Author: CP

Jubilant’s recurring 4QFY08 results were in-line with expectations, with a robust trend in revenues as well as profitability. The high margin PLSPS business (especially CRAMS) was the key growth driver and now contributes c62% of revenues.

Sales growth of 38% YoY (22% organic) and 443 bps expansion in EBIDTA margins led to an 87% increase in recurring PAT. Reported PAT was buoyed by translation gains (Rs1bn). CRAMS was the key growth driver, up 86% YoY (46% organic), while industrial products benefited from lower molasses prices (down 20% YoY) and higher selling prices. Jubilant also guided to a 35% organic revenue growth and higher EBIDTA margins.

Jubilant indicated that organic capex for FY09 would be cRs7.5bn – higher than our estimates by cRs3bn – funded through debt and internal accruals. Company hopes to report an EPS of Rs 22 in FY07.

Do not take these results of Oriental Bank of Commerce only at face value – Rs1b quarterly loss is on account of accelerated write-off of acquisition costs. Operationally, pre-provisioning profits are flat yoy and up 10% qoq – ahead of expectations, and suggest some signs of a bounce-back, albeit off a pretty modest base.

OBC has pushed up margins about 10bp qoq; should better peer government banks. But this comes off a fairly low base; while this offers upside, the low 225bps margin level remains a fundamental drag on profitability.

OBC continues to maintain industry level growth – about 21% for the year, balanced, with some acceleration over the quarter. Its asset book, however, does see some increased pressure – not significant, but along with a provision write-back to support the bottom line, has eroded loan loss coverage.

Going forward, company should report an EPS Of Rs 29.88 for FY09.

Net revenues of Exide Industries up 50% YoY at INR7,913.4 mn in 4Q FY08 and Net profit at INR628 mn shows strong growth of 63% YoY in 4QFY08. EBITDA margins remain at 14.2% YoY even in the face of a 66% YoY increase in lead prices but dip QoQ from 15.1% owing to the increase in manufacturing and SGA costs. NPM increases by 30bps YoY to 7.9% due to stable depreciation costs.Full year FY08 EPS at Rs 3.13

Rise in lead prices has squeezed the margins of Exide Industries. For FY09E we expect EPS to be INR 3.8 with operating margins at 16.7%. Expect net sales to show a growth of 15% YoY and PAT to show a growth of 21%. This is on the back of an estimated volume growth of 15% in the industrial battery segment, 10% volume growth in two-wheeler battery segment and 9.6% volume growth in four-wheeler battery segment.