ICICI Bank vs. HDFC Bank.
Printed From: The Equity Desk
Category: Investment Ideas - Creating winning portfolios!
Forum Name: Large Cap Blue Chips
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URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=277
Printed Date: 26/Apr/2024 at 10:21am
Topic: ICICI Bank vs. HDFC Bank.
Posted By: sajanvm
Subject: ICICI Bank vs. HDFC Bank.
Date Posted: 19/Jul/2006 at 9:54am
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The lending business of banks is largely immune to a rising interest rate scenario. Ofcourse, if interest rates go up very much, then credit offtake will go down. But I think we are far away from that scenario. Banks which have a large percentage of floating rate loans (issued when their borrowing costs were much lower) should do very well ? In particular, ICICI bank looks good. ICICI also has many valuable subsidiaries - value will get unlocked over a period of time. ------------- Sajan |
Replies:
Posted By: basant
Date Posted: 19/Jul/2006 at 10:28am
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Yes, The Indian Retail loan to GDP ratio is still very low so consumers will not think twice before signing for further credit and India is still a very much a growing consumer story. What could be very interesting is that many Banks are available at less then adjusted Book value. The money managers at some of these have also become smart. As you say over the past few months they have reallocated their asset portfolio in favour of HTM. Take a look at these figures:
Bank Adj Book Value (Fy07)* C.M.P Remarks
ICICI 264 467 Huge value in Lombard,MF
S.BI 709 694 Great play on India
HDFC Bank 212 697 Boring Co. that provides
consistent growth
Bank of Baroda 233 176 Changing its face
PNB 333 304
*Consensus Brokerage estimates
The above data shows that in case of some banks we are getting something at lesser then what it is worth.I am not sure when but out of these HDFC Bank ICICI and BOB would start attracting buying at some point in time. And that point would be when the general public thinks that these stocks are finished. They have already fallen by more then 30% each from the peak.One need not react to Banking company astocks as one does in the US economy where mortgages are slammed down for each percenatage rise in interest rates. The sheer under penetration of consumer loans might make things more easy then it appears.But for many of the banks like a Uco bank or an UBI there could be trouble since their retail portfolio is miniscule compared to their over all lending.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: prosperity
Date Posted: 06/Sep/2006 at 11:18pm
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I fail to understand why don't u value ICICI Bank over HDFC Bank...
Both have excellent people @ the top...
Both are leaders in housing loan segment ....
Both have multiple avenues of revenues/profit - Insurance, AMC, etc. etc...
Advantage of ICICI over HDFC-
1) Reach of ICICI ATMS and ICICI Bank is very high
2) PE is lower than HDFC
So, what do u say ?
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Posted By: basant
Date Posted: 06/Sep/2006 at 11:35pm
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Both HDFC Bank and ICICI are great banks but as an investor I would prefer HDFC BANk because I am sure that will grow its EPS by 30% CAAGR. the basic differences between the valuation of the two banks are:
1) ICICI has been diluting equity so while the Net profit growth looks good the EPS growth has not been all that great hence the lower PE.
2) HDFC bank has a niche market whereas ICICI is all over theplace. In times of sluggish demand ICICI will face the heat because it camnnot beat the market it is itself the market.
3) HDFC Bank has an unmatched track record of growing at 30% for the last 10 years while ICICI has seen some swings in growth.
4) The value of subsidiaries in ICIC Bank is assumed to be worth Rs 150 per share.
5) On a price to adj book basis ICICI trades at 2 times while HDFC Bank trades at 4.5 times.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: prosperity
Date Posted: 06/Sep/2006 at 11:57pm
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Agree that Diluting equity is bad ...
But ICICI being all over the place is VERY GOOD and i consider it as positive - this is what Peter Lynch said right ?
ICICI earns a good amount by its high fee based income
Icicidirect is the leading online brokerage portal
The scale comes from innovative products ...
99.9 % Gold Scheme is one example of that
And ICICI has been doing it successfully for past 3 yrs...
its first mover in so many things ... its like a first habit to them...
8AM to 8 PM Mon-Sat ... isn't that ultra customer service
first to transfer funds all across india in minutes ...
so many firsts... first to have no annual fees in credit cards, first to have loan against property, against car, against NSC, etc....
and first to ask RBI to submit bid for UWB...
And see the clean action -
On Saturday, RBI told about UWB miseries...
On Sunday, ICICI informed the exchanges about the board meet on Monday
On Monday, before 11 - it became the first bank to formally tell RBI about UWB takeover bid...
And i personally like K V Kamath over Deepak Parikh ... and u only said that IIM folks at top level can do wonders to the company .. K V Kamath is from IIM Ahmedabad...
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Posted By: Ajith
Date Posted: 07/Sep/2006 at 12:23pm
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I do not know about returns but 10 years from now, I expect ICICI to be the leading global bank from India.Ofcourse, as long as Deepak Parekh is at the helm of affairs HDFC group will be the classiest financial outfit in India.
------------- Ajith |
Posted By: basant
Date Posted: 07/Sep/2006 at 12:54pm
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But if a Bank dilutes equity by making private placements the top line and the bottomline grows but the EPS does not (to that extent) so stock prices could underperform considering the kind of growth the bank sees. In HDFC Bank's case they are growing only by what they can manage. WHile I would put both of them in the top league one for vision and expansion and the other for efficient use of capital don't you think that a shareholder would be concerned where money grows the most (It is diffferent from a concept of looking at the businesss and not the stock)and there HDFC bank with its superior ratios and efficient use of capital could deliver more even while ICICI bank goes out to become a global bank.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: Ajith
Date Posted: 07/Sep/2006 at 2:08pm
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Frequent outside(other than exising)equity dilution is something I detest as it affects returns(Karur came out with frequent rights).But if I remember correctly ICICI has a global business of billions of dollars and if they can manage growth-global and domestic, returns will be phenomenal and Rahul Bajaj and Temasek are unlikely to encourage equity dilution but I have no clue on the technicalities of capital adequacy fora growth-hungry bank.HDFC is what we pure investors would always prefer instinctively 30 percent safe and good growth rate being more or less assured.
