IFCI: In a clean-up mood - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

IFCI: In a clean-up mood

Feb 13, 2002

IFCI once again reported grim financial performance with nine months cumulative losses mounting to Rs 4.9 bn. The institutions' income from operations also declined by 19% YoY, during the period April - December 2001.

(Rs m) 3QFY01 3QFY02 Change 9m FY01 9m FY02 Change
Income from Operations 6,948 6,382 -8.1% 21,207 17,124 -19.3%
Other Income 15 172 1027.0% 44 202 359.5%
Interest Expenses 6,342 6,039 -4.8% 19,023 18,168 -4.5%
Net interest income 606 343 -43.5% 2,184 (1,044) -
Other Expenses 281 246 -12.7% 833 784 -5.9%
Operating Profit 325 97 -70.2% 1,351 (1,828) -
Operating Profit Margin (%) 4.7% 1.5% 6.4% -10.7%
Provisions and Contingencies 270 750 178.3% 1,013 3,270 222.6%
Profit before Tax 71 (481) 382 (4,896) -
Tax - - - - -
Profit after Tax/(Loss) 71 (481) 382 (4,896) -
Net Profit Margin (%) 1.0% -7.5% 1.8% -28.6%
No. of Shares (m) 639.5 638.7 639.5 638.7
Diluted Earnings per share* 0.4 -3.0 0.8 -10.2
*(annualised)

Higher operating expenses (mainly staff cost) resulted in operating losses for the first nine months of FY02. IFCI's cost to income ratio at 48% is one of the highest amongst its peers in the sector. Stiff pressure on interest cost, which declined less than proportionately compared to fall in interest income also contributed to operating loss.

During the quarter, the institution received funds from Government of India and LIC amounting to Rs 6 bn cumulatively. This fund infusion would provide the institution with adequate capital and liquidity to conduct its business operations. SBI and IDBI are yet to contribute their part of Rs 2 bn each to bail out IFCI from its financial woes.

IFCI made higher provisions for bad losses during the first nine months of FY02 to increase the provision coverage ratio, which stood at a mere 4% in FY01. Consequently, its net losses sky rocketed to Rs 4.9 bn for the period ended December 2001.

IFCI's stock valuation has seen sharp erosion in the last one year. From an average price of Rs 8.5, the stock currently trades at Rs 4. It will take at least 3-4 years to IFCI to restructure its current loans, provide adequate amount for non-performing assets and start generating profits. These factors are already reflected in its stock price, which lacks buying interest.

Equitymaster requests your view! Post a comment on "IFCI: In a clean-up mood". Click here!

  

More Views on News

CAMS IPO: Should You Apply? (IPO)

Sep 18, 2020

Does the company having 70% market share of the mutual fund registrar business have sound prospects?

More Views on News

Most Popular

This Diwali Consider Richa's #1 Stock Pick for 2021 (Profit Hunter)

Nov 13, 2020

Why I admire the approach that Richa uses to zero in on stocks with huge upside potential.

Don't Let Brokerages Fool You into Buying HUL & Nestle. The Real Money is in These Stocks Right Now... Views On News (Views On News)

Nov 12, 2020

Rahul Shah discusses why he preferred a little known stock over Nestle Ltd and how he was proven right.

How to Short Sell the Right Way (Fast Profits Daily)

Nov 13, 2020

In this video, I'll show you how to short sell effectively.

Stocks that Could Shine More than Gold After Diwali (Profit Hunter)

Nov 17, 2020

If the markets become volatile over the next few months, do this.

US Elections: Won a Battle, Now the War (The Honest Truth)

Nov 13, 2020

Ajit Dayal on the urgent need to fix the disparity between the rich and the poor in the US.

More

Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms

IFCI SHARE PRICE


Nov 25, 2020 03:36 PM

TRACK IFCI

IFCI - MUTHOOT FINANCE COMPARISON

COMPARE IFCI WITH

MARKET STATS