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Price: $34.45
Discount category: Far above intrinsic value
Intrinsic value source: AI estimate
Next earnings: 2027-01-16
Next earnings is estimate: Yes
Company name: ICICI Bank
Sector: Banks
About: ICICI Bank is one of the largest private-sector banks in India. It takes deposits and gives retail, rural, business banking and corporate loans, and it has branches outside India. Its main subsidiaries and group companies include ICICI Prudential Life Insurance, ICICI Lombard General Insurance, ICICI Prudential Asset Management, ICICI Securities and ICICI Home Finance. At September 30, 2026, it had 7,656 branches, deposits of ₹20,499 billion, advances of ₹18,316 billion and a standalone balance sheet of ₹27,253 billion. Its fiscal year ends on March 31, and it reports under Indian GAAP in rupees. Its shares trade on the NSE and the BSE in India. Its ADSs trade on the New York Stock Exchange, and each ADS represents two equity shares.
Thesis: ICICI Bank trades at a premium to the AI estimate because investors pay for its high returns and fast growth. Consolidated profit after tax was about 17.0% of average equity in the first half of fiscal 2027, when annualized (a calculation from the results). Standalone profit after tax rose 20.1% in Q2 fiscal 2027, and gross non-performing assets fell to 1.20% of advances. Part of the recent growth comes from foreign currency FCNR (B) deposits under a swap facility of the Reserve Bank of India. Without them, deposits grew 17.0% and loans grew 24.1% in the year to September 30, 2026. For the premium to be earned, three things must be true. The net interest margin must stay near 4.2% as rates change; it was 4.18% in Q2 fiscal 2027, down from 4.30% a year earlier. Net non-performing assets must stay near 0.30% of advances. Return on equity must stay near the current level, and the bank must name a successor before the new two-year term of the chief executive Sandeep Bakhshi, which started on October 4, 2026, ends in 2028. The Q3 fiscal 2027 report, expected in mid-January 2027, gives the next test, and the full-year report in April 2027 gives a larger one. If returns fall toward those of other large Indian banks, the premium can shrink over the next two years.
Valuation: The intrinsic value for ICICI Bank is an AI estimate from November 9, 2026. It is not an analyst's value. An AI research agent calculated it from ICICI Bank's filings. The method is a justified price-to-book model. Value per share is book value per share times (ROE - g) / (r - g), where ROE is the long-term return on equity, r is the cost of equity in rupees and g is long-term growth. The results for the quarter and half year to September 30, 2026 (6-K, October 22, 2026) give consolidated share capital of ₹1,435.96 crore and reserves and surplus of ₹386,225.63 crore, with a face value of ₹2 per share. This gives 7,179.8 million shares and a consolidated book value of ₹539.93 per share. The same results give consolidated profit of ₹31,773.24 crore for the six months, which is about 17.0% of average equity when annualized (a calculation from the results), and consolidated profit of ₹54,207.70 crore for the year to March 31, 2026. The 20-F for the year to March 31, 2026 (July 20, 2026) says that each ADS represents two equity shares. The book value carries the listed subsidiaries at book value, not at market value, and the estimate makes no change for this. The ROE, cost of equity and growth in each case are assumptions. The low case assumes ROE of 15.5%, a 12.5% cost of equity and 7.5% growth. It gives 1.60 times book, ₹863.89 per share and $18.29 per ADS. The base case assumes ROE of 17.5%, near the current level, a 12% cost of equity and 8% growth. It gives 2.375 times book, ₹1,282.34 per share and $27.15 per ADS. The high case assumes ROE of 19%, an 11.5% cost of equity and 8% growth. It gives 3.14 times book, ₹1,696.93 per share and $35.93 per ADS. The estimate uses an exchange rate of ₹94.46 per U.S. dollar, the market rate at the close on November 6, 2026, as an assumption. The estimate assumes weights of 25%, 50% and 25%. The weighted intrinsic value is ₹1,281.38 per share and $27.13 per ADS. The value moves with the rupee. Switching costs and intangible assets are the main sources of the advantage. Customers keep their salary accounts, loans and cards at one bank for many years, and ICICI Bank has a strong brand and 7,656 branches. Its gross non-performing assets fell to 1.20% of advances at September 30, 2026. But other large private banks offer the same products, and regulation and interest rates can change returns. The estimate expects the advantage to last 10 years or more, but not 20 years. As of 2026-11-09.
