Allcargo Global Logistics' 1QCY2010 consolidated results were above expectations due to strong pick-up in volumes across segments. While revenues grew by 21.9% year-over-year, operating profit grew by a mere 2.7% due to inability to fully pass on increased freight rates in the ECU line, resulting in margin erosion. However, lower interest expenses and tax rate led to a 23.2% jump in net profit. The company maintained a neutral outlook while being well positioned in container segments.
Gateway Distriparks reported quarterly results that were marginally below estimates. Revenue growth was driven by a 24.2% year-over-year increase in the higher-margin Rail business. However, CFS revenues fell 9.2% due to a fire. Profits increased significantly due to tax write backs. While funds from Blackstone were slightly delayed, management expects funds in the next quarter and for Rail to break even on profits this fiscal year. Falling market share at a key container terminal remains a concern.
The document provides an analysis of Consolidated Construction Consortium's (CCCL) 4QFY2010 results and outlook. Some key points:
- CCCL reported 33.2% revenue growth for 4QFY2010 inline with estimates, but order inflow for FY2010 was below expectations at Rs2,166cr.
- The company's current order book stands at Rs3,392cr, providing 1.4x revenue visibility for FY2011, which is lower than peers.
- The analyst expects 19.2% revenue CAGR for CCCL over FY2010-2012 on the back of its order book and recovery in private capex.
- C
1) Finolex Cables reported a 50.4% year-over-year increase in net sales to Rs. 493.1 crore for the first quarter of FY2011, driven by strong growth in the electrical cables segment.
2) Operating margins declined to 8% from 15.2% in the prior year quarter due to higher raw material costs, though margins improved sequentially.
3) Net profit increased 4.5% year-over-year to Rs. 23 crore for the quarter despite margin pressure, with sales growth offsetting higher costs.
Consolidated Construction Consortium (CCCL) reported net sales of Rs.508 crore for 1QFY2011, in line with expectations. Operating margins of 8.3% and net profits of Rs.18.8 crore were also as expected. Order inflows grew 152% year-over-year to Rs.1,706 crore, indicating a revival in commercial and infrastructure segments. CCCL maintains an order backlog of Rs.4,527 crore, providing visibility for the next few years. While margins and profits met estimates this quarter, analysts maintain an 'Accumulate' rating given strong order backlog and expected 20% earnings growth over FY2010-12.
SAIL's 4QFY2010 results were in line with estimates. Revenues grew 1.8% to Rs11,955cr due to higher sales volumes and average realization. EBITDA margins expanded significantly to 25.9% due to lower raw material costs and consumption, leading to a 40.2% rise in net income to Rs2,085cr. While demand is expected to remain strong, the company maintains a neutral outlook given rich valuations and plans for a public offering limiting further upside.
Allcargo Global Logistics reported a 22.2% year-over-year and 9.2% quarter-over-quarter increase in revenues to Rs. 639 crore for 2QCY2010, driven by strong growth in ECU Line volumes. Operating profit grew 6.8% year-over-year but operating margins fell 150 basis points to 10.4% due to higher costs. Net profit declined 18.7% year-over-year to Rs. 38 crore due to one-time gains in the prior year quarter. The company expects continued growth from ECU Line and plans to expand container freight station capacity. The analyst upgrades the stock to Accumulate based on improved ECU Line performance and reasonable
Container Corporation of India's (Concor) 1QFY2011 results were below expectations due to lower lead distances and terminal charges pulling down Exim performance. Revenue grew 0.9% year-over-year to Rs. 916 crore, below estimates, with Exim revenue falling 0.6% due to lower realizations and rent. Modest Exim volume growth of 7.8% despite robust port growth indicates losing market share to private players. EBITDA margin of 27% beat estimates but profit fell 3.7% to Rs. 194 crore due to Exim weakness. Management expects new railway policies to benefit Concor from FY2012 but no revenue impact in FY2011. The report maintains
Container Corporation of India reported quarterly results that were significantly below expectations due to higher rail freight expenses and rebates that reduced margins in the important EXIM business. EXIM revenues grew over the previous year but margins fell sharply due to an inability to fully pass on rail freight cost increases. The analyst downgraded the stock to Reduce based on the weak EXIM performance and concerns about declining market share for Container Corporation in that business over the long run.
Gateway Distriparks reported quarterly results that were marginally below estimates. Revenue growth was driven by a 24.2% year-over-year increase in the higher-margin Rail business. However, CFS revenues fell 9.2% due to a fire. Profits increased significantly due to tax write backs. While funds from Blackstone were slightly delayed, management expects funds in the next quarter and for Rail to break even on profits this fiscal year. Falling market share at a key container terminal remains a concern.
The document provides an analysis of Consolidated Construction Consortium's (CCCL) 4QFY2010 results and outlook. Some key points:
- CCCL reported 33.2% revenue growth for 4QFY2010 inline with estimates, but order inflow for FY2010 was below expectations at Rs2,166cr.
- The company's current order book stands at Rs3,392cr, providing 1.4x revenue visibility for FY2011, which is lower than peers.
- The analyst expects 19.2% revenue CAGR for CCCL over FY2010-2012 on the back of its order book and recovery in private capex.
- C
1) Finolex Cables reported a 50.4% year-over-year increase in net sales to Rs. 493.1 crore for the first quarter of FY2011, driven by strong growth in the electrical cables segment.
2) Operating margins declined to 8% from 15.2% in the prior year quarter due to higher raw material costs, though margins improved sequentially.
3) Net profit increased 4.5% year-over-year to Rs. 23 crore for the quarter despite margin pressure, with sales growth offsetting higher costs.
Consolidated Construction Consortium (CCCL) reported net sales of Rs.508 crore for 1QFY2011, in line with expectations. Operating margins of 8.3% and net profits of Rs.18.8 crore were also as expected. Order inflows grew 152% year-over-year to Rs.1,706 crore, indicating a revival in commercial and infrastructure segments. CCCL maintains an order backlog of Rs.4,527 crore, providing visibility for the next few years. While margins and profits met estimates this quarter, analysts maintain an 'Accumulate' rating given strong order backlog and expected 20% earnings growth over FY2010-12.
SAIL's 4QFY2010 results were in line with estimates. Revenues grew 1.8% to Rs11,955cr due to higher sales volumes and average realization. EBITDA margins expanded significantly to 25.9% due to lower raw material costs and consumption, leading to a 40.2% rise in net income to Rs2,085cr. While demand is expected to remain strong, the company maintains a neutral outlook given rich valuations and plans for a public offering limiting further upside.
