ICICI Bank Ltd

Retail all the way

Ashutosh Narkar 5675 4480

(anarkar@indiainfoline.com) September 2004
Dealing
Sandeepa Arora 92234 09033
Biren Patel 98204 43920

IT’S ALL ABOUT MONEY, HONEY!

 ICICI Bank Ltd: Retail all the way

Recommendation BUY Retail credit growth to drive earnings

BSE 532174 We are recommending a long term BUY on ICICI Bank. Continued growth in retail
NSE ICICIBANK credit should help ICICI Bank to grow its advances portfolio at around 26%, which
CMP Rs288 would help drive earnings growth.
52 week H/L Rs352/200
Market Cap Rs217bn
Face Value Rs10 Improved funding mix to expand margins
Market Lot 1 An improved retail liability base resulting in a higher low cost deposit base would help
bring down cost of funds to improve net interest margins (NIM) at 2.3%. Core
Shareholding pattern
operating profits are expected to show a CAGR of 36% over the next two years.
Share Holders % holding
Promoters 0.00
Institutional Investors 64.70 Earnings model less dependent on Treasury earnings
Other Investors 27.16 Q1 FY05 contribution of treasury was mere 26%. The bank has a pretty low duration
General Public 8.14
on its SLR portfolio, which should help ICICI Bank lower capital losses. A good bet
vis-à-vis PSU peers.

Share Price Chart Price target of Rs346 gives an upside of 20%

ICICI Bank(282.000, 290.000, 278.500, 288.950, +9.95001)

We recommend a price target of 346 with a 12-month perspective, which gives us a

350

300

250
potential upside of 20%. We have used the average of EVA model and the (ROE-g)/
200 COE-g) model to arrive at out price target.
150

Key Financials (Rs in million)

15000

10000
2003 2004 2005E 2006E 2007E
5000

2003 Jun Jul Aug Sep Oct Nov Dec 2004 Feb Mar Apr May Jun Jul Aug Sep
x1000

Oct
Net Interest Income (Rs mn) 14,241 18,788 28,434 38,644 46,875
Net Profits (Rs mn) 12,062 16,371 18,844 23,965 30,497
EPS (Rs) 19.7 26.6 25.8 32.8 41.7
ROAA (%) 1.1 1.4 1.4 1.5 1.6
ROE (%) 18.3 21.9 18.5 18.1 20.1
Price Earnings ratio 14.6 10.8 11.2 8.8 6.9
Price/ Book Value 2.5 2.2 1.7 1.5 1.3
Price/ Adjusted Book Value 4.3 2.7 2.0 1.7 1.4

ICICI bank valuation

Fair Price to Book Multiple (ROE-g)/ (COE-g) 2.0
COE 12.6
Share price Beta 0.9
Target Price 346

Peer Comparison CMP Target Price Upside

SBI 473 494.0 4.4
ICICI Bank 288 346.0 20.1
HDFC Bank 404 418.0 3.5
Corporation Bank 271 301.0 11.1
CANARA Bank 147 157.0 6.8
PNB 258 272.0 5.4

September 29, 2004 2

 ICICI Bank Ltd: Retail all the way

Q1 FY05 —A quick recap

(Rs mn) Q1 FY05 Q1 FY04 yoy (%) qoq (%)
NII 6,306 4,160 51.6 19.4
Fee income 4,180 2,360 77.1 11.8
Capital gains 930 2,610 (64.4) (56.1)
Total income 12,883 10,983 17.3 1.1
Core income 11,953 8,373 42.8 12.6
Core profits 4,629 2,443 89.5 24.8
PAT 4,307 3,402 26.6 (5.4)

Improved spread expands margins

The bank reported a strong 52% growth in its net income interest (NII), which was
led by a sharp drop in interest cost by 15%, while the interest income also dropped
by 4.3%. However, this can be attributed to the realignment of the yield on its advances
portfolio, which should drop further. The yield on advances at FY04 stood at 10.5%,
which is quite higher than the market yield and also compared to its peers.