Risks: Large FCNR (B) deposit inflows raised the share of term deposits, and the average current and savings account ratio was 35.8% in Q2 fiscal 2027. Higher funding costs or lower rates can push the net interest margin below 4.2%. The chief executive started a new two-year term on October 4, 2026, which ends in 2028. An unclear succession can affect the bank's strategy and the value of the shares. The bank earns in rupees, and the ADS trades in U.S. dollars. A weaker rupee lowers the value of each ADS. The Reserve Bank of India directed a ₹12.8 billion standard asset provision on some agricultural priority sector loans, and the bank received warnings from SEBI in 2026. New regulatory findings can add costs. Gross non-performing assets were 1.20% of advances at September 30, 2026. A slower economy can raise credit costs, although the bank holds a contingency provision of ₹131 billion.
Balance sheet: ICICI Bank is a bank, so its balance sheet is mostly loans, investments and deposits, and not corporate debt. At September 30, 2026, the standalone balance sheet was ₹27,253 billion. Deposits were ₹20,499 billion and borrowings, including subordinated debt, were ₹2,045.5 billion, up from ₹1,262.9 billion at June 30, 2026. Advances were ₹18,316 billion, so advances were about 89% of deposits (a calculation from the results). Investments were ₹5,575 billion. Under Basel III, the total capital adequacy ratio was 16.68% and the CET1 ratio was 16.01%, against requirements of 11.70% and 8.20%. Gross non-performing assets were 1.20% of advances and net non-performing assets were 0.30%, with a provision coverage ratio of 75.0%. The bank also held a contingency provision of ₹131 billion. Consolidated share capital and reserves were ₹3,876.6 billion. Up to August 31, 2026, it had issued about USD 3.55 billion of USD bonds. As of 2026-09-30.
Checkpoints: Jan 16, 2027 (estimate): Q3 fiscal 2027 results: margin and asset quality. Pending. Watch: Profit growth near loan growth, a net interest margin near 4.2% and stable asset quality pass; a margin below 4.0% or rising bad loans fail. Apr 2027 (estimate): Fiscal 2027 results: returns. Pending. Watch: Consolidated return on equity near 17% and no new regulatory issue pass; a clear fall in returns fails.
Recent events: 2026-10-17: ICICI Bank reported Q2 fiscal 2027 results. Standalone profit after tax rose 20.1% to ₹148.4 billion, and net interest income rose 17.7% to ₹253.4 billion. The net interest margin was 4.18%. Deposits grew 27.1% and loans grew 30.0% from a year earlier, or 17.0% and 24.1% without FCNR (B) deposits and the loans against them. The gross non-performing asset ratio fell to 1.20%, and the CET1 ratio was 16.01%. Consolidated profit after tax was ₹163.3 billion. 2026-09-04: The Reserve Bank of India approved Life Insurance Corporation of India to hold up to 9.99% of ICICI Bank's paid-up capital or voting rights within one year. 2026-08-31: ICICI Bank said that it had raised about USD 17.88 billion of FCNR (B) deposits under the swap facility of the Reserve Bank of India up to August 31, 2026. Its international branches and subsidiaries had lent about USD 9.00 billion against these deposits. From July to September 2026, it also issued senior unsecured USD notes through its IFSC Banking Unit. 2026-07-18: ICICI Bank reported Q1 fiscal 2027 results. Standalone profit after tax was ₹148.1 billion, and the net interest margin was 4.36%. 2026-07-04: ICICI Bank signed a letter of undertaking with Prudential Corporation Holdings about the non-exercise of some of Prudential's rights in ICICI Prudential Life Insurance. In May 2026, after Prudential announced a controlling stake in Bharti Life Insurance, ICICI Bank said that it will keep its majority holding in ICICI Prudential Life. 2026-05-22: The Reserve Bank of India approved the re-appointment of Sandeep Bakhshi as Managing Director and CEO for two years from October 4, 2026. 2026-04-18: ICICI Bank reported results for the year to March 31, 2026. Standalone profit after tax was ₹501.5 billion and consolidated profit after tax was ₹542.1 billion. The board recommended a dividend of ₹12 per share.