Month: April 2008

Net revenues of Exide Industries up 50% YoY at INR7,913.4 mn in 4Q FY08 and Net profit at INR628 mn shows strong growth of 63% YoY in 4QFY08. EBITDA margins remain at 14.2% YoY even in the face of a 66% YoY increase in lead prices but dip QoQ from 15.1% owing to the increase in manufacturing and SGA costs. NPM increases by 30bps YoY to 7.9% due to stable depreciation costs.Full year FY08 EPS at Rs 3.13

Rise in lead prices has squeezed the margins of Exide Industries. For FY09E we expect EPS to be INR 3.8 with operating margins at 16.7%. Expect net sales to show a growth of 15% YoY and PAT to show a growth of 21%. This is on the back of an estimated volume growth of 15% in the industrial battery segment, 10% volume growth in two-wheeler battery segment and 9.6% volume growth in four-wheeler battery segment.

In F4Q08, JISL reported standalone revenues of Rs6bn (33% YoY) and EBITDA margins of 20.6% (460bps YoY expansion) driving 72% growth in EBITDA to Rs1.2bn. MIS grew 54% YoY to Rs2.4bn with strong demand across key states while EBITDA margins remained flat at around 31%. Plastics business grew 21% YoY in F4Q08 driven by domestic pipes business (47% YoY), while the sheets business (largely exports) declined 30% YoY impacted by US housing slowdown. Agro processing (AP) grew 25% YoY owing to muted growth in fruit processing (12%).

The company is expected to report a full year EPS of Rs 25 for FY09.

Geometric Ltd reported weak Q4FY08 numbers, with revenue growing by just 2.0% QoQ to Rs1,265m, while net profit declined by 31.4% QoQ to Rs47m. EBITDA grew 10% QoQ, while operating margin expanded 90bps to 12.5%. PAT margin declined 180bps to 3.7% of revenue, driven down under pressure from losses under other income. Other income reported a loss of Rs11m (as compared to a profit of Rs26m last quarter) and Rs203m for the entire fiscal.

We are underweight on Midcap IT stocks in India and we are recommending investors to Book Profits and exit the sector and look at companies with domestic business model such as Infrastructure, Telecom, Retail etc.

Fag Bearings’ (FBIL) Q1CY08 results were better than our expectations. Net sales grew by 9.4% YoY from Rs1.57bn to Rs1.72bn (we expected Rs1.75bn), mainly due to slowdown in the auto and industrial sectors. There was a sharp drop in two-wheeler and commercial vehicle sales during the quarter, which has affected overall sales growth.

The company’s EBIDTA margin declined by 30bps from 22.2% to 21.9% YoY (we expected 16.0%), due to increase in personnel cost. Personnel cost increased by 200bps from Rs115m to Rs159m due to rise in salaries and lower sales growth. Material cost declined by 80bps from 53.9% to 53.1% despite rise in prices of steel and components, as the company was able to pass the same to its customers. FBIL’s net profit improved by 15.5% YoY from Rs220m to Rs254m due to lower tax rate (we expected Rs178m).

We expect the company on a conservative basis to report an EPS of Rs 65 for FY09.