On Mar 13, 2013, we upgraded
ICICI Bank Ltd.
) to Outperform based on the company's strong fiscal third
quarter 2013 (ended Dec 31) results. Moreover, ICICI Bank has a
long-term earnings growth rate of 22.0%.
Why the Upgrade?
On Jan 31, ICICI Bank announced its fiscal third quarter 2013 net
income of INR22.50 billion ($409 million), reflecting a 30%
year-over-year rise. The solid results were mainly driven by
top-line growth, partly offset by an increase in loan loss
provisions and higher operating expenses.
Estimates over the past 60 days have also been rising with the
Zacks Consensus Estimate for fiscal 2013 going up 5.4% to $2.75
per share. Similarly, the Zacks Consensus Estimate for fiscal
2014 advanced 5.1% to $3.30 per share. With the Zacks Consensus
Estimates for both the years moving north, ICICI Bank now has a
Zacks Rank #1 (Strong Buy).
Reasons for Positive Bias
Domestic loans represent the major portion of ICICI Bank's
overall loan portfolio. Further, the company has been marketing
retail deposits on a large scale, primarily to bring down the
cost of funds and create a stable funding base.
Moreover, on the international front, ICICI Bank is expanding its
retail franchise through technology-based banking services as
well as opening of additional offshore branches. Additionally, it
has been improving its services for offshore banking units by
offering foreign currency deposits.
Other Stocks That Warrant a Look
Besides ICICI Bank, other foreign banks that are worth
Banco Bilbao Vizcaya Argentaria, S.A.
BBVA Banco Franc
Banco Macro S.A.
). The first two stocks carry a Zacks Rank #1 (Strong Buy), while
the latter holds a Zacks Rank #2 (Buy).
BANCO BILBAO VZ (BBVA): Free Stock Analysis
BANCO FRANC-ADR (BFR): Free Stock Analysis
BANCO MACRO-ADR (BMA): Free Stock Analysis
ICICI BANK LTD (IBN): Free Stock Analysis
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