Allcargo Global Logistics reported a 22.2% year-over-year and 9.2% quarter-over-quarter increase in revenues to Rs. 639 crore for 2QCY2010, driven by strong growth in ECU Line volumes. Operating profit grew 6.8% year-over-year but operating margins fell 150 basis points to 10.4% due to higher costs. Net profit declined 18.7% year-over-year to Rs. 38 crore due to one-time gains in the prior year quarter. The company expects continued growth from ECU Line and plans to expand container freight station capacity. The analyst upgrades the stock to Accumulate based on improved ECU Line performance and reasonable
Container Corporation of India's (Concor) 1QFY2011 results were below expectations due to lower lead distances and terminal charges pulling down Exim performance. Revenue grew 0.9% year-over-year to Rs. 916 crore, below estimates, with Exim revenue falling 0.6% due to lower realizations and rent. Modest Exim volume growth of 7.8% despite robust port growth indicates losing market share to private players. EBITDA margin of 27% beat estimates but profit fell 3.7% to Rs. 194 crore due to Exim weakness. Management expects new railway policies to benefit Concor from FY2012 but no revenue impact in FY2011. The report maintains
Container Corporation of India reported quarterly results that were significantly below expectations due to higher rail freight expenses and rebates that reduced margins in the important EXIM business. EXIM revenues grew over the previous year but margins fell sharply due to an inability to fully pass on rail freight cost increases. The analyst downgraded the stock to Reduce based on the weak EXIM performance and concerns about declining market share for Container Corporation in that business over the long run.
Exide Industries reported a 35.1% increase in net profit for 1QFY2011 compared to the previous year. Net sales grew 27.5% year-over-year to Rs1,152 crore, exceeding estimates. Earnings before interest, taxes, depreciation, and amortization margins improved from the previous quarter due to a decline in other expenditures. The analyst maintains an "Accumulate" rating for Exide Industries due to reasonable valuations and expects net sales and profit to grow annually over the next two years.
Reliance Communication's quarterly performance failed to meet expectations, with wireless revenue growing only 1.7% compared to the industry average. While the company surpassed 100 million subscribers, its broadband and global business segments saw declines. Profits grew 10.1% due to higher interest earned, but margins fell due to higher network and access costs. Going forward, profitability is expected to come under pressure from increased leverage for capex spending and acquiring 3G licenses.
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Madhucon Projects reported disappointing results for the fourth quarter of fiscal year 2010 that were below expectations. While revenue grew robustly due to higher subcontracting in the power segment, operating margins hit a historical low of 6.4% due to the heavy subcontracting. The analyst maintains a "Buy" rating but lowers the target price to Rs. 190 per share based on revised estimates factoring in lower margins and a higher holding company discount applied to the valuation of Madhucon Infra subsidiary. Near-term revenue visibility comes from existing power segment orders but margins are expected to remain under pressure from ongoing subcontracting.
1) Marico reported a 13.4% increase in quarterly revenue to Rs. 790.1 crore, above estimates, led by 16% volume growth in its core brands Parachute and Saffola.
2) Earnings grew 27% to Rs. 73.7 crore after adjusting for tax rate declines, despite margins contracting.
3) The analyst upgrades Marico stock from "Reduce" to "Neutral" and increases earnings estimates by 2-3% based on strong volume growth and lower taxes boosting profits.
Bajaj Auto reported strong results for the fourth quarter of fiscal year 2010 that exceeded estimates. Net sales grew 80.5% year-over-year to Rs3,399 crore, driven by an 83.8% increase in volume. Operating profit margin expanded substantially to 22.9% compared to 15.2% in the prior year quarter. Net profit for the quarter was Rs529 crore, up 306% year-over-year and above estimates. For fiscal year 2011, management expects robust volume growth and maintains guidance of 20% operating profit margin despite rising raw material costs.
NTPC reported a 7.9% year-over-year increase in net sales for the fourth quarter of fiscal year 2010, slightly ahead of estimates. Operating profit grew 1.9% year-over-year due to a 2.3% increase in sales volumes from commissioning new plants and higher plant load factors, though margins declined. Net profit declined 4.5% due to one-time provisions and lower interest rates. The analyst maintains an "Accumulate" rating and target price of Rs230, seeing continued growth from NTPC's regulated business model and expansion plans offset by potential project delays.
Jyoti Structures reported a 20.3% year-over-year growth in net profit to Rs. 25 crores for the fourth quarter of FY2010, slightly below estimates. Operating margins expanded more than expected by 235 basis points to 12.8% due to lower raw material costs. For the full year, net profit grew 15.3% to Rs. 92 crores on sales of Rs. 2,006 crores. The company maintained its buy recommendation with a target price of Rs. 215, citing the large investments planned for power transmission and the company's position as a top player in the industry.
TV Today Network reported quarterly revenue growth of 46.9% year-over-year to Rs78.9 crore, aided by steady growth in its broadcasting business and the amalgamation of its radio business. However, the company reported a loss of Rs10.1 crore for the quarter compared to a profit of Rs8.1 crore last year, with its operating margin contracting significantly, owing to losses incurred in its newly amalgamated radio business. For the full year, TV Today reported revenue growth of 13.9% but net profit declined 7.9% due to a Rs38 crore loss in the radio business. The analyst downgraded the stock to Neutral given losses in the radio business and a
Gateway Distriparks' quarterly results were below expectations due to lower volumes and increasing competition. Revenue grew 3.8% to Rs129cr but EBIDTA fell 6.5% and PAT declined 15.5% due to lower ground rent and delayed rail expansion. The analyst downgraded the stock to "Accumulate" given delays in funding and dilution from a planned equity issuance. Competition is impacting margins in the CFS segment while rail freight remains loss-making, challenging the target for breakeven PAT in FY2011.
Exide Industries reported a 35.1% increase in net profit for the first quarter of fiscal year 2011. Net sales grew 27.5% due to a substantial increase in both original equipment and replacement auto battery sales. While raw material costs increased, operating margins improved on a quarter-over-quarter basis due to a decline in other expenditures and average lead prices. The analyst maintains an "Accumulate" rating for Exide Industries due to reasonable valuations and expectations for continued double-digit revenue and earnings growth over the next two fiscal years.
Reliance Industries reported lower-than-expected quarterly results, with profits impacted by lower-than-expected refining margins. Revenue grew 120.7% year-over-year primarily due to higher refining revenues, but margins were lower than estimates. While volume growth was strong, profitability was hurt by refining margins of $7.5/bbl compared to an estimated $8.5/bbl. The analyst maintains a buy rating due to expectations for margin improvement and inorganic growth opportunities.
Infosys reported a 4.3% quarter-over-quarter growth in revenues to Rs. 6,198 crore for the first quarter of fiscal year 2011, backed by a 7.6% growth in volumes. However, earnings before interest and taxes (EBIT) margins fell by 1.8% due to annual wage hikes. Infosys revised its fiscal year 2011 revenue growth guidance upwards from 16-18% to 19-21% in rupee terms and maintained its earnings per share growth guidance of 7.2-11.5%. The growth was broad-based across services and verticals led by the banking, financial services and insurance sector.
BGR Energy Systems reported a very strong 4QFY2010 performance, with revenues growing 130.7% and net profit up 130.6% over the previous year. For the full year, revenues grew 59.7% and net profit increased 74.7%. The company maintained a healthy order backlog of Rs10,230cr and expects continued growth in orders. The analyst maintains a Buy recommendation on the stock with a target price of Rs722, noting attractive valuation multiples and expecting revenue and profit to grow at 36.7% and 31.2% CAGR over the next few years.