Core operating profits continue the upward march

Strong growth in fee income coupled with a 52% growth in NII, saw the bank’s core
operating profits grow by 27%. The bank has a strong fee income growth as compared
to its peers, which has been a distinct feature of its earnings model. Operating expenses
grew by 23%, which pushed the cost to income ratio up to 56% as compared to
54% in June FY04. Capital gains during the quarter were down by 64%, due to the
rise in interest rates across the counter.

Retailization of the balance sheet continues

During the quarter, retail assets grew by 62% and now constitute 56% of the advances
base. The retail liabilities also improved their share, with retail deposits now constituting
64% of the total borrowings. The growth in retail liabilities has reduced the funding
cost, however the retail advances has been responsible for the operating expenses
growing at around 23%.

Asset quality maintained

The bank maintained its asset quality, with a marginal drop in net NPA to Rs20.1bn
or 2.7%. However, the drop was more due to the sale of loss assets to Asset
Reconstruction Company (ARCIL). Restructured assets also increased by around
Rs6.4bn. The worrying part is the sudden growth in restructured assets after seeing a
declining trend over the past few quarters.

September 29, 2004 3

 ICICI Bank Ltd: Retail all the way

Investment highlights
¾In a rising interest rate environment, banks with less dependence on treasury income
would be a preferred lot. ICICI Bank’s treasury contribution to the earnings before
tax during Q1 FY05 formed 26% compared to more than 45% for many PSU banks.

¾Bank currently has a better securities portfolio compared to its PSU peers with
average maturity of its at around 2 years. A further drop in bond prices to hit less on
ICICI Bank’s balance sheet.

¾Retail advances form 56% of the loan portfolio. NPA accretion in the retail portfolio
is marginal. Loan growth at around 26% to help improve business. Focus on SME to
help improve spread.

¾Change in the funding mix should improve margins further. Low cost deposits
expected to rise further.

¾Hidden value in subsidiaries to expand valuations.

Investment portfolio concerns- Overblown

The bank has been maintaining a minimum required SLR portfolio with an average
maturity below 2 years. The portfolio duration at end of June quarter stood at 2 years.
The bank has a cushion on interest rate rise up to only 6.5%. Any rise above that level
would trigger investment depreciation to be booked. However, the recent RBI ruling
to transfer securities up to 25% of the demand and time liabilities of banks in the held
to maturity (HTM) category would help reduce mark to market (MTM) losses. We
expect the banks to transfer these securities to the HTM category at around 5.85-
5.95%, which prevailed just at the time of the announcement.

Retail all the way

ICICI Bank has been on the forefront in the sector’s race towards retailisation of their
balance sheets and currently it holds a market share of 30%. The bank had a retail
advance base of 56% at the end of the June quarter and is expected to improve
further. This is deviating from its parent’s core competency of project financing, which
has been slowly reduced, resulting in an improved performance. However, the bank
has been equally focused on improving its retail liabilities, which currently forms 63%
of the funding base. Low cost deposits further form 23% of the total deposits.

September 29, 2004 4

 ICICI Bank Ltd: Retail all the way

Retail loan mix (%) FY03 FY04 Q1 FY05

Home loans 47.8 44.7 51
Auto loans 23.3 24.5 20
Commercial 12.9 15.9 13
Two-wheeler,
Personal loans & others 16.2 14.9 16
Source: Company data

As expected, home loans form around 51% of the retail advances, while the auto
sector forms another 36% with other personal finance contributing to the remaining
13% of the pie. Out of the above three sectors, housing and auto should play a major
role in ICICI’s success. Both the sectors have outperformed the economy in the last
few years and the prospects look good for a repetition. The personal loan segment
derives its growth mainly through demographic change, which has been brought about
by the booming economy. The rising disposable income coupled with a positive change
in attitude towards debt financing has augured well for personal loan segment.

