Month: January 2008

New Delhi Television (NDTV) has announced that NDTV and an overseas subsidiary of NDTV have signed a MoA with NBC Universal, Inc. (NBCU) and a subsidiary of NBCU in respect of the sale / issue by an overseas subsidiary of NDTV of an effective 26% stake to an affiliate of NBCU for a consideration of US $ 150 million. The said subsidiary of NDTV is the indirect parent company of the following companies: NDTV Imagine, NDTV Convergence, NDTV Labs, NDTV Lifestyle, NDTV Emerging Markets B.V and the said subsidiary is a joint venture partner in NGEN Media Services.

The MoA also envisages that NBCU affiliates would have the option to acquire up to 50% of said subsidiary in the third year of the joint venture at the then fair market value. The MoA and the transaction contemplated therein are subject to receipt of all necessary approvals. The proposed joint venture shall not relate to news channels in India.

ICICI’s profits were ahead of expectations, if qualitatively a little mixed. Key takeaways: a) P&L pickup, on fairly broad-based gains; b) asset quality drift continues, and growth appears to be slipping away; c) business focus: subsidiaries to the fore, as its (questionable) international focus continues. Overall, the P&L shine was likely dulled a bit by the balance sheet and its direction.

While margins are up (remaining low, but getting better positioned for expansion), fee income growth has accelerated to over 33% (in spite of slackening growth), and cost pressures appear to be stabilizing. There is some evidence of ICBK’s potential to raise profitability (a long-held expectation) through its franchise.

Balance sheet issues are likely to take center stage as: a) domestic loan growth moderates further (retail 12% yoy), b) int’l ops remain a key focus, in spite of questionable economics, and challenging markets, and c) asset deterioration continues at a steady (expected) pace. In sum, there are more questions than answers.

Idea’s 3QFY08 EBITDA at Rs5,672m was in line driven by robust revenue growth (9.3%qoq) though offset by sustained increase in network opex. Idea has started accounting pre-paid revenues net of distributor discount which explains the qoq decline in marketing costs/SAC. Adjusting for this, revenues grew 12.5%qoq. Net profit at Rs2,368m was below expectations due to higher deferred tax provision.

MOUs [Minutes of usage] which had dipped in 2Q due to inactive subs/seasonality bounced back to 377, up 5% qoq though still lower than 1QFY08. Though reported ARPUs were down 3%, the decline was negligible adjusting for the impact of the accounting change on commissions. The adjusted rev/min qoq decline at ~5% though slightly more than larger peers is broadly in line with the industry trend.

S Kumars Nationwide’s 3QFY08 revenues increased 44% YoY, with earnings up a strong 72% YoY, better than our expected 56%. This was largely due to higher sales growth (8%) in luxury textile division benefiting from new capacities and lower than expected depreciation charge as expansions in high value cotton fabric and home textiles have been pushed back to Mar/Apr’08.

EBITDA margins grew 190bps YoY to 22.6% levels, in-line with estimates. However, growth has started to moderate; we see margins peaking at 23% in FY09E since high costs relating to brand promotion expenses and overheads relating to expansions in home
textiles and cotton fabric should limit further gains.

Company is expected to report an EPS of Rs 8.39 and Rs 9.87 for FY08 and FY09.

Larsen & Toubro (L&T) has announced that Larsen & Toubro’s (L&T) Heavy Engineering Division has been awarded an order to manufacture and supply 22 Hydrocracker & Atmospheric Residue Desulphurisation (ARDS) Reactors for Kuwait National Petroleum company’s prestigious clean fuel project 2020.

The total value of the order is KWD 117.89 million, equivalent to US $ 421 million (Rs 1695 crore). This is the largest ever order placed with any single manufacturer in the world for such critical reactors. The order has been won against stiff international competition from Japanese and Italian reactor manufacturers.

These reactors will be manufactured from advanced technology steels containing chromium, molybdenum and vanadium, with thickness up to 300 mm and weights up to 1450 MT. The reactors for the clean fuel project 2020 have to conform to Chevron process design and specifications. L&T’s heavy engineering division is amongst a select group of companies qualified for manufacture of such critical equipment.