Also we tend to back the smaller companies.When the markets tanked I
used to tell anyone who asked Reliance is the safest bet ( Minimum risk)at 910 but I did not buy it myself.Will these megacorps become supermegacorps and give outsized returns as well? ------------- Ajith |
Posted By: basant
Date Posted: 07/Sep/2006 at 2:37pm
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Yes for me also small looks beautiful or rather the prettiest. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: prosperity
Date Posted: 07/Sep/2006 at 5:32pm
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The only strong reason against ICICI that i have got is equity dilution...
All other reasons are there and more in ICICI...
So, if ICICI does NOT dilute its equity in next 10 years ...
then with less PE and with less P/B - Isn't ICICI worth more than HDFC ?
My gut says that in next 10 years - ICICI would give more that HDFC....
If u want, we can check the progress of ICICI and HDFC yearly from now onwards ...
Good Luck !
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Posted By: basant
Date Posted: 28/Sep/2006 at 11:06pm
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HDFC Bank has firmly established its brand and recently has grown its deposit base of over 1 crore customers. The company should continue with its 25% - 30% growth rate over next few years. Increasing number of branches and ballooning customers would help the company in cross selling products. This fee base income should keep the bank in good stead. Despite the rate increases all the various sections of the bank’s retail asset segments witnesses robust demand. There have been some delay in new branch addition but the company continues to grow its business unabated.The share of retail lending in loan book is likely to further increase from current 55%. When we initially initiated the discussion on the Banking stocks HDFC Bank and ICICI Bank traded at Rs 697 and Rs 467 respectively. They have gone up about 33% and 52% respectively. Shall provide update on ICICI bank (also growing equally fast) very soon.
Source: Company Presentation at CLSA meet. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: chic_1978
Date Posted: 28/Sep/2006 at 11:24pm
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Hi just to share this piece of information
ICICI bank has launched its exposure in the International Diamond sector in a big way, has already opened branches in London & Belgium to my knowledge. Infact its getting its piece of cake from ABN Amro Bank, SBI, ADB Bank who were considered stalwarts in Diamond Credits. ------------- happy & wise investing |
Posted By: Ajith
Date Posted: 28/Sep/2006 at 8:31am
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While we look at the growth prospects of HDFC Bank and ICICIC Bank we must consider the negative factors also.Agressive lending brings with it NPAs.The market is giving higher PE to HDFC Bank on this factor as well. ------------- Ajith |
Posted By: investor
Date Posted: 29/Sep/2006 at 4:02pm
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I think from a brand-recall point of view, ICICI BANK is way ahead of HDFC bank, but from an investors point of view, HDFC bank is a better bet, though only marginally ahead. |
Posted By: basant
Date Posted: 29/Sep/2006 at 4:06pm
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Look how much each spends on adv and you would know why? ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: basant
Date Posted: 01/Oct/2006 at 1:09pm
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ICICI is now the market leader in almost all the key financial businesses - retail lending, corporate banking, asset management and insurance. It is also the 2nd largest bank in The retail loan book at Rs 90,000 crores is growing fast and despite the bank’s increased pace of growth is among the fastest growing banks. Retail constitutes the largest share of its loan book (67%) and these loans were up 60% in 1Q07. The deposit base is also growing fast at (60%YoY). The fastest growth is happening in the savings deposit at 90%YoY. ICICI has a 17% share of incremental system deposits indicating that it is aggressively growing its market share. The proposed international forays coupled with its strategy to go rural should be the growth drivers for the next few years. Insurance and asset management sectors are witnessing strong growth. In the Private life insurance segment ICICI is the market leader is the market leader with a 32%. The new business premiums grew at 160% in 1QFY07. Its AMC has also now emerged as the largest in its segment CLSA has valued ICICI’s stake in its subsidiary at Rs 18,000 crores.That comes to around Rs 200 per share. So the value of the main business is Rs 500 per share at around 1.88 times adjusted book (FY 07)
The Bank’s international strategy is powered by, globalization of Indian corporate and leveraging the low cost
Rural Source: Company presentation at CLSA meet. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: basant
Date Posted: 11/Oct/2006 at 4:14pm
I had the experience of how scalable this cross selling business could become.DSP merrill Lynch is coming out with a small cap fund and HDFC Bank is wooing its cutomers day in and day out to subscribe to this "at par Rs 10 NFO".
1) I received a mail from them in my email ID
2) WHen i went to the Bank there was a person waiting to make me an investor into this "Rs 10 at par NFO".
3) ANd I just received an SMS on my mobile about this fund. I had applied for the insta alert banking transaction facility but now they are advertising about how we could apply for this fund.
Great stock. Great concept but the price has run up hard  ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: basant
Date Posted: 12/Oct/2006 at 7:09pm
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HDFC bank is raising a US $ 100 million debt. this should add to the EPS for the year since the company's http://www.theequitydesk.com/forum/forum_posts.asp?TID=119 - RoE is significantly higher then the cost of debt. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: s_praharaj
Date Posted: 13/Oct/2006 at 8:16pm
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I have some interesting figure on ICICI Bank and HDFC Bank, which may help in deciding which is better.
