ICICI Bank Shares Fall Over 2% After Q2 Results; Analysts Stay Bullish Despite Soft Loan Growth

ICICI Bank Shares Dip After Q2 Earnings Despite Profit Rise

Shares of ICICI Bank Ltd fell more than 2% in early trade on Monday, October 20, after the private sector lender announced its second-quarter (Q2 FY26) financial results.
At around 10 am, the stock was trading at ₹1,405.70 apiece, down 2.1% from the previous close on the BSE, amid mixed investor sentiment following its performance update.

The bank released its quarterly results on Saturday, October 18, reporting a moderate rise in profit but slower loan growth compared to peers.

ICICI Bank Q2 Results: Profit Up 5.2% YoY, NII at Record High

For the quarter ended September 30, 2025, ICICI Bank reported a standalone net profit of ₹12,358.9 crore, a 5.2% year-on-year (YoY) increase from ₹11,745.9 crore in the same period last year.

The bank’s net interest income (NII) — the difference between interest earned and interest expended — rose 7.4% YoY to ₹21,529.5 crore, up from ₹20,048 crore a year earlier.
This growth was supported by steady loan demand and disciplined asset quality management.

On the balance sheet front, the capital adequacy ratio (Basel III) improved to 15.76%, compared with 15.35% in Q2 FY25, reflecting strong capital buffers.

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Asset Quality Strengthens, Provisions Fall 26% YoY

One of the key positives in ICICI Bank’s results was the improvement in asset quality.
The gross non-performing asset (GNPA) ratio declined to 1.58%, compared to 1.97% a year ago, while the net NPA ratio eased slightly to 0.39%.

Further, provisions and contingencies dropped nearly 26% YoY to ₹914 crore, down from ₹1,233 crore in the same period last year.
This decline reflects improved loan recoveries and reduced slippage across retail and SME portfolios.

Brokerages React: ‘Buy’ Ratings Intact, but Growth Concerns Linger

Despite the short-term dip in share price, leading global and domestic brokerages maintained positive outlooks on ICICI Bank, citing its strong fundamentals and stable earnings trajectory.

HSBC: Buy | Target ₹1,680

HSBC retained its ‘Buy’ rating with a target price of ₹1,680, implying an upside of nearly 17% from current levels.
The brokerage highlighted that ICICI Bank’s operating performance remained robust, supported by stronger-than-expected NIMs, lower credit costs, and healthy fee income.
However, HSBC slightly trimmed earnings estimates, citing slower loan growth and higher operating costs.

CLSA: Positive, but Cautious

Global brokerage CLSA termed it a “good but not great” quarter for the bank.
It maintained a target price of ₹1,700, signaling an upside potential of more than 18% from the last closing price.
CLSA analysts noted that management’s lack of guidance on NIM improvement for H2 FY26 could reflect repricing pressures from high-cost deposits.

Morgan Stanley: Overweight | Target ₹1,800

Morgan Stanley remained the most bullish, reiterating its ‘Overweight’ call with a target price of ₹1,800, implying an upside potential of 25%.
The brokerage expects ICICI Bank to continue benefiting from strong balance sheet quality, capital efficiency, and cost discipline.

Domestic Brokerages: Focus on Growth Momentum

Domestic analysts echoed similar sentiments, while highlighting areas that need improvement.

Emkay Global Financial Services said the bank’s Q2 results were “slightly below expectations,” citing soft credit growth and lower treasury gains, which led to a 3% earnings miss at ₹13,700 crore.
The brokerage noted that credit growth slowed to a four-year low of 10% YoY, primarily due to deceleration in the SME and retail lending segments.

Phillip Capital maintained a positive view but stressed that ICICI Bank needs to accelerate growth to justify its premium valuation multiples compared to peers such as HDFC Bank and Axis Bank.

Meanwhile, Bob Capital Markets said that while the net interest margin (NIM) declined sequentially, the drop was smaller than expected, signaling that profitability remains resilient even amid margin compression across the sector.

ICICI Bank Outlook: Stable Fundamentals, But Eyes on Growth Rebound

Analysts believe that ICICI Bank’s fundamentals remain strong, with a resilient balance sheet, low NPA levels, and comfortable capital adequacy.
However, the next few quarters will likely hinge on the bank’s ability to revive loan growth and maintain NIM stability amid a tightening liquidity environment.

The lender’s diversified portfolio across retail, corporate, and SME lending continues to offer stability, but competition and deposit repricing are expected to weigh on margins in the short term.

“ICICI Bank remains one of the best-managed large-cap banks, but sustaining double-digit credit growth will be key to maintaining its premium valuation,” said a Mumbai-based analyst with a domestic brokerage.

Stock Performance and Technical View

From a market perspective, ICICI Bank’s stock has been one of the best-performing private lenders in 2025, gaining over 22% year-to-date before the Q2 results-led correction.
Technical analysts expect the stock to find support near ₹1,385–1,390 levels, while resistance is seen around ₹1,450–1,460 in the near term.

Short-term investors are advised to monitor price action around ₹1,400, while long-term investors may consider the current dip as a buying opportunity, given the positive outlook from leading brokerages.

Short-Term Dip, Long-Term Value Intact

While the 2% fall in ICICI Bank shares post-earnings reflects short-term disappointment over slower loan growth, the overall Q2 performance remains strong on profitability and asset quality.
Most analysts expect the lender to sustain steady earnings growth and robust return ratios in the second half of FY26, supported by efficient cost control, lower credit costs, and stable margins.

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