- GE Shipping's (Gesco) 1QFY2011 results were above estimates due to strong performance in the offshore segment, however the shipping segment was impacted by lower freight rates and tonnage.
- Revenue declined 10.6% YoY due to a 31.6% decline in the shipping segment, offset by 45.1% growth in the offshore segment.
- EBITDA margin expanded 495 bps YoY to 40.6% due to strong margins in the offshore segment.
- PAT grew 11.4% YoY to Rs. 171.8 cr. Management expects to list its offshore subsidiary Greatship by 2HFY2011 which will unlock value.
Mphasis reported 4.8% quarter-over-quarter revenue growth to Rs. 1,279 crore for 3QFY2010. The company saw mixed performance, with strong volume growth in application and ITO segments, but steep pricing cuts of 9.6% in applications. Margins declined slightly due to pricing changes and salary hikes, but were supported by restructuring in BPO and cost optimization in ITO. Revenue was driven by financial services, technology, and healthcare verticals, while telecom declined due to client issues. The company added 22 new clients spanning industries and saw improved wallet share with existing clients.
Marico reported disappointing quarterly results, with top-line growth of only 6% year-over-year and flat earnings growth, below estimates. However, a significant gross margin expansion of 644 basis points year-over-year was a positive surprise. While underlying volume growth remained strong at 14%, top-line growth was constrained by price cuts. The outlook remains neutral given concerns around value growth and slowing growth at Kaya.
Ultratech result update4 qfy2010-060510Angel Broking
Ultratech Cement reported a 2.5% year-over-year growth in net sales for the fourth quarter of fiscal year 2010, though profit declined due to higher costs. Volume sales grew 9.9% while realizations fell 5.6%. Net profit declined 26.1% to Rs229 crore due to a 23.8% drop in operating profit from increased raw material and other costs. The analyst maintains an "Accumulate" rating and sets a target price of Rs1,084 based on an estimated EV/EBITDA multiple of 6.5x and EV/tonne of $105 for fiscal year 2012.
Container Corporation of India reported lower profits in FY2010 due to lower ground rent revenues and its inability to fully pass on increases in haulage charges. Export volumes remain weak as revival has yet to happen, while domestic volume growth is expected to increase to 25% of total volumes by FY2012 from the current 22%. Margins are forecasted to remain under pressure in FY2011 from higher contributions from low-margin domestic business and increased empty container runs in the first half of the year. Management expects modest volume growth of 10-12% in FY2011 largely due to a low base and higher imports.
Sadbhav Engineering reported quarterly revenues and profits that were below expectations. Higher depreciation and tax expenses related to the reversal of past tax benefits weighed on profits. The company has a large order backlog that provides visibility, but rich valuations lead the analyst to maintain a Neutral rating on the stock.
Hindalco reported strong results for the first quarter of fiscal year 2011. Revenue grew 29.2% year-over-year to Rs. 2,533 crore, driven by a 12.7% increase in aluminum shipments. Adjusted EBITDA more than doubled to Rs. 263 crore, resulting in adjusted EBITDA margins of 10.4%. However, net profit declined 65% to Rs. 50 crore due to higher interest and tax expenses. Management expects continued growth in demand and benefits from capacity expansions. The stock currently trades at attractive valuations and the analyst maintains a Buy rating with a target price of Rs. 204.
Ambuja Cement reported a 20.5% year-over-year increase in net profit for the second quarter of 2010 due to a substantial rise in shipments. Operating profit grew 23.7% year-over-year as operating margins expanded. The company expects ongoing capacity additions to support continued healthy shipment growth. Analysts maintain a neutral rating on Ambuja Cement, seeing the stock as fairly priced based on estimated 2011 earnings and capacity.
GE Shipping (Gesco) reported strong fourth quarter fiscal year 2010 results that exceeded expectations. Revenue grew 126.1% year-over-year in the offshore segment due to increased operating days. Overall operating profit increased 139.2% year-over-year, driven by lower expenses. Gesco intends to list its offshore subsidiary Greatship to unlock value and plans to add more offshore vessels. The analyst maintains a 'Buy' rating based on Gesco trading at a discount to global peers and expectations that accelerated phase-out of single hull tankers will support freight rates.
Exide Industries reported a 35.1% increase in net profit for 1QFY2011 compared to the previous year. Net sales grew 27.5% year-over-year to Rs1,152 crore, exceeding estimates. Earnings before interest, taxes, depreciation, and amortization margins improved from the previous quarter due to a decline in other expenditures. The analyst maintains an "Accumulate" rating for Exide Industries due to reasonable valuations and expects net sales and profit to grow annually over the next two years.
Reliance Communication's quarterly performance failed to meet expectations, with wireless revenue growing only 1.7% compared to the industry average. While the company surpassed 100 million subscribers, its broadband and global business segments saw declines. Profits grew 10.1% due to higher interest earned, but margins fell due to higher network and access costs. Going forward, profitability is expected to come under pressure from increased leverage for capex spending and acquiring 3G licenses.
MPL Result Update 4qfy2010-030510-finalAngel Broking
Madhucon Projects reported disappointing results for the fourth quarter of fiscal year 2010 that were below expectations. While revenue grew robustly due to higher subcontracting in the power segment, operating margins hit a historical low of 6.4% due to the heavy subcontracting. The analyst maintains a "Buy" rating but lowers the target price to Rs. 190 per share based on revised estimates factoring in lower margins and a higher holding company discount applied to the valuation of Madhucon Infra subsidiary. Near-term revenue visibility comes from existing power segment orders but margins are expected to remain under pressure from ongoing subcontracting.
1) Marico reported a 13.4% increase in quarterly revenue to Rs. 790.1 crore, above estimates, led by 16% volume growth in its core brands Parachute and Saffola.
2) Earnings grew 27% to Rs. 73.7 crore after adjusting for tax rate declines, despite margins contracting.
3) The analyst upgrades Marico stock from "Reduce" to "Neutral" and increases earnings estimates by 2-3% based on strong volume growth and lower taxes boosting profits.
Bajaj Auto reported strong results for the fourth quarter of fiscal year 2010 that exceeded estimates. Net sales grew 80.5% year-over-year to Rs3,399 crore, driven by an 83.8% increase in volume. Operating profit margin expanded substantially to 22.9% compared to 15.2% in the prior year quarter. Net profit for the quarter was Rs529 crore, up 306% year-over-year and above estimates. For fiscal year 2011, management expects robust volume growth and maintains guidance of 20% operating profit margin despite rising raw material costs.
