Balrampur Chini Mills reported a weak 3QSY2010 with net sales flat at Rs540cr and PAT declining 83% to Rs11cr. This was due to a 51% drop in EBITDA to Rs64cr caused by higher cane costs, which increased 50% YoY, and greater contribution from lower margin levy sales. While sugar volumes fell 19% YoY, distillery realizations declined 15% due to higher inventory levels. The company expects sugar prices to remain under pressure in the near term from higher global supplies. Management believes restoring import duties on sugar could support domestic prices going forward.
- Greenply Industries reported a 54.6% year-over-year increase in standalone quarterly revenue to Rs259 crore, exceeding estimates, driven by higher capacity utilization and realizations in plywood and laminates.
- Net profit increased 54.7% to Rs13.3 crore, also ahead of estimates, due to lower interest and depreciation expenses.
- The report maintains a buy recommendation, as the company is well-positioned to benefit from capacity expansions in laminates and a new MDF plant, while its stock trades at a discount to earnings estimates.
Madras Cements reported a 9% year-over-year decline in net revenue to Rs. 700 crore for the first quarter of FY2011, mainly due to a 10.7% fall in cement prices. Operating profit declined 33% to Rs. 196 crore as operating margins contracted by 983 basis points to 27.9% due to higher fuel costs and lower prices. Net profit declined 48% to Rs. 73 crore for the quarter. Despite the decline in revenue and profits, the company maintained a buy rating based on an expected recovery in prices and continued presence in high-growth southern markets.
Balrampur Chini Mills' 2QSY2010 results were below expectations due to higher cane costs and increased contribution from mandatory levy sugar quotas. Total sales grew 32% to Rs421 crore driven by strong sugar prices, though margins declined significantly due to raw material costs and levy quotas. The analyst maintains a Neutral rating due to fair valuations and expects sugar prices and industry profitability to stabilize in the coming year.
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.
India Cements' net sales and profits declined significantly in the first quarter of fiscal year 2011 compared to the same period last year. Net sales decreased 8.1% and operating profit declined 71.2% due to a substantial decline in cement prices in Andhra Pradesh, which accounts for around 45% of the company's revenues. Net profit dropped 82.7% to Rs25cr as a result of the poor operating performance, despite a profit from selling shares in another company. The company expects pricing pressure to continue in the southern region in the coming quarters due to excess capacity.
Polyplex Corporation reported higher-than-estimated quarterly and annual results. Net sales grew 19.4% year-over-year for the quarter and 9.1% for the full year. Quarterly net profit jumped 50.2% year-over-year due to a substantial increase in other income. For the full year, net profit declined 14.9% but was above estimates. The company trades at a discount to its peers and its Thailand subsidiary, despite an estimated 26% earnings CAGR over the next two years. The analyst maintains a "Buy" rating with a target price of Rs418.
Madras Cements reported a 10% year-over-year decline in quarterly revenue to Rs577 crore due to a 31% decline in cement realizations. Operating margins fell to 21.4% from 26.3% last year due to lower realizations. Net profit declined 60% year-over-year to Rs29.4 crore. The analyst maintains a buy rating on Madras Cements with a target price of Rs142, valuing the company at 6 times EV/EBITDA based on FY2012 estimates despite overcapacity issues weighing on prices in the southern markets where it operates.
Nestle reported a 21% increase in revenue for the second quarter driven by 20% growth in domestic sales and 36% growth in exports. However, earnings grew at a slower 12% due to a contraction in operating margins from rising input costs and increased spending on marketing. The analyst downgraded the stock to Reduce due to concerns over margin pressure and high valuations leaving little room for negative surprises. Top-line growth was robust due to increased sales volumes and limited price increases while exports picked up on higher sales to Russia.
- Greenply Industries reported a 54.6% year-over-year increase in standalone quarterly revenue to Rs259 crore, exceeding estimates, driven by higher capacity utilization and realizations in plywood and laminates.
- Net profit increased 54.7% to Rs13.3 crore, also ahead of estimates, due to lower interest and depreciation expenses.
- The report maintains a buy recommendation, as the company is well-positioned to benefit from capacity expansions in laminates and a new MDF plant, while its stock trades at a discount to earnings estimates.
Madras Cements reported a 9% year-over-year decline in net revenue to Rs. 700 crore for the first quarter of FY2011, mainly due to a 10.7% fall in cement prices. Operating profit declined 33% to Rs. 196 crore as operating margins contracted by 983 basis points to 27.9% due to higher fuel costs and lower prices. Net profit declined 48% to Rs. 73 crore for the quarter. Despite the decline in revenue and profits, the company maintained a buy rating based on an expected recovery in prices and continued presence in high-growth southern markets.
Balrampur Chini Mills' 2QSY2010 results were below expectations due to higher cane costs and increased contribution from mandatory levy sugar quotas. Total sales grew 32% to Rs421 crore driven by strong sugar prices, though margins declined significantly due to raw material costs and levy quotas. The analyst maintains a Neutral rating due to fair valuations and expects sugar prices and industry profitability to stabilize in the coming year.
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.
India Cements' net sales and profits declined significantly in the first quarter of fiscal year 2011 compared to the same period last year. Net sales decreased 8.1% and operating profit declined 71.2% due to a substantial decline in cement prices in Andhra Pradesh, which accounts for around 45% of the company's revenues. Net profit dropped 82.7% to Rs25cr as a result of the poor operating performance, despite a profit from selling shares in another company. The company expects pricing pressure to continue in the southern region in the coming quarters due to excess capacity.
Polyplex Corporation reported higher-than-estimated quarterly and annual results. Net sales grew 19.4% year-over-year for the quarter and 9.1% for the full year. Quarterly net profit jumped 50.2% year-over-year due to a substantial increase in other income. For the full year, net profit declined 14.9% but was above estimates. The company trades at a discount to its peers and its Thailand subsidiary, despite an estimated 26% earnings CAGR over the next two years. The analyst maintains a "Buy" rating with a target price of Rs418.
