If you are a regular reader here, we started recommending HSBC and also track their Sr. Fund Manager, Mr. Duggal. We now present to you an insight on HSBC’s India investment strategy. Indian markets continue to face headwinds in the form of global risk aversion and deceleration in corporate profit growth due to slowing economic activity. Risk aversion is unlikely to end soon but don’t expect it to get worse either. India’s Growth (more…)
Month: October 2008
Container Corp. of India – Volumes Down – Profits Up
In 2QFY09, Concor’s sales growth was a moderate 10% yoy due to a 9% improvement in realizations despite 1% volume growth. According to management, Exim volume grew only 3% due to a global slowdown, while domestic volume fell 8.8%. Domestic volume was hit by lower petrochemical volumes and ban on some commodity exports. The PAT for 1FH-Y09 was Rs 425.7 crore
Cost rationalization helped EBITDA grow 26.6% yoy, expanding margin by 383bps to 29.8%. Deployment of new equipment in ICDs and route rationalization helped Concor reduce costs.
Being zero debt and cash rich, Concor has maintained its capex plans despite the slowdown and liquidity crunch. According to management, this approach should help them once demand picks up.
Expect Concor to report an EPS in the range of Rs 67.50 to Rs 68.30 for full year FY09.
NDTV Cash Burn Continues
NDTV Ltd (NDTV) declared Q2FY09 standalone revenues of Rs 739mn (9% YoY), EBITDA loss of Rs 124mn (vs EBITDA profit of Rs 2mn in Q2FY08) & adjusted net loss of Rs 130mn (vs. loss of Rs 40mn in Q2FY08). Losses were due to higher selling & marketing expenses, primarily carriage fees. NDTV recorded consolidated revenues of Rs 1.2bn (68% YoY due to NDTV Imagine’s launch in Jan 08), EBITDA loss of Rs 1.1bn (loss of Rs 192mn in Q2FY08) and adjusted PAT loss of Rs 1.2bn (loss of Rs 243mn in Q2FY08).
NDTV De-merger:
NDTV’s Board has approved the de-merger of the news business into a separate company. The activities will be split into two groups of companies which will carry out 1) News & other businesses and 2) Entertainment & specified allied businesses.
For one share (face value: Rs 4) held in NDTV, the shareholders will receive one share (face value: Rs 4) of the entity that acquires the news business and continue to hold their current shares.
HDFC Bank Result Review
HDFC Bank has reported a profit after tax (PAT) of Rs528 crore for Q2FY2009, indicating a growth of 43.3% year on year (yoy). The Q2FY2009 financials include the effect of the merger of Centurion Bank of Punjab (CBoP) with HDFC Bank and hence are not strictly comparable with the performance in the year-ago period.
The net interest income (NII) for the quarter stood at Rs1,866.5 crore, up 60.5% yoy buoyed by the CBoP acquisition-led balance sheet expansion and healthy margins. The reported core net interest margin (NIM) stood at a healthy 4.2% compared with 4% a year ago. The capital raised by HDFC Bank and CBoP during FY2008 has contributed to the same. (more…)
Inflation Softens – Food Prices Rise
For the week ending 4 Oct’08, headline (wholesale price index, WPI) inflation was 11.44%, lower than market’s estimate (11.9%). Inflation for 9 Aug ’08 was revised upwards 19bps to 12.82%. [Did the Government manipulate ? Is their metrics / procedure buggy ?]
Prices of basic food articles such as food grains, cereals, fruits and vegetables remain firm. Vegetable prices have moved up considerably on a week over week basis. The fall in inflation is due to the fall in non-administered petro and manufactured products. (more…)
HCL Technologies – Below Expectations
HCL Tech reported sub 20% YoY growth in U$ revenues to US$ 505 mn (+0.2% QoQ), Rs 23.7 bn (+9.2% QoQ, +38.6% YoY), lower than expectations despite inorganic revenue contribution of ~US$ 7 mn during the quarter.
Operating margins declined by 70 bps QoQ to 21.6%. Net profits (adjusted for ESOP charge) came in at Rs 3.3 bn (+186% QoQ, +18.1% YoY) driven by lower forex losses and higher other income. Revenues from top 5/top 10 clients declined by ~2% QoQ. Onsite Software revenue productivity was down by ~4.5% sequentially.
HCL Tech reported a muted 1% QoQ volume growth in Core S/w (marking the lowest sequential growth in volumes ever). Revenues in Core S/w declining by 0.7% QoQ despite ramp up in a recently awarded telecom deal. For FY09 the company is expected to report an EPS of Rs 21.20 to Rs 21.60.