ICICI Bank’s last quarter results were slightly disastrous by most standards, and therefore the stock markets decided to ignore them completely. I nearly did myself, until a few minutes ago. here’s the quarterly EPS (Trailing 12 month data used so that i don’t miss anything) and the growth charts of the EPS itself.
The stock trades at 830, and that’s a P/E of 24.64 on the trailing 4 quarter EPS. The argument that markets price “expectations seems to be completely off; for most of the period from 2005 to now, the stock has traded at a P/E of 15 or more, and the annualized growth rate from 2005 (Q3 TTM EPS of 26.32) to now is a mindboggling 5%.
AxisBank and HDFCBank also get large P/Es. AxisBank has grown EPS from Rs. 15 (TTM) in 2005 to Rs. 60 today. HDFCBank from Rs. 23 to Rs. 62. One might think they deserved the high P/E for their results.
ICICI on the other hand has just stagnated. One year back, I posted about how their EPS growth was consistently low. A year later nothing has changed; in fact, the December quarter showed a dip of 9% in their Earnings Per Share.
Yet, the stock has moved up from the last year’s price of Rs. 363 to Rs. 830 today. It’s a remarkably optimistic market, isn’t it? But perhaps I look at the wrong data: the past. The future is a better thing to look at, but I’ll be the first to admit I don’t know what it looks like.
