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Equity Research

Sun Pharma + Ranbaxy

November 3, 20082 min read

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…)

Economy, Markets and Macro Views

Punjab National Bank – Good Q2

November 3, 20082 min read

Punjab National Bank (PNB) reported strong Q2FY09 numbers. Net profit was up 31% y-o-y to INR7.1bn and was better than our estimate of INR5.9bn. Key highlight of the result was the net interest income growth at 31% y-o-y, the highest since March 2006 and closely matching the pace of private sector peers. Loan growth too, at 29% y-o-y, for the first time moved above the sector average, having underperformed the sector for the past eight quarters.

Opex grew by 11% yoy (6% higher than MLe) as the bank provided Rs1bn towards impending wage revisions (v/s. Rs250mn in 1QFY09). Asset quality concerns have reduced significantly with gross NPAs declining by 4% qoq to 2.4%. Net NPAs too decreased 24% qoq (at 0.4%). (more…)

Equity Research

SBI+ Bank of Baroda

November 1, 20083 min read

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…)

Economy, Markets and Macro Views

Punj Lloyd – How it Compares with L&T ?

November 1, 20082 min read

Punj Lloyd (PLL) announced its consolidated results; revenue was up 54% at INR29.5bn (our estimate was INR25.9bn, consensus estimate INR26.2bn). Net profit was up 61% to INR1.44bn (our estimate INR0.84bn, consensus INR1.1bn). A large part of the order inflow of INR56bn in 2QFY09 was driven by the INR36.4bn EPC order by Qatar Petroleum.

Management continues to be confident given the robust backlog of Rs217bn (1.9x FY09E sales). The company has minimal exposure to real estate and most of the clients are government companies. (more…)

Equity Research

Tata Power Vs Reliance Power

October 31, 20082 min read

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…)

Economy, Markets and Macro Views

RCom vs Bharti Airtel

October 31, 20082 min read

Reliance Communications and Bharti Airtel both reported their Q2 numbers and here is a brief comparison on the same.

RCom reported 2Q FY09 net profit at Rs15.3bn, up 17% YoY and flat QoQ; reported results were boosted by ~Rs919mn of one-time income from FLAG arbitration. Adjusting for this, RCom’s EBITDA margin fell ~250bps QoQ to 39.8%.

High debt levels (~70% of which is forex debt), possible pressure on EBITDA margins from network expansion and increasing competitive risks in the Indian telecom sector remain key risks in our view. The Co continues to capitalize (MTM) losses (~Rs23bn) on its forex exposure. (more…)

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