ICICIBANK - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

🧠 My Thought Process

You're asking for a full-spectrum fundamental analysis of ICICI Bank, with a numeric rating and strategic investment guidance. I’ve weighed profitability, capital efficiency, valuation, and business durability, and incorporated the latest analyst sentiment and financial updates from September 2025

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📊 Fundamental Analysis of ICICI Bank

🔍 Core Financials

Profitability

PAT Qtr: ₹12,768 Cr vs ₹12,630 Cr — stable growth (↑15.4% YoY), reflecting strong operating leverage.

EPS: ₹69.0 — robust earnings base.

ROE: 17.8%, ROCE: 7.61% — solid returns, especially ROE, though ROCE is modest due to capital-heavy nature.

Leverage & Liquidity

Debt-to-equity: 5.67 — high, typical for banks; backed by strong asset quality and provision coverage.

Dividend Yield: 0.77% — modest, with consistent payouts.

Cash Flow & Asset Quality

Strong operating metrics, with improving net interest margins (NIMs) expected from Q3 FY26 onward

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Asset quality remains resilient, with easing stress in unsecured retail and MFI segments

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📉 Valuation Indicators

Metric Value Interpretation

P/E Ratio 20.8 Premium vs industry PE of 12.6 — justified by growth and quality

P/B Ratio ~3.34 Reasonable given ROE and digital moat

PEG Ratio 0.78 Attractive — undervalued relative to growth

Intrinsic Value ~₹1,500–₹1,600 Slight upside from current price

🏦 Business Model & Competitive Edge

Segment Leadership: One of India’s top private banks, with strong presence in retail, corporate, and digital banking.

Moat: Tech-driven operations, diversified loan book, and strong CASA ratios.

Growth Drivers

Digital banking leadership and transaction banking scale.

CRR cuts injecting ₹2.5 trillion into the system, aiding liquidity and margin recovery

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Analysts expect ICICI Bank to deliver healthy RoA and remain a top pick in the sector

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📈 Technical & Entry Guidance

Current Price: ₹1,422

DMA 50/200: ₹1,424 / ₹1,366 — trading near short-term support.

RSI: 51.6 — neutral zone.

MACD: -4.31 — mild bearish crossover.

🎯 Entry Zone

Ideal Buy Range: ₹1,375–₹1,410 — near DMA 200 support.

Stop Loss: ₹1,340

Target: ₹1,600–₹1,700 in medium term

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🕰️ Long-Term Holding Outlook

Hold if invested: Strong fundamentals, digital moat, and sector leadership justify long-term holding.

Buy on dips: Especially near ₹1,400 zone.

Growth Triggers: CRR cuts, digital expansion, and improving NIMs in H2 FY26

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⭐ Fundamental Rating

4.6

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Business Today | MSN

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Business Today | MSN

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