Crompton Greaves reported strong quarterly results with net profit growth of 39.9% year-over-year. While revenue growth was modest at 1.9%, the company significantly expanded operating margins. The strong performance was driven by growth in standalone business and improved margins in international operations despite a revenue decline. The company maintained its guidance for revenue and profit growth in fiscal year 2011.
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
1) Colgate reported a 13.4% year-over-year growth in top-line to Rs. 516 crores, in line with estimates. Volume growth was steady at 11%.
2) Earnings grew 39.6% year-over-year to Rs. 114.4 crores, significantly beating estimates. This was driven by a 638 basis point expansion in operating margins to 24.1% due to higher gross margins.
3) The analyst maintains an 'Accumulate' rating and revised target price of Rs. 752, expecting the company to report a 15.1% CAGR in revenue through FY2012, while margins remain stable.
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
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.
NIIT reported a 1.9% decline in consolidated net revenues for the fourth quarter of fiscal year 2010 but net income grew 40.2% due to a 400 basis point increase in EBITDA margins. While the company's school learning services and corporate learning services businesses saw revenue declines, its individual learning solutions segment grew revenues by 13.9% driven by growth in the IT and formal training management sectors. Strong margin expansion and improved performance in the individual learning segment helped boost profits despite currency headwinds.
Shoppers stop result update 4 qfy2010 040510Angel Broking
Shoppers' Stop reported a 23.1% year-over-year growth in net sales to Rs388.8 crore for the fourth quarter of FY2010. Operating margins expanded substantially by 490 basis points to 6.2% due to cost rationalization measures. Net profit was Rs12.6 crore compared to a loss of Rs24.5 crore in the prior year quarter. For the full year FY2010, net sales grew 11.4% while operating margins improved 600 basis points and the company reported a profit versus a loss in the previous year. While growth prospects remain positive, the analyst recommends a Neutral rating given rich valuations.
- 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.
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.
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
1) Colgate reported a 13.4% year-over-year growth in top-line to Rs. 516 crores, in line with estimates. Volume growth was steady at 11%.
2) Earnings grew 39.6% year-over-year to Rs. 114.4 crores, significantly beating estimates. This was driven by a 638 basis point expansion in operating margins to 24.1% due to higher gross margins.
3) The analyst maintains an 'Accumulate' rating and revised target price of Rs. 752, expecting the company to report a 15.1% CAGR in revenue through FY2012, while margins remain stable.
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
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.
NIIT reported a 1.9% decline in consolidated net revenues for the fourth quarter of fiscal year 2010 but net income grew 40.2% due to a 400 basis point increase in EBITDA margins. While the company's school learning services and corporate learning services businesses saw revenue declines, its individual learning solutions segment grew revenues by 13.9% driven by growth in the IT and formal training management sectors. Strong margin expansion and improved performance in the individual learning segment helped boost profits despite currency headwinds.
Shoppers stop result update 4 qfy2010 040510Angel Broking
Shoppers' Stop reported a 23.1% year-over-year growth in net sales to Rs388.8 crore for the fourth quarter of FY2010. Operating margins expanded substantially by 490 basis points to 6.2% due to cost rationalization measures. Net profit was Rs12.6 crore compared to a loss of Rs24.5 crore in the prior year quarter. For the full year FY2010, net sales grew 11.4% while operating margins improved 600 basis points and the company reported a profit versus a loss in the previous year. While growth prospects remain positive, the analyst recommends a Neutral rating given rich valuations.
- 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.
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.
Rallis India reported a 14% increase in sales and 151% increase in profits for the fourth quarter of fiscal year 2010, in line with analyst estimates. Strong demand from farmers during the Rabi season and a 1000 basis point expansion in operating margins from 10% to 20% drove results. For the full fiscal year, Rallis saw a path-breaking performance with net sales growth of 5.2% and profit growth of 45.9% despite a drought in India and lower export prices for commodities. Going forward, analysts expect continued strong growth over the next few years supported by high agro-commodity prices and the upcoming commissioning of a new export facility.
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.
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.
Graphite India reported a 66% year-over-year increase in 4QFY2010 sales, in line with estimates. Full year FY2010 sales fell 10.1%, lower than expected, due to lower production at the company's German facility. However, operating margins increased to a strong 29.4% for FY2010 due to higher realizations. Going forward, the company is well positioned for growth due to increasing demand from the steel industry and its capacity expansion plans. The report maintains a "Buy" recommendation on the stock based on its attractive valuation and growth outlook.
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
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.
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.
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.
