ICICI Bank: Motilal Oswal sees 41% upside in 2026

ICICI Bank stays a top pick despite recent underperformance

Motilal Oswal Financial Services has reiterated a ‘Buy’ rating on ICICI Bank, calling it its top pick within the banking sector even after the stock slipped sharply in recent months. The brokerage said the lender is well-positioned to sustain sector leadership, supported by a healthy growth outlook and robust asset quality. The call comes after ICICI Bank shares tumbled 10% over the last six months, reflecting a tougher period for large banking stocks. Despite that weak near-term price trend, Motilal Oswal expects the stock to see a gradual rerating as operating performance remains strong. The brokerage’s key argument is that market share gains across important lending segments continue, even as sentiment around the sector has softened. The note also points to the bank’s cost leadership and strong liability franchise as structural supports.

Stock moves on Thursday and the immediate trigger

On Thursday, ICICI Bank shares traded higher, rising over 1% to around Rs 1,258.40 on the NSE. During the session, the stock climbed as much as 1.5% to Rs 1,261.60, and was described as the day’s top index contributor. The move followed renewed attention on brokerage expectations and target prices, with Motilal Oswal reiterating its bullish stance. The market reaction is notable because the stock’s near-term trend has been negative, and even modest rebounds have been watched closely. The trading action also came after a recovery from an intraday low mentioned at Rs 1,247.2. Overall, the day’s price move did not change the longer-term picture, but it did highlight that the stock remains sensitive to broker commentary.

What Motilal Oswal is projecting

Motilal Oswal maintained its target price of Rs 1,750 per share on ICICI Bank. Based on a stated previous closing price of Rs 1,242 on the NSE, that implies an upside of nearly 41%. The brokerage also outlined profitability assumptions in its note: FY28E RoA/RoE of 2.3%/16.2%. Motilal Oswal added that ICICI Bank remains its top buy within the banking sector, and referenced its valuation framework as 2.5x Sep’27E standalone adjusted book value (ABV). Separately, the brokerage is projecting a 16% loan CAGR, pointing to sustained profitability despite the stock’s muted returns.

Why the stock has been subdued

Motilal Oswal acknowledged that ICICI Bank’s performance has been tepid over the past year. It linked that to a broader derating across large banking stocks amid persistent FII selling, which has weighed on sector multiples. The stock trend cited in the updates remains negative in the near term, with the shares down over 1% in a week and a month. ICICI Bank is also down over 6% on a year-to-date basis and 12% over one year. In the Hindi-language market update, the stock was also described as about 7% down this year, and 17% below its 52-week high of Rs 1,500. Even with these declines, longer-term returns cited remain strong, with 34% returns over three years and 96% returns over five years.

Operating performance and market share gains in focus

Motilal Oswal’s central thesis is that the bank’s operating performance is holding up despite the stock price weakness. The brokerage expects the combination of sustained growth momentum and market share gains across key lending segments to support a gradual rerating. It also flagged the bank’s strong liability franchise and cost leadership, which typically matter for margin stability and the ability to fund growth competitively. While the note does not quantify market share changes in the provided details, it treats the trend as ongoing and meaningful to the outlook. The emphasis is also on “earnings visibility” and “sustained growth momentum,” positioning ICICI Bank as a relatively stronger large private bank in a risk-aware environment.

Asset quality expectations and what the brokerage highlighted

A major pillar of the positive view is asset quality. The coverage notes repeatedly describe ICICI Bank as having robust or resilient asset quality, which underpins confidence in sustained profitability assumptions. One update also cited a projection that by FY28, gross NPA could reduce to 1.43% and net NPA to 0.34%. These estimates help explain why the brokerage is comfortable building in a high-return profile by FY28. The focus on asset quality is especially relevant at a time when investors are closely tracking slippages, recoveries, and the direction of credit costs across lenders.

Scale and distribution: branches and ATM footprint

In a separate brokerage-related excerpt included in the supplied text, ICICI Bank was noted to have added 402 branches during the first nine months of FY26. That took its network to 7,385 branches and 11,983 ATMs and cash recycling machines. Distribution scale matters for retail deposit gathering and cross-selling, and it can support growth in granular liabilities over time. Even though the stock is in a weaker phase on price charts, the physical network expansion provides a datapoint that the operating engine continues to invest in reach and capacity.

Key data points at a glance

What investors are likely to track next

The immediate watchpoints are whether the stock’s derating pressure eases and whether FII flows into large banks stabilise, since the brokerage itself linked sector weakness to persistent selling. Market participants will also track whether ICICI Bank continues to deliver on the profitability path implied by FY28E RoA and RoE estimates, and whether the bank maintains its operating performance through varying rate and competition conditions. On the fundamentals side, asset quality outcomes relative to the GNPA and NNPA expectations cited for FY28 will remain a key marker. Investors may also monitor the bank’s growth trajectory in line with the 16% loan CAGR expectation mentioned in the brokerage view, since loan growth and funding costs jointly shape earnings durability.

Conclusion

Motilal Oswal has kept ICICI Bank as its top ‘Buy’ in the banking sector, even after a weak six-month stock run and broader derating across large banks. With a Rs 1,750 target and an implied ~41% upside from the referenced closing level, the brokerage is leaning on operating resilience, asset quality comfort, and sustained growth assumptions. The next set of market moves is likely to remain sensitive to sector sentiment and foreign investor positioning, but the brokerage’s framework is clear: it expects a gradual rerating if performance stays on track.