NTPC reported a 7.9% year-over-year increase in net sales for the fourth quarter of fiscal year 2010, slightly ahead of estimates. Operating profit grew 1.9% year-over-year due to a 2.3% increase in sales volumes from commissioning new plants and higher plant load factors, though margins declined. Net profit declined 4.5% due to one-time provisions and lower interest rates. The analyst maintains an "Accumulate" rating and target price of Rs230, seeing continued growth from NTPC's regulated business model and expansion plans offset by potential project delays.
Jyoti Structures reported a 20.3% year-over-year growth in net profit to Rs. 25 crores for the fourth quarter of FY2010, slightly below estimates. Operating margins expanded more than expected by 235 basis points to 12.8% due to lower raw material costs. For the full year, net profit grew 15.3% to Rs. 92 crores on sales of Rs. 2,006 crores. The company maintained its buy recommendation with a target price of Rs. 215, citing the large investments planned for power transmission and the company's position as a top player in the industry.
TV Today Network reported quarterly revenue growth of 46.9% year-over-year to Rs78.9 crore, aided by steady growth in its broadcasting business and the amalgamation of its radio business. However, the company reported a loss of Rs10.1 crore for the quarter compared to a profit of Rs8.1 crore last year, with its operating margin contracting significantly, owing to losses incurred in its newly amalgamated radio business. For the full year, TV Today reported revenue growth of 13.9% but net profit declined 7.9% due to a Rs38 crore loss in the radio business. The analyst downgraded the stock to Neutral given losses in the radio business and a
Gateway Distriparks' quarterly results were below expectations due to lower volumes and increasing competition. Revenue grew 3.8% to Rs129cr but EBIDTA fell 6.5% and PAT declined 15.5% due to lower ground rent and delayed rail expansion. The analyst downgraded the stock to "Accumulate" given delays in funding and dilution from a planned equity issuance. Competition is impacting margins in the CFS segment while rail freight remains loss-making, challenging the target for breakeven PAT in FY2011.
Exide Industries reported a 35.1% increase in net profit for the first quarter of fiscal year 2011. Net sales grew 27.5% due to a substantial increase in both original equipment and replacement auto battery sales. While raw material costs increased, operating margins improved on a quarter-over-quarter basis due to a decline in other expenditures and average lead prices. The analyst maintains an "Accumulate" rating for Exide Industries due to reasonable valuations and expectations for continued double-digit revenue and earnings growth over the next two fiscal years.
Reliance Industries reported lower-than-expected quarterly results, with profits impacted by lower-than-expected refining margins. Revenue grew 120.7% year-over-year primarily due to higher refining revenues, but margins were lower than estimates. While volume growth was strong, profitability was hurt by refining margins of $7.5/bbl compared to an estimated $8.5/bbl. The analyst maintains a buy rating due to expectations for margin improvement and inorganic growth opportunities.
Infosys reported a 4.3% quarter-over-quarter growth in revenues to Rs. 6,198 crore for the first quarter of fiscal year 2011, backed by a 7.6% growth in volumes. However, earnings before interest and taxes (EBIT) margins fell by 1.8% due to annual wage hikes. Infosys revised its fiscal year 2011 revenue growth guidance upwards from 16-18% to 19-21% in rupee terms and maintained its earnings per share growth guidance of 7.2-11.5%. The growth was broad-based across services and verticals led by the banking, financial services and insurance sector.
BGR Energy Systems reported a very strong 4QFY2010 performance, with revenues growing 130.7% and net profit up 130.6% over the previous year. For the full year, revenues grew 59.7% and net profit increased 74.7%. The company maintained a healthy order backlog of Rs10,230cr and expects continued growth in orders. The analyst maintains a Buy recommendation on the stock with a target price of Rs722, noting attractive valuation multiples and expecting revenue and profit to grow at 36.7% and 31.2% CAGR over the next few years.
- GE Shipping's (Gesco) 1QFY2011 results were above estimates due to strong performance in the offshore segment, however the shipping segment was impacted by lower freight rates and tonnage.
- Revenue declined 10.6% YoY due to a 31.6% decline in the shipping segment, offset by 45.1% growth in the offshore segment.
- EBITDA margin expanded 495 bps YoY to 40.6% due to strong margins in the offshore segment.
- PAT grew 11.4% YoY to Rs. 171.8 cr. Management expects to list its offshore subsidiary Greatship by 2HFY2011 which will unlock value.
Mphasis reported 4.8% quarter-over-quarter revenue growth to Rs. 1,279 crore for 3QFY2010. The company saw mixed performance, with strong volume growth in application and ITO segments, but steep pricing cuts of 9.6% in applications. Margins declined slightly due to pricing changes and salary hikes, but were supported by restructuring in BPO and cost optimization in ITO. Revenue was driven by financial services, technology, and healthcare verticals, while telecom declined due to client issues. The company added 22 new clients spanning industries and saw improved wallet share with existing clients.
Marico reported disappointing quarterly results, with top-line growth of only 6% year-over-year and flat earnings growth, below estimates. However, a significant gross margin expansion of 644 basis points year-over-year was a positive surprise. While underlying volume growth remained strong at 14%, top-line growth was constrained by price cuts. The outlook remains neutral given concerns around value growth and slowing growth at Kaya.
Ultratech result update4 qfy2010-060510Angel Broking
Ultratech Cement reported a 2.5% year-over-year growth in net sales for the fourth quarter of fiscal year 2010, though profit declined due to higher costs. Volume sales grew 9.9% while realizations fell 5.6%. Net profit declined 26.1% to Rs229 crore due to a 23.8% drop in operating profit from increased raw material and other costs. The analyst maintains an "Accumulate" rating and sets a target price of Rs1,084 based on an estimated EV/EBITDA multiple of 6.5x and EV/tonne of $105 for fiscal year 2012.
Container Corporation of India reported lower profits in FY2010 due to lower ground rent revenues and its inability to fully pass on increases in haulage charges. Export volumes remain weak as revival has yet to happen, while domestic volume growth is expected to increase to 25% of total volumes by FY2012 from the current 22%. Margins are forecasted to remain under pressure in FY2011 from higher contributions from low-margin domestic business and increased empty container runs in the first half of the year. Management expects modest volume growth of 10-12% in FY2011 largely due to a low base and higher imports.
Sadbhav Engineering reported quarterly revenues and profits that were below expectations. Higher depreciation and tax expenses related to the reversal of past tax benefits weighed on profits. The company has a large order backlog that provides visibility, but rich valuations lead the analyst to maintain a Neutral rating on the stock.
Hindalco reported strong results for the first quarter of fiscal year 2011. Revenue grew 29.2% year-over-year to Rs. 2,533 crore, driven by a 12.7% increase in aluminum shipments. Adjusted EBITDA more than doubled to Rs. 263 crore, resulting in adjusted EBITDA margins of 10.4%. However, net profit declined 65% to Rs. 50 crore due to higher interest and tax expenses. Management expects continued growth in demand and benefits from capacity expansions. The stock currently trades at attractive valuations and the analyst maintains a Buy rating with a target price of Rs. 204.
