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Another solid quarter! Business growth robust; RoA remains the best-in-class at 2.49%

* ICICI Bank (ICICIBC) reported a 1QFY27 PAT of INR148b (12% beat on MOFSLe), fueled by strong core performance and lower provisions.

* 1QFY27 RoA at 2.49% remains best-in-class, and the bank remains well positioned to sustain its sector leadership.

* NIMs improved by 4bp QoQ to 4.36% (8bp positive impact from interest on IT refund; adj. NIM improved 1bp QoQ).

* The strength as well as the quality of earnings from ICICIBC continued to surprise the street. The bank continued to deliver growth and profitability at a scale that is even beyond the aspirations of most peer banks.

* Fresh slippages declined 11% YoY to INR55.5b. GNPA/NNPA ratios were flat at 1.45%/0.36%.

* We raise our earnings estimate by 4-5%, factoring in FY28E RoA/RoE of 2.3%/16.8%. ICICIBC remains our top BUY within the sector with a TP of INR1,750 (premised on 2.4x Mar’28E ABV).

Strong core profitability; credit costs contained

* ICICIBC’s 1QFY27 PAT grew 15.9% YoY/8.0% QoQ to INR148.1b (12% beat). This was led by robust loan growth, strong operating profits, and lower provisioning. Consolidated PAT increased 14% YoY to INR154.4b.

* NII grew 12.7% YoY/6.1% QoQ to INR243.8b (2% beat). Reported NIMs improved by 4bp QoQ to 4.36% (8bp positive impact from interest on IT refund). The adjusted NIM improved 1bp QoQ for the quarter.

* Other income stood at INR85.7b (10% beat), as the core fee income grew 23.5% YoY/7.5% QoQ on the back of healthy business momentum. Treasury income came in at INR1.5b vs. a loss of INR1b in 4Q.

* Opex increased 10% YoY/4%QoQ to INR125.7b. ICICIBC expects opex growth to remain below revenue growth amid an improvement in operating leverage. The C/I ratio dipped to 38.1% vs. 39.9% in 4QFY26. Core operating profit grew 15.6% YoY/10.5% QoQ to INR202.4b.

* On the business front, advances growth was robust at 19.6% YoY/5.0% QoQ, led by continued traction in business banking (up 28.2% YoY/6.9% QoQ) as well as retail portfolio (up 14% YoY/3.1% QoQ). The domestic corporate portfolio grew 18.5% YoY/6.9% QoQ.

* Deposits growth was steady at 14.0% YoY (up 2.2% QoQ), with CASA deposits growing at 9.3% YoY/down 2.6% QoQ. The CASA ratio thus declined to 39.5% from 41.4% in 4QFY26.

* Fresh slippages declined 11% YoY to INR55.5b. GNPA/NNPA ratios were flat at 1.45%/0.36%. PCR ratio was flat at 75.2%. Total provisions were lower than expected at INR 12.6b v/s 18.1b in 1QFY26, aided by recoveries from NCLT. The contingency buffer remained stable at INR131b (0.8% of loans).

Valuation and view

ICICIBC reported yet another strong quarter with resilient NIM, strong core profits, and robust asset quality metrics. Its NIM improved 4bp QoQ (8bp positive impact from the interest on IT refund vs. 5bp in 4QFY26), and the NIM is expected to remain broadly stable over FY27. Provisions were lower than expected with one-off recovery and sustained lower slippages, while the bank maintains its conservative credit cost guidance of 50bp. We expect credit costs to be in the range of 0.4-0.5%. We believe that the bank is well-positioned to deliver a 2.33% average RoA over FY27-28E. Asset quality is among the best in the industry, with the bank maintaining its contingency buffer at INR131b (0.8% of loans). We raise our earnings estimate by 4-5%, factoring in FY28E RoA/RoE of 2.3%/16.8%. ICICIBC remains our top BUY within the sector with a TP of INR1,750 (premised on 2.4x Mar’28E ABV).

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