SECURITY ANALYSIS AND PORTFOLIO MANAGEMENT

ANALYSIS OF SHARES OF ICICI BANK LTD.

SUBMITTED BY:
GURPAL SINGH
F08082
ICICI Bank is India's second-largest bank with total assets of Rs. 3,674.19 billion (US$ 77
billion) at June 30, 2009 and profit after tax Rs. 8.78 billion for the quarter ended June 30, 2009.
The Bank has a network of 1,499 branches and about 4,816 ATMs in India and presence in 18
countries. ICICI Bank offers a wide range of banking products and financial services to
corporate and retail customers through a variety of delivery channels and through its specialized
subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture
capital and asset management. The Bank currently has subsidiaries in the United Kingdom,
Russia and Canada, branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar
and Dubai International Finance Centre and representative offices in United Arab Emirates,
China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has
established branches in Belgium and Germany.
ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National Stock
Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New
York Stock Exchange (NYSE).

• Vision

“To be the preferred brand for total financial and banking solutions for both

corporates and individuals”

• Mission
We have believed in capitalising on emerging opportunities and contributing to the
growth of our country. We have believed in innovation to enhance the range of products
and services that we offer and provide greater convenience to the customer. We have
believed in building depth of talent and leadership in the organisation and empowering
the team to achieve organizational goals.
We have placed strong emphasis on a framework of ethics and good governance that
balances the interests of different stakeholders. We have sought to be adaptable and
flexible, anticipating and responding to the changing needs of the economy, the dynamic
business environment and the expectations of our stakeholders. These values and beliefs
will continue to be the foundation of our strategy.

• Goals

ICICI Group sees before it a wide opportunity spectrum: increasing household incomes &
consumption in both rural and urban India; significant industrial & infrastructure
investment potential; and the vast Indian diaspora spanning the globe. We, as a multi
specialist financial services group, are well positioned to capitalise on these
opportunities.

• Our products & services include:

 Current Account

- RCA
- TCA
- M2O
Business Loans

- Vendor/Dealer Finance
- Working Capital Finance
- Cash Credit
- Equipment Finance
- Credit Card Securitization
- Vendor Bill Discounting
- Merchant Account
- Medical Equipment Loans
Forex

- Fx Remittance
- Derivatives
- Forward Contract
Trade
- Letter of Credit
- Bank Guarantee
- Export Bill Negotiation
- Export Finance
- Import Finance
- Escrow Account
Cash Management service
- Collection
- Payment
Other Services
- Tax Payment
- Insurance
- Investment

Some of the features that give our customers a value-added banking experience include
 Technology
Our technology driven banking system ensures a wide reach, instant online
transactions and faster dealings.

Product range
Our products spectrum includes easy loans, phone banking, doorstep banking, etc. We
also have products targeted at specific groups.

The zero balance roaming current account caters specifically to entrepreneurs. It offers
remittance, export, import and advisory services. Besides, being a “zero balance”
account it enables our customers to utilize their financial resources more effectively.

Size & Network

We have a wide customer base. Our ‘Click and Brick' distribution network includes
branches, ATMs, internet banking, phone banking and mobile banking.

Customer relationship.
We believe in establishing a personal relation with our customers so that we can
understand their needs better and provide effective customized service

We have received several prestigious national and international awards in recognition of our
innovation in banking, customer service, technology focus and human resource practices.
These include:
Triple AAA Best Cash Management Country Award in India - 2005The Asset
Best Bank in India - 2--4 Euromoney
Travel and Tourism India 's Most Customer Friendly Bank - 2004 Outlook Money
Best Bank 2004 Business India
Best domestic commercial bank Asianmoney
Best emerging bank in India Global Finance
Best multi - channel strategy 2003 The Banker Magazine UK
Bank of the Year 2003, in India The Banker Magazine , UK
Excellence in Retail Financial Services 2003 Asian Bankers Journal
Fundamental Analysis (E-I-C)

Economy

About 70 per cent of the respondents according to the survey expect recovery by 2010, India
seems to be more optimistic than the average, a survey titled 'global business reactions' to
recession and strategies for recovery' carried out by the firm said.
While, nearly 50 per cent of those surveyed plan to make new investments either this year or
next year, it added. In fact, eight per cent of the respondents also feel that they were not impacted
by the global recession at all.
The survey was carried out by KPMG in companies across 29 countries and involved more than
850 senior decision makers in the companies.
While talking about steps taken by the government it pointed out that a good number of India Inc
feels that the government has taken enough measures including tax and interest rate cuts to face
economic downturn.
"18 per cent think the government has done enough already or should not interfere," it stated.