ICICI Bank HDFC Bank
Branches 614 535
Employees 25984 14878
Advances 1461131m 350613
Deposits 1650832 557968
Business 3112463 908581
Low Cost Deposit 375105 309383
Business per Branch 5069.20 1698.30
Business per Employee 119.80 61.1
NP per Branch 41.4 16.3
NP per Employee 1.0 0.6
(Amount in millions rupees) source-SSKI
Though the above figures and statistics are clearly in favour of ICICI Bank,
my personal feeling is that HDFC Bank is a better Bank than ICICI Bank, due to following reasons.
1. ICICI is very aggressive and takes a lot of risk.
2. I am not really sure about the official NPA Level of the Bank.
3. I somehow feel that ICICI Bank is a high risk high gain stock where as HDFC Bank is a blue chip. They may be conservative, but they do Banking as it should be done.
------------- Shashi Praharaj |
Posted By: basant
Date Posted: 13/Oct/2006 at 8:24pm
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I think that you are a Banker and a Banker is the best judge on the business of another banker. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: s_praharaj
Date Posted: 13/Oct/2006 at 10:29pm
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Basant,
You are really great, How could you get it,
I have never given a hint.
I work as a Chief Manager in a public Sector Bank in Mumbai,
Soon I will introduce myself in detail in the appropriate column.
It might be a personal preference, but I prefer HDFC Bank.
Though ICICI Bank is a high risk game, still they have the size which can not be ignored. They have brought the Bank to such a colossal size, that if tomorrow anything adverse happens, the Govt will be the first to bail them out. They have this advantage.
Thanx again for such an accurate guess. ------------- Shashi Praharaj |
Posted By: basant
Date Posted: 13/Oct/2006 at 10:52pm
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No, I am not great at this. I read it somewhere if I can recollect well not sure where but yes, people in the same industry have better insight then the ones from the outside.
ICICI Bank's RoE is less then its growth rate so it would have to approach the markets for equity dilutiuon and that will affect the stock's performance. Equity dilution will affect EPS etc etc.
I do not remember HDFC Bank having done any equity offering after its IPO and has been a 30 bagger in 11 years (with dividends).
Kamath and the ladies are doing a great job at ICICI and while the Bank may become a global bank we as shareholders would be more concerned with our stock prices.No doubt it is a good bank but just that HDFC is better.
Regards,
Basant ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: basant
Date Posted: 17/Oct/2006 at 9:34pm
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Another stunner from HDFC Bank. Inspite of higher provisioning 69%; the company came out with a higher net profit at 31% y-o-y. The notable items was the swelling fee income which grew at close to 44% (should grow faster due to the cross selling startegy of the Bank indicated above). ALso the net interest margin at 4% compares favourably with ICICI Bank and SBI at 2,8% each.
The strategy of the Bank to reduce interest rates as part of the festive offer indicates that the interest rate fears are close to over.This is a jewel in the crown. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: monu_duggad
Date Posted: 09/Dec/2006 at 4:43pm
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Icici announced merger of sangli bank with itself.
Its expected to issue additional 3.4 million shares...
Forum
Wont it lead to drop in price because of equity dilution of additional 3.4 million shares ? ( I have icici bank shares)
Also...with the hike in crr by 50 points.....how do u think its gonna impact the banking sector....will it end the party of banking stocks which r having nice run after june crash ? Or 50 basis points dont matter much....
Somehow i feel markets might overreact keeping friday's sell-off in mind.. ------------- If you think you can,You Can |
Posted By: basant
Date Posted: 09/Dec/2006 at 5:41pm
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That dilution is small and also it results in some asset also but that is the fear with icici bank; equity will always keep growing so the growth in NP would result in a lesser growth in EPS. I hope Prosperity does not jump on me for this again!!! ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: prosperity
Date Posted: 10/Dec/2006 at 11:29am
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No Basantji, I am not jumping on you.. still want to state 2 things:
1) Equity Dilution is to the extent of ONLY 0.004 times i.e. 0.4% equity
2) Recently ICICI raised BIG Loan Amnt to meet the difference between Huge Credit offtake it is having and moderate deposits..
If for organic operations, ICICI is taking loan to meet its operations ...
How can we expect ICICI to take loan to acquire inorganic assets ?
LMK if my understanding is incorrect or unaware or skewed ?
------------- |
Posted By: basant
Date Posted: 10/Dec/2006 at 11:53am
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1) Equity Dilution is to the extent of ONLY 0.004 times i.e. 0.4% equity
2) Recently ICICI raised BIG Loan Amnt to meet the difference between Huge Credit offtake it is having and moderate deposits..
If for organic operations, ICICI is taking loan to meet its operations ...
How can we expect ICICI to take loan to acquire inorganic assets ?
LMK if my understanding is incorrect or unaware or skewed ?
_________________________________________________________
Yes, it is insignificant but that is my point why raise equity then if it is so insignificant - for such small amounts an all cash deal could have been done. Basically when ever a company grows at more then its RoE (discussed that before) it would have to frequently dilute equity.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: tigershark
Date Posted: 11/Dec/2006 at 8:50am
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the total assests to gdp ratio for the indian banking industry is just 40% that indicates gross underpentration of the banking sector added to this the capitalisation of the indian banking industry is a fraction of that of chinas thanks to the rbi our banks are far healthier than those in china the long term potential for phenomenal growth is tremendous for the indian banks not only are fii , foreign banks but now dfi and multilaterals are looking at equity stakes in banks, so i feel that at 0.50crr increas does not change the long term outlook for the banks but it does change the share prices of our banks ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: basant
Date Posted: 11/Dec/2006 at 9:07am
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.50crr increas does not change the long term outlook for the banks but it does change the share prices of our banks - You said it very well this is the best that could happen to the long term investors. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: prosperity
Date Posted: 16/Dec/2006 at 10:56pm
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For those who still wants to continue blaming ICICI and like manishdave said there are people who wants to settle personal scores with ICICI and hence employ huge people to empty cash from ATM at the same time !!
