ICICI: Snips NPAs to 5.2% - Views on News from Equitymaster

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ICICI: Snips NPAs to 5.2%

May 3, 2001

ICICI has reported a 56% drop in net profits to Rs 5.3 bn for the year ended March '01 thanks to higher provisions for non performing assets. Excluding the accelerated provision of Rs 8.1 bn, ICICI's profits actually increased by 11%.

(Rs m) FY00 FY01 Change 4QFY00 4QFY01 Change
Income from Operations 78,880 86,660 9.9% 20,210 22,150 9.6%
Other Income 2,560 1,710 -33.2% 1,230 890 -27.6%
Interest & Depreciation 63,590 68,540 7.8% 16,040 17,660 10.1%
Operating Profit (EBDIT) 15,290 18,120 18.5% 4,170 4,490 7.7%
Operating Profit Margin (%) 19.4% 20.9%   20.6% 20.3%  
Other Expenses 2,890 3,370 16.6% 880 870 -1.1%
Profit before Tax 14,960 16,460 10.0% 4,520 4,510 -0.2%
Provisions and write offs 4,620 14,210 207.6% 1,370 10,890 694.9%
Other adjustments 2,940 3,440 17.0% 1,130 3,470 207.1%
Tax 1,220 400 -67.2% 330 (340) -203.0%
Profit after Tax/(Loss) 12,060 5,290 -56.1% 3,950 (2,570) -165.1%
Profits excld. provs. and adjsts. 13,740 16,060 16.9% 4,190 4,850 15.8%
Net profit margin (%) 15.3% 6.1%   19.5% -11.6%  
Number of shares (eoy) 785 785   785 785  
Diluted Earnings per share* 15.4 6.7   20.1 -  
P/E (at current price)   12.2        

This effort of ICICI is remarkable as it has helped the institution in bringing down the ratio of net NPAs to advances to 5.2% (7.6% in FY00). However, gross NPA ratio is still high at 9.9% (11.1% in FY00).

The approvals and disbursements of ICICI jumped by 29% and 24% respectively. The institution has also consolidated its position in the retail segment by providing all financial products under the one roof. Retail business accounted for 7% of total approvals (2% in FY00) and 11% of total disbursements (3% in FY00).

At the current market price of Rs 82 ICICI is trading at a P/E of 6.7 times FY01 annualised earnings.

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