DLF - Marginal Recovery in Q1 FY 2010
Friday, July 31, 2009DLF revenues of Rs17.46bn and earnings of Rs3.96bn were down 55% YoY and 79% YoY respectively. EBITDA margins of 45% surprised, despite the fall in revenues; would await more details on this. The company has also announced dividend of Rs2/share for FY09.
Construction activity has picked up, now 42msf under contrs (vs. 36.5msf in 4Q), particularly resi projects; also delivered 1msf of off/comm. space. Pre-sold ~2.5msf in the qtr - Delhi, Capital Greens (2msf); and Bangalore (0.5msf); Total developable area down to 423msf (vs. 425msf earlier due to sale of few projects/land. De-notified 5-SEZs as commercial / IT space demand still muted - though pick-up in enquiries.
DAL outstanding recd to the tune of Rs25bn in the qtr (vs. target Rs20bn), this has lowered receivable to Rs26bn (vs. Rs49bn as of Mar 09), expects another Rs5bn during FY10.
Better than expected qtr though sustaining these margins going forward appear difficult. Operationally, improved construction activity and reducing DAL receivables and debt are positive signs.
Published by Webmaster @ 10:48 AM IST.
Kotak Mahindra Bank - Capital Market Linked Businesses Rebound
Wednesday, July 29, 2009Kotak reported consolidated F1Q10 earnings of Rs2.6bn, up 72% YoY and 22% QoQ.
Growth during the quarter was driven by a rebound in capital market-related businesses. PBT for these businesses increased 93% YoY and 206% QoQ.
Credit issues continued with gross NPL levels rising - up 100 bps during the quarter to 3.4%. Most of the increase was concentrated in the small value personal loan segment.
Banking business trends remained muted with NII progression still weak and the bank choosing to re-focus the loan book toward lower yielding corporate loans. Tier I increased to 18.3% from 16% in the previous quarter.
Kotak management has been proactive in managing asset quality through moderation in growth and has a strong balance sheet with high Tier 1. Also, market-related businesses should continue contributing to earnings as capital market activity picks up further.
FY10 EPS is expected to be Rs 28.
Published by Webmaster @ 6:21 PM IST.
Ashok Leyland - Weak + Tata Motors - Surprise Positively
Tuesday, July 28, 2009Ashok Leyland continues to be adversely affected, given concentration of sales in southern India (coupled with loss of market share in the north and eastern markets). Mgmt had also indicated in the recent analyst meet that its sales were affected by consumers shifting to haulage vehicles, rather than speciality vehicles like tractor trailers, tippers.
Operationally, EBITDA was 86% below forecasts. Sales were ~8% above estimates due to higher realizations (we believe on account of spare parts & engine sales).
Mgmt. guided to single-digit domestic volume growth in FY10 and expects exports to increase to 9,000 units. It also expects to increase its operating margins by 350 bps y/y in FY10. Fully Diluted EPS expectation for FY10 is Rs 1.56 and Rs 2.07 for FY11.
Tata Motors recurring net profit at Rs 1.95bn was well ahead of our expectations (we had forecast a modest loss). The results are buoyed by a lower effective excise duty (7.6% of gross revenues this Q) as production from Uttaranchal increased (~13k units/ month). Material costs as % of revenues were a tad lower than estimates.
Mgmt noted that the company's operating cash flows in 1Q were Rs20bn – an encouraging trend. Overall debt levels remain high - ~Rs169bn - and are a concern, given the aggressive debt equity ratio (~6x end FY09). Working capital was slightly elevated - inventory has increased to 32 days (from 28), while receivables also rose to 23 days.
Tata Motors is expectd to report an EPS of Rs 8.35 for FY10.
Published by Webmaster @ 11:25 AM IST.
Bank of baroda - High Profits, Modest Quality
Monday, July 27, 2009While BOB's 1QFY10 profits were up 85% YoY, well ahead of our 48% expectation, they did disappoint. The primary drivers of the beat were trading gains (pretty common in the quarter) and equity/offshore portfolio write-back (less common in the quarter). The
profit camouflages core P&L pain, whereas a simple reading of the results does
not. The BS does feel a bit of strain too, but did a little better than expectations.
Margins for the sector have suffered a little ahead of expectations. BOB's are down almost 32bps YoY (48 bps QoQ) and it appears to be among those that have suffered most. Fee incomes have also been relatively wobbly, culminating in pre-provisioning operating profits falling 24% QoQ (up only 7% YoY). This is disappointing, and while management expects a reversal in the rest of the year, it will likely be of modest means relative to the quarters hit.
With management suggesting a relatively cautious outlook, the stock only looking moderately attractive on valuation, and no real big directional upside/downside.
Published by Webmaster @ 10:01 AM IST.
Direct tax growth plunges to 3.65%
Wednesday, July 22, 2009Showing the impact of economic slowdown, the net direct tax collections during first three months of the fiscal registered a marginal growth of 3.65%. The government said in a statement that collections in the April-June period stood at Rs.59,465 crore, up from Rs.57,373 crore in the same period last fiscal.
At the disaggregate level, growth in Corporate Taxes was 3.31% (Rs.35,709 crore as against Rs.34,566 crore), while Personal Income Tax (including FBT and STT) grew at 4.38% (Rs.24,564 crore as against Rs.22,782 crore).
Lower growth in net tax collection was mainly on account of higher tax refund outgo of 52.01% at Rs.17,600 crore in the present quarter as against Rs.11,578 crore in the first quarter last fiscal, according to the government.
Fringe Benefit Tax (FBT) recorded a negative growth of 7.56% (Rs.1,031 crore as against Rs.1,115 crore) and Securities Transaction Tax (STT) declined by 9.90% (Rs.1,462 crore as against Rs.1,623 crore) compared to the corresponding period last fiscal.
