Indian Equity Research and Investment Strategy
Punj Lloyd (PLL) announced its FY08 result with consolidated revenue up 51% to INR 77.5bn (in line with estimates) and PAT of INR 3.2bn . EBIDTA margin improved by 100bps. The order book of INR 196bn, or 2.5xFY08 sales, provides revenue visibility. PLL maintains its focus in the oil and gas sector and has increased upstream capex in the India and Caspian region.
Now you are wondering inspite of the good results why is the stock hammered on the bourses ? (more…)
Topline for the full year FY08 up by mere 20% compared to FY07. For 4QFY08 topline improved by 33% to 4741 mn compared to 3573 mn in 4QFY07. Increase in revenue can be attributed to better (average) realization from Rs. 2700 in FY07 to Rs. 3200 in FY08. The total area sold during FY08 increased by 37.4% compared to FY07.
Higher interest cost lead to a decline in net profit margins from 17% in 3QFY08 to 15% in 4QFY08. However on the back of better realization and increased volume, net margins for the full year increased by 200 bps from 14% in FY07 to 16% in FY08.
Sobha Developers Land bank stands at 4024 acres (230 mn sq. ft developable area) as on 31st March 08. Outstanding amount to be paid over next 2 years for the land acquired is Rs. 660 cr. Land bank is distributed as follows – Bangalore 1600 acres, Pune 170 acres, Hosur 700 acres, Cochin 500 acres, Chennai 500 acres, Gurgaon 228 acres and others 326 acres.
Average realization in 2007-08 was Rs 3,200 per sq. ft compared to Rs 2,700 sq. ft in 2006-07.
NTPC’s 4QFY08 Recurring PAT at Rs18.0bn was up 4% YoY. Reported PAT was down 23% YoY on account of exceptional foreign exchange fluctuation items of Rs4.7bn. The company does not expect similar items from FY09 on account of change in accounting.
NTPC’s FY08 Recurring PAT at Rs75.0bn up 12% YoY was 7% below CIR estimates of Rs80.6bn on account of ~ Rs6bn of extra coal costs in 4QFY08 after Coal India hiked prices by 10%. These costs will be made up in the tariffs next year as this is a pass through item.
FY08 gross generation at 200.9 bkwh up 6% YoY was below CIR estimates of 209bkwh on account of delay in capacity addition and gas supply shortages.
Out of the 22,430MW of capacity the company expects to add in the XIth plan, 1,740MW has been commissioned, 16,930MW is under construction and 3,760MW is yet to be ordered. For FY09, we expect the company to report an EPS of Rs 10.98.
Crude Oil speculators have created a havoc in emerging countries like India. As the 10th largest oil importing nation in the world (oil imports are close to 70% of India’s crude oil requirements), a continued uptrend in prices will likely have repercussions on India’s Balance of Payments (BoP). With every US$1/bbl increase in oil prices likely to increase the import bill by US$700mn, if WTI touches US$150/bbl, the current account deficit (CAD) would widen to US$61.3bn or 4.7% of GDP v/s base case of the CAD at US$37bn or 2.8% of GDP. This would lead to a drawdown in reserves and much further currency weakening. (more…)
The Real Estate sector under the lobby of Developers and Builders had squeezed the hard-working middle class Indian BUYER with unseen rates in the nation’s history. However, as warned by few professional bloggers on the web, it seems to me like Residential Real Estate is a House of Cards which has began to fall. (more…)
The Finance Ministry today relaxed norms on external commercial borrowings(ECBs). There were three distinct strands on which norms were relaxed. Limits on borrowings by companies for rupee expenditure was raised from USD 20 million to USD 50 million. Companies in the infrastructure sector can however raise USD 100 million. The USD 500 million per company per year limit under the Automatic Route was kept unchanged. (more…)