Mortgage growth story to continue

India still remains one of the most under penetrated markets. The Indian mortgage
market although has been growing continuously at a blistering pace, it still lags behind
its developing and developed peers. India’s mortgage ratio to GDP is merely 2.5%
compared to around 10-14% for other developing countries and well above 50% for
the developed countries.

Mortgage as % of GDP

UK 57

USA 54

Thailand 14

China 7

India 2.5

Source: National Housing Bank, India Infoline

Auto Financing- not ready to slow down

Fast developing Indian infrastructure giving impetus to the Indian automobile industry
to give a fillip to the banks auto financing business. The penetration levels in the auto
finance market has grown substantially over the past few years and currently stands at
around 80%. Moreover, the new Government’s thrust on the agricultural and transport
which should keep the commercial vehicle growth intact. India has a very low vehicle
density with 8 per thousand, which is far below the world average. However, with a
growing penetration of car finance, the situation should change. This will aid ICICI,
which has a market share of almost 32% in the complete auto loan market.
September 29, 2004 5
 ICICI Bank Ltd: Retail all the way

90% New car finance penetration levels

80%
70%
60%
50%
40%
30%
20%
10%
0%
1998-99 2000-01 2001-02 2002-03 2003-04

Source: Industry data

Leadership position in retail finance to aid ICICI Bank

Retail advances as % of total advances

Peer group comparision
60

50

40
(%)
30

20

10

0
ICICI bk HDFC bk SBI PNB Canara Corp bk

Source: Company data, India Infoline

Market share (%) Mar-04

Mortgage 28
Auto & 2 wheelers 37
Commercial vehicle 25
Other personal loans 29
Source: Company data

ICICI Bank, with its leadership position is capable of taking charge of this sustained
retail boom. With the existing technology and a strong distribution network across
the country, the bank will be able to deliver better results. We expect a strong retail
loan growth of 36% over the next 3 years. We expect the retail assets to constitute
around 57% of the loan portfolio in FY05. The asset quality in the retail advancing
business has been of high quality with net NPA level at around 0.7%. Concentration
on a more stable mortgage lending should ward off any NPA threats in this segment.

September 29, 2004 6

 ICICI Bank Ltd: Retail all the way

Retail loan growth for ICICI Bank

500 Retail Advances
400
300
200
100
0
2002 2003 2004 2005E

Source: Company data, India Infoline estimates

Improved funding mix through retail liabilities

The bank has been concentrating on improving its funding mix and retail deposits
constitute 64% of the total debt funds. The low cost deposits over the past two
years have been growing at a fast pace and now constitute around 23% of the
total deposits. We expect the low cost deposits to grow at CAGR of 39% over
the next three years. This would help the bank reduce its cost of deposits, which
has already come down to 4.5% in June 04.

(%) Deposit cost dynamics

40.0 7.0
6.0
30.0 5.0 COD
low (%)
cost 20.0
4.0
depo 3.0
sits 10.0 2.0
1.0
0.0 0.0
2003 2004 2005E 2006E 2007E

Low cost deposits COD

Source: Company data, India Infoline estimates

Another reason for the drop in cost of deposits is the shift in the service delivery
channel for the bank. 70% of the customer transactions were dealt through the electronic
channels like ATM, internet, and phone banking. An average ATM transaction costs
45% less than a physical banking channel. The bank has the second largest ATM
network of 1,790 behind SBI. The bank has already implemented the core banking
solution as against its PSU peers, which are currently in the pilot implementation stage.

September 29, 2004 7

 ICICI Bank Ltd: Retail all the way

100%

80%
60%
40%
20%

0%
2002 2003 2004 2005E 2006E 2007E

Deposits Other Borrowings

Source: Company data, India Infoline estimates

ICICI Bank’s funding mix has been gradually changing with deposits
occupying larger share. This has helped the bank reduce its cost of funds.
With the repayment of erstwhile ICICI Ltd’s high cost borrowings, this should
further bring down its funding cost. We expect deposits to form around
78% by end FY07. This coupled with a rising share of low cost deposits
should help improve margins in the long run.