During the month of June, net collection during stood at Rs.35,307 crore compared to net collection of Rs.34,533 crore during June 2008. Growth in Corporate TDS was 12.1% (Rs.19,584 crore against Rs.17,477 crore last year) and non-government PIT TDS growth was 12.4% (Rs.21,188 crore against Rs.18,849 crore last year) over the month of June.
Published by Webmaster @ 12:06 PM IST.
Axis Bank reports 70.24% rise in the net profit
Monday, July 13, 2009Axis Bank has reported a 70.24% rise in the net profit to Rs 562.04 crore for the June 2009 quarter as against Rs 330.14 crore during the year-ago period.
The bank’s total income has moved up 33.65% from Rs 2891.24 crore for the June 2008 quarter to Rs 3864.13 crore for the June 2009 quarter.
Axis Bank has strengths in both retail and corporate banking and is committed to adopting the best industry practices internationally in order to achieve excellence. As of June 30, 2009, the bank has a very wide network of more than 853 branches and extension counters. The bank has a network of over 3723 ATMs providing 24 hrs a day banking convenience to its customers.
Published by Webmaster @ 2:01 PM IST.
IIP at Eight-month High of 2.7%,
Friday, July 10, 2009The uptrend in industrial output continued in May with output up 2.7% YoY and 0.6% on a MoM seasonally adjusted basis. This was higher than our (1.6%) as well as consensus expectations (1.4%) but lower than the 1.3% s.a growth last month. Similar to trends seen earlier this year, the April data was revised, BUT this time the revision was downwards from 1.4% to 1.2%. The revision was led by capital goods (from -1.3% to -7.3%) which raises doubts on the much awaited investment recovery.
On a sectoral basis, growth was led by mining up 3.7%, electricity up 3.3% and manufacturing up 2.5%. Worrying sign is the continued contraction in capital goods (-3.6%) for the third month in a row, (ii) While consumer goods came back into the black (1.2%) after three months, consumer non-durables remained in the red with the key drag being food products and beverages.
Published by Webmaster @ 2:04 PM IST.
Sun Pharma up on getting USFDA approval for Bicalutamide tablets
Wednesday, July 08, 2009Sun Pharmaceutical Industries has announced that United States Food & Drug Administration (USFDA) has granted its subsidiary an approval for an abbreviated new drug application (ANDA) for generic Casodex, Bicalutamide tablets.
These tablets are an androgen receptor inhibitor indicated for use in combination therapy with a luteinizing hormone-releasing hormone (LHRH) analog for the treatment of Stage D2 metastatic carcinoma of the prostate. Bicalutamide tablets are generic version of Casodex tablets from AstraZeneca, having annual sales of approximately $314 million in the US market.
Recently, the company received a tentative nod from the US Food and Drug Administration (USFDA) for its Abbreviated New Drug Application (ANDA) for the generic version of Optivar, azelastine ophthalmic solution 0.05%. The approval will enable the Indian pharma major to market the drug in the US market.
The sterile azelastine ophthalmic solution is the generic version of Optivar Ophthalmic Solution manufactured by Medpointe Pharmaceuticals, which has annual sales of around $48 million in the US market.
The drug is recommended for the treatment of the itching of the eyes associated with allergic conjunctivitis.
Last month, the USFDA seized drug products manufactured by Caraco Pharmaceutical Laboratories (Caraco) - the US subsidiary of Sun Pharma - at the company's Michigan facilities in Detroit, Farmington Hills, and Wixom.
According to the FDA, Caraco repeatedly failed to meet current Good Manufacturing Practice (cGMP) requirements, which guarantee the quality of manufactured drugs. Following this action, the company has been asked to instantaneously stop from further distributing drugs until there is assurance that the firm complies with good manufacturing requirements.
Published by Webmaster @ 9:21 AM IST.
Godawari Power & Ispat
Thursday, July 02, 2009Godawari Power & Ispat's (GPIL) Standalone Top-line fell by a whopping 34.8% yoy to Rs171.8cr (Rs263.4cr) in 4QFY2009. This de-growth was on account of a 46% decline in the revenue from the steel division, and due to the production cut undertaken by the
company in its Steel Billets and Ferro Manganese segment (for the purpose of increasing the sales volume of the power division). However, the sales from Sponge Iron increased by a massive 235% yoy to Rs84.9cr (Rs25.4cr). For FY2009, the company's standalone and Consolidated Top-line increased by 24.9% and 35.1%, respectively.
GPIL's Standalone net profit stood at Rs9.7cr (Rs28.8cr), for the quarter, down 66.2%. This fall was primarily on account of the decline in the operating profit. The company's FY2009 standalone and consolidated net profits declined by 39.6% and 37.7%, respectively.
Published by Webmaster @ 3:16 PM IST.
Implications of Fuel Price Hike
Late last evening, the government raised retail prices of petrol by 9% (Rs4/ltr) and diesel by 6% (Rs2/ltr). Although this is still less than current international prices (petrol and diesel would need to be raised by an additional Rs2.5/ltr as margins are negative, the hike is positive, bodes well for the reform process and is a step towards fiscal consolidation.
Given that petrol and diesel have a weight of 2.9% in the WPI, the fuel price hike would have a ~30bps impact on inflation. We expect inflation to cross 4% levels by year end. On rates, we expect bond yields are likely to stay in the 6%-7% range due to the RBI's continued participation in the borrowing program. We maintain our view that
RBI will reverse its easy money policy next year.
Published by Webmaster @ 12:07 PM IST.
