INDIA: ICICI stk down 5.5 pct despite profit rise. |
Reuters English News Service
BOMBAY, May 2 (Reuters) - Shares of Indian financial firm ICICI Ltd were down 5.5 percent despite posting a 20.5 percent rise in net profit for 1999/2000 (April-March).
Analysts said investment gains had helped prop up the net profit and this factor was unlikely to help a rise in net profit again in 2000/01.
"If you strip the gains from sale on investments, profit is not all that impressive," Hemendra Hazari, banking analyst at ASK-Raymond James told Reuters.
The benchmark 30-share Bombay index rose 34 percent during the financial year, helping ICICI 's net profit from the sale of investments to touch 2.93 billion rupees against 440 million in the previous year.
ICICI 's stock was traded at 126.00 rupees at 11:15 a.m (0545 GMT) compared to Friday's close of 133.40 rupees tracking a weak market which was down over three percent at 4,510.66 points.
The firm which posted a net profit of 12.06 billion rupees ($276.29 million) for 1999/00 announced its results after close of trading on Friday.
The firm's shares have taken a beating since the central bank had questioned the firm's 1998-99 (April-March) results in early March.
ICICI had disputed a Reserve Bank of India (RBI) inspection report which said the profit figure for the year was overstated by 4.03 billion rupees on lower provision for sticky loans.
The stock had touched a high of 196.0 in early March before the central bank report dragged down the stock.
However, analysts said they were still bullish about the firm's e-commerce initiatives which would help decide future valuations.
"Its e-commerce initiatives are impressive and given the thrust there the stock is trading at reasonable levels," Vimal Jain of Prime India Broking said.
He however added that he had no recommendation for the stock.
ICICI on Friday detailed its e-commerce initiatives at an analysts' meet on Friday after announcing its results.
ICICI , along with its subsidiaries, has a strong presence in technology and offers a gamut of services including e-banking through ICICI Bank and e-broking through I-Web.
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