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ICICI EPS down 23%, even Net Profit is down


So with the latest results, ICICI Bank has decided to show us what EPS “degrowth” really means.

EPS is now Rs. 6.51 versus Rs. 8.54 a year back. (Standalone, diluted). Thats a 23.77% drop in the earnings per share. That’s because the base has increased so much – up 20,000 cr. on capital it raised last year.

Uhem. But look at the absolute values. Net profit is at Rs. 728 cr. versus Rs. 775 cr. a year back. Smaller absolute profits on a larger capital base.

And they lost Rs. 500 cr. on their SLR securities (which are 72000 cr.) because of interest rate hikes. In July end, RBI raised the rate again, will that mean another 500 cr. this qtr? Plus, NPAs are high – they’ve sold 3000 cr. to Arcil, and they have some 25% of their asset book abroad. Does not look very good, does it?

On a consolidated basis, EPS is down to Rs. 5.52 from 8.13.

If this continues they’ll end their year with a Rs. 25 or Rs. 30 EPS. Either ways, there’s no reason for it to command a price of 675. Does this warrant, in any way, a P/E of more than 10?

Disclosure: Short, in my ShortOnlyStrategy (SOS).


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