Dalal Street

Colgate Palmolive (India) reported net sales of Rs 4.1bn (up 16%), EBITDA of Rs 661mn (up 7.6%) and adj. PAT of Rs 719mn (up 16%) in Q1FY09.

Pre exceptional profit growth was marginally ahead of expectations, driven by 16% revenue growth, and buoyed by 49% rise in other income. Revenues were supported by strong 11.5% volume growth, with toothpaste and toothbrushes recording 11% and 32% growth in the quarter respectively.

Overall EBITDA growth was 8%. Margins tend to be volatile on account of aggressive brand-building spends. Gross margins expanded 50bps Y/Y (up 220 bps QoQ) as cost pressures were offset by price hikes and excise benefits at the Baddi production facility.

Colgate continues to dominate across key segments – toothpastes, toothbrushes and toothpowder – with market shares of c48%, 37% and 46%, respectively

Colgate has the highest dividend yield of c5% and FCF yield of 6.5% in the India Consumer Universe and should provide downside support at these levels.

India’s number one IT Services and Consulting Company, TCS reported flat revenues $1,525m which were below consensus estimates. EBITDA margins were 22.1%. TCS reported lower than expected forex loses boosting Net Profit for Q! FY09 to Rs 12.4b.

Volumes increased 1.3% while blended pricing declined ~90bp qoq. Decline in pricing was due to lower product revenues and less revenues from transformational deals. The company said that it has signed ~12 large deals in Q1 and is working on 20 more such deals which are still in the pipeline.

The management does expect growth to revert in the coming quarters. TCS trades at ~13x FY09E, which is close to historic lows and at ~18% discount to Infosys. For FY09 the company is expected to report an EPS of Rs 60.

BGR Energy System’s Power Projects Division has secured an EPC contract from Rajasthan Rajya Vidyut Utpadan Nigam (RRVUNL) for the 2 x 600 MW Kalisindh Thermal Power Project.

The EPC order from the RRVUNL is for Kalisindh Thermal Power Project. The EPC contract worth Rs 4,900.06 crore will be executed over 39 months for Unit I and 42 months for Unit II.