In fact, according to the KPMG survey about 48 per cent respondents felt that the tax bills in
future could be lesser while 54 per cent said that the companies should create more tax efficient
operations.
The government had given three stimulus packages in the form of fiscal sops and tax cuts to
boost the sagging Indian economy. At the time of global meltdown the Indian industry has also
suffered losses either due to lower profits or reduced demand.
The feeling that the government had done enough is not only in India but as much as 9 per cent
of the respondents globally feel that their governments have done enough
Industry

The growth in the Indian Banking Industry has been more qualitative than quantitative and it is
expected to remain the same in the coming years. Based on the projections made in the "India
Vision 2020" prepared by the Planning Commission and the Draft 10th Plan, the report forecasts
that the pace of expansion in the balance-sheets of banks is likely to decelerate. The total assets
of all scheduled commercial banks by end-March 2010 is estimated at Rs 40,90,000 crores. That
will comprise about 65 per cent of GDP at current market prices as compared to 67 per cent in
2002-03. Bank assets are expected to grow at an annual composite rate of 13.4 per cent during
the rest of the decade as against the growth rate of 16.7 per cent that existed between 1994-95
and 2002-03. It is expected that there will be large additions to the capital base and reserves on
the liability side.
The Indian Banking Industry can be categorized into non-scheduled banks and scheduled banks.
Scheduled banks constitute of commercial banks and co-operative banks. There are about 67,000
branches of Scheduled banks spread across India. As far as the present scenario is concerned the
Banking Industry in India is going through a transitional phase.

The Public Sector Banks(PSBs), which are the base of the Banking sector in India account for
more than 78 per cent of the total banking industry assets. Unfortunately they are burdened with
excessive Non Performing assets (NPAs), massive manpower and lack of modern technology.
On the other hand the Private Sector Banks are making tremendous progress. They are leaders in
Internet banking, mobile banking, phone banking, ATMs. As far as foreign banks are concerned
they are likely to succeed in the Indian Banking Industry.

In the Indian Banking Industry some of the Private Sector Banks operating are IDBI Bank, ING
Vyasa Bank, SBI Commercial and International Bank Ltd, Bank of Rajasthan Ltd. and banks
from the Public Sector include Punjab National bank, Vijaya Bank, UCO Bank, Oriental Bank,
Allahabad Bank among others. ANZ Grindlays Bank, ABN-AMRO Bank, American Express
Bank Ltd, Citibank are some of the foreign banks operating in the Indian Banking Industry.

COMPANY

BALANCE SHEET

Balance Sheet ------------------- in Rs. Cr. -------------------

Mar '05 Mar '06 Mar '07 Mar '08 Mar '09

12 mths 12 mths 12 mths 12 mths 12 mths

Capital and Liabilities:

Total Share Capital 1,086.75 1,239.83 1,249.34 1,462.68 1,463.29
Equity Share Capital 736.75 889.83 899.34 1,112.68 1,113.29
Share Application Money 0.02 0.00 0.00 0.00 0.00
Preference Share Capital 350.00 350.00 350.00 350.00 350.00
Reserves 11,813.20 21,316.16 23,413.92 45,357.53 48,419.73
Revaluation Reserves 0.00 0.00 0.00 0.00 0.00
Net Worth 12,899.97 22,555.99 24,663.26 46,820.21 49,883.02
Deposits 99,818.78 165,083.17 230,510.19 244,431.05 218,347.82
Borrowings 33,544.50 38,521.91 51,256.03 65,648.43 67,323.69
133,363.2
Total Debt 203,605.08 281,766.22 310,079.48 285,671.51
8
Other Liabilities & Provisions 21,396.17 25,227.88 38,228.64 42,895.39 43,746.43
167,659.4
Total Liabilities 251,388.95 344,658.12 399,795.08 379,300.96
2
Mar '05 Mar '06 Mar '07 Mar '08 Mar '09

