Zydus Cadila acquires Combix Labs
Friday, May 30, 2008
Zydus Cadila - India's 4th largest pharmaceutical group and a global healthcare provider, announced its foray into Spain with the acquisition of 100% stake in Laboratories Combix.Laboratories Combix which has a pure generics focus provides the right fit for Zydus' entry strategy into a market that is estimated at $ 1.7 billion and is growing at 21.5% compared to 6% for the overall pharmaceutical market in 2007. The Spanish pharmaceutical market is the 5th largest in Europe.
Established in 2006, Combix with a sales and marketing focus has a solid portfolio covering 17 molecules. Additionally, it has a range of products that are pending launch or in the pipeline. The acquisition allows Zydus to jumpstart its business and leverage strengths in product development, a high quality, cost-competitive supply chain and operational efficiency.
Published by DalalStreet Business @ 10:32 AM
Karuturi Global Acquires Land in Ethiopia
Thursday, May 29, 2008
With the Government of India creating un-necessary hurdles in allotting barren lands to Corporates, companies are looking overseas for land acquisitions for their global dreams. Just a while ago, we have been informed by the management of Karuturi Global Ltd that the Company has completed its acquisition of 100,000 acres of land in Ethiopia, for cultivation of rice, vegetables, palm oil and sugarcane. The Company is in the process of acquiring a further land bank of 650,000 acres of land in Ethiopia.
Published by DalalStreet Business @ 4:48 PM
Tata Motors skids on overhang of large equity dilution
At the time of declaring financial results for the year ended 31 March 2008 (FY 2008) during trading hours yesterday, 28 May 2008, Tata Motors announced plans to raise about Rs 7,200 crore through three simultaneous but unlinked rights issues to be used for financing the Jaguar-Land Rover acquisition. However the offer price, ratio and conversion prices of the rights issues will be announced later.
The first issue would consist of normal shares on a right basis amounting to Rs 2,200 crore. The second would raise up to Rs 2,000 crore through issue of "A" equity shares having one vote for every 10 shares. A further amount of Rs 3,000 crore is proposed to be raised through a third rights issue of five-year 0.5 per cent convertible preference shares (CCPs), optionally convertible into "A" equity shares after three years but before five years from the date of allotment.
The company had also proposed to raise about $500/600 million through an appropriate issue of securities in the foreign markets on terms to be decided at that time.
Published by DalalStreet Business @ 12:08 PM
Compucom bags 142 Crore Education Project
Wednesday, May 28, 2008The management of Compucom Software Limited has informed us that the company has been awarded an ICT project by Secondary Education Department, Government of Rajasthan to
provide Computer Education on BOOT basis in 2292 Govt. Schools of Rajasthan.
The contract value is worth Rs 142 Crore (Approximate).
Published by DalalStreet Business @ 12:54 PM
Fertile gains for fertiliser shares on higher subsidy
The substantially higher subsidy bill is a part of the strategy of the government to safeguard farmers from sharp price spiral for both raw materials and finished fertilisers in the global market.
Fertiliser shares had risen in a weak market yesterday, 27 May 2008, when the news of higher subsidy hit the market during trading hours. On that day, Nagarjuna Fertilisers and Chemicals rose 2.36% to Rs 45.55, Rashtriya Chemicals and Fertilisers gained 1.04% to Rs 67.90, and Chambal Fertilisers and Chemicals jumped 6.85% to Rs 76.40
Meanwhile, the government's new fertiliser investment policy is likely to be finalised in the next two to three weeks. The new policy will aim at linking production cost of new fertiliser units to the international prices, in order to encourage fresh investments in the sector.
Published by DalalStreet Business @ 8:29 AM
Reliance Fresh Order for Sita Shree
Tuesday, May 27, 2008
We have just been alerted by the management of Sita Shree Food Products that the company has received 400 metric ton orders from one of its valued customer Reliance Retail's subsidiary Reliance Fresh, prevailing month to deliver Wheat flour and pulses which is increased about 250% from the last order of 160 MT.Sita Shree is equipped with own manufacturing and marketing unit to increase and grow their sales with their well experienced personnel. The directors of the company has wide & depth knowledge of grains and pulses market to expand and grow the profitability of the company.
Published by DalalStreet Business @ 10:41 AM
WNS looking to BUY Firstsource
WNS holdings is looking to buy out ICICI Bank's entire stake and mop up shares held by some other private equity investors in Firstsource Solutions. ICICI Bank is the single largest shareholder in Firstsource Solutions (FSL), holding 24.84% stake (as at end March 2008).Firstsource is among India's leading business process outsourcing (BPO) companies providing business process management services to global leaders in banking & financial services, telecom & media and healthcare domains.