Ambuja Cement reported a 20.5% year-over-year increase in net profit for the second quarter of 2010 due to a substantial rise in shipments. Operating profit grew 23.7% year-over-year as operating margins expanded. The company expects ongoing capacity additions to support continued healthy shipment growth. Analysts maintain a neutral rating on Ambuja Cement, seeing the stock as fairly priced based on estimated 2011 earnings and capacity.
GE Shipping (Gesco) reported strong fourth quarter fiscal year 2010 results that exceeded expectations. Revenue grew 126.1% year-over-year in the offshore segment due to increased operating days. Overall operating profit increased 139.2% year-over-year, driven by lower expenses. Gesco intends to list its offshore subsidiary Greatship to unlock value and plans to add more offshore vessels. The analyst maintains a 'Buy' rating based on Gesco trading at a discount to global peers and expectations that accelerated phase-out of single hull tankers will support freight rates.
Container Corporation of India (Concor) reported modest 1.6% year-over-year decline in revenue for 2QFY2011 due to shutdown at JNPT port and prolonged monsoon dragging down performance. EBITDA margins of 27.7% were higher than expected due to moderate decline in exim segment. The company maintained its 12% annual volume growth guidance for the exim segment for FY2011, which will be challenging given 1HFY2011 growth. A proposed hike in haulage charges by Indian Railways effective October 1st was postponed by one month which could impact profitability in 2HFY2011 if most of the increase is passed on to customers.
Wipro reported financial results for the first quarter of fiscal year 2011, with revenues growing 3.1% over the previous quarter and 12.6% over the same quarter last year. Operating profit margins expanded due to effective currency hedges, and net income grew 9% over the previous quarter and 30.5% over the first quarter of fiscal year 2010. The company's performance was driven by strong volume growth in IT services revenues, with new client additions and large deal wins during the quarter. The analyst maintained an "Accumulate" rating on Wipro stock, with a target price representing 13% upside.
Larsen and Toubro (L&T) reported much better than expected results for the fourth quarter of fiscal year 2010. Revenues grew 28.1% year-over-year to Rs. 13,858 crore, driven by increases in several business segments. Operating margins reached a historic high of 15.1% due to cost controls. The order backlog remained robust at Rs. 1,00,239 crore. Going forward, the analyst maintains a positive view on the company given its strong order backlog, operating cash flows, and return ratios above 20%.
Ashok Leyland reported a 141.3% year-over-year growth in net sales to Rs2,939 crore for the fourth quarter of fiscal year 2010, in line with expectations. Net profit grew 317.6% year-over-year to Rs222.7 crore, higher than expected due to better operating margins and a change in depreciation policy. Operating margins increased 345 basis points due to price hikes, lower raw material prices, and cost reduction efforts. The company expects commercial vehicle industry volumes to grow 15-18% in fiscal year 2011.
IGL reported a 27.7% year-over-year increase in net profit to Rs51.5cr for the fourth quarter of FY2010, which was lower than expected due to lower gross gas margins and slower CNG volume growth quarter-over-quarter. Operating margins expanded by 75 basis points year-over-year to 32.6% due to revenue growth and recovery of overdrawl charges. However, concerns remain regarding the sustainability of high margins given IGL's reliance on subsidized gas prices. The analyst recommends reducing exposure to the stock and sets a target price of Rs210.
Bharat Forge (BFL) reported a 92.8% year-over-year growth in standalone net sales for the fourth quarter of fiscal year 2010, exceeding expectations. Operating margins improved substantially to 22.8% due to lower raw material costs and operating leverage. BFL recorded a net profit of Rs. 61.3 crore for the quarter, above estimates. At the consolidated level, BFL reported a 46.7% year-over-year increase in revenues for the fourth quarter and completed the process of restructuring its global subsidiaries.
Colgate Palmolive reported first quarter results for fiscal year 2011 with revenues growing 13% year-over-year to Rs. 528.8 crores, slightly below estimates. Earnings beat estimates due to a sharp rise in gross margins of 662 basis points year-over-year. Volume growth was 13% overall led by 14% growth in toothpaste and 19% growth in toothbrushes. The analyst maintains a "Reduce" rating due to the stock being highly expensive trading at 23.4 times estimated fiscal year 2012 earnings per share given muted earnings growth estimates.
FAG Bearing recorded strong results for the second quarter of 2010, with net sales growing 35% year-over-year to Rs. 273 crore, beating estimates. Operating profit increased 66% to Rs. 52 crore due to lower raw material costs and improved operating leverage. Net profit surged 82% to Rs. 33.8 crore, aided by robust top-line growth and lower taxes. The analyst maintains a "Buy" rating and revised earnings estimates upward based on the company's solid performance.
Elecon Engineering reported a 15% increase in revenue for the first quarter of fiscal year 2011. While operating margins declined slightly, net profits increased 57% due to a 32% decrease in interest costs. The company maintains a strong order backlog of Rs1,582 crore, providing revenue visibility. Recovery in the industrial sector and opportunities in material handling equipment are expected to drive continued growth for Elecon Engineering.
Elecon Engineering reported a 15% rise in revenue for the first quarter of fiscal year 2011. While operating margins declined slightly, profit grew 57% due to a 32% drop in interest costs. The company has a robust order backlog of Rs1,582 crore, offering high revenue visibility. Going forward, recovery in the industrial sector and opportunities in material handling equipment are expected to drive continued growth for Elecon Engineering.
1. GSK Consumer reported a robust 20.3% year-over-year growth in top-line to Rs648cr, beating estimates due to higher volumes, prices, and lower excise duty. However, margins contracted 149 basis points to 20.5% as the company reinvested gains into higher advertising.
2. Bottom-line growth was 14.6% year-over-year to Rs96cr, below expectations due to margin pressure and lower other income.
3. The analyst maintains a Neutral rating as valuations remain high despite revising estimates marginally upward, leaving little upside potential.
1. GSK Consumer reported a robust 20.3% year-over-year growth in top-line to Rs648cr, beating estimates due to higher volumes, prices, and lower excise duty. However, margins contracted 149 basis points to 20.5% as the company reinvested gains into higher advertising.
2. Bottom-line growth was 14.6% year-over-year to Rs96cr, below expectations due to margin pressure and lower other income.
3. The analyst maintains a Neutral rating as valuations remain high despite revising estimates marginally upward, leaving little upside potential.
1) Nestle reported a 16.9% increase in top-line to Rs1,480cr, slightly below estimates, due to higher volumes and limited price increases. Bottom-line grew only 2.3%, significantly below expectations, due to a spike in input costs.
2) Gross margins contracted 263bps and EBITDA margins fell 397bps as input costs rose substantially. Higher brand investments and other expenses also weighed on profits.
3) The analyst downgrades Nestle to Neutral and lowers earnings estimates due to higher input costs and competitive pressures. Valuations leave little upside potential given cost pressures.
1) For 1QCY2010, FAG Bearing reported a 25.2% year-over-year growth in net sales to Rs237.4cr, in line with expectations. Operating margins declined by 417 basis points to 15.3% due to higher raw material costs.
