Nuvama has maintained its Buy rating on ICICI Bank, with a target price of ₹1,670, indicating a 17% upside from the current market price of ₹1,426.70. The brokerage highlighted the bank’s resilient margin performance, solid asset quality, and strong core profitability as key positives in its Q1FY26 results.
While reported net interest margin (NIM) declined by 7 basis points quarter-on-quarter, the core NIM dropped only 4bps—significantly better than the 12–15bps decline Nuvama had anticipated. Notably, ICICI Bank was the only bank to post a positive surprise on NIM in the current environment, underlining its strong liability management strategy.
Despite a lower proportion of wholesale deposits, the bank has managed to reprice its liabilities faster than peers, including HDFC Bank. Asset quality remains robust, with net non-performing loans (NPLs) rising just 2% QoQ, mainly due to stress in the agriculture segment.
Loan growth remained steady at 11.5% YoY, while net interest income (NII) rose 2% QoQ and 11% YoY. Core NII increased 3% sequentially, and core pre-provision operating profit (PPOP) grew 1% QoQ and 11% YoY—among the best across the sector.
Nuvama believes ICICI Bank’s ability to outperform on key operational metrics reinforces its investment case and supports a premium valuation.
Disclaimer: The brokerage view is based on publicly available research and does not constitute investment advice. Please consult a certified financial advisor before making any investment decisions.
