IDBI's profits before tax for 3QFY01 declined by 33% due to lower operating margins. The decline in profits is also due to higher provisioning for bad and doubtful debts and lower capital gains on sale of investments compared to 3QFY00.
Income from Operations
Operating Profit (EBDIT)
Operating Profit Margin (%)
Profit before Tax
Profit after Tax/(Loss)
Net profit margin (%)
Diluted number of shares
Diluted Earnings per share*
P/E (at current price)
IDBI's sanctions during the nine months period ended December 2000 declined by 1.8% while disbursements were lower by 4.5%.
Provisions for non performing assets was higher consequent to the revision of the RBI's provisioning guidelines. Accordingly, sub-standard assets are to be classified as doubtful assets after 18 months of an asset being classified as NPA instead of 24 months earlier.
At the current market price of Rs 50, IDBI trades at a P/E multiple of 5 times its 3QFY01 annualised earnings. The institution has declared bonus in ratio of 3:5 during the December quarter. The bank has comparatively lower valuations than its peers (ICICI and HDFC), due to concern over quality of its assets and inability to sustain the growth by venturing into new areas.
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