Margins expected to expand further

8.0 3.0
2.5
6.0
2.0
4.0 1.5
1.0
2.0
0.5
0.0 0.0
2003 2004 2005E 2006E 2007E

COD NIM

Source: Company data, India Infoline estimates

The bank has also started concentrating on the lucrative SME segment to improve its
yield on advances. But a higher yield on advances portfolio is expected to come
down as the securitization portion of the interest income to drop with interest rates
rising in the future. However, the continued drop in the cost of deposits (COD) should
more than compensate for the drop in yields. The net interest margin (NIM) is expected
to vault to around 2.3% for the year end, which should further expand in the next two
years.

September 29, 2004 8

 ICICI Bank Ltd: Retail all the way

Core profits continue to rise

14000
12000
(Rs mn) 10000
8000
6000
4000
2000
0
Q104 Q204 Q304 Q404 Q105

Fee Income Core Income

Source: Company data

Bank’s core profits have by far been driven by strong NII growth and steady growth
in fee income. This would help the bank insulate itself against the drop in capital gains.
Over the last three quarters, the bank has consistently improved its core operating
profits, which was a result of strong core income growth. While most of the industry
players booked huge capital gains during Q3 FY04 and Q4 FY04, ICICI Bank
showed a negative growth. This lower dependence on treasury gains would help
bank to maintain profitability in a rising interest rate situation.
qoq growth (%) Q204 Q304 Q404 Q105
NII 8.2 7.8 8.9 19.4
Core fee income 10.2 17.3 22.6 11.8
Capital gains 76.2 (17.2) (44.4) (56.1)
Total income 19.5 (1.1) (1.8) 1.1
Operating expenses 8.6 0.3 7.0 6.0
Core income 1.8 7.6 15.8 12.6
Core operating profits (14.9) 30.3 36.9 24.8
Source: Company data

We expect a continued robust growth in fee income coupled with an expanding spread
to drive ICICI Bank’s core profit growth at a CAGR of 37% over the next two
years.

September 29, 2004 9

 ICICI Bank Ltd: Retail all the way

Cost to income ratio expected to improve

60.0
50.0
40.0
(%)
30.0
20.0
10.0
0.0
2002 2003 2004 2005E 2006E 2007E

Cost/Income

Source: Company data, India Infoline estimates

Banks greater focus on retailizing its balance sheet has seen its costs rise at an alarming
rate. However, we feel the bank has done most of the required groundwork and
should soon start reaping the benefits. The bank has created the technology platform
coupled with a strong distribution network in place. At the same juncture, most of its
PSU peers have just started implementing technology solutions and expanding network.
Another rising cost for all the banks has been the growing advertising and marketing
expense. We expect this expenditure to grow at around 50% annually over the next 3
years. Although high at this rate, it seems moderate compared to the growth, which
would be seen in the PSU banks.

Equity issue- timed to perfection

ICICI Bank’s recent capital raising scheme has increased it’s tier I capital to 9.36%
while the tier II ratio to 5.85%. With the implementation of Basel II norms, a further
dilution of CAR is expected. However, with the bank’s focus on mortgage lending
(which attracts lower risk weight at 35%) and other retail assets (75% risk weight)
would help it avoid further equity dilution. With tier I ratio at a comfortable level, the
bank has further scope to increase its tier II capital base. Hence we do not expect
any further dilution of equity capital in the next 2 years.

