ICICIBANK - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:15 pm

Fundamental Rating: 4.1

📊 Core Financials:

- Quarterly PAT at ₹12,359 Cr vs ₹12,768 Cr previously → slight decline but overall strong profitability.

- ROCE at 7.61% and ROE at 17.8% → healthy efficiency for a large bank.

- Debt-to-equity ratio at 5.58 → high leverage, typical for banking institutions.

- Cash flows remain robust, supported by consistent earnings and dividend yield of 0.81%.

💹 Valuation Indicators:

- Current P/E: 19.6 vs Industry P/E: 14.7 → trading at a premium.

- P/B ratio: ~3.1 (₹1,354 / ₹433) → reasonable for banking sector.

- PEG ratio: 0.74 → attractive, suggests undervaluation relative to growth.

- Intrinsic value appears close to CMP, indicating fair pricing.

🏢 Business Model & Competitive Advantage:

- ICICI Bank is one of India’s largest private sector banks, offering retail, corporate, and digital banking services.

- Competitive advantage lies in strong retail franchise, digital innovation, and diversified loan book.

- Market cap of ₹9,68,240 Cr reflects scale and leadership in the banking sector.

📈 Entry Zone & Long-Term Guidance:

- CMP ₹1,354 is slightly below DMA 50 (₹1,376) and DMA 200 (₹1,369), showing mild weakness.

- RSI at 43.2 and MACD negative → near oversold zone.

- Suggested entry zone: ₹1,300–₹1,340.

- Long-term holding recommended due to strong fundamentals, digital leadership, and growth potential in retail lending.

Positive

• Strong ROE (17.8%) and consistent profitability.
• PEG ratio of 0.74 indicates undervaluation relative to growth.
• DII holdings increased by 1.15%.
• Robust retail and digital banking franchise.

Limitation

• High debt-to-equity ratio (5.58), typical for banks but adds leverage risk.
• P/E of 19.6 is higher than industry average (14.7).
• Quarterly PAT declined slightly (₹12,768 Cr → ₹12,359 Cr).

Company Negative News

• FII holdings reduced by -1.21%.
• Stock trading below DMA levels with negative MACD, showing short-term weakness.

Company Positive News

• DII holdings increased by 1.15%.
• Quarterly PAT remains strong despite slight decline.

Industry

• Banking industry is growing with strong demand for retail credit and digital services.
• Industry P/E at 14.7 indicates sector is moderately valued compared to ICICI Bank’s premium pricing.

Conclusion

⚖️ ICICI Bank is financially strong with consistent profitability, robust retail presence, and digital leadership. While valuations are slightly premium compared to industry peers, PEG ratio suggests fair growth potential. Entry is favorable around ₹1,300–₹1,340 for long-term investors, with potential for sustained growth in India’s expanding banking sector.