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ICICI Bank Results – EPS Growth is 2%

So ICICI Bank has announced it’s 3rd Quarter Results.

What they highlight: Net Profit up 35%, Interest Income up 32%, Deposits up 33%.

What I would highlight: None of the above is comparable year on year, because a) they acquired Sangli Bank and b) they did a huge-ass dilution of 20K crore in July. Earnings per share is the only thing comparable. It’s up 2% YOY from Rs. 9.81 to Rs. 10.01 per share for the December quarter, and up about 10% in the 9 months ended December (from Rs. 24.48 to Rs. 26.48) Assuming the higher end – 10% – they will end up with an EPS of about Rs. 34 in this financial year. At current prices of Rs. 1240, that’s a P/E of 36. For a bank growing at 10% on EPS, it’s a tad high, donyathink?

Another thing of concern is that the subprime losses are not mentioned. They don’t have to provide a balance sheet to the Indian exchanges but they must to the exchanges abroad, so come Monday we may see something they will release on US GAAP and on the writedowns. With the ABX indices diving to record lows, we may see a lot more writedowns on the CDO exposure.

Note also that retail loans are 61% of assets, and NPAs are increasing (up to 3% from 2.1%). Also the minor fact that KV Kamath, CEO had sold nearly 1/5th of his personal stake in September, and Nachiket Mor who headed their credit stuff, has sold all of his.

Disclosure: Short ICICI Bank.

  • Ankur says:

    >this opened my eyes…
    i thought this quarterly results were wonderful

  • Rohit says:

    >Deepak, very interesting about insiders selling out.
    Is there a website where you can get details of what insiders are doing ? In the US this has to be reported and you can find the details on finance.yahoo.com, but I have not been able to find a similar site for indian stocks.

  • koty says:

    >Hi Deepak,
    I have been searching for a stock screener to filter stocks deoending on their P/E, EV, EBITA, Net assets etc. ICICIDirect partly fits my criterion but does not give all the parameters abreast of each other. Equitymaster does give it but only for few stocks. Moneyoga gives only 20 stocks which I cant filter. Is it possible to incorporate a filter so as to filter stocks based on Greenblatt’s magic formula, which in turn can be assessed later. Or the best would be to create a module similar to magicformulainvesting.com for moneyoga?

  • Deepak Shenoy says:

    >ankur: thanks mate.

    rohit: Insider Info – I don’t know of a site that does it but we’ll surely add some of these features to Moneyoga.

    koty: I would like to help create custom filters, and get a hang of how Equitymaster works as well. magic formula investing is good too but we don’t know if the market for something like this is wide enough (we don’t have a huge amount of money, so have to get the biggest bang for the buck).

  • Rohan Choukkar says:

    >Anything on HDFC Bank?