Madras Cements reported a 10% year-over-year decline in quarterly revenue to Rs577 crore due to a 31% decline in cement realizations. Operating margins fell to 21.4% from 26.3% last year due to lower realizations. Net profit declined 60% year-over-year to Rs29.4 crore. The analyst maintains a buy rating on Madras Cements with a target price of Rs142, valuing the company at 6 times EV/EBITDA based on FY2012 estimates despite overcapacity issues weighing on prices in the southern markets where it operates.
Nestle reported a 21% increase in revenue for the second quarter driven by 20% growth in domestic sales and 36% growth in exports. However, earnings grew at a slower 12% due to a contraction in operating margins from rising input costs and increased spending on marketing. The analyst downgraded the stock to Reduce due to concerns over margin pressure and high valuations leaving little room for negative surprises. Top-line growth was robust due to increased sales volumes and limited price increases while exports picked up on higher sales to Russia.
Tata Motors reported strong results for the fourth quarter of fiscal year 2010. Consolidated net sales were up 84.6% year-over-year to Rs. 28,978 crore, driven by higher other income and improved performance at subsidiaries like Jaguar Land Rover. Operating profit was Rs. 3,135 crore compared to an operating loss in the prior year. Net profit increased significantly to Rs. 2,228 crore from Rs. 316 crore in 4QFY2009, benefiting from cost cutting measures and higher other income. The results were above expectations due to the company's aggressive cost reductions and good turnaround at key subsidiaries.
Ambuja Cements reported a 7.8% year-over-year increase in net sales for the first quarter of 2010 due to a 4.3% rise in despatches and 3.3% higher realizations. Operating margins increased 328 basis points to 32.3% due to lower energy costs. Net profit grew 38.3% driven by strong operating performance. The company continues expanding capacity which is expected to reach 27 million tonnes by the end of 2010. While demand is forecast to remain robust, increased competition from new capacity additions could put pressure on prices and margins after May 2010.
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.
GlaxoSmithKline Pharmaceuticals reported financial results for the first quarter of 2010 that were ahead of estimates. Net sales increased 18.4% year-over-year to Rs541.1 crore, driven by growth in the vaccine and dermatology segments. Operating margin expanded to 37% from 36% in the prior year quarter due to an improved product mix. Net profit grew 12.6% to Rs161.2 crore. The analyst maintains a "Reduce" rating on the stock and sets a target price of Rs1,700, citing rich valuations of 29.1 times estimated 2010 earnings.
Apollo Tyres reported modest results for 1QFY2011, despite a sharp jump in rubber prices and lockout at one of its plant. Standalone top-line registered a decline of 5% yoy to Rs1,121cr due to a 20% decline in tonnage sold following a lockout at its Perambra facility. Operating margin contracted by 603 bps to 10.4% due to higher raw material costs. Net profit declined 57.1% to Rs40.6cr. However, consolidated performance was better with 11.4% revenue growth and stable net profit due to strong performances at subsidiaries.
- Dishman reported 1QFY2011 results which were primarily in line with estimates, boosted by higher other income. Net sales were down 11.3% YoY due to subdued CRAMS segment performance.
- Operating profit margin contracted 140bps to 22% due to sales de-growth. However, net profit was maintained due to higher other income.
- The company maintained FY2011 guidance of 15-20% top-line growth and 25% operating margin, expecting a robust second half of FY2011.
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
For the fourth quarter of 2010, TVS Motor reported net sales of Rs. 1,216 crore, up 33.7% year-over-year due to a 27.8% increase in volumes and 8.7% increase in realizations. Operating margins expanded 118 basis points due to a 416 basis point drop in raw material costs. Net profit was Rs. 20.3 crore, up 38.9% year-over-year. Going forward, TVS Motor expects to improve market share following new product launches but faces competitive pressures. The analyst maintains a neutral rating due to recent stock price appreciation and TVS Motor's inconsistent performance history.
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.
Sesa Goa's 1QFY2011 results were in line with estimates at the top line, but bottom line was ahead due to a lower tax rate. Top line growth of 138.6% was driven by higher iron ore prices, while volume growth was only 14.9% due to permit issues. EBITDA margins expanded significantly due to strong operations leading to a 208.3% rise in net profit. While Chinese steel and iron ore production is growing, imports have declined recently due to rising domestic Chinese iron ore production, causing a 31.5% drop in iron ore prices since April. The company is trading at attractive valuations but the outlook for volume growth is uncertain due to delays in permits and infrastructure issues.
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.
Tata Motors reported strong results for the first quarter of fiscal year 2011. Consolidated net sales grew 65% year-over-year to Rs. 27,056 crore, driven by higher domestic and JLR volumes as well as a 27% increase in JLR realizations. Consolidated operating profit jumped 667% to Rs. 3,855 crore and operating margins increased substantially to 14.2% compared to 3.1% in the prior year period. However, standalone performance was marginally below expectations with net sales up 63% to Rs. 10,416 crore and net profit falling 23% to Rs. 396 crore due to lower other income. While volumes grew 48% driven by strong
Orchid Chemicals reported 1QFY2011 results above expectations driven by higher other operating income and off-take under the Hospira contract. Net sales were flat at Rs303.6cr but above estimates, while net profit was Rs21.7cr versus a loss last year. For FY2011, the company expects 23% revenue growth to Rs1,600cr with 22% EBITDA margins. However, concerns remain around high receivables and low asset turnover. The report maintains a Neutral rating.
Bhushan Steel reported lower sales volume in 1QFY2011 compared to the previous quarter, however average gross realizations increased. Despite lower top-line performance, margins expanded due to lower raw material costs. Net profit increased by 19.7% year-over-year due to margin expansion, though it declined 14.6% sequentially. The analyst maintains a 'Buy' recommendation and sees volumes growing over the next few years as expansion plans are completed.
Pantaloon Retail reported a 25.3% year-over-year growth in net sales to Rs. 2,057.6 crore for the third quarter of fiscal year 2010, below expectations of 30.2% growth. Same store sales growth was 13.9% and 13.2% for value and lifestyle retailing respectively. Operating margins remained flat at 10.5% while net profit grew 62.7% to Rs. 55.9 crore due to sales growth and unchanged interest costs. The analyst maintains an accumulate rating and target price of Rs. 469 based on retail space expansion, revival in consumer sentiment, and organizational restructuring.
