report is the quality of ICICI Bank's earnings. Analysts noted that the bank achieved a 7% beat in profit before provisions and taxes (PPoP) primarily through core revenue expansion. This is highlighted as a differentiator from some industry peers, who in recent quarters have relied more on reduced operating expenses to boost their bottom lines. By growing its core income faster than its operational spending, ICICI Bank has demonstrated improved efficiency in its primary lending operations.
Loan Growth and Segment Activity
The bank’s loan book has shown a steady upward trend, marking the fourth consecutive quarter of improvement. Recent data shows a 5% increase sequentially and a 20% rise compared to the same period last year. Reflecting this momentum, the brokerage has adjusted its loan growth forecast for FY27 upwards by 200 basis points to 17% year-on-year. Fee income also grew by 7.5% during the quarter, despite the first quarter of the financial year often being a slower period for banking activity. The bank’s ability to generate this income through its corporate, retail, and business partnership segments remains an area for investors to watch as it indicates broad-based demand.
Provisioning and Future Outlook
Regarding the impact of expected credit loss (ECL) provisions, the report suggests that the bank’s existing financial buffers are well-positioned to handle these costs without significantly hurting long-term earnings. While changes in regulatory provisioning requirements can affect banking financials, the analysis suggests these impacts are manageable for the institution. Following these results, the brokerage has raised its core profit after tax (PAT) estimates for FY27 and FY28 by an average of 5%.
For investors, the primary monitorables remain the sustainability of loan growth and how the bank manages its fee income in the upcoming quarters. While the brokerage maintains a positive view, the actual performance will depend on continued demand in the retail and corporate lending spaces and the bank's ability to maintain its profit margins against potential changes in the broader economic interest rate environment.