Its time to take a look at Corporate India’s performance in Q1FY09. Profit GROWTH for the Sensex companies came out at 11.7%, the lowest since 2002. SENSEX. Ebitda margins declined marginally by 51bps to 20.6% and Ebitda grew by 26.3%, excluding financials. Growth was mainly concentrated in four sectors – Media (29%, supported by exceptionals), Telecoms (27%), Capital Goods (+25%) and Real Estate (+25%). (more…)
Month: August 2008
Madhucon projects – Embedded Assets and Projects
Madhucon Projects Ltd (MPL) reported 1QFY09 results at Rs148mn (+60.8% yoy), ahead of estimates (Rs130mn), led mainly by higher revenues and margins. Revenues grew by 67.2% yoy to Rs2.4bn driven by a strong order backlog of Rs47bn as on 30th June 2008 (6.4x FY08 revenues) and scale up in execution of the company’s BOT projects.
Operating margins fell by 50bps to 14% due to the impact of higher material costs in the company’s fixed price captive BOT contracts. Interest expenses jumped 137.6% led by higher debt for equipment financing. Consequently, PAT increased by 60.8% yoy to Rs148mn.
MPL’s coal mine in Indonesia are progressing is an hidden asset to the company. MPL has an outstanding order position of approximately Rs4,850cr. The order book comprises Roads (35%) – mainly Highways and Flyovers – Irrigation (31%), Power (19%) and Real Estate (15%). The company is expected to report a fully diluted EPs of Rs 16 to Rs 18 for FY09.
Amtek Auto – Consolidation Amidst Weak Results
Amtek Auto has announced the consolidation of all group companies into itself amidst declaring weak results. Consolidated earnings after minority interest including gain on sale of shares (net of losses on forex hedges) of Rs 305 mm came in at Rs 1,070 mm. Lower operating margin at 15.5%. Adjusted net earnings after minority interest of Rs 765 mm were 22% below last year’s Rs 981 mm; depreciation was up 39% to Rs 584 mm and interest was up 19% to Rs 300 mm. (more…)
Shoppers Stop – Retail Trouble Evident
Shoppers Stop reported net sales of Rs. 289.19 crore for Q1 FY09 against Rs. 225 crore in Q1 FY08, an increase of 28.5%. Gross profit rose by only 26.3% to Rs. 104.37 crore for 1Q FY09 as compared to Rs. 82.59 crore in 1Q FY08 on account of decline in share of private labels (20.4% against 20.9%). The company reported operating loss of Rs. 0.59 crore for the Q1 FY09 as against operating profit of Rs. 13.55 crore for Q1 FY08 on account of increase in expenditure (37% growth) primarily attributable to service tax paid (Rs. 4 crore), expenses incurred on re-branding (Rs. 7 crore) and higher overheads of new stores. (more…)
Vishal Retail – Slowdown or consoldation ahead ?
Vishal Retail’s Q1FY09 net sales grew 18.26% to Rs 396.09 crore in Q1FY09 as compared to Rs 318.42 crore in Q4FY09 due to 10% higher footfalls. The operating profit stood at Rs 49.09 crore with a margin of 12.37% as against 10.88% in Q4FY08. This improvement in operating profit margin was on account of the enhanced contribution of private labels to 13.2% from 10% of sales in Q4FY08. Also, there was a marginal growth of 1.5% in sales per sq ft to Rs 1788 in Q1FY09 from Rs 1762 in Q4FY08. The net profit grew 36.5% to Rs 14 crore in Q1FY09 from Rs 10.4 crore in Q4FY08.
On the flip side, as per mgt, inventory position at the end of 1Q has worsened to Rs2800/sq ft (Rs6.5bn) vs Rs2580/sq ft (Rs5.6bn) as of FY08 end. Further, debt has gone up from Rs5.3bn to Rs6.5bn, pushing the debt-equity ratio beyond 2x.
DSP Merill expects the company to report an EPS of Rs 19 for FY09 while ICICI Sec expects the company to report an EPS of Rs 35. We find ICICI’s expectations are really aggressive to meet in this market.
Ranbaxy Labs + Glaxosmithkline Pharma
Ranbaxy Labs: Ranbaxy’s 2Q PAT (adjusted for forex impact) of Rs1.6bn was on the back of 13% revenue growth and modest margin improvement (17.8% vs 16.4% in 1QCY07). Reported PAT at Rs229mn was largely shadowed by Rs1.93bn forex translational loss. As a result, forecasts are lowered by 12-19% and we now model 34% CAGR in core profits (CY08-10E) and impact of FTF opportunities till 2010.
Timelines on Daiichi Sankyo’s open offer remain intact (August 8th-27th). Management reiterates guidance of 20% top-line growth and 17-18% EBITDA margin. W.Europe markets continue to face pressures while growth outlook on RoW markets is robust. Complying with USFDA, to send necessary documents relating to district court motion on Poanta Sahib case by August 3rd, 2008. Ranbaxy is expected to report an EPS of Rs 16 to Rs 17 for year ending Dec-2008.
Glaxo Smithkline Pharma: GSK’s revenues (net of excise) grew 11% YoY on a comparable basis; reported growth (6.3% YoY) is lower due to sale of the fine chemicals business. This was driven by healthy growth rates in priority products and vaccines.
GSK continues with its efforts to boost revenues. It launched Tykerb in 2Q and has entered into an in licensing deal with Astellas. It has entered into a co-promotion agreement with Daiichi Sankyo India for the antihypertensive drug Olmesartan Medoxomil and its combination products.
Gross margins improved 176bps YoY on the back of improving product mix (no fine chemicals; higher share of priority products within pharma). At the same time, strong control over costs translated into a 207bps YoY improvement in EBIDTA margins. GSK is expected to report an EPS of Rs 55 for FY08 ending in Dec-08.