Published by DalalStreet Business @ 9:51 AM
Auto stocks skid on fears of steep hike in petrol price
Monday, May 26, 2008On fear of more than 20% hike in Petrol prices [Rs 10 to Rs 16 / litre hike expected], Auto stocks were unloaded on the bourses mercilessly. Bajaj Auto is down 11%, Maruti Suzuki down 4%, Hero Honda down 2%, Tata Motors down 2.5% and TVS Motors down 3%.
Auto firms are already facing a facing a challenging time. On the one hand, sales has slowed down due to higher interest rates and on the other hand a surge in raw material prices has squeezed margins.
Published by DalalStreet Business @ 3:06 PM
Reliance Communications + MTN GROUP to enter into exclusive negotiations
India's leading telecom company Reliance Communications and MTN Group, a leading emerging market telecom operator, have agreed to enter into exclusive negotiations for a period of up to 45 days with respect to a potential combination of their businesses.The negotiations are currently taking place and a further announcement will be made when appropriate. It is to be noted that there is no certainty either on completion, or the timing of the said proposal. In the meantime, shareholders are advised to exercise caution in their dealings in the companies securities dealings until a further announcement is made.
Published by DalalStreet Business @ 1:12 AM
Federal Bank - Hit by Higher Bond Charges
Saturday, May 24, 2008Federal's 4Q08 profits (+4% yoy) were 30% below estimates on higher-than-expected bond portfolio charges and some rise in loan loss provisions. Core operations grew by 37%, strong on the back of a sharp increase in margins. We believe its new capital allows management to seek higher growth opportunities, both organic and inorganic, and will be a key valuation driver.
Federal's margins increased to 376bps (+60bps qoq) and were a key beneficiary of its new capital. While we expect NIMs to moderate from current levels, management seemed confident of maintaining them at 340-350bps despite aggressive 25% loan growth target.
Retail loans (and provisions) showed higher stress for a second successive quarter. While asset quality is fairly comfortable (0.2% net NPLs), we believe its rising predilection for retail and SME warrants greater caution in the current environment.
We expect a Negative Growth in EPS and it is expected to report Rs 27.49 for Fy09 lower than Rs 28.66 reported in Fy08.
Published by DalalStreet Business @ 2:04 PM
Tata Teleservices Maharashtra - Poor Show
Tata Teleservices Maharashtra continued to underperform. 4QFY08 revenues of Rs4.56 bn (+3.6% Q/Q; 19.8% Y/Y) were in line but EBITDA of Rs1.15 bn (+5.8%, +30.6%) was 2.5% below our estimate. Net loss of Rs206 mn came in lower (versus JPMe: Rs308 mn) due to higher other income. For the full year (FY08), TTML’s revs were up 21% Y/Y and EBITDA was up 40%.
Revenue momentum was decent despite slowdown in sub-additions to 0.35 MM vs. 0.54 MM in 3Q. ARPU decline (6.5% Q/Q) was lower versus recent trend; we estimate 4Q wireless ARPU
was ~Rs240 (RCOM: Rs320). Margin expansion was only 50 bps as interconnect/network costs were a tad higher. However, SAC (handset subsidy) is on a declining trend (Rs600 in FY08 vs. Rs900 in FY07). Notably, FY08 was TTML's first ever year of a positive EBIT.
For FY09, the company is expected to be in Red losing Rs 0.28 / share.
Published by DalalStreet Business @ 12:29 AM
Lakshmi Machine Works - No growth visibility
Friday, May 23, 2008
Lakshmi Machine Works - LMW reported Q4FY08 results below our expectations. While Net sales grew by 7.4% yoy to Rs6251mn (11% growth in the textile machinery business and a 21% decline in the machine tools & foundry division), Operating profits remained flat at Rs1206mn. (margins declined by 150bps yoy to 19.3% mainly due to the rise in raw material prices ).APAT (ex one off items) declined by 12.6% yoy to Rs601mn (attributable to the sharp increase in depreciation owing to higher capex). LMW ended FY08 with revenue growth of 18% (as compared to the growth guidance of 30%) and a PAT growth of 15.5%. Although LMW started the year with a strong order backlog of Rs53.3bn, the lower than expected (as well as guided) growth reflects, higher than anticipated slowdown in the textile sector.
The company faces a double whammy in the form of (1) Declining demand (thus impacting revenue growth) and (2) Rising raw material prices (hitting margins, though management indicated an intention for upward revision in prices post Q1FY09)
Published by DalalStreet Business @ 12:05 PM
HDIL - Bonus + Inline Results
Thursday, May 22, 2008Mumbai Realty major, HDIL declared bonus in the ration of 2:7. results for Fy2008-08 were inline with our expectations.
HDIL reported revenues of Rs9.8 bn (v/s our expectation of Rs9.7 bn) and PAT of Rs7.1 bn (v/s our expectation of Rs6.7 bn) for 4QFY08. HDIL booked revenues largely from the sale of commercial property in Andheri (Kaledonia) in 4QFY08 for a consideration of Rs9 bn. Also HDIL booked Rs0.5 bn from land development in Vasai-virar region. PAT was 6% higher than our estimates due to our higher construction cost assumptions for the commercial property.