Has any Bank like ICICI Bank - given facility to give part-payment for applying for its shares in IPO/FPO ??
And see what people do - to those who are there for them ... HUM HAIN NA !
-----
Source: NSE - Icici Bank Ltd has informed the Exchange that ICICI Bank, in terms of the Prospectus dated December 08,2005 had issued and allotted 15,905,240 partly paid-up equity shares of face value of Rs.10/- each issued at Rs.498.75 per share, on which Rs.150.00 had been paid up (Rs.9.00 towards shares capital and Rs.141.00 towards share premium). The balance amount of Rs. 348.75 per share (Re.1.00 towards share capital and Rs.347.75 towards share premium) was payable on allotment. On December 16,2005 the Bank had issued a Notice to the holders of partly paid-up equity shares to pay the balance amount due on or before January 06,2006. Subsequently, the Bank had sent four reminders on February 08,2006, April 04,2006, June 15,2006 and October 05,2006 to these shareholders for payment of the balance amount along with interest thereon. It was conveyed that if the amount was not paid, the equity shares would be liable for forfeiture including amount already paid thereon. Although adequate opportunity was given to the shareholders to pay the balance money due, a few shareholders have still not paid the said amount. Hence it was proposed to initiate steps for forfeiture. Accordingly, a Notice of Forefeiture dated November 21,2006 was sent to the holders of partly paid-up equity shares to pay the balance money together with interest thereon, on or before December 12,2006 failing which the equity shares would be liable for forfeiture including the amount already paid thereon. Based on the response of the shareholders, the Bank will decide on the future course of action. Date: 2006-11-30
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Posted By: basant
Date Posted: 11/Jan/2007 at 9:56am
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Kotak estimates HDFC Bank's EPS to be Rs 37.1 for Fy 07 and Rs 48.20 for Fy 08. I expect HDFC Bank to trade at a PE of 25 times Fy 08 over the enxt 12 months. This brings us to a price objective of at least Rs 1350 over the course of one year. The actual price could be better then this because markets move in a band of PE range rather then one particular defined PE.
It is perfectly possible to get a return of 35% - 50% over one year in HDFC Bank. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: India_Bull
Date Posted: 23/Jan/2007 at 12:51pm
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Basantji, I am holding HDBC Bank and not comfortable with ICICI-s equity dilution. Looks ICICI bank is poised for superior growth leaving HDFC Bank far behind. What do you suggest ?
------------- India_Bull forever Bull ! www.kapilcomedynights.com |
Posted By: basant
Date Posted: 23/Jan/2007 at 2:47pm
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See ICICI bank will grow top line at more then HDFC bank but market pays for EPS growth though EPS growth in ICICI could be higher then HDFC Bank the latter had a kind of solidity in earnings and an assured 30% CAGR year after year for 10 years. This is something that I do not think ICICI bank could guarantee because ICICI Bank is becoming very large and when you become that large you kind of replicate the industry so if the Banking industry is not growing at 30% it would be difficult for ICICI to grow EPS 30% for say 10 years.But ICICI is a very good business to own also just that I prefer HDFC Bank.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: tigershark
Date Posted: 30/Jan/2007 at 4:03pm
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et dated 29012007 carries a great interview of one mr aditya puri highlights are as follows from autopilt mode hdfc bank plans to geow more agressively plans to raise capital in the next 12months how it will has not been decided have bcom big players in comm exc mkts and have penetrated the mandis now 40% business is coming from non metro areas.clearing house for nse and the stock lending business is not risky as certain poeple think it to be.with the economy growing at 8% growth may have just begun at hdfc bank.all hdfc bank shareholders need read this interview. ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: deveshkayal
Date Posted: 16/Feb/2007 at 10:09pm
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Strengths and Weaknesses of the two banks
ICICI Bank
Strengths
Strong Balance Sheet
Expanding international and rural business
Well-established subsidiaries in life and non-life insurance and AMC business
Strong Bench-strength
Weaknesses
Frequent capital dilution
Lesser share in low-cost deposits,still to fix liability mix
Large retail portfolio may breed NPAs going forward
No promoters,shareholding quite scatterred
HDFC Bank
Strengths
Large share of low-cost deposits,higher net interest margin
Better quality of assests,NPA of 0.4 per cent
Free Float available,FIIs can buy its stock
Higher profitability
Weaknesses
Marginal international presence
No next line of leadership
Not very aggressive in M&A space,growing only organically
Possible takeover target (I think Citigroup is holding some stakes)
------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: kulman
Date Posted: 16/Feb/2007 at 10:20pm
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GOOD !
Devesh jee....is it sourced or your own?
