This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

India Bank ADRs on the Roll

Stocks in this article: HDB IBN

Two India bank ADRs, HDFC Bank (HDB) and ICICI Bank (IBN), announced their March-quarter earnings this past week.

HDFC bank has reported a 32.6% year-over-year increase in its quarterly profit, beating analyst estimates, on the back of a strong recovery in credit demand in India. ICICI Bank posted its best quarterly profit growth in two years, benefiting from the increase in fee income and reduction in operational costs.

However, ICICI earnings fell short of consensus estimates and the contraction in loan book disappointed investors. Both banks reported an improvement in their asset quality, boosted by the strong economic growth that reduced the pace of loan defaults.

As Asia's third-largest economy is expected to grow more than 8% for fiscal year 2011, as estimated by the central bank, we expect loan demand to improve further on the back of business expansions. From the trough of 9.7% in October 2009, credit volumes grew at an annualized rate of 17% in early April, with increased lending to businesses and consumers.

Citing strong credit demand, ICICI forecasts a credit growth of 16%-20% for fiscal year 2011, after witnessing a 17% contraction in the fiscal year 2010. HDFC Bank expects its loan book to grow faster than the central bank's target of 20% during the fiscal year.

On Monday, the first day of trading after the release of earnings statements, HDFC gained 1.7% while ICICI tumbled 4.4% on NYSE.


For the March quarter, HDFC showcased its consistent performance by delivering a quarterly profit that increased 32.6% year-over-year and 2.2% quarter-over-quarter. Net interest income increased by 27% year-over-year and 5.7% quarter-over-quarter.

On a year-over-year basis, retail loan grew a healthy 27%, against the industry average of 17%, surprising the market on the upside.

In the past quarters, HDFC focused on corporate lending, improving the bank's current and savings account share and lowering credit costs. The loan mix of the bank is well distributed between retail and corporate in the ratio 55:45.

The bank's margins were up by 20 basis points to 4.4%, as against 4.2% in the December quarter of 2009, following a strong 37% year-over-year growth in the current and savings account (CASA) share.

As per TheStreet's Analyst ratings guide, the stock has two buy, two hold and no sell ratings.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs