The ICICI Bank share price is in focus. The domestic brokerage house, Motilal Oswal reiterated its ‘Buy’ rating on the private sector lender and set a target price of Rs 1,750. Based on the current market price, the target implies an upside potential of about 41%.

The brokerage house Motilal Oswal believes ICICI Bank is entering its next phase of growth with several factors working in its favour. While the stock has delivered a relatively subdued performance over the last year amid foreign investor selling across the banking sector, Motilal Oswal expects the bank’s operational strength to eventually reflect in its valuation.

So, what makes the brokerage positive on ICICI Bank? Here’s a closer look –

Growth engines continue to gain speed 

According to Motilal Oswal, ICICI Bank’s loan growth is becoming increasingly broad-based. While business banking remains a key contributor, the brokerage expects stronger momentum from personal loans, corporate lending and small business financing over the next few years.

The bank reported healthy credit growth during the March quarter. Furthermore, corporate loan growth, which had remained subdued for some time, is also showing signs of recovery as working capital requirements increase.

Deposit strength – A competitive edge 

One of the key challenges facing banks nowadays is attracting deposits. However, Motilal Oswal believes ICICI Bank remains better positioned than many of its peers because of its diversified deposit franchise.

The bank continues to acquire customers through salary accounts, digital channels, transaction banking relationships and its expanding branch network. 

The brokerage report also noted that ICICI Bank’s liquidity position remains comfortable. With a liquidity coverage ratio of around 126% and a controlled credit-deposit ratio, the bank has sufficient flexibility to support future lending growth without facing funding pressures.

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Margins likely to remain stable

The brokerage house added that the net interest margins appear to have stabilised after facing pressure from recent rate cuts.

The brokerage firm believes ICICI Bank’s strong pricing power and healthy loan mix should help protect margins going forward. 

Motilal Oswal expects growth in higher-yielding segments such as personal loans, along with disciplined lending practices, to support profitability.

Technology investments supporting efficiency 

Another factor supporting the brokerage house bullish outlook is the bank’s ability to maintain cost efficiency.

Over the past few years, ICICI Bank has significantly increased spending on digital capabilities, analytics and customer service infrastructure. 

Motilal Oswal expects productivity gains, digital adoption and higher business volumes to further improve efficiency levels. As a result, operating leverage could become an important driver of future earnings growth.

Asset quality remains a key strength

Asset quality continues to be one of ICICI Bank’s strongest areas, according to Motilal Oswal.

The bank has maintained tight underwriting standards and continues to benefit from strong recovery mechanisms.

As per the report, the brokerage house expects bad loan ratios to improve further over the coming years, with gross non-performing assets and net non-performing assets likely to decline by FY28. Credit costs are also expected to remain under control, helping protect profitability.

What are key things investors need to watch

Motilal Oswal believes ICICI Bank is well positioned to deliver consistent growth across loans, deposits, margins and asset quality. The brokerage expects the lender to report profit growth of around 15% annually over FY26-FY28, supported by improving operating leverage and continued market share gains.

Disclaimer: This article contains analysis and specific stock recommendations from a registered domestic brokerage, including a “Buy” rating and a target price, which are subject to market risks. Readers are advised that the views expressed here do not constitute a direct offer or solicitation by this publication, and investments should be made based on individual financial goals and consultation with a SEBI-registered financial advisor. This disclaimer has been generated using AI to support user well-being and responsible content consumption.