Hidden value in subsidiaries to come to the fore

(Rs mn) Share capital Reserves Profits*
ICICI securities 2030 1897 3927
ICICI Prudential Life Insurance Company 6250 -4052 2198
ICICI Lombard General Insurance Company 2200 99 2299
Prudential ICICI Asset Management Company 185 709 894
ICICI Home Finance 1550 191 1741
* data till Dec 2004

September 29, 2004 10

 ICICI Bank Ltd: Retail all the way

ICICI bank’s subsidiaries have been performing well and we expect them to contribute
significantly to the overall share price of the bank. We have valued the subsidiaries on
a price to book value basis and giving a 20% holding company discount. The
subsidiaries contribute around Rs24 to the share price of its parent ICICI Bank. We
assume these are pretty conservative valuations and the subsidiaries are expected to
contribute on the higher side in the future.

September 29, 2004 11

 ICICI Bank Ltd: Retail all the way

Concerns
Interest rate hike, Positive for yields, loan growth to slow down
Interest rate hike does impact loan growth to some extent. However, the present
scenario should witness interest rates to rise from a historical low. We expect the
interest rates to start rising from end of FY05 or early FY06 onwards. There is no
evidence of negative growth in advances due to a rate hike, except that growth rate
takes some beating. But with a higher concentration on retail loans, we expect bank to
achieve a good rate on back of sustained retail growth with retail loan CAGR of 37%.
This assumption is based on increased consumer spending triggered by a rising
disposable income in the country. Another benefit of rising rates is the improved yield
the bank will enjoy as yield on advances rise for all floating rate loans disbursed by the
bank. In the event of customers changing from floating to fixed, the customer has to
pay a fee of 1.75%, which should compensate for the change over.

CRR hike to impact earnings by 4%

We expect the CRR hike to impact the bank’s net profits by around 4% in FY05.
However, the change in HTM valuation by allowing banks to transfer more securities
has more than compensated for the CRR hike. We do not expect interest rates on
loans and advances and deposit cost to rise immediately as these rates follow the
sovereign paper with a lag of one year. Our estimations factor in the rise in interest
rates around end FY05 and beginning FY06. We expect the 5 year sovereign paper
at the end of FY05 to be around 6.4% which is 150 basis points above the March 04
levels, with a further rise of 100 basis points and around 50-60 basis points in FY06
and FY07 respectively.

Asset Quality…….?
With a greater thrust on retail assets, the bank has been able to ward off the NPA
threat. A drop in project financing segment has taken care of the legacy NPAs.
Corporate lending to commodity sector over the years has been reduced. This is
further complimented with the upturn in the commodity cycle, which has led to a
better recovery. However, the June quarter saw a rise in restructured assets to Rs72.6bn
as compared to Rs66.3bn in March 04, which had been showing a declining trend.
The bank made a loan loss provisioning of Rs320mn, which was lower than last
year’s Rs860mn.

The bank has a low provision coverage ratio and with the current provisioning, NPA’s
are expected to rise. Dabhol NPA’s still loom large on the banks balance sheet. The
bank has an exposure of Rs7bn funded and Rs9bn non-funded (guarantees) towards
the project. The bank has made provisions of Rs2.4bn till now. Considering a
restructuring package to come into force in the next 1 year, we have factored in the
excess provision required of around Rs4bn over the next two years. However, we
expect the other incremental NPAs to remain under control with retail NPA’s at around
0.7% and lower the exposure to project financing.
September 29, 2004 12
 ICICI Bank Ltd: Retail all the way

Loan composition

100.0
80.0
60.0
(%)

40.0
20.0
0.0
2003 2004 2005E 2006E 2007E

Retail Project Finance Other loans

Source: Company data, India Infoline estimates

Valuation rationale
The bank at a current CMP of Rs288 gives a price earnings multiple of 11.2x at
FY05 EPS and a 8.8x at FY06 EPS. Our model of ROE-g/ COE-g gives us a fair
price to book value of 2.0 and target price of Rs340 where as the bank is currently
trading at 1.7x FY05E book value. An EVA valuation gives us a price target of
Rs352. We have used the risk free rate at 6.25%, which is higher than industry estimates,
and thus our price target of Rs346 is pretty conservative. We use the average of the
two methods to arrive at the price target.
Valuation comparision chart