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: deveshkayal
Date Posted: 16/Feb/2007 at 10:25pm
Everything is sourced,but i dont think source is to be put in above post.Some members have taken my job of postman,i dont want to leave it.(especially in media sector)  ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: PrashantS
Date Posted: 16/Feb/2007 at 10:59pm
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hey is this a coincidence ...i just read this article yesterday http://www.tmcnet.com/usubmit/2007/02/14/2335820.htm |
Posted By: Mohan
Date Posted: 16/Feb/2007 at 11:08pm
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ICICI focus is more on Quantitaitve growth
HDFC focus is Qualitative quantity growth. Very focussed ------------- Be fearful when others are greedy and be greedy when others are fearful. |
Posted By: basant
Date Posted: 23/Feb/2007 at 8:13pm
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The interest rate upcycle will send opportunities to buy HDFC bank. Long term investors who have a more then 5 years view should capitalize on these opportunities to buy the retail focussed banking stocks as part of the long term portfolio.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: tigershark
Date Posted: 28/Feb/2007 at 7:03am
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dear basant yu say to be careful of interest rate sensitive industries now banking is highly int rate sensitive so do yu avoid making any investments in hdfc bank or yesbank or icici at this juncture or is it a long term oppurtunity also pantaloon has a large capex plan will increasing int rates put pressure on its margins ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: basant
Date Posted: 28/Feb/2007 at 9:21am
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That is interesting. HDFC Bank has a 12 year operating history so those guys are never streched and would continue to exist and deliver. ICICI Bank could be in some temporary trouble since their borrowing and lending are a bit in mismatch but for all these private sector retail banks the new wave of incremental growth will come from fee based services like selling financial products etc. Most of them are already into it and this business does not need any capex - it is a servioce model.
Your assesement on http://www.theequitydesk.com/forum/forum_posts.asp?TID=135 - http://www.theequitydesk.com/forum/forum_posts.asp?TID=135 -
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Posted By: s_praharaj
Date Posted: 01/Mar/2007 at 11:10pm
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The interest rate hike will definitely affect the earnings of the Bank. But more than that it will affect the companies, those are having high debt. Banks to a great extent will pass on the increase in deposit rate to the borrowers by increasing the interest rate on loans. But the companies which are having more debts has to pay it from their earnings. So they will be affected.
I am already seeing big companies enquiring for availing loans at a higher rate, which they were refusing earlier.
So Basant's view of focussing on low debt or zero debt companies will definitely yield better returns. ------------- Shashi Praharaj |
Posted By: tigershark
Date Posted: 03/Mar/2007 at 1:17pm
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MOTILAL OSWAL has upgraded its rating on HDFC BANK to buy from neutral saying that the bank was poised to gain in arising interest rate senario.with deposit costs on the rise they beleive that banks with strong retail franchise ,higher proportion ofCASA DEPOSITSand thus lower cost of funds would be best placed. hdfc bank emerges as our preferred bank on all these fronts as cost of funds remain relatively insulated as more than half of its deposits are contacted at fixed rates-casa deposits of 2.5-2.8%...mr banker s praharaj sir are you and basant sir, inaccordance with this view bcos i feel the stock iscoming towards attractive terrtory where one can invest in this bank ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: basant
Date Posted: 03/Mar/2007 at 1:41pm
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I have always been a very aggressive proponent of the HDFC Bank stock. Declines like these give opportunity to the long term buyer to get in. Did the report mention about fee based income going up. ALso they are slated to do an equity offering later this year.Nothing confirmed on this yet. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: tigershark
Date Posted: 03/Mar/2007 at 1:46pm
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no the report does not mention bout fee based income but when they say retail franchise i suppose they include fee based under that banner yes i have heard aditya puri saying so some really big fiis will be queing up for that ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: s_praharaj
Date Posted: 03/Mar/2007 at 10:42pm
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Fee Based Income is around 25% of total Income for HDFC bank. The fee based Income is growing at 22% per year for HDFC Bank. The non-Intt Income is growing at 26%. The increase would have been more, but due to a loss of 21.1 crore on trasury operations, the growth is shown at 26%.
I have analysed HDFC Bank , with ICICI Bank, UTI Bank, Kotak Bank and Yes Bank. Though the growth rate in some areas are a shade higher in icici Bank than HDFC Bank, still when important parameters such as net NPA, NIM, % of casa to tot deposit, Capital Adequacy Ratio etc, are considered ,HDFC Bank scores better than ICICI Bank. For last 5 years it shows a more than 20% CAGR growth in business, Net profit, Net Intt Income, Other Income etc. HDFC Bank has the highest Net Intt Margin of 4.3% in the Industry. Its net NPA at at 0.4% is the lowest in the Industry. Its cost of fund at 3.8% also is the lowest in the Industry.
The only negative with HDFC Bank is that they have not opened any Branch in last nine months. Imagine a Bank giving a growth of almost 30% in almost all parameters without opening a single branch, is quite praiseworthy. I read somewhere that they applied to RBI for licenses of 100 Branches to be opened next fiscal.
In a price band of 900-950, I feel it is an opportunity to enter the stock. ------------- Shashi Praharaj |
Posted By: basant
Date Posted: 03/Mar/2007 at 8:36am
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Maybe that equity dilution is slated to happen when they get the RBI approval of opening over 100 branches. YOur small write ups make things look very easy. Thank you Sir. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: prosperity
Date Posted: 04/Mar/2007 at 10:28pm
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BRAND is another thing which is not present in HDFC Bank and a whole lot present in ICICI Bank ... The advertising spends by ICICI and international presence establishes the BRAND much further !!
In Buffet's world, BRAND stands for opposite of COMMODITIES/CYCLICALS ! ------------- |
Posted By: Mohan
Date Posted: 04/Mar/2007 at 11:47pm
------------- Be fearful when others are greedy and be greedy when others are fearful. |
Posted By: Mohan
Date Posted: 04/Mar/2007 at 1:40am
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I wonder whick bank would Buffet buy ?
my money is on HDFC Bank.