Hotel Leela Venture reported a 24.9% year-over-year growth in net sales to Rs105.8 crore for the first quarter of FY2011, driven by higher occupancy rates and average room rates. Operating profit was up 67.5% to Rs31.6 crore due to fixed cost absorption, leading to a significant increase in net profit to Rs9.2 crore from Rs0.4 crore in the prior-year period. Going forward, the company expects to benefit from improving industry dynamics, but its current valuation remains higher than peers.
1. Mahindra and Mahindra (M&M) reported good results for the first quarter of the fiscal year 2011, with net sales up 21.6% and operating profit up 27.4% compared to the same period last year.
2. Net profit beat analyst expectations by 11%, reaching Rs. 562 crore due to lower than expected tax rates and higher interest income.
3. The report recommends maintaining a "Buy" rating for M&M, setting a target price of Rs. 772 based on the company's core business valuation and value of investments.
Rallis India reported strong results for the first quarter of fiscal year 2012. Revenue grew 48.7% year-over-year to Rs. 292 crore, driven primarily by higher revenue from Metahelix, which Rallis acquired in December 2010. Standalone revenue also rose 17% on higher volumes. EBITDA margin expanded significantly to 14.7% due to higher margins in seeds and improvements in standalone business. While the results were good, the analyst remains neutral on the stock due to its fair valuation.
Larsen & Toubro (L&T) reported modest results for the first quarter of fiscal year 2011 that were below analyst expectations on revenue but positively surprised on margins. Revenue grew 6.4% year-over-year to Rs. 7,885 crore, below estimates, due to flat performance in the engineering and construction segment. However, operating margins expanded significantly by 170 basis points due to lower subcontracting costs. The order backlog remained strong at Rs. 1,07,816 crore as of June 30, 2010 and order inflows were led by the power segment. While most positives are priced into the stock, further upside could come from value unlocking at subsidiary levels.
Maruti Suzuki reported quarterly results that were below expectations, with net profit growing 170% year-over-year to Rs. 657 crore, lower than projected. Volume growth drove the company's 31% year-over-year increase in net sales to Rs. 8,425 crore for the quarter. Margins increased significantly year-over-year due to improved operating leverage and lower raw material costs, but declined sequentially. The company maintained its annual capex plan of Rs. 9,000 crore to be spent between 2008-2012 for expansion purposes.
Kyle Jordan seeks an entry-level position that provides professional growth. He has a Bachelor's degree in Chemistry from Colorado School of Mines and is ISO certified for manufacturing processes. Currently an Associate Engineer at Integrity Bio, Inc., his responsibilities include coordinating inventory, collaborating on project evaluations, performing production processes according to quality standards, and preparing documentation.
Robert Steinberg has over 10 years of experience in marketing, event coordination, and customer support roles. He has a Bachelor's degree in Business Management from NC State University. His experience includes campaign management for social media advertising, customer support advocacy at Hulu, event coordination for a catering company, media correspondence for a marketing firm, and theatre technician work. He has strong skills in social media marketing, communications, customer service, and business management.
Tata Motors reported strong results for the fourth quarter of fiscal year 2010. Consolidated net sales were up 84.6% year-over-year to Rs. 28,978 crore, driven by higher other income and improved performance at subsidiaries like Jaguar Land Rover. Operating profit was Rs. 3,135 crore compared to an operating loss in the prior year. Net profit increased significantly to Rs. 2,228 crore from Rs. 316 crore in 4QFY2009, benefiting from cost cutting measures and higher other income. The results were above expectations due to the company's aggressive cost reductions and good turnaround at key subsidiaries.
Ambuja Cements reported a 7.8% year-over-year increase in net sales for the first quarter of 2010 due to a 4.3% rise in despatches and 3.3% higher realizations. Operating margins increased 328 basis points to 32.3% due to lower energy costs. Net profit grew 38.3% driven by strong operating performance. The company continues expanding capacity which is expected to reach 27 million tonnes by the end of 2010. While demand is forecast to remain robust, increased competition from new capacity additions could put pressure on prices and margins after May 2010.
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.
GlaxoSmithKline Pharmaceuticals reported financial results for the first quarter of 2010 that were ahead of estimates. Net sales increased 18.4% year-over-year to Rs541.1 crore, driven by growth in the vaccine and dermatology segments. Operating margin expanded to 37% from 36% in the prior year quarter due to an improved product mix. Net profit grew 12.6% to Rs161.2 crore. The analyst maintains a "Reduce" rating on the stock and sets a target price of Rs1,700, citing rich valuations of 29.1 times estimated 2010 earnings.
Apollo Tyres reported modest results for 1QFY2011, despite a sharp jump in rubber prices and lockout at one of its plant. Standalone top-line registered a decline of 5% yoy to Rs1,121cr due to a 20% decline in tonnage sold following a lockout at its Perambra facility. Operating margin contracted by 603 bps to 10.4% due to higher raw material costs. Net profit declined 57.1% to Rs40.6cr. However, consolidated performance was better with 11.4% revenue growth and stable net profit due to strong performances at subsidiaries.
- Dishman reported 1QFY2011 results which were primarily in line with estimates, boosted by higher other income. Net sales were down 11.3% YoY due to subdued CRAMS segment performance.
- Operating profit margin contracted 140bps to 22% due to sales de-growth. However, net profit was maintained due to higher other income.
- The company maintained FY2011 guidance of 15-20% top-line growth and 25% operating margin, expecting a robust second half of FY2011.
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
For the fourth quarter of 2010, TVS Motor reported net sales of Rs. 1,216 crore, up 33.7% year-over-year due to a 27.8% increase in volumes and 8.7% increase in realizations. Operating margins expanded 118 basis points due to a 416 basis point drop in raw material costs. Net profit was Rs. 20.3 crore, up 38.9% year-over-year. Going forward, TVS Motor expects to improve market share following new product launches but faces competitive pressures. The analyst maintains a neutral rating due to recent stock price appreciation and TVS Motor's inconsistent performance history.