HDIL has various projects under construction in different parts of Mumbai. Prices of HDIL's projects in following places at Mumbai Motilal Nehru Nagar, Santacruz (W), Andheri, Ghatkopar, Jogeshwari , Malad, Virar, Vasai, Worli, Bandra etc.
Published by DalalStreet Business @ 11:39 AM
Apollo Tyres + Ceat - Result Analysis
Wednesday, May 21, 2008
Ceat Tyres: Ceat's Q4FY2008 results are ahead of our expectations, mainly on the sales front. The net sales of the company grew by 14.8% to Rs646.2 crore in the quarter. The original equipment (OE) sales continued to decline whereas the replacement sales grew strongly by 28.2% in Q4FY2008.The operating profit margin (OPM) declined by 180 basis points to 6.0% as a result of a higher raw material cost. Consequently, the operating profit declined by 12.3% to Rs38.5 crore.
For FY2008, the sales grew by 9.2% to Rs2,329 crore and the adjusted profit after tax (PAT) increased by 80.7% to Rs67.7 crore. Ceat sold a small part of its Bhandup plant and realised a value of Rs130 crore during the year. So, the reported PAT grew by 294% to Rs147.6 crore.
Apollo Tyres: Apollo Tyres' (ATL) Q4FY08 results were in line with projections, though raw material prices increased more than expected. Net profit grew by 38.7% YoY to Rs 593m, aided by a 10% growth in revenue and a 140bps rise in the EBITDA margin. The company has announced major capacity programmes for the next three years involving an investment of Rs 11.5bn towards a greenfield project in Tamil Nadu and for increasing existing radial capacities for passenger car as well as truck & bus tyres at its Baroda plant.
Higher CAPEX and investment would impact the company's cash flow in the medium term. EPS growth is expected to be flat for Fy2009.
Published by DalalStreet Business @ 11:55 AM
K S Oils - Losing Viscosity
K S Oils (KSO) has reported above-expected revenue growth for Q4FY08, at 107% YoY to Rs 6.7bn. The quarter's performance was backed by higher branded and retail sales coupled with stronger average realizations. While net profit came in slightly below estimates, growth was nevertheless robust at 91% YoY to Rs 402mn.
During FY08, KSO witnessed a sharp rise in the average sales price of edible oils. There is a cut back on sales volume expectations for crude mustard oil for these two years, anticipating pressure due to price hikes. In addition, we expect the company to encounter procurement cost pressures, which would have an impact on margins. Subsequent to these adjustments, earnings estimates for FY09 and FY10 stand reduced by 15% and 17% respectively
Published by DalalStreet Business @ 11:49 AM
Bharat Forge - Weak Castings
Recurring parent PAT at Rs 683m (+6% Y/Y), was in-line with estimates. EBITDA margin rose 70 bps y/y (50 bps above estimates) led by stronger growth in exports, and (we reckon) the attendant beneficial DEPB impact. However, slower growth in domestic demand, margin pressures due to rise in input costs, a volatile currency, and slower-than-expected turnaround in operations of subsidiaries and JV operations are a dent on its bottom line.
Although subsidiary operations are expected to improve over the next two years, parent PAT is forecast to account for c80-85% of consolidated PAT over the next 2 years - and parent operations are thus the key to long-term growth and profitability. We forecast strong earnings CAGR of 26% in standalone PAT over the next two years, driven by steady improvement in export sales (notably in non auto segment).
Bharat Forge's EPS for FY09 is expected to be mere Rs 14.3 while that of FY10 is expected to hit Rs 20.25.
Published by DalalStreet Business @ 10:05 AM
Shipping Corporation 1:2 Bonus
Tuesday, May 20, 2008The board of Shipping Corporation of India has considered the proposal to issue 1 bonus share for every 2 shares held, to the shareholders and it was decided to recommend the proposal to the administrative ministry i.e. ministry of shipping, road transport & highways for their approval in terms of the articles of association of the company.
Published by DalalStreet Business @ 2:50 PM
SAIL Exhibits Strength
Steel Authority of India (SAIL) reported robust numbers for the quarter ended March 2008. Revenues for the quarter rose 32.8% YoY to Rs 137.9bn on the back of sharply higher realizations, with record saleable steel production of 3.5mn tons and improved product mix. However, bottom-line growth lagged that of the top line mainly due to higher employee costs (additional provision of Rs 15.9bn), which rose 100% YoY due to wage revision of employees, w.e.f 1 Jan 2007.EBITDA margins declined by 260bps YoY, primarily due to higher employee costs. Profits rose 25% YoY to Rs 23.7bn. For FY08, the company reported an 18.2% growth in revenues (including price escalation) and an EBITDA of Rs 122bn, up 24% YoY. Operating margins for the year stood at 29.7% vs. 28.3%.
