TVS Motors:Q3 results were predictably very poor, with net profit declining 49% YoY, and EBITDA declining 49% YoY and 24% QoQ. We are again revising down forecasts. With no change in fundamentals, we maintain our Sell rating on the stock. Q3 margins contracted to another low of 1.7% (down 145bps QoQ), compared to our estimate of 2.6%. We see continuation of muted trends, given the squeeze from competition, and delays in upcoming launches which could improve sales mix i.e. 125cc bike Flame. (more…)
Month: January 2008
TCS + Sony Pictures Sign SoA Deal
Tata Consultancy Services has signed an agreement with Sony Pictures Entertainment, Inc. to develop and deploy service-oriented architecture (SOA) solutions that allow Sony and its customers to better use all of its IT assets to advance their business goals. Based on industry best practices, the SOA solutions combine a set of best-of-breed technologies, tools, patterns and standards from Sony Pictures, TCS and BEA Systems to help enterprise organizations align business functions for greater flexibility and efficiency.
Sony Pictures and TCS have created a world class SOA framework that enables enterprise organizations to quickly sense and respond to changing market conditions. Centered on the deployment of reusable and network-aware applications, the SOA framework leverages key business assets within and beyond enterprise boundaries, with interoperability, independent of platforms, languages and protocols. The framework benefits enterprise organizations across various industry verticals including media & entertainment, insurance, banking, retail, financial services and manufacturing.
Avoid Subscription to KNR Constructions
KNR Construction (KNR) designs, engineers, constructs and maintains roads. The company diversified into construction of irrigation and urban water supply projects in 2005. The execution of infrastructure projects requires significant amount of technical expertise and skill. Pre-qualification for bidding of such projects is often based on past experience of execution is not a problem though it can’t bid for mega construction projects which require minimum net worth criteria. (more…)
Avoid Investment in Bang Overseas Limited
Bang Overseas Limited (BOL) is engaged in the manufacturing of fashion fabrics and meeting ready to wear requirements of its customers in the apparel, textile, and retail segment. The Company proposes to utilize the issue proceeds to augment its apparel manufacturing capacity and strengthen the distribution network. Post expansion, the manufacturing capacity will increase to 19.8 mn pieces p.a. and the number of retail outlets to 100.
BOL had negative cash flows in the past, owing to a high average debtors cycle and an unreasonable average inventory days. (more…)
Dishman Pharma Results Analysis
Dishman reported 3Q FY08 numbers with revenue up 18% YoY while margins declined 939bps to 20% due to losses at subsidiaries. As a result, recurring net income (excluding MTM gains on foreign currency debt) declined 12% to Rs216m. However, we continue to be positive on Dishman and believe that 3Q FY08 was a blip due to some one-off expenses.
1) Some sales were postponed to Q4 FY08. We note this is not unusual in contract manufacturing. 2) Losses at Dishman’s subsidiaries in Japan, the Netherlands and the Middle East – all of which are businesses in the nascent stage. Management expects these to be reversed in Q4. 3) Higher staff costs due to consolidation of the vitamins business and incentive payouts at Carbogen.
Expected Fully diluted EPS – Rs 14.44 [FY08] and Rs 19.59 [FY09].
Under the control of Foreign Institutions, where do retailers go ?
As we have opened the doors of liberalization we have also given permits to setup Modern East India Company to Foreign Institutions. Our markets are heavily owned by institutions in the past 4 years. Our analyst who has been monitoring the market very closely crunching every bit of data and talking to wizards of Dalal Street say that FIIs trapped the retail investors very badly in the recent meltdown.
In hopes of a dream budget, most retailers were expecting a pre-pudget rally to take the Index to a new high of 23,5000 [consensus on the street]. Greed and leverage opportunity by modern day brokerages, who always think of paradise, extended unreasonable credit to retailers who could never sustain. (more…)