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Informist, Thursday, Apr. 16, 2026

 

By Priyasmita Dutta

 

NEW DELHI – Drawing strength from its robust operations during the final quarter of 2025-26 (Apr-Mar), ICICI Bank Ltd.'s net profit is expected to rise on year in the March quarter despite a rise in provisions. The large private-sector bank is also expected to broadly track the sectoral trend of better credit momentum and stable margins during the quarter, according to brokerages tracking the lender. The final quarter for the bank, as well as for the sector, has been affected by lingering uncertainties, making management's outlook for FY27 a key item to monitor, brokerages added.

 

While brokerages estimate ICICI Bank's provisions to rise, they had a divergent view on the extent of it, with estimates ranging from INR 9.90 billion to INR 15.97 billion, indicating a wide range of 11-79% rise on year. 

 

Despite the rise in provisions, the private sector lender is expected to report a 1.3% rise in its net profit for the March quarter at INR 127.97 billion, according to the average of estimates from 12 brokerages. Sequentially, the net profit is seen rising nearly 12%, with a sharp fall in provisions. Prabhudas Lilladher Pvt. Ltd. has the lowest estimate for the net profit at INR 122.91 billion, while Nuvama Wealth Management Ltd. has the highest at INR 133.40 billion. India's second-largest private sector lender is scheduled to report its March quarter earnings on Saturday.

 

ICICI Bank's net profit had fallen 4% on year in the December quarter to INR 113.18 billion, for the first time in over six years, with a doubling of provisions impacting the bottom line. At INR 25.56 billion, its provisions were up nearly threefold sequentially, the highest jump in almost five years. The provisions included an additional standard asset provision of INR 12.83 billion made pursuant to the Reserve Bank of India's annual supervisory review.

 

The central bank had directed the lender to make a standard asset provision for its agricultural priority sector loans due to non-compliance with the regulation for classification. The loans were provided since 2012, and the size of the loans was between INR 200 billion and INR 250 billion, the bank's management had said. The additional provisioning will continue until the loans are repaid or renewed, as per guidelines for priority sector lending classification. "....based on our current assessments, we do not see very major incremental provisions going forward," Sandeep Batra, executive director of the private sector bank, had said in a post-earnings press conference on Jan. 17. 

 

The bank's profitability in the March quarter will be primarily driven by credit growth, with its margins staying flat on quarter, according to brokerages. The RBI's 100-basis-point reduction in banks' cash reserve ratio to 3%, coupled with term deposit repricing, helped reduce the cost of funds, but that was offset by a full repricing of the repo rate cuts, Motilal Oswal Financial Services Ltd. said. The central bank had, in June, cut banks' CRR by 100 bps in four equal tranches between September and November. The RBI's Monetary Policy Committee had lowered the repo rate by 125 bps in 2025, the most in a calendar year since 2019, and has held it at 5.25% since then. 

 

Brokerages estimate ICICI Bank's net interest margin during the March quarter in the range of 4.1-4.3%, broadly the same level as at the end of December and at the end of March 2025. "NIMs (net interest margins) to decline ~2bp q-q (2 basis points sequentially) due to transmission of repo cut partly offset by TD (term deposit) re-pricing and CRR cut," Nomura Equity Research said.  

 

The private sector lender's net interest income is expected to be INR 226.07 billion in the quarter under review, up nearly 7% on year and 3% on quarter, according to the average of estimates from 12 brokerages. Estimates for net interest income range between INR 221.10 billion and INR 229.40 billion. Brokerages unanimously see industry-wide steady loan growth during the March quarter, with ICICI Bank's loan growth likely better than the industry average. They estimate the lender's credit growth 14.0-14.5% on year.

 

ICICI Bank's total advances at the end of the December quarter were INR 14.66 trillion, up nearly 12% on year. The retail loan portfolio had grown over 7% year-on-year and 2% sequentially, and accounted for 51.2% of the total loan portfolio as of Dec. 31. 

 

For the March quarter, the bank's gross non-performing asset ratio is seen improving, brokerages said. In the December quarter, the bank's asset quality had improved slightly, with the gross non-performing asset ratio falling 43 bps on year to 1.53% as on Dec. 31, and down 5 bps on quarter. The net non-performing asset ratio shrank marginally to 0.37% as of Dec. 31, from 0.42% a year ago and 0.39% a quarter ago.

 

Key developments to look out for will be the bank management's outlook on margins and improvement in the loan growth trajectory. 

 

Of the 16 research reports on the stock available with Informist, all have a 'buy' recommendation, with an average target price of INR 1,721, over 28% higher than its current market price. At 1338 IST, shares of the bank traded at INR 1,341.50 on the National Stock Exchange, down 0.4% from the previous close. Since reporting its December quarter earnings on Jan. 17, shares of the company have fallen around 2.0%.

 

The following are the March quarter earnings estimates for ICICI Bank from 12 brokerages in descending order of the estimate of net profit in INR billion:

 

Brokerage	Net Interest Income	Net Profit
Nuvama Wealth Management Ltd	229.40	133.40
Motilal Oswal Financial Services Ltd	228.13	132.32
SMIFS Ltd	229.00	131.00
Kotak Securities Ltd	221.10	130.85
YES Securities (India) Ltd	226.98	130.40
Elara Securities (India) Pvt Ltd	226.95	128.58
Equirus Securities Pvt Ltd	226.68	126.91
JM Financial Institutional Securities Pvt Ltd	222.12	126.61
Emkay Global Financial Services Ltd	222.48	125.64
Nomura Equity Research	227.00	123.90
Anand Rathi Share and Stock Brokers Ltd	225.17	123.08
Prabhudas Lilladher Pvt Ltd	227.82	122.91
Average	226.07	127.97

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Edited by Akul Nishant Akhoury

 

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