ICICI Ltd more valuable than SBI & Analysis of Q3 Results
ICICI is now 15th and SBI 16th
Steady fall in market cap of SBI on the one hand and steady rise in market cap of ICICI, has helped ICICI to overtake SBI (State Bank Of India).
Feb 25, 2000 (cmot)
=================
Tuesday, 1 February, 2000
ICICI has reported a 27% rise in net profits to Rs 271 cr for Q 3 9912 (which includes extraordinary gain of Rs 19 cr ) as against a net profit of Rs 213 cr for the corresponding previous year. The rise is backed by higher fund-based income which has grown by 19.3%. Interest and depreciation charges recorded a slower rise of 14.9%, which have helped the addition to bottom line. Non-fund based income has, however, recorded a faster and healthier growth at Rs 65 cr (Rs 50 cr ) up by 30% over its corresponding previous years period .For Q 1 9906 and Q2 9909 the net profit figures were Rs 261 cr and Rs 277 cr . ICICI has thus maintained its net profit level at around those of the earlier two quarters .
For the nine-month period ending Dec 99, the net profit at Rs 792 cr was higher by 9.84% as against the its corresponding previous year. Growth has mainly come from the last quarter of 1999 as the rise in interest income has been slower in the nine-month period than in the last quarter of 99. Interest expenses have also risen sharply in the nine month period kept pace with the rise in interest income, which has had a neutral effect on the bottom line .Non-fund-based income has risen by 17% during this period .
A significant feature has been the drop in other income for both the three-month and nine-month period of the year ending 9912 . Operating income has dropped by 44% at Rs 4 cr for Q3 9912 and a whopping 74% for the nine-month period at Rs 15cr as against 59 cr for the corresponding period of the previous year.
OPM has remained stable for both the periods under view. At 96.60%, they were a shade lower than 96.78 %. For the full year ended 9903, they were however slightly higher than 96.47% for the nine- month period ending Dec 99, thus indicating control over operating expenditure and maintenance of spreads for all the periods . However, when compared to Q3 9812 and the nine-month period ending 9812 ,the OPM has dipped slightly from 97.05% and 97.08% .
Interest income recorded a growth of 19.4% and 16.9% for Q3 9912 and for the nine-month period ending 9912 over the corresponding previous year periods. Interest expenses and depreciation rose by 14.9% and 15.3% for Q3 9912 and the nine-month period ending 9912. A relatively steeper rise in net profit as compared with the rise in interest expenses helped propel the GP up by 34 %and 20% for the three-month and nine-month period ending Dec 99.
Provision for taxes at Rs 27 cr absorbed 9.65% of profit before taxes for Q3 9912. This ratio stood at 9.90% and 8.6% for the nine-month period ending 9912 and for the year ending 9903.There is a slight improvement in the ratio indicating that more taxes are being paid as against the previous periods . There is an extraordinary gain of Rs 19 cr from the sale of property in Mumbai. If these gains are excluded the net profit growth for Q3 9912 would be at 18% as against the previous quarter. Provisions for non-performing assets saw a jump of 66% and 44% for Q3 9912 and the nine-month period ended 9912.As a result of higher provisions, the net profit growth has been curtailed, which would have been significantly higher otherwise.
The net NPAs outstanding was Rs 3,649 cr and the net NPA ratio as per Indian GAAP at 7.4% is significantly lower than the peak level of 8.1%. If the general provision is netted off as per RBI guidelines, the NPL ratio at 31Dec.'99 would have been 7.1% For the nine-month period, approvals at Rs 36,671cr registered a growth of 19%, disbursements at Rs 17,017 cr grew 23%.
ICICI has been taking a lot of initiatives after its successful ADR issue and domestic issue. The company has beenin a lot of news lately. Its intentions to leverage technology has been recognised by the markets. It has launched a number of strategic initiatives on the Internet including ICICI Direct, India's first internet stock trading service .It has also started work on an open payment gateway for B2B and B2C segments in association with Compaq and QSI systems of Australia .It has offered an Internet-based B2B payment module, 'I-Payments' for purchasers and sellers to effect payment online. ICICI's capital adequacy stood at 17.7% on 31 Dec.'99 with Tier I capital of 11.8%.
The scrip has seen significant trading interest in the past few months. It touched a new yearly high at Rs 135 after seeing a low of Rs 40 .Average volumes in the counter range between 8-12 lakh shares. The scrip has seen a significant uptrend from levels of Rs 70-75 where it finds good support .A dividend of 55% gives a yield of 5.5% on the closing price of 31 Jan 2000. Growth in the coming periods will come from leveraging technology, boost in credit offtake with the lowering of interest rates and on the back of a recovery in the economy ....
-Courtesy (Capital Market) |