Dabur reported a mixed set of results for the first quarter of fiscal year 2011. While revenue growth was strong at 23% due to a record 20% increase in volume, earnings growth disappointed at 17% due to margin contraction and higher taxes. Revenue was boosted by double-digit growth in consumer care division categories like oral care, health supplements, and home care. However, earnings fell short of estimates due to a rise in advertising spending squeezing margins. The company also announced an acquisition and a bonus share issue.
For 1QCY2010, Bosch India reported a 58.6% year-over-year growth in net sales to Rs1,596cr due to 65% growth in the auto segment and 25.4% growth in other businesses. EBITDA margins increased by 892 basis points to 19.1% due to a decline in other expenditures. Net profit spiked 310% to Rs203cr. Bosch expects continued growth in the commercial vehicle and tractor segments. The company is forecast to report EPS of Rs236.7 and Rs268.7 for CY2010E and CY2011E, respectively.
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.
- 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.
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.
- Blue Star reported a 22.6% year-over-year increase in quarterly revenue to Rs875 crore, slightly ahead of estimates. Operating margins were in line with estimates at 12.8%.
- The company has shifted its strategic focus from IT/ITeS and retail segments to hospital, hotel, and infrastructure segments, which have longer execution periods.
- Order inflows increased 43% year-over-year to Rs704 crore for the quarter, indicating an improved outlook. The analyst maintains an "Accumulate" rating with a target price of Rs425.
SpiceJet reported a 34.3% year-over-year increase in net sales for the fourth quarter of FY2010, but net sales were 12.8% lower than the previous quarter and slightly below estimates. Net profit was Rs. 27.5 crore compared to a loss in the previous year, but below estimates due to lower revenues and higher advertising costs. The analyst believes SpiceJet is well positioned to benefit from growing passenger demand and has plans to add four more aircraft in FY2011. The stock is recommended as an accumulate with a revised target price of Rs. 65, which would be a 10% upside from current levels.
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.
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.
All cargo result update 1 qcy2010 050510Angel Broking
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' 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.
Maruti Suzuki reported a 27% year-over-year increase in net sales to Rs. 9,147 crore for the second quarter of fiscal year 2011, which was 1.9% above estimates. Earnings before interest, taxes, depreciation, and amortization (EBITDA) margin declined 222 basis points year-over-year to 10.5% due to higher raw material costs and royalty charges. However, net profit grew 5% to Rs. 598 crore, beating estimates of Rs. 535 crore due to higher other operating and other income. While top-line growth was supported by a 27.4% increase in vehicle volumes, margins were impacted by rising costs.
The Nifty futures open interest increased by 2.4% while the Minifity open interest barely changed. Some stocks saw increases in open interest like CONCOR (+28.81%), GodrejInd (+28.74%), and Lupin (+26.89%), while others saw decreases like Ibrealeast (-20.44%), Unitech (-17.55%), and PFC (-14.14%). The put-call ratio for Nifty increased to 1.2 from 1.18. Implied volatility decreased for at-the-money Nifty options. Analysts provide commentary on specific stocks and recommend maintaining existing long positions in Suzlon, JPAssociat, and BhartiAirtel
The market indices in India rose modestly, with the Sensex gaining 0.5% and the Nifty up 0.7%. Mid cap and small cap indices also saw gains of around 1%. Select frontline stocks like SBI, DLF, and ITC rose 1-2%, while others like Sterlite, RCOM, and Tata Motors declined 1-4%. In company news, Vedanta may acquire a majority stake in Cairn India for $8-8.5 billion. Marico acquired a South African health brand called Ingwe. First quarter earnings results were mixed, with ABG Shipyard missing estimates but Cipla's results coming in ahead of expectations.
Rallis India reported a 14% increase in sales and 151% increase in profits for the fourth quarter of fiscal year 2010, in line with analyst estimates. Strong demand from farmers during the Rabi season and a 1000 basis point expansion in operating margins from 10% to 20% drove results. For the full fiscal year, Rallis saw a path-breaking performance with net sales growth of 5.2% and profit growth of 45.9% despite a drought in India and lower export prices for commodities. Going forward, analysts expect continued strong growth over the next few years supported by high agro-commodity prices and the upcoming commissioning of a new export facility.
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.
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.
Graphite India reported a 66% year-over-year increase in 4QFY2010 sales, in line with estimates. Full year FY2010 sales fell 10.1%, lower than expected, due to lower production at the company's German facility. However, operating margins increased to a strong 29.4% for FY2010 due to higher realizations. Going forward, the company is well positioned for growth due to increasing demand from the steel industry and its capacity expansion plans. The report maintains a "Buy" recommendation on the stock based on its attractive valuation and growth outlook.
