Year: 2008

Nelcast Ltd reported 37.2% YoY top line growth to Rs 1139.2 mn for quarter ended March 2008 compared to corresponding quarter last year. For FY08, Net sales reported growth of 16.6% YoY to Rs. 3564.5 mn as compared to Rs 3057.6 mn in corresponding period last year. The company reported 10.1% YoY growth in EBDITA in Q4FY08 to Rs 127.1 mn compared to corresponding quarter last year. For FY08, EBITDA witnessed growth of 18% YoY. Total expenditure witnessed increase of 43.8% YoY during the fourth quarter mainly due to increase in raw material costs and other expenses. The company reported decline in its EBDITA margins by 410 basis points to 9.7% in Q4FY08 compared to 13.8% in Q4FY07.However for full year FY08, It maintained its EBDITA margins at around 13%.

Nelcast is set to be major beneficiary of accelerating trend of sourcing of auto components due to its high skilled labors, lower wage costs and proven track record.

Domestic sales were muted (up 1% YoY) offset by a significant decline in export sales (-57% YoY). Truck sales grew by 5% YoY aided by low base effect last year. Bus sales fell 29% YoY primarily due to high base effect, we believe base effect will remain challenging for bus sales over the next 4-5 months.

Domestic MHCV goods sales grew by 7% YoY. Our channel checks indicate that retail offtake is not very buoyant but growth is being aided by a low base last year. Freight rates remain reasonably buoyant: +2%Y/Y, +1%MoM – the recent hike in diesel prices has been partially passed on.

Management maintained its outlook of 8-10% growth in truck sales for the industry and ~15% growth for Ashok Leyland in FY09E. We believe market share gains for Ashok Leyland will be extremely difficult as Tata Motors launches its new products over the next two years.

Allahabad Bank reported a net profit of Rs1.6bn for Q4FY08, below expectations. However the NII at Rs4.4bn was inline with expectations. The operating performance deteriorated during the quarter with NII falling by 5%yoy. The fee income remained flat at Rs1.1bn due to high base effect on last year. With sharp jump in the Opex, the core operating profit has declined by 19.0% yoy. However, with higher treasury gains and lower tax rate, the net profit has grown by 35% yoy.

The asset quality continued to improve with gross NPA declining to 2.0% of assets (2.6% last year) and net NPA of less than 0.8 %

Toshiba Corporation and JSW, one of the India’s well known business groups have agreed to establish a joint venture company to manufacture and market steam turbines and generators for thermal power plants in India.

Under the terms of agreement between the companies, Toshiba and JSW will establish a joint venture in June 2008. The new company will have an initial capitalization of US$ 50 million, 75% held by Toshiba and 25% by JSW Group, to be held by two key group companies. JSW Steel – 5% and JSW Energy – 20%. The companies are now deciding the location of the headquarters and manufacturing facilities and will and will announce the details in due course.