Year: 2008

Nestle reported net sales, operating profit, and adjusted PAT growth of 22%, 8.5%, and 11.4%, respectively, which compares with our expectations of 20%, 18%, and 19% growth, respectively. Domestic FMCG growth was robust at 23% during the quarter. Nestle reported a 250bp decline in GPM due to a steep increase in prices of key commodities like milk solids, green coffee, vegetable fats, wheat flour, and sugar.

The calibrated price hikes taken by Nestle could only partially offset the cost pressures being faced by the entire FMCG industry. (more…)

Sun Pharma reported Sales and PAT were up 76% and 135% respectively. While exclusivities were the primary driver of growth and margin expansion, we highlight that core biz appears to have done well too. We estimate exclusivity sales of cUS$68m in 2Q – assuming PBT margins of 85% on these sales, we estimate that recurring sales and PAT grew 32% and 31% respectively. Sun maintained its FY09 guidance.

Sun indicated that post the sharp erosion in market values of global generic companies, there appear several assets that could give a better return vis-a-vis Taro. (more…)

SBI reported 11% growth in its net profits to Rs23.8bn in 2Q2008.Operating revenue was up 27% and is marginally ahead of our expectations by 5%. Lower operating cost growth (up 9%) boosted PPOP growth to 55% yoy. The bank has provided Rs6.93bn as estimated liability with respect to wage revision, but details regarding the accounting for the same are not available. Provisioning for NPA has been higher than our expectations by 14%. We expect this trend to continue as provision coverage for the bank is low compared to the industry. (more…)

Tata Power reported net revenue of Rs19.6bn (up 45% YoY), primarily on the back of increasing fuel costs which are a complete pass through in the regulated business model. EBITDA was up 1% YoY at Rs2.7bn; however, EBITDA margins were under pressure this quarter declining by 584 bps YoY primarily due to an increase in cost of fuel (up 76% YoY). Other income (excluding Rs1.7mn on profit on sale of investment in F2Q09 vs Rs851mn in F2Q08 and forex gain of Rs767mn in F2Q09 vs Rs90 mn in F2Q08) was Rs1.1 bn (up 141% YoY). This was largely attributed by dividend income received from subsidiaries. (more…)