Friday, July 29, 2011

ICICI Bank Q1 FY 2011-2012 Result and Valuation analysis

ICICI Bank has declared its first quarter result. It has reported a sharp jump of 30% (YoY) in profit. During the period, net profit of the bank increased to Rs 1,332 crore against Rs 1,026 crore in the corresponding quarter of last fiscal. However on QoQ basis the net profit came in lower by 8.3% as the bank did a net profit of Rs. 1452 crores in Q4 of fical year 2011.

The bank’s net interest income went up over 21% to Rs 2,411 crore from Rs 1,991 crore year-on-year. Net interest margin of the bank declined to 2.6% in April-June quarter against 2.7% in the previous quarter.

The bank is working towards maintaining its margins at 2.6% this fiscal, said its managing director and chief executive officer Chanda Kochhar in a press conference.

The bank is expected to clock in an EPS of approx Rs. 50 for current fiscal year. Excluding the dividend of Rs. 15 (expected) for next year, the FY-13 BV is estimated around Rs. 513.

At the current market price of Rs. 1037 the stock is currently trading at a Price to book value of approx. 2 times which appears to be on the fair value side, considering the rising interest rate scenario in India.

Hence at InvestorZclub we believe that there is not much upside expected in the stock until and unless the bank shows an improvement in NIM and asset quality and interest rate in India shows some signs of moderation.

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