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.
Sesa Goa's 1QFY2011 results were in line with estimates at the top line, but bottom line was ahead due to a lower tax rate. Top line growth of 138.6% was driven by higher iron ore prices, while volume growth was only 14.9% due to permit issues. EBITDA margins expanded significantly due to strong operations leading to a 208.3% rise in net profit. While Chinese steel and iron ore production is growing, imports have declined recently due to rising domestic Chinese iron ore production, causing a 31.5% drop in iron ore prices since April. The company is trading at attractive valuations but the outlook for volume growth is uncertain due to delays in permits and infrastructure issues.
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.
Tata Motors reported strong results for the first quarter of fiscal year 2011. Consolidated net sales grew 65% year-over-year to Rs. 27,056 crore, driven by higher domestic and JLR volumes as well as a 27% increase in JLR realizations. Consolidated operating profit jumped 667% to Rs. 3,855 crore and operating margins increased substantially to 14.2% compared to 3.1% in the prior year period. However, standalone performance was marginally below expectations with net sales up 63% to Rs. 10,416 crore and net profit falling 23% to Rs. 396 crore due to lower other income. While volumes grew 48% driven by strong
Orchid Chemicals reported 1QFY2011 results above expectations driven by higher other operating income and off-take under the Hospira contract. Net sales were flat at Rs303.6cr but above estimates, while net profit was Rs21.7cr versus a loss last year. For FY2011, the company expects 23% revenue growth to Rs1,600cr with 22% EBITDA margins. However, concerns remain around high receivables and low asset turnover. The report maintains a Neutral rating.
Bhushan Steel reported lower sales volume in 1QFY2011 compared to the previous quarter, however average gross realizations increased. Despite lower top-line performance, margins expanded due to lower raw material costs. Net profit increased by 19.7% year-over-year due to margin expansion, though it declined 14.6% sequentially. The analyst maintains a 'Buy' recommendation and sees volumes growing over the next few years as expansion plans are completed.
Pantaloon Retail reported a 25.3% year-over-year growth in net sales to Rs. 2,057.6 crore for the third quarter of fiscal year 2010, below expectations of 30.2% growth. Same store sales growth was 13.9% and 13.2% for value and lifestyle retailing respectively. Operating margins remained flat at 10.5% while net profit grew 62.7% to Rs. 55.9 crore due to sales growth and unchanged interest costs. The analyst maintains an accumulate rating and target price of Rs. 469 based on retail space expansion, revival in consumer sentiment, and organizational restructuring.
Hotel Leela Venture reported a 24.9% year-over-year growth in net sales to Rs105.8 crore for the first quarter of FY2011, driven by higher occupancy rates and average room rates. Operating profit was up 67.5% to Rs31.6 crore due to fixed cost absorption, leading to a significant increase in net profit to Rs9.2 crore from Rs0.4 crore in the prior-year period. Going forward, the company expects to benefit from improving industry dynamics, but its current valuation remains higher than peers.
1. Mahindra and Mahindra (M&M) reported good results for the first quarter of the fiscal year 2011, with net sales up 21.6% and operating profit up 27.4% compared to the same period last year.
2. Net profit beat analyst expectations by 11%, reaching Rs. 562 crore due to lower than expected tax rates and higher interest income.
3. The report recommends maintaining a "Buy" rating for M&M, setting a target price of Rs. 772 based on the company's core business valuation and value of investments.
Rallis India reported strong results for the first quarter of fiscal year 2012. Revenue grew 48.7% year-over-year to Rs. 292 crore, driven primarily by higher revenue from Metahelix, which Rallis acquired in December 2010. Standalone revenue also rose 17% on higher volumes. EBITDA margin expanded significantly to 14.7% due to higher margins in seeds and improvements in standalone business. While the results were good, the analyst remains neutral on the stock due to its fair valuation.
Larsen & Toubro (L&T) reported modest results for the first quarter of fiscal year 2011 that were below analyst expectations on revenue but positively surprised on margins. Revenue grew 6.4% year-over-year to Rs. 7,885 crore, below estimates, due to flat performance in the engineering and construction segment. However, operating margins expanded significantly by 170 basis points due to lower subcontracting costs. The order backlog remained strong at Rs. 1,07,816 crore as of June 30, 2010 and order inflows were led by the power segment. While most positives are priced into the stock, further upside could come from value unlocking at subsidiary levels.
Maruti Suzuki reported quarterly results that were below expectations, with net profit growing 170% year-over-year to Rs. 657 crore, lower than projected. Volume growth drove the company's 31% year-over-year increase in net sales to Rs. 8,425 crore for the quarter. Margins increased significantly year-over-year due to improved operating leverage and lower raw material costs, but declined sequentially. The company maintained its annual capex plan of Rs. 9,000 crore to be spent between 2008-2012 for expansion purposes.
Kyle Jordan seeks an entry-level position that provides professional growth. He has a Bachelor's degree in Chemistry from Colorado School of Mines and is ISO certified for manufacturing processes. Currently an Associate Engineer at Integrity Bio, Inc., his responsibilities include coordinating inventory, collaborating on project evaluations, performing production processes according to quality standards, and preparing documentation.
Robert Steinberg has over 10 years of experience in marketing, event coordination, and customer support roles. He has a Bachelor's degree in Business Management from NC State University. His experience includes campaign management for social media advertising, customer support advocacy at Hulu, event coordination for a catering company, media correspondence for a marketing firm, and theatre technician work. He has strong skills in social media marketing, communications, customer service, and business management.
Megan Finley is seeking an internship in public relations, advertising, or marketing to gain real-world experience and enhance her skills and knowledge in mass communications. She has a background in advertising through her major in mass communication advertising and minor in written communication at UW-Eau Claire. Her relevant coursework and involvement in student organizations like the American Advertising Federation provide experience in areas like public relations, advertising writing and design, and media planning.