12 mths 12 mths 12 mths 12 mths 12 mths

Assets
Cash & Balances with RBI 6,344.90 8,934.37 18,706.88 29,377.53 17,536.33
Balance with Banks, Money
6,585.07 8,105.85 18,414.45 8,663.60 12,430.23
at Call
Advances 91,405.15 146,163.11 195,865.60 225,616.08 218,310.85
Investments 50,487.35 71,547.39 91,257.84 111,454.34 103,058.31
Gross Block 5,525.65 5,968.57 6,298.56 7,036.00 7,443.71
Accumulated Depreciation 1,487.61 1,987.85 2,375.14 2,927.11 3,642.09
Net Block 4,038.04 3,980.72 3,923.42 4,108.89 3,801.62
Capital Work In Progress 96.30 147.94 189.66 0.00 0.00
Other Assets 8,702.59 12,509.57 16,300.26 20,574.63 24,163.62
167,659.4
Total Assets 251,388.95 344,658.11 399,795.07 379,300.96
0

Contingent Liabilities 97,507.79 119,895.78 177,054.18 371,737.36 803,991.92

Bills for collection 9,803.67 15,025.21 22,717.23 29,377.55 36,678.71
Book Value (Rs) 170.35 249.55 270.37 417.64 445.17

Source : Asian CERC

PROFIT AND LOSS ACCOUNT

Profit & Loss account ------------------- in Rs. Cr. -------------------

Mar '05 Mar '06 Mar '07 Mar '08 Mar '09

12 mths 12 mths 12 mths 12 mths 12 mths

Income
Interest Earned 9,409.89 13,784.50 22,994.29 30,788.34 31,092.55
Other Income 3,416.23 5,036.62 6,962.95 8,878.85 8,117.76
12,826.1
Total Income 18,821.12 29,957.24 39,667.19 39,210.31
2
Expenditure
Interest expended 6,570.89 9,597.45 16,358.50 23,484.24 22,725.93
Employee Cost 737.41 1,082.29 1,616.75 2,078.90 1,971.70
Selling and Admin Expenses 1,040.49 2,360.72 4,900.67 5,834.95 5,977.72
Depreciation 590.36 623.79 544.78 578.35 678.60
Miscellaneous Expenses 1,881.77 2,616.78 3,426.32 3,533.03 4,098.22
Preoperative Exp Capitalised 0.00 0.00 0.00 0.00 0.00
Operating Expenses 3,177.78 5,274.23 8,849.86 10,855.18 10,795.14
Provisions & Contingencies 1,072.25 1,409.35 1,638.66 1,170.05 1,931.10
10,820.9
Total Expenses 16,281.03 26,847.02 35,509.47 35,452.17
2
Mar '05 Mar '06 Mar '07 Mar '08 Mar '09

12 mths 12 mths 12 mths 12 mths 12 mths

Net Profit for the Year 2,005.20 2,540.07 3,110.22 4,157.73 3,758.13
Extraordionary Items 0.00 0.00 0.00 0.00 -0.58
Profit brought forward 53.09 188.22 293.44 998.27 2,436.32
Total 2,058.29 2,728.29 3,403.66 5,156.00 6,193.87
Preference Dividend 0.00 0.00 0.00 0.00 0.00
Equity Dividend 632.96 759.33 901.17 1,227.70 1,224.58
Corporate Dividend Tax 90.10 106.50 153.10 149.67 151.21
Per share data (annualised)
Earning Per Share (Rs) 27.22 28.55 34.59 37.37 33.78
Equity Dividend (%) 85.00 85.00 100.00 110.00 110.00
Book Value (Rs) 170.35 249.55 270.37 417.64 445.17
Appropriations
Transfer to Statutory Reserves 547.00 248.69 1,351.12 1,342.31 2,008.42
Transfer to Other Reserves 600.01 1,320.34 0.00 0.01 0.01
Proposed Dividend/Transfer
723.06 865.83 1,054.27 1,377.37 1,375.79
to Govt
Balance c/f to Balance Sheet 188.22 293.44 998.27 2,436.32 2,809.65
Total 2,058.29 2,728.30 3,403.66 5,156.01 6,193.87

