ICICI Bank: MOFSL Sets Rs 1,750 Target on Leadership Stability

Introduction

Motilal Oswal Financial Services (MOFSL) has identified ICICI Bank as its top pick within the Indian banking sector. The brokerage's confidence is anchored by the recent board recommendation to extend the tenure of Managing Director and CEO, Sandeep Bakhshi, a move that MOFSL believes has resolved a significant uncertainty surrounding the bank's leadership.

The Significance of Leadership Continuity

The proposal to extend Sandeep Bakhshi's term by two years is seen as a pivotal development. According to MOFSL, this decision reinforces leadership stability and ensures the continuation of the strategic direction that has defined the bank's recent success. This continuity is crucial for investor confidence and removes what the brokerage termed a 'key overhang' on the stock, allowing the market to focus on the bank's strong operational performance and future growth prospects.

From Individual Stardom to Team Cohesion

Under Bakhshi's guidance, ICICI Bank has undergone a significant cultural and operational transformation. MOFSL highlights a deliberate shift away from a culture that incentivized 'individual stardom' to one that emphasizes team performance and collective responsibility. This strategic change has been instrumental in the bank's ability to deliver consistently strong and less volatile outcomes. The focus on a cohesive organizational culture, coupled with robust growth in core Pre-Provisioning Operating Profit (PPoP), underpins the bank's position as a resilient and successful institution.

An Opportunity in Underperformance

MOFSL points to the stock's recent market performance as a key reason for its attractive valuation. In the fiscal year 2026 so far, ICICI Bank shares have delivered a modest 6% return. This is a stark contrast to the average annual return of 21% seen over the previous three fiscal years (FY23, FY24, and FY25). This period of relative underperformance has resulted in the stock trading at valuations that are cheaper compared to its historical averages, presenting a compelling entry point for investors.

Financial Projections and Stability

The brokerage expressed confidence in ICICI Bank's financial trajectory. It projects that the bank is firmly on track to deliver a Return on Assets (RoA) of 2.2% in FY26 and a sustainable Return on Equity (RoE) of 16% over the FY26-27 period. This outlook holds despite some one-off provisions noted in the third quarter. MOFSL also highlighted the stability in the bank's Net Interest Margins (NIMs), which have been steady in recent quarters. This stability is attributed to a reduction in the cost of deposits, a balanced loan mix, and disciplined pricing strategies across its retail and corporate loan books.

Key Projections by Motilal Oswal

A Measured Approach to Growth

ICICI Bank's strategy is described as measured and deliberate. The management is avoiding aggressive, high-risk expansion. Instead, the focus is on strategically capturing market share in segments where risk-adjusted returns are favorable. This prudent approach ensures that growth is both sustainable and profitable, contributing to the bank's reputation as one of the most dependable large-bank stories in the sector.

Current Market Snapshot

Analyst Consensus

The positive sentiment from MOFSL is echoed by other market analysts. For instance, Citi has also maintained a 'BUY' rating on the stock with a target price of ₹1,720. The consensus among a majority of analysts is bullish, with 36 out of 37 recommending either 'Buy' or 'Strong Buy', reflecting broad confidence in the bank's fundamentals and strategic direction.

Conclusion

In summary, Motilal Oswal's endorsement of ICICI Bank as a top sector pick is based on a combination of confirmed leadership stability, attractive valuations, and a proven track record of operational excellence. With the uncertainty around the CEO's tenure now addressed, the bank appears well-positioned to continue its trajectory of best-in-class growth and profitability, reinforcing its status as a cornerstone investment in the Indian banking landscape.