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
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.
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.
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.
Dabur reported a mixed set of results for the first quarter of fiscal year 2011. While revenue growth was strong at 23% due to a record 20% increase in volume, earnings growth disappointed at 17% due to margin contraction and higher taxes. Revenue was boosted by double-digit growth in consumer care division categories like oral care, health supplements, and home care. However, earnings fell short of estimates due to a rise in advertising spending squeezing margins. The company also announced an acquisition and a bonus share issue.
For 1QCY2010, Bosch India reported a 58.6% year-over-year growth in net sales to Rs1,596cr due to 65% growth in the auto segment and 25.4% growth in other businesses. EBITDA margins increased by 892 basis points to 19.1% due to a decline in other expenditures. Net profit spiked 310% to Rs203cr. Bosch expects continued growth in the commercial vehicle and tractor segments. The company is forecast to report EPS of Rs236.7 and Rs268.7 for CY2010E and CY2011E, respectively.
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.
- 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.
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.
- Blue Star reported a 22.6% year-over-year increase in quarterly revenue to Rs875 crore, slightly ahead of estimates. Operating margins were in line with estimates at 12.8%.
- The company has shifted its strategic focus from IT/ITeS and retail segments to hospital, hotel, and infrastructure segments, which have longer execution periods.
- Order inflows increased 43% year-over-year to Rs704 crore for the quarter, indicating an improved outlook. The analyst maintains an "Accumulate" rating with a target price of Rs425.
SpiceJet reported a 34.3% year-over-year increase in net sales for the fourth quarter of FY2010, but net sales were 12.8% lower than the previous quarter and slightly below estimates. Net profit was Rs. 27.5 crore compared to a loss in the previous year, but below estimates due to lower revenues and higher advertising costs. The analyst believes SpiceJet is well positioned to benefit from growing passenger demand and has plans to add four more aircraft in FY2011. The stock is recommended as an accumulate with a revised target price of Rs. 65, which would be a 10% upside from current levels.
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.
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.
All cargo result update 1 qcy2010 050510Angel Broking
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' 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.
Maruti Suzuki reported a 27% year-over-year increase in net sales to Rs. 9,147 crore for the second quarter of fiscal year 2011, which was 1.9% above estimates. Earnings before interest, taxes, depreciation, and amortization (EBITDA) margin declined 222 basis points year-over-year to 10.5% due to higher raw material costs and royalty charges. However, net profit grew 5% to Rs. 598 crore, beating estimates of Rs. 535 crore due to higher other operating and other income. While top-line growth was supported by a 27.4% increase in vehicle volumes, margins were impacted by rising costs.
The Nifty futures open interest increased by 2.4% while the Minifity open interest barely changed. Some stocks saw increases in open interest like CONCOR (+28.81%), GodrejInd (+28.74%), and Lupin (+26.89%), while others saw decreases like Ibrealeast (-20.44%), Unitech (-17.55%), and PFC (-14.14%). The put-call ratio for Nifty increased to 1.2 from 1.18. Implied volatility decreased for at-the-money Nifty options. Analysts provide commentary on specific stocks and recommend maintaining existing long positions in Suzlon, JPAssociat, and BhartiAirtel
The market indices in India rose modestly, with the Sensex gaining 0.5% and the Nifty up 0.7%. Mid cap and small cap indices also saw gains of around 1%. Select frontline stocks like SBI, DLF, and ITC rose 1-2%, while others like Sterlite, RCOM, and Tata Motors declined 1-4%. In company news, Vedanta may acquire a majority stake in Cairn India for $8-8.5 billion. Marico acquired a South African health brand called Ingwe. First quarter earnings results were mixed, with ABG Shipyard missing estimates but Cipla's results coming in ahead of expectations.
The document provides an analysis of the Indian stock market and various company results from May 3, 2010. It summarizes that domestic indices closed with small gains, while global indices declined. It reviews auto sales numbers that showed growth for Maruti Suzuki and declines for others. It also summarizes results for several companies, including declines for ABB India and India Cements but growth for Gateway Distriparks and IRB Infrastructure.
The document provides a market summary for the day, including:
- Index levels for Nifty and Sensex along with their opening, high, low and closing levels and percentage change
- Top 5 gainers and losers for the day along with their percentage change
- Sectoral performance for the day with percentage gain/loss for key sectors
- Analysis that markets are currently trading near the upper limit of their range and are likely to test higher levels if they close above certain index levels. Key support levels are also mentioned.
- Stocks with positive and negative bias for the next 2-3 days.
- Pivot point levels for various stocks.
