Year: 2008

In F4Q08, JISL reported standalone revenues of Rs6bn (33% YoY) and EBITDA margins of 20.6% (460bps YoY expansion) driving 72% growth in EBITDA to Rs1.2bn. MIS grew 54% YoY to Rs2.4bn with strong demand across key states while EBITDA margins remained flat at around 31%. Plastics business grew 21% YoY in F4Q08 driven by domestic pipes business (47% YoY), while the sheets business (largely exports) declined 30% YoY impacted by US housing slowdown. Agro processing (AP) grew 25% YoY owing to muted growth in fruit processing (12%).

The company is expected to report a full year EPS of Rs 25 for FY09.

Geometric Ltd reported weak Q4FY08 numbers, with revenue growing by just 2.0% QoQ to Rs1,265m, while net profit declined by 31.4% QoQ to Rs47m. EBITDA grew 10% QoQ, while operating margin expanded 90bps to 12.5%. PAT margin declined 180bps to 3.7% of revenue, driven down under pressure from losses under other income. Other income reported a loss of Rs11m (as compared to a profit of Rs26m last quarter) and Rs203m for the entire fiscal.

We are underweight on Midcap IT stocks in India and we are recommending investors to Book Profits and exit the sector and look at companies with domestic business model such as Infrastructure, Telecom, Retail etc.

Fag Bearings’ (FBIL) Q1CY08 results were better than our expectations. Net sales grew by 9.4% YoY from Rs1.57bn to Rs1.72bn (we expected Rs1.75bn), mainly due to slowdown in the auto and industrial sectors. There was a sharp drop in two-wheeler and commercial vehicle sales during the quarter, which has affected overall sales growth.

The company’s EBIDTA margin declined by 30bps from 22.2% to 21.9% YoY (we expected 16.0%), due to increase in personnel cost. Personnel cost increased by 200bps from Rs115m to Rs159m due to rise in salaries and lower sales growth. Material cost declined by 80bps from 53.9% to 53.1% despite rise in prices of steel and components, as the company was able to pass the same to its customers. FBIL’s net profit improved by 15.5% YoY from Rs220m to Rs254m due to lower tax rate (we expected Rs178m).

We expect the company on a conservative basis to report an EPS of Rs 65 for FY09.

The turnover in Orient’s ‘fans’ business, at Rs1.3bn, grew 27% yoy during 4Q08, followed by cement at 16%. Paper however slipped 18% yoy due to a 10-day unprecedented shutdown. Total turnover for the quarter, at Rs3.8bn, beat our estimates by 4%. Cement aggregate volumes, at 0.65m tons, inched up 2% yoy. Net realizations, at ~Rs2,950 a ton, rose 13% yoy (and 3% qoq).

The company made a provision of Rs 125m for receivables from its Kenya JV, Pan Paper. Adjusting for this, operating profit, at Rs982m, crossed our estimate of Rs 946m. A temporary shutdown at the paper plant reduced its profitability to Rs35m (Rs104m yoy, Rs111m qoq). This led to an overall dip in the OPM yoy and qoq.

However, the company is expected to report no growth in EPS for FY09 and is likely to be Rs 11.