J.P. Morgan has raised its target price for ICICI Bank to Rs 1,500 while maintaining an Overweight rating, after the bank delivered a profit of Rs 11,790 crore in Q3 FY25, marking a 15% YoY increase. While the profit was in line with J.P. Morgan’s estimates, the net interest income (NII) grew 9% YoY, with net interest margins (NIM) declining slightly by 2 basis points to 4.25%.
The report emphasized sharp cost controls, with operating expenses growing by just 5% YoY, and fee income rising by 16% YoY, driving a 15% YoY growth in core PPOP. Deposit growth of 14% YoY, along with above-system CASA growth of 13% YoY, painted a positive picture for the bank. Asset quality remained stable, with net slippages at 0.8%. The bank’s earnings also benefited from a small drawdown in contingency reserves, which helped maintain strong growth momentum.
ICICI Bank delivered a strong performance in Q3 FY25, with net profit rising by 15% year-on-year (YoY) to ₹11,792.42 crore, compared to ₹10,271.54 crore in Q3 FY24. This growth was driven by robust net interest income (NII), which stood at ₹20,370 crore, an increase of 9% from ₹18,678 crore in the corresponding quarter of the previous year. The growth in NII was supported by higher loan disbursements and stable margins.
The bank’s asset quality improved further during the quarter, with its gross non-performing assets (GNPA) ratio declining to 1.96% as of December 31, 2024, from 1.97% in the previous quarter (Q2 FY25). The net non-performing assets (NNPA) ratio also remained stable at 0.42%, reflecting better credit management and stronger recoveries.
Provisions (excluding tax) for the quarter stood at ₹1,226.65 crore against Rs 1,049 crore in Q3 FY24 but slightly lower than Rs 1,226 crore in Q2FY25.