The technical report provides a market summary for the day, including sector performances and top gainers and losers. It then analyzes the daily Nifty and Sensex charts and provides short term outlook and support and resistance levels. Key levels to watch for further upside or downside moves are identified. Specific stocks expected to remain positive or negative in the short term are also mentioned. Pivot points are given for various stocks to watch key support and resistance levels.
- The Indian stock market declined significantly on May 20, with the Sensex falling 2.8% and Nifty down 2.9%, as Asian markets weakened.
- The 3G spectrum auction concluded, raising around Rs. 70,000 crore for the government, double the estimated amount. Major bidders like Bharti, RCOM, Idea, and Vodafone won spectrum in several circles.
- The government increased the price of natural gas sold by ONGC and OIL to $4.2 per unit, more than doubling the previous rate. This will boost the profits of these companies but increase costs for power and fertilizer firms.
ICICI Bank reported a 16.8% year-over-year increase in net profit for the first quarter of fiscal year 2011, which was in line with analyst estimates. While advances increased 1.8% quarter-over-quarter, they declined 6.9% year-over-year due to repayments in retail and short-term corporate loans. Non-performing assets stabilized with a declining trend in retail loan slippages. The bank maintained a strong capital adequacy ratio of 20.2% with a substantial Tier-1 component of 14.0%, positioning it well for growth.
The document provides a summary of derivative market activity in India for June 07, 2010. Key points include:
- Nifty futures open interest decreased slightly while Minifuties interest increased. Nifty futures closed at a discount.
- Implied volatility of at-the-money options decreased. Total open interest in the market was over Rs. 1.21 lakh crore.
- Specific stocks like Ruchisoya and Syndibank saw increases in open interest while stocks like PFC and Andhrabank saw decreases.
- The put-call ratio for Nifty increased slightly to 1.40. Historical volatility decreased for some stocks.
The RBI's annual monetary policy review raised key policy rates like the repo rate and reverse repo rate by 25 basis points each, in line with expectations. The review projected GDP growth of 8% for FY2011 and placed the baseline inflation projection at 5.5% for the same period. While current inflation drivers are supply-side factors like food and fuel, inflation is becoming more broad-based. Money supply growth is expected to increase, putting upward pressure on interest rates. The summary argues that monetary tightening may need to be front-ended in FY2011 to anchor inflation expectations given reviving consumption and lagged capital expenditure.
The key Indian stock market indices saw modest gains of around 0.8% on positive cues from European and US markets recovering from early losses. Several mid-cap stocks such as United Breweries and United Breweries Holdings gained 5-20% while some like Gee Kay Finance and J&K Bank declined 3-5%. The document reviews the performance of key companies such as ACC, Ambuja Cements and Bajaj Auto reporting modest to strong revenue and profit growth or declines driven by factors like volume growth, input costs and currency fluctuations. The outlook provides technical support and resistance levels for the indices.
1) Orchid Chemicals has acquired US-based generic marketing and sales company Karalex Pharma through an all-cash deal estimated between 2-2.5x Price/Sales.
2) The acquisition will help Orchid establish front-end presence in the US market and launch 15 new generic products over the next few years.
3) The deal is expected to contribute $10 million to Orchid's revenue in FY2011 and $15 million in FY2012, while maintaining EBITDA margins of 17-18%.
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.
The document provides a summary of derivative market activity in India for July 08, 2010. It notes that Nifty futures open interest increased by 1.04% while Minifty futures open interest decreased by 4.81%. Implied volatility of at-the-money options increased from 18% to 19.55%. Certain stocks like KSOILS, TV-18, and GTLINFRA showed positive cost of carry. OI gainers included SOBHA, INDIANB, and JINDALSWHL while OI losers included ORIENTBANK, APOLLOTYRE, and ROLTA.
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.
GIPCL posted a 23.1% year-over-year increase in net profit to Rs36cr for the fourth quarter of fiscal year 2010, in line with estimates. The growth was aided by a 15.5% decline in fuel costs due to increased gas availability and lower interest and tax expenses. While net sales declined 12.4% to Rs254cr, operating profit fell 13.3% to Rs62cr. The company maintained its expansion plans and guidance. At a share price of Rs110, GIPCL is trading at an attractive valuation compared to its peers.
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
Graphite India reported a 10.2% increase in net sales for the first quarter of fiscal year 2011, which was below expectations. Net profit declined 23.9% from the previous year due to a drop in operating margins from 29.0% to 23.0% as graphite electrode prices fell more than anticipated. Segment sales grew for power, steel, and others but were muted for graphite and carbon. While first quarter results were below forecasts, management expects demand and prices to increase going forward as the global steel industry recovers.