Scott Laurel has over 10 years of experience as a Database Administrator with expertise in SQL Server, MySQL, PostgreSQL and MongoDB. He has a proven track record of ensuring database stability, performance and high availability. His skills include database design, maintenance, monitoring, tuning, backup/recovery and implementing redundant infrastructure configurations.
Arun Vickram is a food professional with over 5 years of experience in production and inventory management roles. He has a Master's degree in Business Administration and Food Science and Technology. His experience includes leading production teams, improving productivity, reducing costs and defects, and ensuring compliance with food safety standards. He is seeking a management role in food manufacturing and is proficient in various computer skills.
Daniel Hauner is seeking a team-oriented position where he can utilize his 9+ years of customer service experience and 1.5 years of accounting and operations experience. He has worked as an Operations Analyst for Transcendent LLC since 2014 where he uses QuickBooks, manages a CRM system, and works with vendors. Previously, he was an Associate Store Manager and Head of Inventory at Sussex Ace Hardware from 2005 to 2014, where he oversaw inventory management, customer service, marketing, and training employees. Hauner has a Bachelor's degree in Finance and Marketing from the University of Wisconsin-Whitewater.
Rebecca J. Nelson is a Clinical Research Technician with experience in clinical research, environmental protection, and the seismic industry. She utilizes her background as a marine biologist to promote environmental awareness and applies her knowledge of seismic operations to enhance performance and regulatory compliance. Nelson oversees multiple clinical studies simultaneously and ensures protocols are followed. She has worked in protected species monitoring and submitted reports on conservation efforts. Nelson is dedicated to community service, with over 1,000 hours contributed through organizations assisting the disabled, homeless, and those in need internationally.
Ann-Marie Pope is seeking a position that allows her to utilize her excellent customer service, organizational, administrative, and leadership skills. She has over 5 years of experience in office management roles. She holds a Bachelor's Degree in Spanish from Georgia Southern University and is proficient in Microsoft Office, QuickBooks, and Access. Her skills include adaptability, time management, leadership, communication, and problem solving. She volunteers with animal rescue organizations and has held leadership roles in campus organizations.
Rocky Willis has over 15 years of experience in residential construction sales management, information technology, and project management. His background includes sales, leadership, business analysis, systems engineering, desktop support, and application development. He has worked with a variety of industries and clients on both technical projects and providing IT support.
This document is a resume for Joshua Caleb Nunes, a veteran of the U.S. Marine Corps with experience in artillery, construction, painting, and labor. His skills include active listening, reading comprehension, time management, critical thinking, troubleshooting, and active learning. As a Marine, he managed maintenance and repairs of vehicles and radar systems worth $7 million. He also supervised 8 Marines and maintained $800k of electronic gear. His other experience includes painting, construction labor, mixing and pouring concrete, and operating machinery.
Bajaj Hindusthan reported lower-than-expected results for the third quarter of 2010, with revenue increasing 82% year-over-year but profit declining. Higher raw material costs and increased sales of levy sugar at a loss impacted margins. While volume increased for both sugar and distillery, realization declined for distillery. The outlook remains challenging due to expected higher sugar production weighing on prices. The company maintained a neutral rating given fair valuation.
GIPCL reported a 42.3% year-over-year increase in net profit to Rs42cr for the first quarter of fiscal year 2011, despite flat revenues. The bottom line growth was driven by lower tax expenses from tax refunds received for prior years. Operating profit grew 3.3% to Rs64cr on better realizations. The company maintains a buy rating with a target price of Rs135, expecting revenue and profit to grow at a CAGR of 32.5% and 28.3% through fiscal year 2012 driven by new plant capacity additions.
Cipla reported 1QFY2011 results that were ahead of estimates, with operating margins improving sequentially. While domestic formulation sales grew only 3.6% due to lower generic sales, export sales increased 14.4% due to growth in ARV and anti-asthma segments. Operating margins expanded to 20.9% due to lower other expenses. Net profit grew 6.5% to Rs257cr from higher margins and other income. The company expects its new Indore facility to start contributing significantly over the next 6-12 months and sees this aiding substantial future growth. The report recommends buying the stock.
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.
GlaxoSmithKline Pharma reported lower-than-expected 2QCY2010 results with net sales of Rs. 498 cr, up 8.9% YoY, and net profit of Rs. 129 cr, up 3.7% YoY. Sales were impacted by supply constraints in the vaccine segment. While operating margins improved, other income declined by 28.9% YoY. Given the company's rich valuations trading at 31.5x CY2010 earnings, Angel Research maintains a Sell rating with a target price of Rs. 1,700.
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.
Gujarat Gas reported a 2.1% quarter-on-quarter increase in net operating income to Rs419 crore for 2QCY2010, with net profit increasing 21.5% year-over-year to Rs58 crore. EBITDA margin declined 270 basis points sequentially to 22.3% due to a decrease in the gross gas spread. Average gas sales volumes grew 2.1% quarter-on-quarter and 19.3% year-over-year. While top-line growth met expectations, bottom-line was marginally below estimates due to lower-than-expected EBITDA. Supply constraints are receding with improving domestic gas availability and subdued RLNG prices, supporting future volume
Steel Authority of India reported a 1.7% decline in EBITDA to Rs. 1,843 cr for the first quarter of FY2011, below Angel Research's estimate, due to lower sales volume and higher staff costs. Net profit declined 11.3% to Rs. 1,177 cr for the same reasons. While steel prices increased, sales volume fell 15.5% from a year ago. Staff costs rose sharply due to additional provisions for employee benefits. Going forward, the company is expected to benefit from strong domestic demand, but capacity expansion benefits will only be seen after FY2012. Angel Research maintains a Neutral rating on the stock.
SpiceJet reported strong financial results for the 1st quarter of FY2011, with net sales growing 34.9% year-over-year to Rs708cr, above expectations. Operating margins expanded significantly to 8.3% due to higher passenger loads. Net profit increased 109.6% to Rs55cr, also above estimates, driven by improved operating efficiency. The analyst maintains an 'Accumulate' rating on SpiceJet, expecting sales and profits to grow rapidly in the coming years as the company expands its fleet and benefits from strong industry demand fundamentals.
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 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.
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.
