MUMBAI, July 28: The Industrial Credit and Investment Corporation of India (ICICI) has recorded a 123 per cent jump in net profit for the first quarter of 1997-98. The ICICI board met in Mumbai on Monday to take stock of the qurterly results. Net profit stood at Rs 223 crore, up from Rs 100 crore registered in April-June 1996.

ICICI is the first term lending institution, and the fourth corporate entity, to annouce its audited quarterly financial results. The other three companies to do so were Infosys, Housing Developement Finance Corporation and Essel Packaging.

ICICI's share price spurted 4 per cent on the National Stock Exchange to touch a high of Rs 88.40. On the Bombay Stock Exchange, the scrip rose by Rs 3.25 or 3.82 per cent to close at Rs 88.25.

The stock recorded a net turnover of Rs 12.23 crore on the two bourses. "Since this is the first time the exercise is being carried out on a quarterly basis, comparison with the first quarter of 1997 results may not be strictly appropriate," an ICICI release said on Monday.

Apart from being unaudited, the results of the first quarater of the last fiscal were not adjusted for alignment of accounting practices of the erstwhile SCICI with those of ICICI, the release said.

The highlight of the first quarter's results is a one percentage point rise in non-performing assets, Rs 47 crore in capital gains and 107 per cent growth in approvals.

NPAs rose from 6.8 per cent as on March 31 to 7.8 per cent on June 30. "We have bunched off the NPAs in anticipation. I am confident some of them will be able to turn the corner before the end of the year. With the growth in assets, the percentage of NPAs will come down to at least last year's figure of 6.8 per cent," ICICI managing director and CEO K V Kamath said.

The asset classification has been done in line with the Reserve Bank guidelines, while write offs and provisions have been pro-rated for the quarter, the release said. Write offs and provisions shot up 122 per cent to Rs 55 crore, from Rs 25 crore.

Analysts agreed that NPAs for this fiscal could be lower. "I do not see the NPA level going up alarmingly from the present level even though conditions in the economy have not improved over the last 12 months," Kotak Securities banking analyst Anand Shanbag said.

ICICI, recorded a net capital gain of Rs 47 crore, up from Rs 5 crore in April-June last year. On strong capital gains, Kamath said: "Since the BSE Sensex registered a smart growth in the quarter, disinvestment decisions were executed at peak market levels, taking advantage of the favourable market movements. We pursued an aggressive disinvestment policy on less traded strock by executing negotiated deals."

Fund-based income in the first quarter grew 33 per cent to Rs 1,180 crore, while non-fund-based income increased 68 per cent.

"The results are positive and if the growth in operations is sustained, ICICI will be able to post very good results in a difficult year," Shanbag said. The institution recorded 107 per cent growth in approvals and 32 per cent growth in disbursements.

"The most significant aspect of the quarter was our ability to respond to the market demand. I do not foresee any slowdown in credit demand. We will have an equally strong second quarter and second half," Kamath said.

WI Carr (Far East) banking analyst Rajiv Verma said the results were positive. "We maintain a yearly net profit projection of Rs 920 crore," he said. "Year-on-year growth in operations has been perfect," he said.

Analysts said that most of the growth had been regsitered in actual operations.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.