In the US he owns Wells Fargo which is a very conservative bank focusing on bottom line growth more than topline growth. ------------- Be fearful when others are greedy and be greedy when others are fearful. |
Posted By: Mohan
Date Posted: 05/Mar/2007 at 12:04pm
------------- Be fearful when others are greedy and be greedy when others are fearful. |
Posted By: Mohan
Date Posted: 05/Mar/2007 at 9:21am
------------- Be fearful when others are greedy and be greedy when others are fearful. |
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Posted By: tigershark
Date Posted: 18/Mar/2007 at 12:04pm
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we all know that the march qrt will be good for hdfc bank and as usual it shall post an eps of around 9 thus giving us an annual eps of close to 35 and a pe ratio of 25.8. now let us presume that in fy 08 at least for the first 2 qrts the bank cannot maintain this 30% growth rateand we presume growth rates to come down to 20-23% then would a pe of 22 -23 make sense so price range of 800 - 850 would be a more reasonable level to start an SIP in hdfcbank.could shashiji and basant elaborate on the banks growth rate and logic for long term investment ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: basant
Date Posted: 18/Mar/2007 at 12:13pm
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As far as I know HDFC Bank PE would not see an easy contraction. This is because it has a 48 quarter history of a 30% CAGR so a 2-4 quarter fall in that growth rate should create a buying opportunity. Also as someone mentioned the Bank is awaiting approval for opening up about 100 branches and once that approval is received the growth rate would sigbificantly jump up from these levels.
The more it falls the more valuable it gets - for a long term investor. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: tigershark
Date Posted: 18/Mar/2007 at 12:21pm
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thks for the prompt reply.it appears to be great business that we need to buy at a fair price.your posts help to continue the SIP in that business ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: ashish_agarwal
Date Posted: 18/Mar/2007 at 8:54pm
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HDFC bank is a really good perfomer. Warren Buffet would surely buy deep into it. But how does the choice of buying HDFC compare with HDFC bank..
N i was a lil amused reading one of the posts that HDFC bank delivering a 30% growth rate as boring...Phew...only few companies can boost of such feat.
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Posted By: basant
Date Posted: 18/Mar/2007 at 9:26pm
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Hi.The difference between HDFC bank and http://www.theequitydesk.com/forum/forum_posts.asp?TID=117 - is the same as growing at 30% or 24% respectively, That 6% difference is significant.
Look at this this way a Rs 100,000 initial investment at 30% could grow to Rs 13.78 lacs @ 30% and Rs 8.59 lacs @ 24%. And that means a lot!
This does not mean HDFC is not a good buy but just that I find HDFC Bank to be a bit better. The former is a classic value cum growth (embedded businesses like insurance, AMC, BPO etc) whereas the latter is more growth and less value. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: xbox
Date Posted: 18/Mar/2007 at 5:31am
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Being a very old organization, ICICI Bank has lots of valuable holding. Be it IDFC stake etc. Time to time they keep selling it to finance mainstream business. I find ICICI as value + growth story. Recently it spin-off it's AMC, Insurance business to holding company. Listing of it's holding companies like 3i, firstsource is doing well for it's book value. It is the most aggressive bank in India, which has pros and cons. In uncertain times like this, ICICI Bank will be most affected.
Even HDFC Bank is old organization but even then it does not have similar values as it only operates in Banking. All values are there with HDFC.
HDFC Bank follows step by step approach to growth whereas ICICI prefer all around growth at fast pace. Thanks to it's full scale financial products and aggressive management.
At any given day ICICI Bank scores better than HDFC Bank.!! ------------- Don't bet on pig after all bull & bear in circle. |
Posted By: India_Bull
Date Posted: 18/Mar/2007 at 5:53am
ICICI Bank and HDFC Bank both are becoming more attractive with each fall in the market !!! ------------- India_Bull forever Bull ! www.kapilcomedynights.com |
Posted By: India_Bull
Date Posted: 18/Mar/2007 at 5:59am
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ICICI Bank wants to grow very fast where as HDFC chief is happy with moderate growth.
ICICI scores over HDFC Bank in most of the areas mentioned by you but the only issue is it is also diluting equity very fast. As long as they keep on the growth momentum that should be ok. ------------- India_Bull forever Bull ! www.kapilcomedynights.com |
Posted By: xbox
Date Posted: 18/Mar/2007 at 6:06am
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Only issue is it is also diluting equity very fast.
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Difference between growth of ICICI Bank and HDFC Bank is similar to equity dilution of ICICI Bank on yoy. ------------- Don't bet on pig after all bull & bear in circle. |
Posted By: s_praharaj
Date Posted: 19/Mar/2007 at 1:32pm
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There are many other facts about both HDFC Bank and ICICI Bank.
One of them is asset quality. The Asset quality of HDFC Bank is superb and classified as very Healthy by Standard and Poor and CRISIL. Where as it is not so good for ICICI Bank. All PSU Banks Asset quality is average or below average, except for Canara Bank, where it is Above average.
No doubt ICICI Bank is having so many hidden gems in its kits, and a better growth story, but if we talk of Banking, HDFC Bank is way apart. ------------- Shashi Praharaj |
Posted By: xbox
Date Posted: 19/Mar/2007 at 1:54pm
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The Asset quality of HDFC Bank is superb.
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Just wanna confirm whether you mean HDFC Bank not HDFC. HDFC asset quality is superb for sure. ------------- Don't bet on pig after all bull & bear in circle. |
Posted By: s_praharaj
Date Posted: 19/Mar/2007 at 4:41pm
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Its HDFC Bank, I was discussing. ------------- Shashi Praharaj |
Posted By: prosperity
Date Posted: 19/Mar/2007 at 3:25am
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With ICICI you save that trouble also !!
Whether one says ICICI or ICICI Bank - it would always be understood as one meaning ...
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Posted By: xbox
Date Posted: 19/Mar/2007 at 5:21am
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Its HDFC Bank, I was discussing.
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Thanks Shasi jee. ------------- Don't bet on pig after all bull & bear in circle. |
Posted By: tigershark
Date Posted: 19/Mar/2007 at 8:29am
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talking to a freind of mine who works at the wealth management div of HDFC BANK says that margins have come down slightly.fee based income is up andwe are managing fairly well in a high interest rate regime.basant and shashi pl take note he is looking after the state of goa ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: nikhil090
Date Posted: 08/Apr/2007 at 9:07pm
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My sense is that we are closer to the bottom than anytime earlier in these Financial services stocks.. HDFC Bank at around 900 would be a good buy..
Probably 1-2 more rate hikes may be in the offing (max) and after that a dull period and then rate reduction.. The rate reduction may happen in the next 9 months..
Though in any case HDFC Bank is a great share, there is a little bit of timing also which can be done now.. probably icing on the cake..
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Posted By: basant
Date Posted: 08/Apr/2007 at 9:14pm
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Absolutely. I would agree to that view 100%. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: manishdave
Date Posted: 08/Apr/2007 at 9:45pm
| I gree too. Good time to buy HDFC Bank. |
Posted By: India_Bull
Date Posted: 08/Apr/2007 at 1:30am
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The best way to play the bank stocks is Buy them when the interest rates are at high levels and start selling them when interest rates start to get reduced... And if you observe its a cycle repeating itself again and again ------------- India_Bull forever Bull ! www.kapilcomedynights.com |
Posted By: xbox
Date Posted: 08/Apr/2007 at 5:55am
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I guess there is more downside to Banks. RBI is not in hurry to lower interest rates, so one can wait to see few lower earning results and their outlook/guidance.
Personally, I feel Banks are once buy never sell stocks. I am not aware of any other sector more scalable than this. This is the reason why I like financial sector. <<forgive me ....>> ------------- Don't bet on pig after all bull & bear in circle. |
Posted By: basant
Date Posted: 08/Apr/2007 at 9:26am
That should be the motto and also timing them could be difficult so take a broad call on the interest rate and jump into any bank which is beyond Govt. control because we are unsure of what the Govt. diktat might force these banks to do. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: psimajin
Date Posted: 14/Apr/2007 at 3:10pm
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Basantji,
ICICI BANK has plan to form a separate holding company to avoid frequent dilution of equity.Will this be spin off case? How does the ICICI Bank now stand in comparision to HDFC Bank ?
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Posted By: basant
Date Posted: 14/Apr/2007 at 4:18pm
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ICICI is a big bank more like a mirrior to the general India; HDFC Bank
still has its niche customers which this bank is finding ways to
monetise.So surely ICICI Bank could grow big but shareholders of HDFC
Bank would not be left behind because though the former can unlock
value from insurance the returns are not that predictable as the
latter.HDFC Bank has a history of growing EPS by 30% CAGR for the last
50 quarters and though ICICI Bank has grown the EPS growth has not been
that consistent. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: tigershark
Date Posted: 19/Apr/2007 at 10:29am
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hdfc bank-best placed bank in rising int rate senario.margins set to improve- highest CASA DEPOSITS55%in 3qfyo7. new branch additions would ensure growth has added 48 branches in3qfyo7.asset qlty -already carrying adequate provisioning.equity dilution in 08 is likely to be book accretive will happen at a signifiacnt premium to book,may improve bv by as much as 20%.bank to report eps of 48 in fy08 and 62 in fy 09. bv should be 237 and 291 respectively the stock trades at a pe of 14.5 and a P/B of 3.1 for fy09.making it an atractive investment.FROM MOST ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: basant
Date Posted: 19/Apr/2007 at 10:31am
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Thanks Tigershark. That means we are getting this bank at 16 times one year forward!!! ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: tigershark
Date Posted: 19/Apr/2007 at 10:40am
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thats what MOTILAL BABA is implying.and it does sound possible. ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: kanagala
Date Posted: 19/Apr/2007 at 11:27am
Hi TigerShark, Have seen the report on PNB. It also looks good. In terms of CASA and NIM's it is just a shade below HDFC Bank. |
Posted By: kanagala
Date Posted: 19/Apr/2007 at 11:27am
I am referring to the report available on http://groups.google.com/group/dpstock/browse_thread/thread/6fe62bc9302e5412/76c262a9957bf015#76c262a9957bf015 |
Posted By: kanagala
Date Posted: 19/Apr/2007 at 11:56am
Hi Basant sir, is 09 earnings considered as a 2 year forward? |
Posted By: basant
Date Posted: 19/Apr/2007 at 11:59am
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We are in Fy08 right now which is current year; Fy 09 is forward and Fy07 is trailing. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: tigershark
Date Posted: 24/Apr/2007 at 9:43pm
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total income8405.2 crs compared to 5599.3crs.net at 1141 compared to 870crs .dividend rs 7 per share.for the qrt2384crs compared to1683 crs total income .net343crscompared to263 crs.so the bank has stared to earn a net profit of more than its equity every qrt.detailed results at http://www.bseindia.com - www.bseindia.com basant and shashiji please evaluate the performance for all of us.thks ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: basant
Date Posted: 24/Apr/2007 at 9:47pm
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I'd let the expert (Shashiji) handle this. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: nikhil090
Date Posted: 24/Apr/2007 at 10:15pm
| I would consider these results to be extremely robust. Very strong growth. This with casa of 55% makes it a very sound investment. |
Posted By: tigershark
Date Posted: 24/Apr/2007 at 10:18pm
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CASA OF 55% WOW! ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: s_praharaj
Date Posted: 24/Apr/2007 at 12:09pm
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I have also not seen the detailed result of HDFC Bank.