Source : Asian CERC

VALUATION RATIOS

Mar
Investment Valuation Ratios Mar 08
09
Face Value 10.00 10.00
Dividend Per Share 11.00 11.00
Operating Profit Per Share (Rs) 51.29 48.60

Net Operating Profit Per Share 354.71 343.77

(Rs)
Free Reserves Per Share (Rs) 346.21 351.22
Bonus in Equity Capital -- --

Profitability Ratios
Interest Spread 3.51 3.66
Adjusted Cash Margin(%) 11.81 11.45
Net Profit Margin 10.51 9.74
Return on Long Term Fund(%) 62.34 56.72
Return on Net Worth(%) 8.94 7.58
Adjusted Return on Net Worth(%) 8.80 7.55
Return on Assets Excluding Revaluations 417.64 445.17
Return on Assets Including Revaluations 417.64 445.17

Management Efficiency Ratios

Interest Income / Total Funds 10.60 9.82

Net Interest Income / Total 4.29 3.99

Funds

Non Interest Income / Total 0.02 0.08

Funds
Interest Expended / Total Funds 6.31 5.83
2.76 2.60
Operating Expense / Total Funds
Profit Before Provisions / Total Funds 1.40 1.30
Net Profit / Total Funds 1.12 0.96
Loans Turnover 0.20 0.18
Total Income / Capital Employed(%) 10.62 9.90
Interest Expended / Capital Employed(%) 6.31 5.83
0.11 0.10
Total Assets Turnover Ratios
Asset Turnover Ratio 5.61 5.14

Interest Expended / Interest Earned 76.28 73.09

Other Income / Total Income 0.17 0.86

Operating Expense / Total 26.00 26.22

Income
Selling Distribution Cost Composition 4.43 1.74

Capital Adequacy Ratio 13.97 15.53

Advances / Loans Funds(%) 72.67 69.86

Debt Coverage Ratios

Credit Deposit Ratio 84.99 91.44
Investment Deposit Ratio 42.68 46.35
Cash Deposit Ratio 10.12 10.14
Total Debt to Owners Fund 5.27 4.42
Financial Charges Coverage Ratio 1.25 1.25
Financial Charges Coverage Ratio Post Tax 1.20 1.20

Leverage Ratios
Current Ratio 0.11 0.13
Quick Ratio 6.42 5.94

Cash Flow Indicator Ratios

Dividend Payout Ratio Net Profit 33.12 36.60
Dividend Payout Ratio Cash Profit 29.08 31.00
Earning Retention Ratio 66.35 63.23
Cash Earning Retention Ratio 70.51 68.87
AdjustedCash Flow Times 52.34 49.41

Mar Mar
'08 '09

Earnings Per Share 37.37 33.78

Book Value 417.64 445.17

RATIO ANALYSIS

Shares of Icici bank trades at around 850 , which means its price earnings ratio is around 23
considering its eps of 33.78. its book value is around 445.17 which has improved considerable
from the previous year.

Valuation ratios

Its operating profit per share has come down which may not be a good sign for the company
bundled with the fact that its eps too has decreased.

Profitability ratios

Its treturn on net worth, as well as net profit ratio has come down. This was well expected given
the turmoil the economy went through last year but the company doesn,t seem to be very badly
affected.
Efficiency ratios

Its cd ratio has improved which is a positive banking indicator. Total debt to owner’s funds have
also decreased which again is a good sign for the bank.

Leverage ratios

Its current ratio is very low which can be a matter of concern for the bank. Its dividend payout
ratio has increased. The bank is now retaining less of the dividends.