2) Net profit grew 61.4% year-over-year to Rs22.5cr, with the company meeting performance expectations for the quarter.
3) The analyst maintains a "Buy" rating on the stock, with a target price of Rs712, as revenue growth is expected to be driven by new products and there is upside potential to earnings estimates if industrial production growth increases.
Grasim Industries reported a robust 11.5% year-over-year increase in net profit for the fourth quarter of fiscal year 2010, led by an outstanding 65% sales growth in its viscose staple fiber division. The company's overall sales were up 10.8% to Rs. 5,475 crore for the quarter. The cement business also performed well, with a 5.2% sales increase. Going forward, the company plans additional capacity expansions across its businesses to continue its growth trajectory.
Grasim Industries reported a robust 11.5% year-over-year increase in 4QFY2010 net profit to Rs. 655 crore, led by outstanding performance from its viscose staple fiber (VSF) division. The VSF division's net sales grew 65% to Rs. 1,045 crore due to a 31% rise in volumes and 29% increase in realizations. Overall revenues increased 11% to Rs. 5,475 crore for the quarter. The company set May 28, 2010 as the record date for its planned demerger of the Samruddhi cement unit. Post demerger, Grasim shareholders will directly hold 35% of Samruddhi while G
ACC reported a 2.3% year-over-year increase in quarterly revenue driven by a 4% rise in realizations. Operating margins declined slightly to 31.2% due to higher raw material costs. Net profit was flat at Rs. 405 crore as increased depreciation expenses offset lower interest costs. The analyst maintains a Neutral rating on ACC, setting a fair value of Rs. 948 based on an EV/EBITDA multiple of 7.5x for CY2011 estimates.
GSK Consumer reported a 14.5% year-over-year increase in revenue to Rs537 crore for the second quarter of 2010, below analyst estimates. Earnings grew 30% to Rs71.8 crore, ahead of estimates, driven by margin expansion from lower advertising spending and higher other income. While the company's core brands Horlicks and Boost saw healthy volume growth of 10% and 17% respectively, overall volume growth moderated to around 10%. Looking forward, the company expects advertising spending to increase in the second half of the year with the national rollout of new product Horlicks Foodles.
Similar to All cargo result update 1 qcy2010 050510 (20)
The Indian markets are expected to open higher, tracking gains in most Asian markets. Spain has asked for a bailout of up to €100 billion for its banking system. Chinese exports grew more than expected in May. In India, shares extended gains for a fifth session despite weak global cues as major central banks held off on additional stimulus. The key support and resistance levels for the Nifty are 5,023 and 5,114 respectively. L&T has bagged orders worth Rs. 483 crore to build commercial vessels in Qatar. Vedanta Resources has acquired a 24.5% stake in Raykal Aluminium for Rs. 201 crore.
Axis Bank reported a 27.0% year-over-year increase in net profit to Rs. 942 crore for the first quarter of fiscal year 2012, in line with analyst estimates. Business growth momentum slowed as advances declined 7.4% quarter-over-quarter and deposits fell 3.0% quarter-over-quarter, moderating the bank's cash-deposit ratio to 40.5% from 41.1% last quarter. However, asset quality remained healthy with slippage ratio declining to 0.8% and gross and net NPA ratios stable.
1) For 1QFY2012, Electrosteel Castings reported 16.4% sales growth but margins declined due to higher raw material costs. EBITDA fell 18.2% and net profit declined 7.2%.
2) While sales volumes grew, costs increased more due to a rise in raw material costs as a percentage of sales.
3) The company maintains a buy recommendation due to initiatives in steelmaking and backward integration that should lower costs starting in FY2013 and valuation remains attractive.
1) For 1QFY2012, Persistent Systems reported revenues of ₹224 crore, up 5.2% over the previous quarter and 23.6% over the same period last year.
2) EBITDA was ₹40 crore, up 5.3% over the previous quarter but margins declined.
3) PAT was ₹28 crore, down 16.8% over the previous quarter due to higher taxes.
4) Management maintained revenue guidance of 29% growth for FY2012 and expects PAT to remain flat despite higher tax rates.
HT Media reported a 22.7% year-over-year increase in revenue to ₹494 crore for the first quarter of FY2012. Revenue was also up 5.8% quarter-over-quarter. Advertising revenue grew 17% year-over-year, with 18% growth in English and 15% growth in Hindi. Operating profit rose 11.8% year-over-year to ₹87.8 crore due to higher other income and lower tax rates, although operating margins contracted by 174 basis points. The company maintained its Accumulate rating based on expectations of continued revenue growth and margin expansion.
The summary is:
1) The derivative report analyzes the performance of the Nifty futures, options, and key stocks from the previous trading session on July 18, 2011.
2) It provides details on changes in open interest, premium levels, volatility, and turnover for various derivatives contracts.
3) Trading strategies and technical analysis is also given for some stocks along with risk-reward profiles of sample spreads trades for the Nifty.
The market ended lower, with the Sensex and Nifty closing down 0.3%. Mid- and small-cap indices closed higher. Select heavyweights like Hindalco Industries and BHEL gained 1-3%, while TCS and Tata Motors lost 1-2%. In corporate news, Motherson Sumi Systems agreed to acquire an 80% stake in Peguform for €141.5 million. HDFC Bank, Cadila Healthcare, Crompton Greaves, and Ashok Leyland are scheduled to announce their quarterly results. The trend for the day will be decided by whether Nifty trades above or below the levels of 18,533/5,572 in early trade.
- GSM subscriber additions in India continued their declining trend in June 2011, with net additions of 9.6 million, down 10% from the previous month.
- All major operators except BSNL reported a drop in subscriber additions. Bharti and Vodafone each added 2.1 million subscribers.
- The total GSM subscriber base reached 598.8 million in June 2011, with Bharti, Vodafone, Idea and BSNL maintaining their major market shares.
The document provides a technical analysis of the Indian stock market indices Sensex and Nifty for the week of July 16, 2011. It summarizes that the indices declined over 1.5% for the week and are currently trading in a range between 18,326/5496 on the downside and 19,132/5740 on the upside. It notes that a break above or below this range would dictate the direction of the upcoming trend. The analysis also lists pivot levels for 50 Nifty stocks to watch in the coming week.
The document provides a summary of derivative market activity in India for July 18, 2011. Key points include:
- Nifty futures open interest increased 0.67% while Mini Nifty increased 3.48% as the market closed at 5581.10
- Nifty July futures closed at a premium of 5.85 points and August futures at a premium of 22.60 points
- Implied volatility of at-the-money options decreased from 18% to 17.3%
- Total open interest in the market was Rs. 135,158 crore with stock futures open interest at Rs. 34,675 crore.
The indices opened flat but traded choppily throughout the day. Metal, auto and realty stocks declined while IT stocks gained. The indices are currently trading in a range between 18,326-18,810/5496-5653 on the downside and 19,132-19,094/5740-5700 on the upside. A break above these resistance levels could lead to further gains while a break below support could result in losses extending to 17,805-17,950/5350-5400. Pivot levels for 50 Nifty stocks are provided.