JK Lakshmi Cement (JKLC) reported a 1,663bp year-over-year decline in operating margin to 17.4% in the first quarter of fiscal year 2011 due to an 8.7% fall in realizations and a 36% increase in power and fuel costs. Net profit declined 78.6% year-over-year to Rs. 17 crore. The analyst maintains a "Buy" rating on JKLC, revising the target price to Rs. 92, expecting the company to face relatively less pricing pressure due to its concentration in high-growth northern and eastern regions and benefit from increasing captive power capacity.
1) Jain Irrigation Systems (JISL) reported 27% year-over-year revenue growth to Rs726 crore for the first quarter of FY2011, which was slightly ahead of estimates.
2) EBITDA margin of 23% exceeded expectations and adjusted profit after tax grew 52% year-over-year despite being 9% below estimates.
3) The micro irrigation systems and PVC sheet segments saw particularly strong growth of 44% and 61% respectively during the quarter, driving overall results.
Bharat Forge reported strong results for 1QFY2011 with net sales growing 75.7% year-over-year to Rs 630.1 crore, beating estimates. Operating margins improved significantly to 25.2% due to lower raw material costs and higher utilization levels. Net profit was Rs 59.4 crore, exceeding expectations due to improved volumes and operating leverage. The analyst recommends accumulating the stock given the better-than-expected performance and revised upward estimates.
- Alembic reported lower than expected sales and profits for 1QFY2011 due to weak performance in its export API segment and slower than expected growth in domestic formulations.
- However, interest costs declined significantly due to lower debt levels and the company's decision to demerge its pharmaceutical business from other businesses is expected to unlock value by allowing each business to focus on its core operations.
- The analyst maintains a 'Buy' rating and has set a target price of Rs. 74 per share based on separate valuations of the demerged pharmaceutical and API businesses as well as the company's land assets.
Cairn India reported a quarterly net profit of Rs281cr for 1QFY2011, an increase of 519.3% over the previous year. Revenue grew 310.1% to Rs841cr due to higher production and realisations from the Mangala oil fields. Operating margins expanded significantly to 77% from 64.5% last year due to lower production costs. However, net profit was lower than estimates due to higher financing costs and lower other income. While production and revenues grew strongly year-over-year, costs were also higher than expected, leading to profits below analyst forecasts.
ABB India reported disappointing 2QCY2010 results with revenues of Rs1,447cr, down 3.9% YoY. Net profit fell 54% YoY to Rs38cr due to higher costs and forex losses. Segment results were weak with the power systems segment reporting a loss compared to a profit last year. Order inflows declined 41% YoY to Rs1,235cr due to delays in large orders and pricing pressures.
ITC posted strong quarterly results with top-line growth of 28% above estimates, driven by growth in cigarettes, agriculture, and non-cigarette FMCG. However, earnings growth was below estimates at 27% due to margin contraction from lower margins in agriculture. Cigarette volumes grew around 8-9% while margins expanded. The analyst maintains an accumulate rating and revises estimates upward to reflect stronger non-cigarette revenue and lower losses, while maintaining cigarette growth outlook.
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.
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
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
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Independent Study - College of Wooster Research (2023-2024) FDI, Culture, Glo...AntoniaOwensDetwiler
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
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BRCM
1. 3QSY2010 Result Update | Sugar
July 28, 2010
Balrampur Chini Mills NEUTRAL
CMP Rs80
Performance Highlights Target Price -
Parameters (Rs cr) 3QSY10 3QSY09 % chg Angel est. % diff. Investment Period -
Net sales 540 538 - 675 (20)
Stock Info
EBITDA 64 130 (51) 101 (36)
Sector Sugar
EBITDA margin (%) 12 24 15
Market Cap (Rs cr) 2,068
PAT 11 66 (83) 41 (73)
Beta 0.9
Source: Company, Angel Research
52 Week High / Low 167/67
Balrampur Chini Mills’ (BRCM) 3QSY2010 results were below our expectations Avg. Daily Volume 1075725
mainly due to increased cane cost and higher contribution from levy sales. Total Face Value (Rs) 1
sales were flat at Rs540cr in 3QSY2010, while PAT declined by 83% to Rs11cr. BSE Sensex 17,957
We have pruned our SY2011 estimates due to BRCM’s poor 3QSY2010 Nifty 5,398
performance. At current levels, the stock is trading at fair valuations. Thus, we Reuters Code BACH.BO
maintain our Neutral view on the stock.
Bloomberg Code BRCM@IN
High raw-material cost, levy sales impact margin: Gross margin declined by
955bp to 20.7% in 3QSY2010 from 30.3% in 3QSY2009 due to increased cane
Shareholding Pattern (%)
cost and higher contribution from levy sales. BRCM incurred cost of
Promoters 37.8
Rs2,260/tonne of cane in SY2010 as against Rs1,510/tonne in SY2009, a yoy
increase of 50%. BRCM further booked losses of Rs9/kg (on revised levy price of MF / Banks / Indian Fls 25.0
Rs18/kg) because of higher levy quota sales. FII / NRIs / OCBs 19.7
Indian Public / Others 17.5
Outlook and valuation: Going ahead, sugar prices are likely to be under pressure
due to higher-than-expected sugar production in India and Brazil. Domestic ex-
mill prices have corrected from the highs of Rs42/kg to Rs28–29/kg, while the Abs. (%) 3m 1yr 3yr
cost of inventory is at Rs28/kg. Thus, we estimate most sugar companies to break Sensex 3.3 17.1 17.9
even or record miniscule losses at net level over the next three months. At current BRCM (3.0) (27.5) 15.2
levels, the stock is trading at fair valuations of 1.5x P/B and 1.3x enterprise
value/invested capital on SY2011E estimates. Hence, we maintain our Neutral
view on the stock.