Published by DalalStreet Business @ 10:24 AM
Forthcoming Real Estate Projects from Mahindra Lifespace
Sunday, May 18, 2008
Mahindra Lifespace is probably the only Developer who has witnessed higher selling prices even in areas like Delhi's NCR where prices have fallen. We are in receipt of confirmed reports that in Faridabad, the company's realisation actually increased to Rs4,000 psf from the launch price of Rs3,875 psf in Q4FY2008.Project / City / Commencement
Mahindra Eminente Phase II Mumbai FY 2009
Mahindra Splendour Phase II Mumbai FY 2009
GE Gardens Mumbai FY 2009
Commercial Pimpri FY 2009
Sylvan County Chennai FY 2009
Residential Gurgaon FY 2010
Residential Nasik FY2010
Residential Nagpur FY 2009
We expect Mahindra Eminente to sell upwards of Rs 10,000 / sft based on previously sold prices of various Mahindra Lifespace Residential projects in India.
Labels: Mahindra-Lifespace-Projects
Published by DalalStreet Business @ 1:24 PM
Punjab National Bank - Review
Friday, May 16, 2008Punjab National Bank (PNB) delivered Q4FY08 results, which were ahead of our expectations. The net profit rose 128.8%, whereas net interest income (NII) grew at 12.6%.PNB appears to have consolidated on its gains from 3Q08 and despite an aggressive loan growth, improved both margins and asset quality.
NIMs for the quarter were 366bps (up 10bps qoq) - a surprise and a contrast to most PSU bank peers. Margins could, however, come under some pressure due to aggressive loan growth (+18%qoq), and its relative disadvantage in a declining interest rate situation as its deposit repricing could be slower than peers.
PNB's NPLs have declined 22% qoq - a combination of higher recoveries and little pressure from its relatively large agriculture portfolio (contrary to expectations). Loan loss provisioning was also lower (excl Rs1bn floating provision) and coverage levels jumped to an impressive 77%.
The bank reported an EPS of Rs 64.98 for FY08. EPS estimates for FY09 and FY10 are Rs 76.88 and Rs 91.20 respectively.
Published by DalalStreet Business @ 11:21 AM
Apollo Tyres - Slow Ride
Thursday, May 15, 2008Apollo Tyres' Q4FY08 performance was higher than expected because of rise in margins. Net sales grew by 10% yoy to Rs10bn (our expectations of Rs10.3bn), with volumes growing by ~4%yoy to ~75,000MT. EBIDTA margins declined by 100bps qoq (higher 120bps yoy) at 12.4% and were above our expectations (11%) due to a better product mix and positive impact of price hikes. Net profit grew by 38.7%yoy to Rs 593m.
Going forward, expect 11% CAGR in consolidated revenues led by continued strength in replacement market sales and a partial recover in domestic T&B OEM segment. Despite the recent price hike of ~5% in the replacement market, we expect Apollo's margins to come off by ~100bps from the present level due to sustained surge in prices of key raw materials like NR and crude based inputs.
Published by DalalStreet Business @ 5:06 PM
Sterlite Technologies - Result Review
Sterlite Technologies' (STL) Q4FY08 revenues and EBITDA have been in line with our estimates, while net profit has exceeded expectations mainly due to a lower tax burden for the quarter. The management's FY09 guidance is also ahead of our estimates with revenue and PAT growth pegged at 35–45% and 55–60% respectively.
STL holds a robust order book totalling Rs 13.2bn, with orders worth Rs 3bn received from Power Grid in April. The company's Haridwar plant was commissioned during the quarter and is operating at optimum capacity utilisation, driving volume growth in the conductor segment. The management is also continuing with its plans to further expand manufacturing capacities in the conductor and optic fibre businesses in order to achieve global scale.
Published by DalalStreet Business @ 11:45 AM
Billion Dollar Trouble for Satyam Computers
IT Outsourcing giant, Satyam Computer Services has landed itself into a Billion Dollar Trouble. Satyam was developing mobile payment system for UPaid. When UPaid's patent applications came up for review, Satyam Computers provided forged documents which resulted in Upaid losing a patent infringement case against Telecom giants Qualcomm and Verizon.
UPaid filed a case of fraud and forgery against Satyam Computers in Texas. Satyam sought the proceedings to be heard in London but the High Court of London dismissed the case. Satyam now has to goto trial in texas and chances of it losing the case are very very high.
So IT Managers, beware before you outsource work involving Intellectual Property Rights to India.
