ICICI Bank: Motilal Oswal sees 41% upside in 2026

What changed in the latest call

Motilal Oswal Financial Services (MOFSL) has reiterated its ‘Buy’ rating on ICICI Bank and kept the lender as its top pick within the banking sector. The brokerage’s stance comes even as the stock has struggled in the near term, including a 10% fall over the last six months. MOFSL said the bank remains well-positioned to sustain sector leadership, supported by a healthy growth outlook and robust asset quality.

The brokerage has set a target price of Rs 1,750 per share. Based on ICICI Bank’s previous closing price of Rs 1,242 on the NSE, this implies an upside potential of nearly 41%. During the session referenced in the report, the stock traded around 1% higher at Rs 1,252.30 (at 1:46 pm).

Stock performance and the broader sector context

MOFSL acknowledged that ICICI Bank’s returns have been muted over the past year, and linked the tepid performance to a broader derating across large banking stocks. The brokerage attributed part of this derating to persistent foreign institutional investor (FII) selling.

In another comparison highlighted by the brokerage, ICICI Bank shares delivered a modest 6% return in FY26 so far, compared with an average 21% return over FY23, FY24 and FY25. MOFSL said this has left the stock trading at cheaper valuations compared with its own average trading valuations over the past three years.

Why MOFSL remains constructive on ICICI Bank

MOFSL’s constructive view is anchored in operating performance holding up, alongside sustained market share gains across key lending segments. It also cited strong earnings visibility, a robust asset quality profile, and a resilient liability franchise.

The brokerage highlighted low credit costs and robust provisioning as key supports for asset quality. It also pointed to cost discipline and cost leadership as factors that can help sustain profitability. MOFSL’s expectation, based on these fundamentals, is for a gradual rerating rather than a sudden revaluation.

Leadership stability: Bakhshi tenure extension removes an overhang

MOFSL flagged a specific governance and leadership development as material for sentiment. The bank’s board has recommended extending Sandeep Bakhshi’s tenure as Managing Director and Chief Executive Officer by two years, which the brokerage said removed a key overhang and reinforced leadership stability.

In a separate research note dated January 18, 2026, MOFSL also said the board approved a fresh two-year term as MD and CEO for Sandeep Bakhshi. The brokerage reiterated that the move supports the bank’s ability to deliver “best-in-class” growth and profitability, and described ICICI Bank as one of the most dependable large-bank stories in the sector.

Financial forecasts: profitability and growth metrics cited by MOFSL

MOFSL estimates ICICI Bank can deliver a pre-provision operating profit and profit after tax (PAT) CAGR of around 16% and 15%, respectively, over FY26-28. The brokerage also expects the bank to deliver RoA and RoE of 2.3% and 16.2% over FY26-28.

In another set of projections cited by MOFSL, the bank is on track to deliver RoA of 2.2% in FY26E despite one-off provisions in Q3, with RoA improving to 2.3% over FY27-28E. The brokerage fine-tuned its earnings estimates and projected FY27E RoA and RoE of 2.3% and 16.1%.

MOFSL also mentioned a 16% loan CAGR in its commentary, alongside expectations of sustained profitability despite recent underperformance.

Asset quality outlook: stress seen as limited

On asset quality, MOFSL’s commentary remained supportive, pointing to limited fresh stress and improving recoveries. In the projections shared, gross NPA is expected to decline to 1.43% by FY28, while net NPA is expected to fall to 0.34% by FY28.

The brokerage’s view ties this outlook to low credit costs and strong provisioning, which it sees as reinforcing the bank’s asset quality resilience.

Valuation approach behind the Rs 1,750 target

MOFSL’s target price of Rs 1,750 has been linked to a valuation framework using adjusted book value. One note referenced a target of Rs 1,750 at 2.5x Sep’27E standalone adjusted book value. Another note described a revised target price of Rs 1,750 at 2.7x Sep’27E adjusted book value (ABV).

Separately, MOFSL has also published an ICICI Bank target price of Rs 1,670 in another context, valuing the stock at 2.7x FY27E ABV plus a sum-of-the-parts (SoTP) of Rs 270, and expecting RoA and RoE of 2.3% and 16.7% by FY27E. These differing targets reflect different reports and valuation snapshots mentioned in the provided material.

Key numbers at a glance

Market impact: what this means for investors tracking large banks

MOFSL’s note places ICICI Bank’s muted stock performance in the context of large-bank derating and persistent FII selling. For investors, the brokerage’s central argument is that operating performance and market share gains can support a gradual rerating even when near-term returns are subdued.

In its BFSI sector view, MOFSL also flagged a challenging phase for banks ahead, citing weak margins, higher credit costs, and muted loan growth. But it expects the growth trajectory to start gaining traction from the third quarter, helped by CRR cuts and declining deposit costs, and said the sector should see a gradual rebound in NIMs from 3Q onwards.

Analysis: why the ‘top pick’ label matters in this cycle

The emphasis on leadership stability, asset quality resilience, and consistent operating execution explains why MOFSL continues to call ICICI Bank its preferred large private bank within its coverage. The brokerage’s published projections keep RoA around 2.2% to 2.3% and RoE around 16% over the forecast horizon referenced, which is central to how banks are valued through book multiples.

MOFSL’s commentary also indicates that, in a period where sector-wide factors like FII flows and margin pressure influence valuations, stock-specific rerating may depend on sustained delivery across loan growth, deposits, margins, and credit costs. Its preference list in the BFSI note also included HDFC Bank and State Bank of India (SBI), suggesting a tilt toward balance-sheet strength and provision buffers during a more uncertain margin cycle.

Conclusion

MOFSL has maintained a ‘Buy’ on ICICI Bank with a target price of Rs 1,750, implying roughly 40-41% upside from levels around Rs 1,242 to Rs 1,252 cited in the material. The brokerage’s thesis rests on operating consistency, market share gains, robust asset quality, and the board-backed extension of CEO Sandeep Bakhshi’s tenure as a sentiment support. Investors will likely track how margins, credit costs, and sector liquidity conditions evolve into 3Q, which MOFSL expects to be a key point for a gradual recovery in banking performance.