Current Rating and Its Significance
MarketsMOJO currently assigns ICICI Bank Ltd. a 'Hold' rating, reflecting a balanced view of the stock's prospects. This rating suggests that investors should maintain their existing positions rather than aggressively buying or selling the stock at this time. The 'Hold' status indicates that while the bank demonstrates solid fundamentals and growth potential, certain factors such as valuation and technical indicators warrant a cautious approach.
Quality Assessment: Strong Fundamentals Underpin Stability
As of 20 February 2026, ICICI Bank exhibits an excellent quality grade, underscoring its robust operational and financial health. The bank maintains a strong long-term fundamental strength, with an average Return on Assets (ROA) of 2.16%, signalling efficient utilisation of its assets to generate profits. Additionally, the bank's net profit has grown at an impressive annual rate of 30.41%, reflecting consistent earnings expansion over recent years.
Capital adequacy remains a key strength, with a Capital Adequacy Ratio of 15.03%, well above regulatory minimums. This high buffer provides resilience against credit and market risks, enhancing the bank's capacity to absorb potential losses and maintain stability in volatile conditions.
Valuation: Fair but Prudent Consideration Required
The valuation grade for ICICI Bank is currently assessed as fair. The stock trades at a Price to Book Value (P/B) ratio of approximately 3.1, which is modestly discounted relative to its peers' historical averages. This suggests that the market is pricing the stock with some caution, possibly reflecting concerns over recent earnings trends or broader sector dynamics.
Despite this, the stock has delivered a respectable 11.6% return over the past year as of 20 February 2026, outperforming many benchmarks. Profit growth over the same period stands at 8.3%, resulting in a Price/Earnings to Growth (PEG) ratio of 3. While this PEG indicates a somewhat stretched valuation relative to growth, it remains within a range that does not signal overvaluation.
Financial Trend: Mixed Signals Amidst Flat Recent Results
Financially, the bank's trend is currently flat, reflecting some softness in recent quarterly results. The Profit Before Tax excluding Other Income (PBT LESS OI) for the December 2025 quarter stood at ₹7,432.22 crores, marking a decline of 15.9% compared to the previous four-quarter average. Similarly, Profit After Tax (PAT) for the quarter was ₹11,317.86 crores, down 8.6% from the prior average.
Cash and cash equivalents also reached a low of ₹63,668.79 crores in the half-year period, indicating tighter liquidity compared to earlier periods. These figures suggest that while the bank's long-term growth trajectory remains intact, short-term earnings momentum has moderated, warranting a watchful stance from investors.
Technical Analysis: Mildly Bearish but Not Overly Concerning
From a technical perspective, ICICI Bank's stock is graded as mildly bearish. The stock price has experienced some short-term volatility, with a 1-week decline of 1.35% and a 6-month dip of 2.44%. However, it has also shown resilience with a 1-month gain of 1.45% and a year-to-date increase of 3.9% as of 20 February 2026.
This mixed technical picture suggests that while there may be some near-term headwinds, the stock is not in a pronounced downtrend. Investors should monitor price movements closely, especially in relation to broader market trends and sector performance.
Institutional Confidence and Market Performance
Institutional investors hold a significant 90.87% stake in ICICI Bank, reflecting strong confidence from knowledgeable market participants. Such high institutional ownership often indicates thorough fundamental analysis and a belief in the bank's long-term prospects.
Moreover, the stock has consistently outperformed the BSE500 index over multiple time frames, including the last three years, one year, and three months. This market-beating performance reinforces the bank's position as a leading player in the private sector banking space.
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What the Hold Rating Means for Investors
For investors, the 'Hold' rating on ICICI Bank Ltd. suggests a balanced approach. The bank's excellent quality and strong fundamentals provide a solid foundation, while fair valuation and flat financial trends counsel caution. The mildly bearish technical outlook further supports a wait-and-watch stance rather than aggressive accumulation or liquidation.
Investors already holding ICICI Bank shares may consider maintaining their positions, monitoring quarterly results and market developments closely. Prospective investors might wait for clearer signs of earnings recovery or technical strength before initiating new positions.
Overall, ICICI Bank remains a key player in the private sector banking segment with strong institutional backing and a track record of market-beating returns. The current rating reflects a prudent assessment of its strengths and near-term challenges, guiding investors towards informed decision-making.
Summary of Key Metrics as of 20 February 2026
Market Capitalisation: Large Cap
Mojo Score: 54.0 (Hold)
1-Day Change: +0.37%
1-Year Return: +11.6%
Return on Assets (ROA): 2.16%
Capital Adequacy Ratio: 15.03%
Price to Book Value: 3.1
PEG Ratio: 3
Institutional Holdings: 90.87%
These figures collectively illustrate a bank with solid fundamentals and reasonable valuation, tempered by recent earnings softness and cautious technical signals.
Looking Ahead
Investors should continue to track ICICI Bank’s quarterly earnings, asset quality trends, and macroeconomic factors impacting the banking sector. The bank’s ability to sustain profit growth and improve technical momentum will be critical in determining whether the current 'Hold' rating evolves into a more positive outlook.
Given the current data and analysis, ICICI Bank Ltd. remains a core holding for investors seeking exposure to India’s private banking sector, with a recommendation to hold and reassess as new information emerges.
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