Author: CP

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.

Power Trading Corporation – PTC’s 4QFY08 results at Rs192mn were sharply ahead of estimates (Rs114mn) due to significantly higher than estimated other income. The traded volumes fell by 15.4% yoy to 1.2bn units during the quarter led by lack of surplus power and very low long term volumes of Tala project and Himachal Pradesh Electricity board.

Moreover, the operating margins fell to 0.4% during the quarter led by the lower traded volumes. During the quarter, PTC has acquired an 11% stake in Teesta Urja, a 1,200MW hydel power project in Sikkim. Additionally, the company’s subsidiary PTC Financial Services (PFS) has acquired equity stakes in a power exchange and in wind, bio mass and bio fuel projects in India. These investments have been funded by PTC from the QIP issue of Rs12bn completed in January 2008.