Key financials (Consolidated)
Y/E September (Rs cr) SY2008 SY2009 SY2010E SY2011E
Net sales 1,491 1,747 2,195 3,146
% chg 6.9 17.2 25.6 43.4
Net profit 78 209 115 292
% chg - 167.4 (45.2) 154.7
EBITDA (%) 21.1 25.6 15.2 17.7
EPS (Rs) 3.1 8.2 4.5 11.4
P/E (x) 26.0 9.8 17.8 7.0
P/BV (x) 2.0 1.8 1.7 1.5
RoE (%) 8.4 19.6 9.8 22.5
RoCE (%) 7.6 13.2 9.1 17.5
EV/Sales (x) 2.3 1.6 1.3 0.9
EV/EBITDA (x) 10.8 6.4 8.9 5.1 Sageraj Bariya
EV/IC (x) 1.4 1.5 1.4 1.3 40403800 extn 346
sageraj.bariya@angeltrade.com
Source: Company, Angel Research
Please refer to important disclosures at the end of this report 1
2. Balrampur Chini Mills | 3QSY2010 Result Update
Exhibit 1: Quarterly performance
Y/E September (Rs cr) 3QSY2010 3QSY2009 % chg 9MSY10 9MSY09 % chg
Net sales 540 538 0.4 1474 1325 11.3
Consumption of RM 428 375 1004 771
(% of sales) 79 70 68 58
Gross profit 112 163 (31.2) 470 554 (15.2)
Gross margin (%) 20.7 30.3 (955)bp 31.9 41.8
Staff costs 21 23 77 67
(% of sales) 3.9 4.2 5.2 5.1
Other expenses 27 10 119 110
(% of sales) 5.0 1.9 8.0 8.3
Total expenditure 476 408 1199 948
(% of sales) 88.1 75.8 81.4 71.5
EBITDA 64 130 (50.7) 274 377 (27.2)
EBITDA % 11.9 24.2 18.6 28.5
Depreciation 28 27 5.0 84 81 3.5
EBIT 36 103 191 296
EBIT % 6.7 19.2 12.9 22.3
Other income 0 0 41.2 3 1 214.0
Interest 25 24 5.0 67 78 (14.0)
PBT (excl. extr. items) 12 80 (85.5) 126 218 (42.3)
Extr. income/(expense) 0 0 0 0
PBT (incl. extr. items) 12 80 126 218
Provision for taxation 0 14 20 35
(% of PBT) 3.7 17.0 15.5 15.9
Reported PAT 11 66 (83.2) 106 184 (42.1)
NPM (%) 2.1 12.3 7.2 13.9
Minority & others 0.0 0.0 0.0 0.0
Adj PAT 11.1 66.3 (83.2) 106.5 183.8 (42.1)
Adj NPM (%) 2.1 12.3 7.2 13.9
Equity capital 26 26 26 26
EPS 0.4 2.6 (83.5) 4.1 7.2 (42.9)
Adj EPS 0.4 2.6 (83.5) 4.1 7.2 (42.9)
Source: Company, Angel Research
Lower volume, declining key product prices lead to flat top line
BRCM posted net sales of Rs540cr in 3QSY2010 as against Rs538cr in
3QSY2009. The flat top line was on account of lower sugar volumes and a
decline in the distillery division’s realisations. Sugar volume for the quarter fell
by 18.6% to 0.17mn tonnes, while realisations for the distillery division
witnessed a decline of 15.3% to Rs21.9.
July 28, 2010 2
3. Balrampur Chini Mills | 3QSY2010 Result Update
Exhibit 2: Sugar volume trend Exhibit 3: Sugar realisation trend
0.25 35
32 32
0.20
0.20 30
(mn tonnes)
28
(Rs/kg)
0.17
26
0.15 0.14 25
0.13 23
0.11
0.10 20
3QSY09 4QSY09 1QSY10 2QSY10 3QSY10 3QSY09 4QSY09 1QSY10 2QSY10 3QSY10
Source: Company, Angel Research Source: Company, Angel Research
Distillery realisations witnessed a 15% decline during the quarter to Rs22/litre from
Rs26/litre. The higher inventory build-up and subsequent liquidation led to a
decline in realisations. Management expects the same to revert to the previous
level once the ethanol project is implemented successfully.
Exhibit 4: Distillery volume trend Exhibit 5: Distillery realisation trend
18 30
28
14 13 27
28
12
12 26 26
(Rs/litre)
9 26
(mn litres)
24
6
4 22
22
0 20
3QSY09
4QSY09
1QSY10
2QSY10
3QSY10
3QSY09
4QSY09
1QSY10
2QSY10
Source: Company, Angel Research Source: Company, Angel Research 3QSY10
High raw-material costs and contribution of levy sales impact margin: BRCM’s
gross margin fell by a substantial 955bp to 20.7% in 3QSY2010 from 30.3%
in 2QSY2009. Margin was hit due to increased cane costs and higher
contribution of levy sales. The company incurred Rs2,260/tonne of cane in
SY2010 as against Rs1,510/tonne in SY2009, an increase of 50% yoy. Cane
prices were driven by high demand from mill operators, as sugar prices kept
increasing, while the area under cane cultivation declined during the season.
Levy quota (sale to PDS) increased to 20% in SY2010 from 10% in SY2009
because of the shortage in sugar production. During the quarter, levy sugar
was sold at a fixed price of Rs18/kg (revised price), which led to a loss of
Rs9/kg to the company.
July 28, 2010 3
5. Balrampur Chini Mills | 3QSY2010 Result Update
Key Takeaways from the conference call
• Management expects the government to restore customs duty on imported
white sugar, which could support any further decline in sugar prices from
here on.
• Brazil’s current production is down from its peak production level and
Thailand is undergoing a drought situation. Hence, sugar demand is likely
to see a revival, thereby strengthening prices.
• The industry has not received any fresh sugar import contract, instead it
has witnessed a few cancellations.
• Management expects the closing stock for SY2010 season to be in excess
of five million tonnes.
July 28, 2010 5
6. Balrampur Chini Mills | 3QSY2010 Result Update
Investment Arguments
Domestic sugar supply easing
India's sugar production is estimated to have increased by 27% to
18.5mn–19mn tonnes in SY2010E as against 14.6mn tonnes in SY2009. This was
on account of higher drawal rate of 65% against 53% witnessed last year, as mills
offered higher compensation to farmers compared to the unorganised sector.
