The share price of ICICI Bank fell nearly 3% on January 19as investors reacted to the bank’s December-quarter earnings. The stock came under pressure after Q3 profit declined year-on-year, driven by a regulatory provision that weighed on headline numbers. But major brokerages recommended a ‘Buy’ rating on the stock, though they painted a relatively measured picture.
Analysts said the earnings impact was largely due to an RBI-mandated, one-time standard asset provision on an agricultural loan portfolio, and not because of stress in the loan book. Excluding this, they pointed to steady margins, improving loan growth, healthy asset quality, and management continuity as factors supporting their positive stance on the stock.
Motilal Oswal on ICICI Bank: ‘Buy’
Motilal Oswal Financial Services reiterated its ‘Buy’ rating and pegged the stock at Rs 1,750, which implies an upside of about 28% from the current price. The brokerage said Q3FY26 earnings were affected by one-off provisioning related to agricultural loans and a one-time labour code charge, while underlying operating performance remained steady.
Loan growth during the quarter was led by business banking and corporate segments, while retail growth stayed stable. Net interest margins were flat at around 4.3%, in line with management guidance, as deposit repricing helped offset pressure on asset yields.
Motilal Oswal said asset quality metrics remained comfortable, and the decline in the credit card portfolio during the quarter was due to repayments following festive-led spending in the previous quarter. “Despite the one-off provisioning, ICICI Bank is on track to deliver RoA of 2.2% in FY26,” the brokerage said, adding that leadership continuity removes a key concern for the stock.
JM Financial on ICICI Bank: ‘Buy’
JM Financial Institutional Securities maintained its ‘Buy’ call and raised its valuation to Rs 1,725, implying an upside of around 26% from current levels. The brokerage said ICICI Bank’s reported profit fell 4% year-on-year in Q3FY26 due to an additional Rs 1,283 crore standard asset provision linked to an agricultural priority sector portfolio estimated at Rs 20,000–25,000 crore.
Adjusted for this provision, JM Financial said profit would have grown 4% year-on-year, supported by loan growth of 12% and broadly stable margins. Net interest income rose 8% year-on-year, while operating profit increased 3%, despite higher operating expenses related to labour code provisioning and compliance costs.
JM Financial said the provision was regulatory in nature and does not reflect deterioration in asset quality. “The additional standard asset provision of INR 12.83bn is temporary and will reverse once the PSL portfolio is made compliant,” the brokerage said. It also highlighted that the extension of the MD and CEO’s tenure until October 2028 improves execution confidence at a time when growth momentum is improving.
Anand Rathi Research on ICICI Bank: ‘Buy’
Anand Rathi Research retained its ‘Buy’ rating on ICICI Bank and valued the stock at Rs 1,713, which implies an upside of about 25% from the current market price. The brokerage said the bank’s core performance in Q3FY26 remained steady once one-time items were excluded, with pre-provision operating profit rising 6.9% year-on-year and 3.4% quarter-on-quarter.
Loan growth improved during the quarter, with advances rising 11.5% year-on-year, compared with 10.3% in the previous quarter. Net interest margins remained stable, while fee income continued to be supported by retail-led activity. Anand Rathi noted that despite the seasonally weak quarter, asset quality stayed stable, with gross and net slippages contained.
The brokerage said the rise in credit cost to 36 basis points was largely due to the RBI-mandated Rs 1,280 crore one-time provision on the agricultural portfolio. “Excluding one-offs, trends were in-line with expectations with core PPoP growing by 6.9% y/y. Credit growth accelerated to 11.5% y/y with stable NIMs,” it said, adding that the reappointment of Sandeep Bakhshi as CEO until October 2028 supports continuity and execution visibility.
PL Capital on ICICI Bank: ‘Buy’
PL Capital retained its ‘Buy’ rating and valued ICICI Bank at Rs 1,800, implying an upside of about 31% from Rs 1,370.60. The brokerage said the December quarter was softer due to higher provisions and lower core revenue, leading to a core profit miss of about 5%.
At the same time, PL Capital highlighted that loan growth picked up meaningfully, rising 11.5% year-on-year and 4.1% quarter-on-quarter, driven by corporate, business banking, mortgage, and rural segments. Deposit growth remained steady, while the CASA ratio stayed broadly stable.
PL Capital said the extension of Sandeep Bakhshi’s term until September 2028 reduced uncertainty around senior management. “Growth has picked up; the board’s approval of Mr. Bakhshi’s term extension mitigates KMP risk,” it said, adding that asset quality improved during the quarter, with gross NPAs falling to around 1.5%.
Elara Securities on ICICI Bank: ‘Buy’
Elara Securities reiterated its ‘Buy’ rating and raised its valuation to Rs 1,783, implying an upside of nearly 30% from current levels. The brokerage said ICICI Bank delivered steady core performance in Q3FY26, with pre-provision operating profit ahead of estimates and loan growth surprising positively at 4% quarter-on-quarter.
Net interest margin remained flat during the quarter, which limited net interest income growth sequentially, but Elara said the bank is balancing growth and profitability choices in a challenging rate environment. Slippages were controlled, and retail asset quality remained stable.
Elara described the RBI-directed Rs 1,280 crore standard asset provision as a negative surprise for reported profit but not a sign of credit stress. “Coverage of over 75%, NNPL of 37bp and a contingent buffer of about 0.9% of loans imply earnings consistency,” it said, pointing to buffers that support profitability.
Nuvama Research on ICICI Bank: ‘Buy’
Nuvama Institutional Equities maintained its ‘Buy’ rating but lowered its valuation to Rs 1,670, which still implies an upside of about 22% from current levels. The brokerage said the Q3FY26 profit miss was driven by the RBI-mandated agricultural provision, a one-time labour code charge, and a small miss in net interest income and fee income.
Core pre-provision operating profit excluding treasury loss and wage provisions grew 6% year-on-year and 3% quarter-on-quarter, while loan growth improved to 12% year-on-year. Deposits rose 9% year-on-year, supported by retail savings and term deposits.
Nuvama highlighted that ICICI Bank did not have to declassify the affected agricultural loans from priority sector status, unlike some peers. “The re-appointment of Mr Bakhshi as CEO till Oct-28 is a big positive as it removes a key overhang on the stock,” it said, adding that asset quality remains among the strongest in the sector.
Conclusion
While ICICI Bank’s shares came under pressure after the December-quarter results, brokerage reports show broad agreement that the weakness was driven by regulatory, one-time provisions rather than a change in operating conditions. With most valuations still pointing to 20–30% upside from current levels, analysts continue to focus on loan growth, margin stability, asset quality, and leadership continuity as the key factors to track in the coming quarters.