RATIO ANALYSIS
Promoted by IDBI and SIDBI in 1994, IDBI bank came out with its public issue in 1999.
Shareholding Pattern
Promoters` stake 71.32 %
Institutional Investors 7.44 %
Private Corporate bodies 3.62 %
Indian Public 16.86 %
NRIs / OCB 0.46 %
Ratios Analyzed For :
Determining Operating Efficiency.
Determining Earnings quality.
Deposit ratios.
Capital Adequacy.
Asset quality.
Other key ratios.
Composition of Income for the year 2003
Interest on Deposits (57.21 %)
Interest on others (7.50 %)
Personnel cost (9.76 %)
Provisions for contingencies, NPAs etc. (8.65 %)
Other expenses (16.38 %)
Value Anchor
Tool used by fundamental analysts.
Determine under-valuation/ over-valuation.
Recommend buy/sell strategies.
It is = Projected EPS * Appropriate P.E Ratio
where,
P.E ratio= Dividend Payout ratio
(Req return on equity- Exp gwth rate in dividends)
Required return on Equity
= R(f) + (Beta of equity)(Expected mkt risk premium)
= 5% + (1.0)(10%)
= 15%
Expected Growth in Dividends
= Avg Retention Ratio * Avg Return on Equity
= 0.7 * 16%
=11.2%
Therefore,
P.E = 0.3 ( 0.15 - 0.112) = 7.89
Earnings per share as on March 2003 was Rs. 5.08
Assuming a 10 % growth in EPS,
Projected EPS for March 04
= 5.08 * 1.1
= 5.588
Value Anchor = 5.588 * 7.89
= Rs. 44 (approx)
Promoted by IDBI and SIDBI in 1994, IDBI bank came out with its public issue in 1999.
Shareholding Pattern
Promoters` stake 71.32 %
Institutional Investors 7.44 %
Private Corporate bodies 3.62 %
Indian Public 16.86 %
NRIs / OCB 0.46 %
Ratios Analyzed For :
Determining Operating Efficiency.
Determining Earnings quality.
Deposit ratios.
Capital Adequacy.
Asset quality.
Other key ratios.
Composition of Income for the year 2003
Interest on Deposits (57.21 %)
Interest on others (7.50 %)
Personnel cost (9.76 %)
Provisions for contingencies, NPAs etc. (8.65 %)
Other expenses (16.38 %)
Value Anchor
Tool used by fundamental analysts.
Determine under-valuation/ over-valuation.
Recommend buy/sell strategies.
It is = Projected EPS * Appropriate P.E Ratio
where,
P.E ratio= Dividend Payout ratio
(Req return on equity- Exp gwth rate in dividends)
Required return on Equity
= R(f) + (Beta of equity)(Expected mkt risk premium)
= 5% + (1.0)(10%)
= 15%
Expected Growth in Dividends
= Avg Retention Ratio * Avg Return on Equity
= 0.7 * 16%
=11.2%
Therefore,
P.E = 0.3 ( 0.15 - 0.112) = 7.89
Earnings per share as on March 2003 was Rs. 5.08
Assuming a 10 % growth in EPS,
Projected EPS for March 04
= 5.08 * 1.1
= 5.588
Value Anchor = 5.588 * 7.89
= Rs. 44 (approx)