- The key Indian stock indices declined slightly, with the Sensex and Nifty closing down 0.3%.
- GSM subscriber additions in India continued their declining trend in June across most major operators such as Idea, Bharti Airtel, and Vodafone. Total GSM subscriber addition was 9.6 million, down 10% from the previous month.
- Tata Motors reported flat annual global sales growth in June 2011 compared to the previous year.
- South Indian Bank reported a 41.2% year-over-year increase in net profit to Rs. 82 crores for the first quarter of fiscal year 2012, slightly below analyst estimates.
- Business growth remained strong, with advances growth of 31.2% and deposits growth of 35.5% year-over-year. However, net interest margins compressed by 29 basis points sequentially to 2.8% due to a sharp rise in the bank's cost of deposits.
- Non-interest income was boosted by treasury gains, but fee income growth was modest. Asset quality was stable with gross and net NPAs rising marginally, and provision coverage at a comfortable 73.1%.
Bajaj Auto reported marginally lower-than-expected results for the first quarter of fiscal year 2012, with net sales growth of 22.8% year-over-year driven by a 17.7% increase in volumes. However, operating margins contracted by 145 basis points quarter-over-quarter to 19.1% due to a 150 basis point increase in raw material costs. As a result, net profit grew by 20.5% year-over-year to ₹711 crore, which was slightly below analyst estimates. Going forward, the analyst expects further margin pressure and has revised downward its earnings estimates for fiscal years 2012 and 2013 to factor in higher raw material costs and changes to export incentives.
1) Tata Consultancy Services (TCS) reported strong results for the first quarter of fiscal year 2012, outperforming expectations with revenue growth of 6.3% over the previous quarter and 31.4% over the same quarter of the previous fiscal year.
2) A key highlight was 7.4% quarter-over-quarter growth in business volumes. While profit margins declined due to wage hikes, net profit remained flat due to foreign exchange gains.
3) Management maintained a positive outlook, highlighting strong demand environment and deal pipeline, and expects pricing increases later in the fiscal year.
The document summarizes the Indian stock market outlook and performance on July 15, 2011. It reports that domestic indices closed with modest gains of 0.1-0.4%, while global indices declined. Wholesale price inflation in India rose to 9.44% in June 2011, above estimates and persisting above 9% for seven months, driven by increases in primary articles and fuel costs. Key benchmark levels are identified for determining if the market may continue rallying or correct in the near term.
The summary is:
1) The derivative report analyzes the movement in Nifty futures, options, and individual stocks between July 14-15, 2011.
2) Nifty futures open interest decreased while mini Nifty open interest increased as the market closed at 5599.80.
3) Implied volatility of at-the-money options increased from 17.6% to 18%.
The Sensex and Nifty indices opened lower and traded with volatility, closing marginally lower. On the sectoral front, Realty, Banks and Healthcare gained while IT and FMCG fell. The advance-decline ratio favored advancing stocks. On the daily chart, prices tested but did not close above the downward gap area of 18,679-18,589/5,601-5,580 levels. Immediate resistance is seen at 18,735/5,633, while 18,449/5,541 is crucial support.
1) Infosys reported modest revenue growth of 3.2% qoq for 1QFY2012. EBITDA and margins declined due to wage hikes.
2) Guidance for 2QFY2012 revenue growth was lower than expected at 3.5-5% qoq. Annual revenue growth guidance was unchanged.
3) The analyst revised EPS estimates down and cut the target price to INR 3,200 due to macro concerns and muted guidance.
This document summarizes a derivative report from India Research dated July 13, 2011. Some key points:
- The Nifty futures open interest increased 0.51% while Minifty futures open interest rose 8.2% as the market closed at 5526.15.
- Implied volatility of at-the-money options increased from 18% to 19.75%. PCR-OI decreased from 1.20 to 1.15.
- Total open interest of the market is Rs. 125,816 crore and stock futures open interest is Rs. 33,500 crore.
- FII were net sellers of Rs. 969 crore in the cash market segment. Put-call
1. 1QCY2010 Result Update I Logistics
May 5, 2010
Allcargo Global Logistics NEUTRAL
CMP Rs186
Performance Highlights Target Price -
Allcargo Global Logistics’ (AGL) consolidated 1QCY2010 results were above Investment Period -
our expectations, on account of a strong pick-up in volumes across segments,
with improving Exim visibility. The ECU line continued to remain subdued, on Stock Info
account of inability to pass on the entire rise in freight rates, which resulted in
Sector Logistics
an OPM erosion of 269bp yoy in the ECU line. The management has
indicated a gradual pass of freight rate rise in the ensuing quarters, which Market Cap (Rs cr) 2,325
should boost margins. The consolidated bottom-line was boosted by lower
Beta 0.4
interest expenses and a lower tax rate, which resulted in a 23.2% yoy jump in
the net profit. AGL’s balance sheet is well-capitalised, with zero net debt. We 52 WK High / Low 218/145
maintain a Neutral view on stock.
Avg. Daily Volume 22,256
Pick-up in volumes and lower interest expenses drive profitability: AGL
Face Value (Rs) 2
reported a 21.9% yoy jump in revenues to Rs586cr, due to a strong pick-up in
volumes across segments. The Indian MTO and CFS business grew by BSE Sensex 17,088
~27.8% yoy to Rs104cr and Rs45cr, respectively, on account of strong
Nifty 5,125
volumes, with improving Exim visibility. The ECU line reported a 12.3% yoy
jump in revenues to Rs406cr. The equipment leasing business witnessed a Reuters Code ALGL.BO
revenue growth of 23.9% yoy to Rs20cr, on account of a higher utilisation of
cranes. The Project cargo segment also witnessed a strong revenue growth of Bloomberg Code AGLL@IN
36.0% to Rs41cr, on account of a strong order book. However, the Shareholding Pattern (%)
consolidated operating profit grew by a mere 2.7% yoy to Rs57cr, on account
of inability to pass on the entire hike in freight rates. Consequently, the OPM Promoters 73.0
fell by 182bp yoy to 9.8%. The interest costs fell by 32.6% yoy to Rs3.5cr, as MF/Banks/Indian FIs 1.8
the company utilised its surplus cash to repay Rs100cr of debt. Further, AGL
continued to claim MAT entitlement, which resulted in a lower tax rate of FII/NRIs/OCBs 23.1
17.4% for 1QCY2010 (as against 26.2% in 1QCY2009). Consequently, the
Indian Public 2.1
PAT surged by 23.2% yoy to Rs34cr in 1QCY2010.