Labels: Satyam-IPR-Forgery, Satyam-UPaid-Lawsuit
Published by DalalStreet Business @ 10:19 AM
Market share of Life Insurance Companies in India
Wednesday, May 14, 2008
Here is the market share of various Life Insurance Companies in India at the end of FY2008.LIC 48.1%
ICICI Prudential 13.7%
Allianz Bajaj 10.3%
SBI Life 6.2%
HDFC Standard 4.1%
Birla Sunlife 3.4%
Reliance Life 3.4%
Max New York 2.4%
OM Kotak 1.9%
AVIVA 1.8%
Tata AIG 1.5%
MetLife 1.4%
ING Vysya 1.2%
Shriram Life 0.3%
Bharti Axa Life 0.2%
The top 5 life insurance companies in India control 85% of the market-share while the remaining dozen are still struggling to setup their operations. LIC is the best when it comes to settlement of claims.
Published by DalalStreet Business @ 12:08 PM
Mphasis - De-listing Premium Likely to Return in Stock Valuations
If HP's acquisition of EDS goes through, in our view it is likely to lead to an open offer for minority shareholders of Mphasis (~61% owned by EDS). We believe it makes sense for combined entity to take Mphasis (27,000 emp) private and fully merge it with offshore arm of HPQ (est. ~30,000 emp).
What happened in the Digital Globalsoft[Digital Equipment India Ltd] case - Post merger with Compaq, HP had merged HP-ISO with Digital Globalsoft (majority owned by Compaq) and then de-listed it. HP had made an open offer of Rs750 per share (at ~50% premium to floor open offer price) and finally de-listed at Rs850 per share.
Published by DalalStreet Business @ 9:05 AM
NIIT new vendor for payment card industry
Tuesday, May 13, 2008
NIIT Technologies have qualified as Approved Scanning Vendors (ASV) for Payment Card Industry Data Security Standard (PCI DSS). This brings NIIT Technologies into the league of an elite group of Security Service Providers, providing Scanning Services for all Payment Card Network Vendors, Merchants and credit card service providers, who deal in credit card transactions.The Payment Card Industry Data Security Standard (PCI DSS) requires organizations to conduct quarterly remote network, system and application scans. NIIT Technologies would provide quarterly remote vulnerability scans to help organizations achieve and maintain compliance. NIIT Technologies' security experts conduct the scan, and then provide comprehensive reporting and remediation documentation support for data security issues that are uncovered.
Published by DalalStreet Business @ 2:50 PM
Industrial Production at 6 year Low
Monday, May 12, 2008
Rising borrowing costs had a severe impact on India's industrial production, which grew at the slowest pace since 2002 in March. India IIP Data for March AT 3% Vs 8.6% in Feb. Sonal Verma of Lehman Brothers said,Industry is facing headwinds from tight monetary conditions, high raw material costs and weakening foreign demand.There is unlikely to be much scope to cut policy rates in 2008 to boost domestic demand.Analysts expects interest rates not to come down and higher interest rates are discouraging sales of 2 and 4 wheeler automobiles and residential real estate as well.
Published by DalalStreet Business @ 12:38 PM
Voltamp Transformers - Electrifying Profits
Voltamp Transformers 4Q08 net sales grew 10% yoy to Rs1.35bn, 18.3% lower than our estimates. For the year, they rose 36.9% yoy, to Rs5.55bn, 5.2% lower than estimated. Expect the company to clock sales of Rs8bn and Rs10.7bn for FY09 and FY10, at a 39% CAGR. The value of confirmed orders on hand for FY09 is Rs4.5bn. Capex (relocation to Vadodara) planned for FY09 is Rs350m. The expected transformer manufacturing capacity by FY10, postexpansion, is 13,000 MVA.
For the year, PAT more than doubled, to Rs799m (shooting up 102.3% yoy, at just 1.3% over our Rs789m estimate). The exponential growth was fuelled by significant savings in material costs, which nosedived 580bp yoy. For 4Q08, the company reported PAT of Rs217m, up 59.7% yoy (5% above our expectations). Revised PAT estimates for FY09 and FY10 stand at Rs1bn and Rs1.4bn, a 30.4% CAGR.
Published by DalalStreet Business @ 10:28 AM
Punjab Tractors Ltd
Punjab Tractors (PTL) for Q4FY08 reported robust 105% YoY recurring net profit growth to Rs267mn on low base (Q4FY07 was affected post the acquisition by Mahindra & Mahindra due to restructuring exercise undertaken, which included sharp reduction in inventory & debtors).
Revenues rose 29.5% YoY to Rs2.9bn on the back of 23.8% YoY volume growth - domestic volumes rose 23% YoY and exports surged 63.6% YoY. In Q4FY08, the company registered market share gains of 240bps YoY to 10.5%. EBITDA margin rose 400bps YoY and 50bps QoQ to 13%, driving 87.8% YoY EBITDA growth.
For FY08, the company registered muted revenue growth of 2% on the back of 6.6% sales volumes decline; it also lost market share 20bps to 9.1%, registered EBITDA margin contraction of 160bps to 10% and 7% decline in recurring net profit to Rs652mn.