The document provides an analysis of the Indian stock market and various companies/indices on August 3, 2010. It summarizes that key Indian indices rose about 1.2% as auto sales numbers were better than expected. It also reviews results from companies like Bhushan Steel, GAIL, and discusses orders received by Larsen and Toubro. Market outlook and factors are discussed along with top gainers and losers for the day.
Indian Overseas Bank reported a net profit decline of 33.6% year-over-year but a rise of 57.2% quarter-over-quarter to Rs200cr for 1QFY2011, above estimates. While advances grew 7.9% year-over-year, deposits increased 8.6% year-over-year. Asset quality pressures eased with gross and net NPA ratios improving, and provisions declining sharply. However, non-interest income declined due to muted loan growth and treasury gains. Operating expenses rose 15.2% year-over-year.
Crompton Greaves reported a 4.7% year-over-year increase in consolidated sales to Rs. 2,302 crores for the first quarter of FY2011. EBITDA grew 19.8% to Rs. 297 crores due to lower expenses and improved operational efficiencies. Net profit increased 19.5% to Rs. 190.8 crores. The consumer products and industrial systems segments saw robust growth, while the power systems segment remained weak with a 1.9% sales decline. Going forward, the company expects its power systems segment, which accounts for 63% of revenue, to drive growth as massive capacity expansion in the power sector provides investment opportunities in transmission and distribution.
India cements result update 4 qfy2010-060510Angel Broking
India Cements reported an 8.6% increase in revenue for the fourth quarter of fiscal year 2010 but margins declined. Revenue grew due to a 26.5% rise in cement sales volumes but realizations fell 19.4% due to excess capacity. Margins fell due to higher raw material and freight costs, causing net profit to decline 59.2% year-over-year. The analyst recommends buying the stock based on valuation and expects capacity expansion projects to be completed on schedule.
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.
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.
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.
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.
- Greenply Industries reported higher-than-estimated 1QFY2011 results, with net sales growing 47.7% year-over-year to Rs262 crore, driven by capacity expansion and higher utilization.
- EBITDA grew 28.6% to Rs31 crore, though EBITDA margin contracted 174 basis points to 11.7% due to higher raw material costs.
- Net profit declined 4.9% to Rs10 crore due to increased depreciation and interest expenses from a new plant.
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.
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.
TAJGVK reported an 11.2% year-over-year growth in net sales to Rs63.3cr for the fourth quarter of fiscal year 2010. EBITDA and PAT improved year-over-year due to rising occupancy rates and average room rates. For the full fiscal year 2010, revenues declined 3.5% to Rs229.2cr while EBITDA fell 13.9% and PAT declined 32.1% due to higher interest costs. The analyst maintains a buy rating based on improving industry dynamics and expects the company to benefit from economic recovery in key markets like Hyderabad, Chandigarh, and Chennai.
TVS Motor reported a 41% increase in net sales for the first quarter of fiscal year 2011 compared to the same period last year, driven by a 33% rise in total volumes. However, operating profit was slightly below expectations due to lower-than-expected operating margins. While earnings grew substantially year-over-year due to margin expansion and lower taxes, the report maintains a neutral rating on the stock given its recent price increase. Future performance will depend on consistent volume growth, improved market share, and higher margins.
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.
Reliance Industries reported lower-than-expected earnings for 1QFY2011. While net operating income rose 86.7% year-over-year due to growth in refining revenues, EBITDA was below estimates due to lower petrochemical sales volumes and refining margins. Net profit grew 32.3% year-over-year, meeting estimates. The analyst maintains a 'Buy' rating based on the company's growth outlook and believes it is undervalued relative to its peers.
TCS reported strong financial results for the fourth quarter of fiscal year 2010 that exceeded expectations. Revenue grew 1.1% over the previous quarter to Rs. 7,737 crore, driven by a 4% increase in volumes. However, currency fluctuations reduced realized revenue. Improved operating levers helped expand operating margins by 19 basis points sequentially and 368 basis points year-over-year. Strong other income and profit growth of 7.4% sequentially and 47.1% year-over-year exceeded forecasts. The company added over 10,000 employees in the quarter and closed 10 large deals.
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.
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.
Dishman Pharmaceuticals reported subdued quarterly results, with net sales down 15.2% and operating margins down 350 basis points due to higher material costs. Recurring net profit declined 72.1% for the quarter. However, for fiscal year 2011 the company has guided for 20% revenue growth and operating margins of 25%.
1) HCC reported a 13.6% increase in net sales to Rs.995.4 crore for 1QFY2011, in line with Angel Research estimates. Operating profit grew 9.3% to Rs.125.8 crore.
