CP | Dalal Street

Earnings Season – So Far – Revisit The Optimism ?

November 1, 20092 min read

Around 139 companies from the BSE 500 have reported earnings and the overall score is – Net Sales increase by 3.3% and Net Profits by 25.3% with NPM expanding to 12.4%.

Autos and cement have performed strongly in sales while Telecom, metals and media are the laggards. When it comes to profit, Banks and Autos lead the chart followed by Pharma. Construction and Infra have seen a decline in profits.

On the back of tepid earnings growth, reforms moving slower than expectations and central bank’s signals on a possible exit policy (more…)

Equity Research

Unitech – Q2 Lacklustre Quarter

November 1, 20092 min read

Unitech Ltd’s Revenue fell of 48% and earnings decline of 50% YoY was well below our estimate; on a QoQ basis the performance was relatively better, with flat sales and earnings up 13% given that the company recognized the Gurgaon hotel sale (Rs700m) and earnings of Rs500m in the qtr.

Pre-sold ~10msf of the ~21msf launched; largely driven by its Unihome launches (~5msf). Execution however is still slow with ~35msf under construction (vs. ~33.5msf in 1Q); mgmt expects to ramp up significantly in 2H and is targeting to deliver 30msf over the next 3 yrs, which seems ambitious. (more…)

Equity Research

Sterlite – Strong Q2 + Project on Track

October 30, 20092 min read

Sterlite Industries reported 2QFY10 net income of Rs9.6bn, which was 10% above our estimate for the quarter, and down 25% on a yoy basis (up 43% sequentially). Revenue at Rs60.8 bn was up 34% sequentially, mainly on account of higher realizations for zinc (+20% qoq) and lead (+15% qoq), and higher zinc volumes (+15% yoy). Sale of surplus power from BALCO also contributed to EBIT on a yoy basis, though aluminium and copper.

Zinc Division, which had reported results on Oct. 22 with Rs 10.5b EBITDA, constituted 78% of the consolidated EBITDA. (more…)

Economy, Markets and Macro Views

Reliance Industries – Refining performance dismal

October 30, 20092 min read

Reliance Industries Ltd reported F2Q10 earnings in line with expectations. EBITDA was up 13% QoQ, 12% YoY; EBIT was up 9% QoQ however down 10% YoY due to higher depreciation which was up 30% QoQ and 92% YoY. Net profit grew 5% QoQ however declined
7% YoY.

Gross refining margins (GRMs) stood at US$6/bbl implying a spread of just under US$3/bbl, despite full commissioning of its new refinery. EBIT stagnated QoQ, and was (more…)

Economy, Markets and Macro Views

Canara Bank – Treasury Gains – Stronger Core

October 29, 20092 min read

Q2FY10 net profit of Canara Bank surprised on the upside, at INR9.1bn, up 72% y-o-y. Net interest income growth was healthy at 14% y-o-y. Credit growth has been exceeding the deposit growth for many quarters now (unlike at some of the other PSU peers where the trend is the reverse) and is the primary reason for its strong operational performance. (more…)

India IPO Reviews and Updates

Blindly Avoid DEN Cable Networks Issue

October 29, 20091 min read

Den Networks is a Delhi based company was formed in 2007. The company is a leading cable television company with a pan-India presence. Within a short time span Den has reached out to about a crore households across 77 cities, mainly by buying out small cable TV operators. The company has acquired majority stake in 65 MSO’s (multi system operators) to expand its network across 9 states.

We recommend to BLINDLY AVOID the issue. Without any (more…)

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