Post restructuring, the company seems to be back on TRACK. Existing Investors can HOLD.
Published by DalalStreet Business @ 10:08 AM
Inflation at 7.61%
Friday, May 09, 2008
Inflation for the week ended Apr 26 comes at 7.61 % vs. market 7.57% for the week before. Inflation for the same period last year was 6.06%.Late last week the price of Tea shot up by whopping 16% over the previous week. This week its rising again. Experts expect the Inflation to touch 7.68% for the week ending May 3rd 2008.
YTD Inflation for FY09 is at 7.41%. Morgan Stanley in its report has expressed concerns about India's Macro scenario but however hasn't downgraded India to a SELL yet :-)
Published by DalalStreet Business @ 12:09 PM
Inflation - Rising Cost of Doing Business in India
World's leading banker, Citigroup has some harsh words for India in its report. Citi said,It has become expensive to live in India but probably even more expensive to do business in India. A look at the rising costs of setting up business over the last 3 years - asset, capital and services based - suggests "business inflation" could be as high as 10-35% p.a., well ahead of 7-8% headline inflation. This could be meaningful, given India's growth is primarily investment led.The report further adds that Business inflation is raising break-evens and capital intensity, lowering returns.
Citi estimates, ballpark by nature, suggest that in cases, break-even periods are up 20-80% over the last 3 years, capital intensity is up 10-60% and distribution requires 2x sales to generate the same returns. A part of this pressure is global, and this does not apply to all but raises questions on the direction of returns.Citi raises 4 questions 1. Growth rates - where will they settle? 2. Government/RBI policy stance, in the face of inflation and election [frequent elections, a dampener] . 3. Earnings momentum - slowing, but faltering? 4. Retail investor - will he come back and when ?
Published by DalalStreet Business @ 11:58 AM
Bartronics India - Going Strong
Bartronics India (BIL) reported an outstanding 495% yoy growth in its 4QFY2008 Top-line. This was a result of impressive growth in its Automatic Identification and Data Capture (AIDC) Solutions business, specifically in the RFID Solutions business, as also contribution from the Smart Cards segment. BIL had acquired a US company towards early 2008, which contributed Rs 33cr to Topline.During 4QFY2008, BIL reported a 116bp yoy contraction in EBITDA Margins owing to higher operating costs viz., Raw Material, Staff Costs and Other Expenses. These expenses rose, as a % of Sales, by 675bp yoy, 19bp yoy and 179bp yoy respectively, in 4QFY2008. BIL's total outstanding order book position at the end of FY2008 stood at a significant Rs345cr and constituted 128% of total FY2008 Revenues.
Published by DalalStreet Business @ 9:38 AM
Todays Writing Products Limited
Thursday, May 08, 2008
Todays Writing Products Limited's (TWPL's) Q4FY08 results were in line with our expectations. The company is currently consolidating its business, both in the writing products segment and in its subsidiaries namely, Todays Stationery Mart Limited.- Net sales grew by 73% to Rs717.5mn
- EBIDTA increased by 67% to Rs72.7mn
- PAT (before extra-ordinary items) rose by 148% to Rs28.8mn
- EBIDTA margins rose by 220 bps to 12.6%
- PAT margins increased by 120 bps to 4%
Published by DalalStreet Business @ 12:44 PM
Nelcast Ltd - Good Growth
Nelcast Ltd reported 37.2% YoY top line growth to Rs 1139.2 mn for quarter ended March 2008 compared to corresponding quarter last year. For FY08, Net sales reported growth of 16.6% YoY to Rs. 3564.5 mn as compared to Rs 3057.6 mn in corresponding period last year. The company reported 10.1% YoY growth in EBDITA in Q4FY08 to Rs 127.1 mn compared to corresponding quarter last year. For FY08, EBITDA witnessed growth of 18% YoY. Total expenditure witnessed increase of 43.8% YoY during the fourth quarter mainly due to increase in raw material costs and other expenses. The company reported decline in its EBDITA margins by 410 basis points to 9.7% in Q4FY08 compared to 13.8% in Q4FY07.However for full year FY08, It maintained its EBDITA margins at around 13%.
Nelcast is set to be major beneficiary of accelerating trend of sourcing of auto components due to its high skilled labors, lower wage costs and proven track record.
Published by DalalStreet Business @ 12:09 PM
Ashok Leyland - Lackluster Performance
Domestic sales were muted (up 1% YoY) offset by a significant decline in export sales (-57% YoY). Truck sales grew by 5% YoY aided by low base effect last year. Bus sales fell 29% YoY primarily due to high base effect, we believe base effect will remain challenging for bus sales over the next 4-5 months.Domestic MHCV goods sales grew by 7% YoY. Our channel checks indicate that retail offtake is not very buoyant but growth is being aided by a low base last year. Freight rates remain reasonably buoyant: +2%Y/Y, +1%MoM – the recent hike in diesel prices has been partially passed on.