2) Net profit increased 55.6% to Rs.28.3 crore, marginally ahead of estimates due to higher operating margins and lower taxes.
3) Angel Research maintains a Neutral view on HCC, valuing it at Rs.126/share on an SOTP basis, with limited upside from current levels given its valuation of 36.5x FY2012 EPS.
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.
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.
Similar to Crompton greaves ru4 qfy2010-180510 (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. 4QFY2010 Result Update I Capital Goods
May 18, 2010
Crompton Greaves BUY
CMP Rs243
Performance Highlights Target Price Rs307
Crompton Greaves reported another strong quarterly performance, with an Investment Period 12 Months
impressive 39.9% yoy growth in its adjusted bottom-line to Rs271cr, which was
better than our estimates. Although the company had a muted top-line Stock Info
performance, clocking a mere 1.9% yoy growth, it made up for this with a
Sector Capital Goods
wider-than-expected expansion in operating margins. Currently, the stock
trades at 17.7x FY2011E EPS and at 15.8x FY2012E EPS. We maintain our Buy Market Cap (Rs cr) 15,592
recommendation on the stock.
Beta 0.8
Strong operating performance – consolidated PAT surges by ~40%, beats
expectations: On the consolidated level, Crompton Greaves posted a muted 52 WK High / Low 280/111
top-line growth of 1.9% yoy to Rs2,508cr (Rs2,460cr) for 4QFY2010. Although Avg. Daily Volume 279,080
the standalone business posted a healthy top-line growth of 18.8% yoy,
international operations negated the effect, with a 19.0% yoy de-growth in its Face Value (Rs) 2
revenues (of which ~9% due to currency movement). For FY2010, the BSE Sensex 16,876
consolidated top-line grew by 4.6% yoy to Rs9,141cr (Rs8,737cr).
The consolidated EBITDA margin, however, expanded by 269bp to 16.1% Nifty 5,066
(13.4%), driven by higher operating margins for both the standalone and Reuters Code CROM.BO
international operations. Though the raw material cost increased 204bp as a %
of net sales, it was more than made up for by the combination of lower other Bloomberg Code CRG@IN
expenses and employee costs. Notably, as the margin improvement during the
Shareholding Pattern (%)
year was majorly led by operational efficiencies, the management seemed
confident of maintaining its margins at a consolidated level for FY2011E. Promoters 40.9
Higher operating margins, coupled with a lower tax rate (due to the lower tax
burden on international operations), led to an impressive 39.9% yoy growth in MF/Banks/Indian FIs 31.8
the adjusted net profit to Rs271cr (Rs194cr). For the full year FY2010, the FII/NRIs/OCBs 18.4
consolidated adjusted net profit grew 47.3% yoy to Rs825cr (Rs560cr).
Indian Public 8.9
Outlook and Valuation
Abs. (%) 3m 1yr 3yr
Crompton Greaves is one of the leading players in the power transmission and
distribution space in the country. During FY2010-12E, we expect the company Sensex 3.4 18.1 18.0
to register a Top-line and Bottom-line CAGR of 11.5% and 7.1%, respectively.
At the current price, the stock is quoting at 17.7x and 15.8x FY2011E and Crompton 4.6 108.3 88.9
FY2012E EPS, respectively, which we believe is attractive as compared to its
peers, ABB and Areva T&D. We maintain our Buy recommendation, with a
Target Price of Rs307.