The beauty about HDFC Bank is, that they have the highest CASA %age and year after year they are maintaining it at around 55%. From the face of it the result looks excellent.
Though I am not an expert, I think I can put my view about HDFC Bank and Yes Bank in a couple of days. ------------- Shashi Praharaj |
Posted By: manishdave
Date Posted: 24/Apr/2007 at 1:39am
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Shashiji,
If CASA is high, does it mean that higher interest rate, better for them? They will lend at mkt rate(which is high) but their cost is low. Value of securities will go down, but operating profit will go up.
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Posted By: nikhil090
Date Posted: 24/Apr/2007 at 10:59am
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That should be true. I read somewhere that HDFC Bank's NIM has improved to 4.5% instead of 3.9% last year.
Rest the experts can throw more light.
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Posted By: basant
Date Posted: 24/Apr/2007 at 11:06am
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I have always found HDFC bank intriguing that is becasue this is never the kind of company that needs any analysis. Though this is a far reaching statement but if something can be done in a better way these guys will be right up there doing it. Problem is this is not a big multibagger from here but stable 25%-30% CAGR is definetely what we want.
So if some bank has a NIM of x this will certainly do x+y => wonderful company to own really for people who are looking at good long term magic of compounding. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: tigershark
Date Posted: 25/Apr/2007 at 7:23pm
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net int inc grew51% y-o-yfy 07.nim improved to 4.5.banks casa is around 55 compared to 50 last yr.the banks high casa and strategy to go slow on bulk deposits will help hdfc protect its margins going forward.ha opened 101 branches in qrt 4.the bank trades 4.4 times the estimated fy08 book value.source bs ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: kanagala
Date Posted: 25/Apr/2007 at 11:08pm
Sir, It is funny that most of the brokerages have Sell,Hold and Reduce call on this stock. Hoping to get into this slightly lower levels. This is a 30% growth machine. |
Posted By: kanagala
Date Posted: 25/Apr/2007 at 11:34pm
I mean some of the brokerages not the most of the brokerages. Sorry for the mistake. |
Posted By: vishal.sahay
Date Posted: 28/Apr/2007 at 7:35pm
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The board of directors of ICICI Bank, which met today, approved a proposal to raise additional equity of around Rs 20,000 crore ($ 5 billion) by way of a public issue of shares in India and, subject to applicable regulations and necessary approvals, an issue of American Depositary Shares (ADSs) in the United States.
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Dont u think Basant sir that ICICI bank goes out for too much equity dilution. And what might be motive behind raising of such huge funds? Any possible acquisition or for organic growth plans only. And also by chance did u got the time to analyse its results I think this time their results have been marginally lower than the street expectation. Also Shashi if you could also share ur knowledge about this ICICI bank fund raising plan and results synopsis. ------------- Vishal |
Posted By: basant
Date Posted: 28/Apr/2007 at 8:13pm
That is what I keep repeating , Equity dilution is not an issue but the point that the RoE remains at a level lower then growth rate means equity will be diluted after periodic intervels.
Acquisition is never cheap you always have to place the highest bid so I hope this is not for acquiring shares of another Bank.
But in case it plans to buy a PSU bank with this money it could actually favour ICICI bank that is because a 20PE Bank buying out a 6 PE BVank with equity diluted at 20PE is not bad news.Let us wait for the fine print to come out.
Personally I 'd rather be with HDFC bank. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: Rinku
Date Posted: 28/Apr/2007 at 12:07pm
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what are the chances of icici stock price coming down when equity will be diluted? ------------- |
Posted By: basant
Date Posted: 28/Apr/2007 at 11:05am
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I do not think prices would tank but just that frequent equity dilutions restrict upsides. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: xbox
Date Posted: 29/Apr/2007 at 4:06pm
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With Banks, one can't be too wrong. I recall one old hero-honda adv.. Fill it, shut it and forget it...
So Banks are ..
Buy it, hold it and forget it... <<of course lighter note.>>  ------------- Don't bet on pig after all bull & bear in circle. |
Posted By: s_praharaj
Date Posted: 01/May/2007 at 3:55pm
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IN the year 2008, there may be many mergers and acquisitions due to the implementation of Basel-II norms. ICICI Bank is always proactive, and may be getting ready for that. I strongly feel that ICICI Bank is getting ready with a fat kitty, for acquiring few banks. In 2008 also, ICICI bank needs a bigger capital for its as usual aggresive style of doing business.
However, the result of ICICI Bank is lacklusture. It seems they have made a very big loss in their treasury operations. After their sale of stake in NSE for around 500 crores also. their non-intt income is at 446 crores. The NIM is around 2.65%, which is nothing big compared to 4.5% of HDFC Bank. Though the business has increased by around 37%, profit after tax has increased by around 4% (mainly due to non-intt income.). Capital Adequacy Ratio is around 11.7%, which is just OK. Though in netlevel NPA has decresed, in gross level NPA has increased substantially.
With all this, if the price of ICICI Bank still go to 825, then it is a good buy. With ICICI Bank you can not say anything. The risk is worth taking. ------------- Shashi Praharaj |