Management maintained its outlook of 8-10% growth in truck sales for the industry and ~15% growth for Ashok Leyland in FY09E. We believe market share gains for Ashok Leyland will be extremely difficult as Tata Motors launches its new products over the next two years.
Published by DalalStreet Business @ 8:57 AM
Allahabad Bank - Scope for Improvement
Wednesday, May 07, 2008Allahabad Bank reported a net profit of Rs1.6bn for Q4FY08, below expectations. However the NII at Rs4.4bn was inline with expectations. The operating performance deteriorated during the quarter with NII falling by 5%yoy. The fee income remained flat at Rs1.1bn due to high base effect on last year. With sharp jump in the Opex, the core operating profit has declined by 19.0% yoy. However, with higher treasury gains and lower tax rate, the net profit has grown by 35% yoy.
The asset quality continued to improve with gross NPA declining to 2.0% of assets (2.6% last year) and net NPA of less than 0.8 %
Published by DalalStreet Business @ 1:28 PM
Toshiba + JSW for Turbine Joint Venture
Toshiba Corporation and JSW, one of the India's well known business groups have agreed to establish a joint venture company to manufacture and market steam turbines and generators for thermal power plants in India.
Under the terms of agreement between the companies, Toshiba and JSW will establish a joint venture in June 2008. The new company will have an initial capitalization of US$ 50 million, 75% held by Toshiba and 25% by JSW Group, to be held by two key group companies. JSW Steel - 5% and JSW Energy - 20%. The companies are now deciding the location of the headquarters and manufacturing facilities and will and will announce the details in due course.
Published by DalalStreet Business @ 12:17 PM
Power Trading Corporation - Margins Tripped
Tuesday, May 06, 2008
Power Trading Corporation - PTC's 4QFY08 results at Rs192mn were sharply ahead of estimates (Rs114mn) due to significantly higher than estimated other income. The traded volumes fell by 15.4% yoy to 1.2bn units during the quarter led by lack of surplus power and very low long term volumes of Tala project and Himachal Pradesh Electricity board.Moreover, the operating margins fell to 0.4% during the quarter led by the lower traded volumes. During the quarter, PTC has acquired an 11% stake in Teesta Urja, a 1,200MW hydel power project in Sikkim. Additionally, the company's subsidiary PTC Financial Services (PFS) has acquired equity stakes in a power exchange and in wind, bio mass and bio fuel projects in India. These investments have been funded by PTC from the QIP issue of Rs12bn completed in January 2008.
Published by DalalStreet Business @ 2:18 PM
JSW Steel - Hit by Rising Cost
JSW Steel one of the main companies behind steel cartel in India reported a PAT for 4Q excluding SISCOL, prior period taxes and write-back of misc expenditure works out to Rs3bn (-15% yoy). 4Q PAT would have been higher excl forex translation loss of Rs930m. EBITDA was Rs7.2bn (-7% yoy) and the margin was 23.1%, lower yoy and qoq. SISCOL reported FY08 PBT of Rs660m and 21% EBITDA margin.
During 4Q coke costs jumped 89% yoy to Rs19,000/t and iron ore costs rose 98% to Rs2,300/t. Costs are slated to rise further. JSTL has tied up its coking coal at US$305/t for FY09. Iron ore hikes have not yet been finalized but are likely to be in excess of 65%. JSTL has ~25% of captive iron ore and expects ~60% captive iron ore and ~45% coking coal by 2010.
Margins are likely to be hit somewhat in 1Q FY09 as prices are being maintained at current levels for the next 2-3 months. JSTL also passed on the impact of the import duty cut on raw materials by reducing prices of HRC by Rs500/t.
Published by DalalStreet Business @ 10:30 AM
Elder Pharma - Strong Dose of Results
Elder Pharma reported 32% YoY growth in top line in Q4FY08 on the back of strong performance of its leading brands. For full year FY08, total revenue increased by 22% YoY to Rs 5481.4 mn. The growth in revenues was mainly on account of strong performance by its leading brands like Shelcal, Chymoral, Eldervit etc.
Elder's EBDITA margin remained stable at 20.2% during the fourth quarter ended March 2008. For full year FY08, EBDITA margin grew by 280 basis points to 20.2% as compared to 17.4% for last year.
Elder recorded 36.5% YoY growth at net profit level to Rs 204.2 mn during Q4FY08 compared to corresponding quarter last year. For FY08, net profit witnessed growth of 36.1% YoY to Rs 718 mn.
Published by DalalStreet Business @ 8:44 AM
GMR - Sabiha Gokcen International Airport
Monday, May 05, 2008GMR Infrastructure has announced that Istanbul's Sabiha Gokcen International Airport Investment Development and Operations - the company formed by the consortium of GMR Infrastructure (40%), Limak Holdings (40%) and Malaysia Airports Holdings Berhad (20%), which bid for and won the 20-year operation rights of Sabiha Gokcen International Airport, has started its operations and investments for the construction and management of a 10 million capacity terminal.