Key Financials (Consolidated)
Y/E March (Rs cr) FY2009 FY2010 FY2011E FY2012E
Net Sales 8,737 9,141 10,068 11,354
% chg 27.9 4.6 10.1 12.8
Adj. Net Profit 560 860 882 986
% chg 37.7 53.6 2.5 11.8
EBITDA (%) 11.4 14.0 13.7 13.3
EPS (Rs) 8.7 13.4 13.7 15.4
P/E (x) 27.8 18.1 17.7 15.8
P/BV (x) 8.6 6.3 4.9 3.9
RoE (%) 36.1 39.9 30.9 27.3
RoCE (%) 27.5 31.5 29.0 27.1
Puneet Bambha
EV/Sales (x) 1.8 1.7 1.5 1.3
Tel: 022 – 4040 3800 Ext: 347
EV/EBITDA (x) 15.7 12.0 10.8 9.5 E-mail: puneet.bambha@angeltrade.com
Source: Company, Angel Research
1
Please refer to important disclosures at the end of this report Sebi Registration No: INB 010996539
2. Crompton Greaves I 4QFY2010 Result Update
Exhibit 1: 4QFY2010 Performance (Consolidated)
Y/E March (Rs cr) 4QFY10 4QFY09 % chg FY10 FY09 % chg
Net Sales 2,508 2,460 1.9 9,141 8,737 4.6
Raw Material 1,578 1,498 5.4 5,592 5,492 1.8
(% of Net Sales) 62.9 60.9 61.2 62.9
Employee Cost 262 291 (9.9) 1,113 1,065 4.6
(% of Net Sales) 10.5 11.8 12.2 12.2
Other Expenses 265 343 (22.7) 1,158 1,185 (2.2)
(% of Net Sales) 10.6 13.9 12.7 13.6
Total Expenditure 2,105 2,131 (1.2) 7,864 7,742 1.6
EBITDA 403 329 22.5 1,277 996 28.3
EBITDA (%) 16.1 13.4 14.0 11.4
Interest 12 13 (7.2) 26 66 (59.6)
Depreciation 40 30 32.9 155 122 27.5
Other Income 33 21 53.3 94 59 59.6
Profit before Tax 384 307 24.9 1,189 867 37.1
(% of Net Sales) 15.3 12.5 13.0 9.9
Total Tax 114 114 0.3 365 305 19.8
(% of PBT) 29.6 36.9 30.7 35.1
PAT before Minority Interest 270 194 39.3 824 563 46.5
Minority Interest (1) 0 (1) 3
Adjusted PAT 271 194 39.9 825 560 47.3
(% of Net Sales) 10.8 7.9 9.0 6.4
Extraordinary Items (35) 0 (35) 0
Reported PAT 307 194 58.0 860 560 53.6
Source: Company, Angel Research
Strong standalone performance: Crompton Greaves posted a 18.8% yoy growth in
its standalone top-line to Rs1,618cr (Rs1,362cr) for 4QFY2010, primarily driven by
the strong performance across all the three business segments. The EBITDA margin
expanded by 82bp to 16.7% (15.9%), on the back of lower other expenses.
Consequently, the standalone adjusted net profit for the quarter grew by 45.7% yoy
to Rs191cr (Rs131cr). For FY2010, the adjusted net profit grew by 45.3% yoy to
Rs577cr (Rs397cr).
International business – sales under pressure, but margins improve by 463bp: The
international business continues to face pressure, with the top-line falling sharply by
19.0% yoy to Rs890cr (Rs1,098cr) for 4QFY2010, which was primarily driven by the
18.5% yoy de-growth in the revenues of the international power systems segment.
Nonetheless, the EBITDA margin for the international business witnessed an
expansion of 463bp to 14.8% (10.2%), due to lower raw material costs along with
lower other expenses. Higher margins, coupled with a lower tax rate, resulted in a
net profit growth of 27.8% yoy to Rs81cr (Rs63cr). For FY2010, the net profit grew
by 52.1% yoy to Rs248cr (Rs163cr).
May 18, 2010 2
3. Crompton Greaves I 4QFY2010 Result Update
Exhibit 2: 4QFY2010 Performance (Standalone)
Y/E March (Rs cr) 4QFY10 4QFY09 % chg FY10 FY09 % chg
Net Sales 1,618 1,362 18.8 5,284 4,611 14.6
Raw Material 1,104 886 24.6 3,525 3,111 13.3
(% of Net Sales) 68.2 65.0 66.7 67.5
Employee Cost 65 63 3.1 256 229 11.6
(% of Net Sales) 4.0 4.6 4.8 5.0
Other Expenses 179 197 (8.9) 646 632 2.1
(% of Net Sales) 11.1 14.4 12.2 13.7
Total Expenditure 1,348 1,145 17.7 4,426 3,973 11.4
EBITDA 271 217 24.9 858 638 34.4
EBITDA (%) 16.7 15.9 16.2 13.8
Interest 4 4 4 15 (70.2)
Depreciation 13 13 (0.8) 52 45 14.8
Other Income 34 10 224.7 69 36 90.7
Profit before Tax 288 210 36.9 870 614 41.7
(% of Net Sales) 17.8 15.4 16.5 13.3
Total Tax 97 79 22.2 293 217 35.0
(% of PBT) 33.7 37.7 33.7 35.4
PAT before Minority Interest 191 131 45.7 577 397 45.3
Minority Interest
Adjusted PAT 191 131 45.7 577 397 45.3
(% of Net Sales) 11.8 9.6 10.9 8.6
Extraordinary Items (40) 0 (40) 0
Reported PAT 231 131 76.6 617 397 55.5
Source: Company, Angel Research
Segment-wise Performance
During the quarter, on the consolidated basis, the company’s consumer products
and industrial systems segments led its revenue growth, registering a robust 24.3%
and 16.8% growth, respectively. However, despite a strong growth of 14.7% in the
standalone power systems segment, the consolidated power systems segment de-
grew 4.9%, dragged down by the 18.5% yoy fall in the revenues of the international
power systems business.