TECHNICAL ANALYSIS

Price Data for ICICI BANK Ltd. from 17th August till date

Date, Prev Close,Open Price,High Price,Low Price,Last Price,Close Price,Average Price,Total

Traded Quantity,Turnover in Lacs,

17-Aug-2009,744.85,733.7,736,702.1,708,704.95,714.63,5539932,39589.8431185,
18-Aug-2009,704.95,710.15,728,697.35,721,720.05,716.12,6220986,44549.8493675,
19-Aug-2009,720.05,723,725,700.4,720,716.55,712.57,6823565,48622.998002,
20-Aug2009,716.55,724.9,734.8,714.15,723,719.55,726.91,3744698,27220.5810095,
21Aug2009,719.55,719.9,749.25,706.95,746.3,745.4,726.33,8591103,62399.7084715
24-Aug-2009,745.4,750,773.9,750,763.5,767.95,768.16,5552551,42652.2033565,
25-Aug2009,767.95,761.15,767,750.35,759.85,759.2,758.93,5205544,39506.676924,
26-Aug-2009,759.2,760,768.4,752.5,762.1,761.9,760.69,4230806,32183.4272335,
27-Aug-2009,761.9,755,760,746.85,753.2,750.55,752.31,5146345,38716.4150165,
28Aug2009,750.55,749.85,770.75,749.85,762.2,763.6,761.48,4778984,36390.840573
31-Aug-2009,763.6,754.5,762.9,743,751.6,751.15,752.08,4749016,35716.551988,
01-Sep-2009,751.15,752.2,775.6,740,743,744.8,757.43,5190778,39316.52923,
02-Sep-2009,744.8,735,745,723,733.6,736.1,737.6,3883848,28647.2983565,
03-Sep-2009,736.1,741,751.9,730.1,734,735.95,741.57,5323133,39474.896941,
04-Sep-2009,735.95,739,752.5,731,744.05,743.9,742.02,4347024,32255.9865185,
07-Sep-2009,743.9,748.8,796.9,748.6,795,788.85,771.72,6672288,51491.4760475,
08-Sep-2009,788.85,795,806.5,781.7,787,789.95,791.95,9261862,73349.315486,
09-Sep-2009,789.95,787,799,783.6,794.1,792.9,791.19,4704721,37223.148386,
10-Sep-2009,792.9,805,828.4,803.5,815.2,816.6,820.74,6882203,56485.276586,
11-Sep2009,816.6,830,844.65,818.25,834.25,835.15,828.46,6528251,54084.151871,
14-Sep-2009,835.15,820,834.95,818.1,828.4,824.6,825.52,3877518,32009.514822,
15-Sep-2009,824.6,830,847,829,846.5,844.4,838.2,3485597,29216.294676,

MOVING AVERAGE

ICIC NIFT
DAYS I Y
17/08/2009 714.63 4387.9
18/08/2009 716.12 4458.9
19/08/2009 712.57 4394.1
20/08/2009 726.91 4453.45
21/08/2009 726.33 4528.8
24/08/2009 768.16 4642.8
25/08/2009 758.93 4659.35
26/08/2009 760.69 4680.85
27/08/2009 752.31 4688.2
28/08/2009 761.48 4732.35
31/08/2009 752.08 4662.1
1/9/2009 757.43 4625.35
2/9/2009 737.6 4608.35
3/9/2009 741.57 4593.55
4/9/2009 742.02 4680.4
7/9/2009 771.72 4782.9
8/9/2009 791.95 4805.25
9/9/2009 791.19 4814.25
10/9/2009 820.74 4819.4
11/9/2009 828.46 4829.55
14/9/2009 825.52 4808.6
15/9/2009 838.2 4892.1
 SUPPORT AND RESISTANCE LEVEL

ICI
DAYS CI
17/08/2009 714.63
18/08/2009 716.12
19/08/2009 712.57
20/08/2009 726.91
21/08/2009 726.33
24/08/2009 768.16
25/08/2009 758.93
26/08/2009 760.69
27/08/2009 752.31
28/08/2009 761.48
31/08/2009 752.08
1/9/2009 757.43
2/9/2009 737.6
3/9/2009 741.57
4/9/2009 742.02
7/9/2009 771.72
8/9/2009 791.95
9/9/2009 791.19
10/9/2009 820.74
11/9/2009 828.46
14/9/2009 825.52
15/9/2009 838.2

PRICE-VOLUME ANALYSIS
 Both Price and Volume are increasing at an increasing rate. Thus this shows a bullish
view of investors for the stock.

CONCLUSION

Considering the present condition as ICICI is making new highs everyday and the positive
sentiment of the market, I would recommend a definite buy at Rs 850 and a definite sell at Rs
950.
Price is likely to move between range of Rs. 850 – Rs. 940.