The consortium has 20-year operation rights of Sabiha Gokcen International Airport.
Published by DalalStreet Business @ 5:59 PM
Omaxe embraces Spa + Massage Business
Real Estate major, Omaxe Ltd has entered into MOU for establishing and operating SPA and massage knowledge centre, SPA and massage techniques and but not limited to other related services under the name of Thai Privilege Spa in New Delhi and Northern India.
The company has enterd into Spa Franchise agreement for establishing and operating of SPA outlet of Thai Privilege Spa in Noida, India and with Thai Privilege Consultant, a central group of Thailand which is a group of international repute.
Published by DalalStreet Business @ 3:57 PM
Adlabs Films + Lotus Five Star Cinemas Deal
Reliance ADAG's Adlabs Films has entered into agreement for acquisition of majority and controlling interest in Lotus Five Star Cinemas and will be operating a 51 screen cinema exhibition chain in Malaysia.The chain will have a footprint across the Malaysia and will be playing mainstream Hollywood films in addition to movies in the Indian languages viz. Hindi, Tamil, Chinese and Malay.
Adlabs currently has 160 screens operating in India. Its international presence, in addition to Malaysia, comprises 220 screens covering the East, Mid West and West Coast of USA as also Mauritius and Nepal.
Published by DalalStreet Business @ 1:18 PM
Bharati Shipyard - Slowing Down
Bharati Shipyard's 4Q08 PAT was Rs327m (up 6% yoy) on revenue of Rs2.06bn (up 30% yoy). OPM stood at 27.3% compared to 33.1% in the previous-year corresponding period. This arose from higher subsidy being booked in the same quarter the previous year. Adjusted for this, the overall margin has improved.
The order book, at Rs46.35bn, has stagnated in the past six months, largely as capacities are running at optimum utilization. Management intends to procure further orders once additional progress on the Dabhol capex is made.
The Mangalore shipyard is scheduled to commence operations by Sep.-Oct.'08 (against 1Q09 earlier), and would be fully commissioned by Mar.'10. The yard at Dabhol has touched 25%
utilisation and is expected to reach its peak after FY10.
Published by DalalStreet Business @ 12:15 PM
Balrampur Chini - Margins Sweetening
Despite 28% Q-o-Q decline in revenues to INR 3 bn (due to lower sugar sales volumes), there were operational positives in the Q2FY08 results. The sugar segment reported bumper profitability of 17.8% on better sugar realization and better spread of fixed costs on higher production base.
Co-products clocked yet another strong quarter with cogeneration reporting 61% Y-o-Y growth in revenues to INR 947 mn and 52% EBIT margins. Distillery revenues remained flat Y-o-Y at INR 498 mn. Strong performance across segments meant EBITDA margins tripled to 43%, while EBITDA grew 135% Y-o-Y to INR 1.3 bn. Despite higher fixed expenses in Q2FY08, (interest at INR 231 mn vis-a-vis INR 150 mn last year, depreciation at INR 306 mn vis-a-vis INR 194 mn a year ago), earnings grew 229% Y-o-Y to INR 657 mn.
Published by DalalStreet Business @ 9:32 AM
Bears Hug Moser Baer
Saturday, May 03, 2008Moser Baer reported 4Q loss of ~Rs720m (standalone) compared to ~Rs400m profit in 4QFY07. For FY08, Moser reported standalone losses of Rs800m. Optical media outlook continues to be challenging with another sharp ASP fall this quarter. New businesses are still in investment mode and do not contribute much.
Optical Media is going through severe pricing pressures due to a difficult supply-demand scenario with the dispute on royalty issue between Philips and the large CDR producers. Management admitted that near-term challenges are likely to continue.
PV business had $20m revenue in 4Q. The 40 MW crystalline silicon line is being expanded to 80 MW soon and production capacity of solar modules has been expanded to 40 MW.
Published by DalalStreet Business @ 12:35 PM
TAJGVK Hotels & Resorts Ltd
Thursday, May 01, 2008TAJ GVK reported 5.4% yoy increase in sales as ARRs for Chandigarh increased by 14% yoy while those for Taj Krishna in Hyderabad remained flat as compared to a year ago. Operating margins improved marginally by 30bps yoy as other expenditure declined yoy.
During the quarter, the company carried out routine renovation work which led to higher depreciation charge but a lower tax outgo led to 7% rise in net profit. For the full year FY08, PAT increased 9.5% as ARRs rose 3.7% on average across four properties.
The company is expected to commission its 215 room hotel in Chennai in May taking total room inventory to 899 rooms. The company is expected to report a Modest EPS Growth of Rs 12.8 for FY09.
Published by DalalStreet Business @ 11:31 PM