20

15
PE (x)

10

0
0 5 10 15 20 25 30 35

Earnings growth (%)

SBI ICICI HDFC Bk Corporation Bk CANARA PNB

Source: India Infoline estimates

On comparative valuations with its peers we recommend a switch over from HDFC
Bank to ICICI Bank, which should provide higher upside. The strong growth in earnings
for HDFC Bank seems to have being factored in the share price. Comparing ICICI
Bank with its PSU peers, we expect dilution in equity capital in the near future in the
PSU banks to bring down their EPS growth rates also coupled with already declining
return on equity.

The concerns to achieving our estimated earnings growth and price target could be -
lower than expected growth in credit, which will seriously impact the bank’s performance.
An incidence of higher growth in NPA’s than expected can affect the earnings forecast,
as the bank would have to make higher provisions. A higher than expected rise in
September 29, 2004 13
 ICICI Bank Ltd: Retail all the way

interest rates, would make ICICI Bank provide higher for capital losses on its SLR
portfolio. Although our valuations factor in a worst-case scenario, a higher growth in
interest rates cannot be ruled out considering the inflationary pressure exerted by rising
crude oil prices.

Projections
Income Statement
Particulars (Rs mn) 2003 2004 2005E 2006E 2007E
(12) (12) (12) (12) (12)
Interest Income 93,681 88,940 98,611 114,915 126,517
Interest Exp (79,440) (70,153) (70,177) (76,272) (79,642)
NII 14,241 18,788 28,434 38,644 46,875
Fee Income 7,918 10,718 15,541 20,203 26,264
Forex Income 102 1,926 2,215 2,481 2,680
Capital Gains 16,835 12,246 3,008 1,475 750
Total Other Income 31,588 30,649 29,042 31,444 37,707
Total Income 45,829 49,437 57,476 70,087 84,582
Employee Expenses (4,030) (5,461) (6,389) (7,475) (8,746)
Total Operating expenses (20,117) (25,712) (29,895) (34,684) (39,777)
Pre Provisioning Profit 25,712 23,725 27,581 35,403 44,805
Total Provisions (17,930) (4,726) (4,027) (4,680) (5,706)
Profit Before Tax 7,782 18,998 23,555 30,724 39,099
Tax 4,280 (2,627) (4,711) (6,759) (8,602)
Profit After Tax 12,062 16,371 18,844 23,965 30,497
Core Income 28,994 37,191 54,469 68,613 83,832
Core Operating Profits 8,877 11,479 24,573 33,929 44,055

Balance Sheet
Liabilities (Rs mn) 2003 2004 2005E 2006E 2007E
Capital 9,627 9,664 10,814 10,814 10,814
Reserves & Surplus 63,207 73,942 116,816 133,353 155,596
Networth 72,833 83,606 127,630 144,167 166,410
Deposits 481,693 681,086 889,945 1,116,338 1,369,890
Borrowings 343,024 307,402 313,550 326,092 332,614
Other Liabilities & Provisions 170,569 180,195 180,099 175,961 172,133
Total Liabilities 1,068,120 1,252,289 1,511,225 1,762,558 2,041,048

Assets (Rs mn) 2003 2004 2005E 2006E 2007E

Cash Balances with RBI 48,861 54,080 71,753 84,956 95,291
Call money & Balances with Banks 16,029 30,627 32,448 35,786 39,468
Investments 354,623 427,429 491,377 554,758 644,028
Advances 532,794 620,955 779,582 939,155 1,107,690
Fixed Assets 40,607 40,564 46,065 52,904 59,570
Other Assets 75,205 78,635 90,000 95,000 95,000
Total Assets 1,068,120 1,252,289 1,511,225 1,762,558 2,041,048
Source: India Infoline estimates