On the margin front too, all the segments registered margin expansion. The
consolidated EBIT margin of the power systems segment increased by 216bp to
14.8% (12.7%), that of the consumer products segment by 244bp to 14.6% (12.1%),
while that of the industrial systems segment increased by 479bp to 25.6% (20.8%).
May 18, 2010 3
4. Crompton Greaves I 4QFY2010 Result Update
Exhibit 3: Segment-wise Performance (Consolidated)
Y/E March (Rs cr) 4QFY10 4QFY09 % chg FY10 FY09 % chg
Revenues
Power Systems 1,684 1,771 (4.9) 6,204 6,174 0.5
Consumer Products 460 370 24.3 1,612 1,322 21.9
Industrial Systems 348 298 16.8 1,259 1,150 9.5
Others 29 29 1.6 103 122 (15.5)
EBIT
Power Systems 249 224 11.3 769 625 23.1
Consumer Products 67 45 49.3 230 146 57.1
Industrial Systems 89 62 43.7 276 213 29.4
Others 2 5 (56.9) 15 19 (22.3)
EBIT Margin (%)
Power Systems 14.8 12.7 12.4 10.1
Consumer Products 14.6 12.1 14.3 11.1
Industrial Systems 25.6 20.8 21.9 18.5
Others 6.7 15.7 14.6 15.9
Source: Company, Angel Research
Exhibit 4: Segment-wise Performance (Standalone)
Y/E March (Rs cr) 4QFY10 4QFY09 % chg FY10 FY09 % chg
Revenues
Power Systems 829 722 14.7 2,510 2,224 12.9
Consumer Products 460 370 24.3 1,612 1,322 21.9
Industrial Systems 337 270 24.8 1,174 1,055 11.3
Others 6 7 (25.2) 25 40 (38.2)
EBIT
Power Systems 161 128 25.5 462 349 32.3
Consumer Products 67 45 49.3 230 146 57.1
Industrial Systems 78 55 41.8 260 204 27.5
Others 0 1 (57.5) 1 1 34.7
EBIT Margin (%)
Power Systems 19.5 17.8 18.4 15.7
Consumer Products 14.6 12.1 14.3 11.1
Industrial Systems 23.2 20.4 22.1 19.3
Others 5.6 9.9 4.0 1.9
May 18, 2010 4
5. Crompton Greaves I 4QFY2010 Result Update
Outlook and Valuation
Crompton Greaves is one of the leading players in the power transmission and
distribution space in the country. The company has a diversified business presence,
with revenues accruing from multiple streams that are spread across geographies.
Besides, over the past few years, the company has made several strategic overseas
acquisitions, which, in addition to plugging in technology gaps, have provided the
necessary scale to its operations.
During FY2010-12E, we expect the company to register a Top-line and Bottom-line
CAGR of 11.5% and 7.1%, respectively. At the current price, the stock is quoting at
17.7x and 15.8x FY2011E and FY2012E EPS, respectively, which we believe is
attractive as compared to its peers, ABB and Areva T&D. We maintain our Buy
recommendation, with a Target Price of Rs307
Exhibit 5: 12-month Forward Rolling P/E Band
400
26x
350
300
20x
Share Price (Rs)
250
200 14x
150
8x
100
50
2x
0
Apr-02
Apr-03
Apr-04
Apr-05
Apr-06
Apr-07
Apr-08
Apr-09
Apr-10
Oct-02
Oct-03
Oct-04
Oct-05
Oct-06
Oct-07
Oct-08
Oct-09
Source: C-line, Angel Research
May 18, 2010 5
9. Crompton Greaves I 4QFY2010 Result Update
Research Team Tel: 4040 3800 E-mail: research@angeltrade.com Website: www.angeltrade.com
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Disclosure of Interest Statement Crompton Greaves
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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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:
INB230994635/INF230994635 Membership numbers: BSE 028/NSE:09946
Angel Capital & Debt Market Ltd: INB 231279838 / NSE FNO: INF 231279838 / NSE Member code -12798 Angel Commodities Broking (P) Ltd: MCX Member ID: 12685 / FMC Regn No: MCX / TCM /
CORP / 0037 NCDEX : Member ID 00220 / FMC Regn No: NCDEX / TCM / CORP / 0302
May 18, 2010 9