Shares of ICICI Bank Ltd, India's second-largest private lender, gained in trade on Monday, July 21, after investors and experts were positive of the bank's beat on net interest margins (NIMs) for the quarter ended June 30, 2025.

ICICI Bank reported a 15 percent year-on-year increase in net profit to Rs 12,768.21 crore for the fiscal first quarter, beating analyst expectations. NII (net interest income), which are the difference between interest earned and interest expended, stood at Rs 21,634.46 crore for the June quarter, up 8.4 percent on-year.

Total income (standalone) rose to Rs 51,451.81 crore, compared to Rs 45,997.70 crore in the year-ago period. Other income surged to Rs 8,504.90 crore from Rs 7,001.92 crore a year earlier.

Further, net interest margins contracted by 7 basis points to 4.34 percent. Going ahead, the management expects that margins would to be rangebound as recent rate cuts are yet to play out.

"The full impact of the recent rate cuts is yet to play out completely — the February and April cuts have largely flowed through the loan book already, while the June cut is expected to reflect more in Q2," the management said in its post-results analyst call.

At 9.38 a.m., shares of the bank were quoting Rs 1,445.6, up 1.4 percent on the NSE.

Should you buy, sell, or hold shares of ICICI Bank?

Domestic brokerage Motilal Oswal said, "ICICI Bank’s results epitomize the saying, “When the going gets tough, the tough get going.” Over the past few years, irrespective of the sectoral challenges such as unsecured asset quality issues, systemic growth moderation, liability accretion or NIM headwinds, the bank has been able to deliver a stellar performance, beating Street expectations."

The brokerage said that ICICI Bank remains its preferred 'buy' in the sector, with an increased price target of Rs 1,670 per share.

Emkay Global noted that ICICI Bank reported a resilient performance, with limited margin compression at 7 bps QoQ to 4.34 percent, compared to peers’ 15 bps drop, and nearly stable asset quality with headline GNPA ratio at 1.7 percent. This, coupled with higher treasury/dividend income, partly offset by higher provisions, led to a PAT beat. The brokerage maintained its 'buy' rating, with a price target of Rs 1,600 per share.

ICICI Bank's reported NIM decreased 7 bps QoQ in Q1FY26 while core NIM fell only 4 bps QoQ, beating estimates of 12-15 bps decline. "ICICI Bank is the only bank to post a beat on NIM so far. Even with a lower share of wholesale, the bank has seen a faster repricing of liabilities versus peers including HDFC Bank, highlighting its excellent liability strategy," adds Nuvama Institutional Equities.

The brokerage kept its 'buy' call intact, with a price target of Rs 1,600 per share, believing the bank is well positioned to deliver 2.1-2.3 percent RoA  over FY26-28E, aided by better cost management, improving fee and contained LLP.