Cane realisations for farmers in the current rally have increased by 73% to
Rs2,600/tonne, while they moved up 18% in SY2004, 7% in SY2005 and 10% in
SY2006. In anticipation of this positive trend extending, an increasing number of
farmers are expected to switch over to cane cultivation, thus resulting in the area
under cane cultivation to once again hit the SY2007 peak level of 5.2mn hectares
(mn ha) in SY2011E.
Exhibit 8: Sugar cane and sugar production estimate
Sugar cane production SY2004 SY2005 SY2006 SY2007 SY2008 SY2009 SY2010E SY2011E
Area under cane (mn ha) 3.9 3.7 4.2 5.2 5.0 4.4 4.3 5.2
% yoy (12.9) (7.0) 14.7 22.6 (2.9) (12.1) (3.3) 22.4
Cane production (mn tonnes) 233.9 237.1 281.2 355.5 341.0 272.5 293.3 338.0
Yield per hectare (tonnes) 59.4 64.8 66.9 69.0 68.2 62.0 69.0 65.0
Drawal (%) 57% 53% 67% 78% 73% 53% 65% 78%
Total cane crushed (mn tonnes) 132.5 124.8 188.7 278.9 250.0 145.0 191.0 263.6
Sugar prod. (mn tonnes) 13.5 12.7 19.3 28.3 26.3 14.6 18.5 26.7
Avg. recovery (%) 10.2 10.2 10.2 10.2 10.5 10.1 9.7 10.1
Sugar production
mn tonnes
Opening stock 12.4 8.2 4.5 3.4 9.8 8.1 4.4 4.4
Production 13.5 12.7 19.3 28.3 26.3 14.6 18.5 26.7
Domestic consumption 17.9 18.5 19.3 20.2 22.5 22.5 23.1 23.6
% yoy 3.4 4.3 4.7 11.4 0.0 2.5 2.5
Exports 0.2 0.0 1.1 1.7 4.8 0.0 0.0 0.0
Imports 0.4 2.1 0.0 0.0 0.0 4.2 4.6 0.0
Closing stock 8.2 4.5 3.4 9.8 8.8 4.4 4.4 7.5
Closing stock (months) 5.5 2.9 2.1 5.8 4.7 2.3 2.3 3.8
Stock-to-use ratio 46% 24% 18% 49% 39% 20% 19% 32%
Source: Industry, Company, Angel Research
Given the increasing number of farmers switching to cane cultivation, sugarcane
supply is further likely to ease in SY2011E. This would result in cane realisations
turning unattractive from the unorganised sector and will force famers to shift over
to mills for better realisations. Hence, we expect the drawal rate to once again hit
the SY2007 peak level of 78% in SY2011E, resulting in total sugar production of
26.7mn tonnes. Moreover, with consumption likely to be 24mn tonnes in
SY2011E, India would end the year with an overall inventory of 7.5mn tonnes,
equivalent to 3.8 months of consumption and an improvement over SY2010.
July 28, 2010 6
7. Balrampur Chini Mills | 3QSY2010 Result Update
Power to cushion profit decline during the down cycle
BRCM’s diversified revenue stream is led by external co-generation power sales.
The company entered the power segment in 2003, much ahead of competitors
such as BJH, which entered the segment in SY2008. While BRCM has total
installed capacity of 180MW, with saleable surplus of 126MW (70% of total
installed capacity), BJH has installed capacity of 428MW with saleable surplus of
105MW (25% of total installed capacity). Operational performance of the division
is also set to improve on the back of the estimated spike in volumes by 101% in
SY2011E. Thus, the division’s contribution to the company’s overall revenue is
expected to increase from 12% in SY2010E to 14% in SY2011E.
SY2011 to be better than SY2010
In SY2010, the sugar industry witnessed extreme sugar prices, both at the high and
low ends. Thus, we believe SY2011 to be a recovery phase for the industry. Mill
operators are likely to be more rational while deciding on cane prices. Cane prices
are likely to be in the current SAP range of Rs1600–1700/tonne, leading to sugar
prices dropping to Rs24/kg from the current level of Rs28/kg.
Going forward, we expect integrated players such as BRCM to benefit as (1) higher
cane availability and lower cane prices would lead to higher utilisation levels (95%)
and (2) power revenue would receive a huge leg up due to higher cane crushing.
We expect BRCM’s financials to improve strongly in SY2011, with RoE improving to
22.5% from 9.8% in SY2010.
Outlook and Valuation
BRCM’s 3QSY2010 performance was below our expectation. Going ahead, sugar
prices are likely to be under pressure because of higher-than-estimated sugar
production in India and Brazil. Hence, sugar demand-supply would achieve a
balance in SY2011E, resulting in further softening of prices. Domestic ex-mill
prices have corrected from the high of Rs42/kg to Rs28–29/kg, while inventory is
in the range of Rs26–27/kg. Thus, we estimate most sugar companies to break
even or record miniscule losses at the net level over the next six months.
We have marginally revised our SY2011E estimates because of the likely
improvement in the company’s balance sheet at the end of SY2010. At the current
level of Rs79, the stock is trading at 1.5x P/BV and 1.3x enterprise value/invested
capital on SY2011E estimates, near its fair valuations. Hence, we maintain our
Neutral view on the stock.
Exhibit 9: Change in estimates
Old New % change
Parameters (Rs cr) SY2010 SY2011 SY2010 SY2011 SY2010 SY2011
Sales 2477 3121 2195 3146 (11) 1
EBITDA 458 565 333 558 (27) (1)
EBITDA margin (%) 18.5 18.1 15.2 17.7
PAT 201 282 115 292 (43) 4
Source: Company, Angel Research
July 28, 2010 7
13. Balrampur Chini Mills | 3QSY2010 Result Update
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Disclosure of Interest Statement Balrampur Chini Mills
1. Analyst ownership of the stock No
2. Angel and its Group companies ownership of the stock Yes
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, its Group companies and Directors.
Ratings (Returns) : Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
Reduce (-5% to 15%) Sell (< -15%)
July 28, 2010 13