Abs. (%) 3m 1yr 3yr
Outlook and Valuation: We believe that AGL is well positioned in the
Container Segment, through its MTO and CFS Segments. We believe that the Sensex 8.2 40.9 22.6
stock’s performance will depend on an improvement in the Operational
efficiency of the ECU Line. At the CMP of Rs186, the stock is trading at 13.0x Allcargo (1.8) 21.0 (10.7)
CY2011E EPS of Rs14.3 and at 7.3x CY2011E EV/EBIDTA. We believe that
the current valuations factor in the company’s near-term growth opportunities;
hence, we maintain a Neutral view on the stock.
Key Financials (Consolidated)
Y/E Dec (Rs cr) CY2008 CY2009 CY2010E CY2011E
Net Sales 2,314 2,061 2,352 2,686
% chg 43.4 (10.9) 14.1 14.2
Net Profit 107.7 129.9 151.9 186.4
% chg 49.4 20.7 16.9 22.7
EBITDA Margin (%) 9.5 10.6 10.9 12.2
FDEPS (Rs) 8.2 9.9 11.6 14.3
Param Desai
P/E (x) 22.6 18.7 16.0 13.0
Tel: 022 – 4040 3800 Ext: 310
P/BV (x) 4.0 2.5 2.0 1.7
E-mail: paramv.desai@angeltrade.com
RoE (%) 23.1 18.0 14.9 15.3
RoCE (%) 22.3 15.2 14.2 16.5
Mihir Salot
EV/Sales (x) 1.2 1.2 1.0 0.9 Tel: 022 – 4040 3800 Ext: 307
EV/EBITDA (x) 12.1 11.6 9.5 7.3 E-mail: mihirr.salot@angeltrade.com
Source: Company, Angel Research
1
Please refer to important disclosures at the end of this report Sebi Registration No: INB 010996539
2. Allcargo l 1QCY2010 Result Update
Exhibit 1: 1QCY2010 Performance (Consolidated)
(Rs cr) 1QCY2009 4QCY2009 1QCY2010 %yoy %qoq
Net Sales 481 544 586 21.9 7.8
Total expenditure 425 492 529 24.4 7.4
Operating Profit 56 52 57 2.7 10.9
OPM (%) 11.6 9.5 9.8 (182bp) 28bp
Depreciation 12 15 15 28.5 3.2
Interest 5 7 4 (32.6) ( 46.9)
Other income 4 4 4 3.3 10.1
Profit Before Tax 43 34 43 0.0 25.5
Tax 11 3 7 (33.5) 160.8
Tax rate (%) 26.2 8.4 17.4 (861bp) 905bp
Minority
(4) (3) (1) (67.7) (55.5)
Interest/EO Items
Reported PAT 27.6 28.4 34.0 23.2 19.9
PAT margin (%) 5.7 5.2 6.2 6bp 59bp
EPS (Rs) 2.2 2.3 2.9 23.2 19.9
Source: Company, Angel Research
Pick-up in volumes; on low base
CFS volumes grew by 38.5% yoy (up 14.8% qoq), led by a strong performance
across the CFS segment, owing to a low base and improving Exim visibility.
However, the EBIT margins in CFS fell by 274bp yoy, owing to a reduction in the
dwell time at JNPT from 11 days to 9 days, as importers were reluctant to take
delivery of goods in 1QCY2010. Standalone MTO Volumes grew by 19.1% yoy (up
3.8% yoy) to 6,978 TEU. ECU Line Volumes also grew by 20.7% yoy (up 2.5% down
yoy) to 51,265 TEU. However, the OPM in the ECU Line fell by 269bp yoy, on
account of inability to pass on the entire rise in freight rates, which the management
has indicated to reverse, as it will gradually pass on hikes in the ensuing quarters.
Exhibit 2: Volumes Break-Up
(TEUs) 1QCY09 4QCY09 1QCY10 %yoy %qoq
Volumes 88,263 104,872 113,521 28.6 8.2
CFS 39,915 48,156 55,278 38.5 14.8
Standalone MTO 5,861 6,720 6,978 19.1 3.8
ECU Line 42,487 49,996 51,265 20.7 2.5
SSource: Company, Angel Research
May 5, 2010 2
3. Allcargo l 1QCY2010 Result Update
Exhibit 3: Segment-wise Performance (Standalone)
Revenue (Rs cr) 1QCY2009 4QCY2009 1QCY2010 %yoy %qoq
Total 128 139 164 28.1 18.4
MTO 81 82 104 27.8 26.0
CFS 35 43 45 27.9 3.4
TFSPL 16 17 20 23.9 13.4
Less Inter-segment (4) (4) (4) 3.4 (6.8)
EBIT (Rs cr)
Total 34 33 38 14.2 15.0
MTO 10 7 13 26.5 70.9
CFS 18 22 21 21.0 (3.0)
TFSPL 6 4 4 (26.8) 9.8
EBIT Margins (%)
Total 26.3 24.2 23.5 (286bp) (71bp)
MTO 12.4 9.1 12.3 (13bp) 323bp
CFS 50.6 51.0 47.8 (274bp) (318bp)
TFSPL 37.2 22.7 22.0 (1,524bp) (73bp
Source: Company, Angel Research
Raises Rs105cr through QIP
During the quarter, AGL issued 0.57cr fresh shares at Rs184.8, resulting in a
dilution of 4.5%. The funds will be utilised for inorganic acquisitions in the MTO
segment. AGL has also indicated capex of Rs220cr in CY2010, for the ongoing
expansion of the ICD segment across India and for purchasing cranes for its
equipment leasing business. We believe that AGL’s balance sheet is well capitalised,
with zero net debt, to fund capex.
Outlook and Valuation
We believe that AGL is well positioned in the Container Segment, through its MTO
and CFS Segments. Moreover, with the ECU Line acquisition, AGL has the
opportunity to scale-up its operations globally as well as enhance its Profits. We
believe that the stock’s performance will depend on an improvement in the
Operational efficiency of the ECU Line. At the CMP of Rs186, the stock is trading at
13.0x CY2011E EPS of Rs14.3 and at 7.3x CY2011E EV/EBIDTA. We believe that the
current valuations factor in the company’s near-term growth opportunities; hence,
we maintain a Neutral view on the stock.
May 5, 2010 3
7. Allcargo l 1QCY2010 Result Update
Research Team Tel: 022-4040 3800 E-mail: research@angeltrade.com Website: www.angeltrade.com
DISCLAIMER
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inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company
may or may not subscribe to all the views expressed within.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as
opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals.
The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true,
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Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section).
Disclosure of Interest Statement Allcargo
1. Analyst ownership of the stock No
2. Angel and its Group companies ownership of the stock No
3. Angel and its Group companies’ Directors ownership of the stock No
4. Broking relationship with company covered No
Note: We have not considered any Exposure below Rs 1 lakh for Angel and its Group companies.
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Tel : (022) 3952 4568 / 4040 3800
Angel Broking Ltd: BSE Sebi Regn No : INB 010996539 / CDSL Regn No: IN - DP - CDSL - 234 - 2004 / PMS Regn Code: PM/INP000001546 Angel Securities Ltd:BSE: INB010994639/INF010994639 NSE:
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May 5, 2010 7