September 29, 2004 14

 ICICI Bank Ltd: Retail all the way

Ratios
2003 2004 2005E 2006E 2007E
Earnings Analysis (%)
NII/ Total Income 31.1 38.0 49.5 55.1 55.4
Fee Income / Total Income 17.3 21.7 27.0 28.8 31.1
Forex Income/Total Income 0.2 3.9 3.9 3.5 3.2
Core Income/ Total Income 63.3 75.2 94.8 97.9 99.1
Capital gains/ Total Income 36.7 24.8 5.2 2.1 0.9
Operational Efficiency
Cost/Income 43.9 52.0 52.0 49.5 47.0
Cost/Core Income 69.4 69.1 54.9 50.6 47.4
Operating cost/ Avg. Assets 1.9 2.2 2.2 2.1 2.1
Employee Cost/ Total Cost 20.0 21.2 21.4 21.6 22.0
Employee Cost/ Net Interest Income 28.3 29.1 22.5 19.3 18.7
Growth (%)
Revenue
Net interest Income 140.1 31.9 51.3 35.9 21.3
Total Income 292.5 7.9 16.3 21.9 20.7
Core Income 230.8 28.3 46.5 26.0 22.2
Pre-Provisioning Profit 371.7 (7.7) 16.3 28.4 26.6
Core Operating profit 249.5 29.3 114.1 38.1 29.8
Net Profit 370.6 35.7 15.1 27.2 27.3
Business
Advances 13.3 16.5 25.5 20.5 17.9
Average Earning Assets 66.7 9.2 20.3 19.2 17.1
Total Deposits 50.1 41.4 30.7 25.4 22.7
Low cost deposits 15.5 23.0 28.2 30.2 30.7
Total Interest bearing liabilities 69.0 9.2 18.4 18.8 17.4
Margin Analysis
Net Interest Margin 1.5 1.8 2.3 2.6 2.7
Yield on Average Advances 11.99 10.53 9.9 9.5 8.4
Yield on Average Investments 8.2 6.2 5.5 5.6 6.0
Cost of Average Deposits 6.2 5.2 4.4 4.1 4.0
Cost of Avg Other Int bearing Liabilities 10.6 9.5 9.0 8.8 7.3
Liquidity
Avg Advances/ Avg Deposits 125.0 99.2 89.1 85.7 82.3
Credit Deposit Ratio 110.6 91.2 87.6 84.1 80.9
Incremental Credit Deposit ratio 38.8 44.2 75.9 70.5 66.5
Asset Quality
Gross NPAs (Rs mn) 50,274 30,476 38,200 39,445 42,092
Net NPAs (Rs mn) 27,759 13,723 18,320 15,966 14,954
Provision Cover 44.8 55.0 52.0 59.5 64.5
NNPA (%) 5.2 2.2 2.3 1.7 1.4
Share Valuation Ratios
ROAA 1.1 1.4 1.4 1.5 1.6
ROAE 18.3 21.9 18.5 18.1 20.1
BVPS 113.2 130.0 169.7 192.3 222.7
Adj. BVPS 67.9 107.7 144.7 170.5 202.3
Dividend Payout 43.0 37.5 37.2 31.0 27.1
EPS 19.7 26.6 25.8 32.8 41.7

September 29, 2004 15

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its employees or directors, associates will not be liable in any manner for the consequences of such action taken by you.
We have exercised due diligence in checking the correctness and authenticity of the information contained herein, but do not
represent that it is accurate or complete. IIL or any of its subsidiaries or associates or employees shall not be in any way
responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this
publication. The recipients of this report should rely on their own investigations. IIL and/or its subsidiaries and/or directors,
employees or associates may have interests or positions, financial or otherwise in the securities mentioned in this report.
India Infoline Ltd, 24 Nirlon Complex, Off Western Exp. Highway, Goregaon(E). Mumbai -63. Tel 2685 0101 / 0505. Fax 2685 0585

it’s all about money, honey!