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Informist, Wednesday, Jan. 14, 2026

 

By Priyasmita Dutta

 

NEW DELHI – ICICI Bank Ltd. is expected to see better on-year rise in its net profit for the December quarter compared to its peers and will broadly track the sectoral trend of better credit momentum and slight easing of margin pressure. ICICI Bank could even be one of the top performers in the banking sector in terms of December quarter earnings, according to brokerages tracking the lender. However, rising provisions due to seasonal stress in agricultural loans are likely to remain a key concern, according to brokerages.

 

Brokerages had a divergent view on ICICI Bank's provisions, and estimated it in the range of INR 13 billion-INR 15.54 billion, signifying a rise of 6-26% on year.

 

Despite a rise in provisions, the private sector lender is expected to report a 5.3% rise in its standalone net profit for the December quarter at INR 124.16 billion, according to the average of the estimates of 12 brokerages. Sequentially, the net profit is seen almost flat. Nirmal Bang Equities Pvt. Ltd. has the lowest estimate for net profit at INR 119.07 billion, while SMIFS Ltd. has the highest at INR 129 billion. India's second-largest private sector lender is scheduled to report its December quarter earnings on Saturday.

 

The bank's profitability will be primarily driven by credit growth, coupled with steady margins, according to brokerages. The Reserve Bank of India's 100 basis points of reduction in banks' cash reserve ratio to 3% helped reduce cost of funding for the bank, besides providing durable liquidity, brokerages said. The central bank had in June cut banks' CRR by 100 bps in four equal tranches between September and November. 

 

In October, the bank had said its net interest margin would likely remain range-bound in the near term with potential benefits from the cut in CRR and repricing of term deposits. Further, the net interest margin "will also get impacted by competitive intensity and monetary policy if there are further rate cuts", the bank had said after its September quarter results. Since then, the RBI's Monetary Policy Committee has cut the RBI repo rate by another 25 bps, taking the total cuts in the repo rate to 125 bps in 2025. 

 

Brokerages estimate ICICI Bank's December quarter net interest margin in the range of 4.2-4.4%, broadly at the same level as at the end of September, and at the end of December 2024. "Margin may remain flat as reduction in loan yields would be offset with reduction in SA/TD (savings accounts or term deposits) rates," Prabhudas Lilladher Pvt. Ltd. said while giving the most optimistic view of the net interest margin at 4.38%. Some of ICICI Bank's peers are expected to see contraction in margins during the quarter, according to brokerages. 

 

"While NIM pressure persists in the near term, a phased reduction in CRR and easing liquidity should help to stabilise (ICICI Bank's) NIMs in Oct-Mar," Motilal Oswal Financial Services Ltd. said in a report. "We expect (ICICI Bank's) NIMs at 4.4% in FY26 and to stabilise at 4.4-4.5% over FY27-FY28," it said.

 

The private sector lender's net interest income is expected to be INR 220.27 billion in the quarter under review, up over 8% on year and 2.3% on quarter, according to the average of estimates from 12 brokerages. Estimates for net interest income range between INR 216.22 billion and INR 224.27 billion. 

 

Brokerages agree loan growth gradually picked up industry-wide during the quarter and that ICICI Bank's loan growth was likely better than the industry average. "We view NII (net interest income) to increase by 9.7% YoY and 3.8% QoQ driven by a modest NIM expansion and robust above-system-loan growth," brokerage SMIFS said. The bank's credit growth during the quarter was likely 11-13% on year, brokerages said.

 

ICICI Bank's total advances at the end of the September quarter were INR 14.08 trillion, up 10.3% on year. The retail loan portfolio had grown 6.6% year-on-year and 2.6% sequentially, and accounted for 52.1% of the total loan portfolio as on Sept. 30.

 

For the December quarter, the bank's gross non-performing asset ratio could weaken due to seasonality, brokerages said. "We are building in slippages of 1.9% (INR 65 billion), Oct-Dec is higher due to PSL (priority sector loans) loans," Kotak Securities said. In the September quarter, the bank's asset quality had improved and provisions had shrunk on year, which had boosted its net profit. The gross non-performing asset ratio fell 39 bps on year to 1.58% as on Sept. 30, and down 9 bps on quarter. The net non-performing asset ratio shrank marginally to 0.39% as on Sept. 30.

 

Key developments to look out for will be the bank management's outlook on margins and improvement in loan growth trajectory. "Clarity on MD & CEO extension to be key monitorable," Motilal Oswal said. Current Managing Director and Chief Executive Officer Sandeep Bakhshi's term at the bank's helm is up for renewal in less than a year. He changed the lender's trajectory for good after he was brought in following the unceremonious exit of his predecessor Chanda Kochhar.

 

Of the 24 research reports on the stock available with Informist, 23 have a 'buy' recommendation on ICICI Bank, with an average target price of INR 1,620.00. This is 14% higher than the current market price. At 1038 IST, shares of the bank were at INR 1417 on the National Stock Exchange, down 1.4% from the previous close. Since reporting its September quarter earnings on Oct. 18, shares of the company have fallen around 3%.

 

Following are the December quarter earnings estimates for ICICI Bank from 12 brokerages in descending order of the estimate of net profit in INR million:

 

Brokerage	Net interest income	Net profit
SMIFS Ltd	224,000	129,000
Nuvama Wealth Management Ltd	219,400	127,000
Emkay Global Financial Services Ltd	220,300	126,417
YES Securities (India) Ltd	221,134	125,294
Kotak Securities Ltd	216,224	125,234
Motilal Oswal Financial Services Ltd	221,655	124,880
Sharekhan Ltd	221,130	124,530
Systematix Shares and Stocks (India) Ltd	218,358	123,891
Elara Securities (India) Pvt Ltd	219,724	123,659
Prabhudas Lilladher Pvt Ltd	220,516	121,544
JM Financial Institutional Securities Pvt Ltd	216,495	119,457
Nirmal Bang Equities Pvt Ltd	224,268	119,070
Average	220,267	124,165

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Edited by Avishek Dutta

 

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