Dalal Street

Hotel Leela reported 3QFY08 revenues of Rs1,430m and net profit of Rs550m. Results are not comparable on a YoY basis because of merger of Kovalam Hotels, a subsidiary, during the quarter. Net profit for the quarter was augmented by high other income which includes gains of Rs69m on forex debt.

The company recorded a healthy EBITDA margin of 51.7% for the quarter on the back of 8% YoY ARR growth, led by 27% growth in Mumbai ARR while Bangalore ARR declined 12%, and high occupancy of 76% which was boosted by higher business and tourist traffic.

Properties on the anvil include hotels at Gurgaon (management contract), Udaipur, Chennai, Delhi, Hyderabad and Pune to be operational over next 2-3 years.

Puravankara Projects:Revenues grew 78% yoy to Rs1,505m while net profit increased 122% yoy to Rs631m on account of a sharp increase in EBITDA margin by 830bps YoY to 39.4% and net interest income of Rs62m in 3Q FY08,
compared to interest expense of Rs3m in 3Q FY07.

~72.8 acres of land added – 30 acres in Hyderabad near Hitech City and 42.8 acres in Sriperumbudur near Chennai. These are still to be included in our NAV estimate. 2) Area under construction has increased to 18.8m sq ft with the launch of two large residential projects in Chennai and Kolkata (JV with Keppel Land) with a total area of ~6m sq ft.

Puravankara’s large exposure to Bangalore and Chennai is an advantage over North India-based developers, since we believe South India appears to have lower supply risks.

Indraprastha Gas: The company reported a strong set of 3QFY08 numbers, with net income growing 27% yoy to Rs450m, in line with our
estimate, driven by sustained volume growth in both CNG and PNG. This was in line with the run rate over the last few Qs. Underlying business remained strong with increasing
PNG penetration (volumes up 18% yoy) and robust growth in CNG sales.

Noida operations will provide a fillip to volume growth from FY09E, with c.5 stations likely to be operational by Mar-08. Though 3 years marketing exclusivity (from Oct-07) for incumbents is lower than expected, first-mover advantage and rapid network
expansion create sufficient entry barriers for potential new entrants.

GAIL:GAIL’s 3Q reported net income of Rs6.2bn was down 7% yoy and below our estimates. Core operating profits of Rs8.7bn were also significantly below estimates, driven primarily by lower than expected LPG and petrochemical production.

LPG production of 307KT during 3Q was significantly lower than recent trends (average 350KT for the last four quarters), impacted primarily by the 15-day annual shutdown at Gandhar and Vijaipur. Another 15-day shutdown at the Pata petrochem plant impacted petrochem sales, down 16% qoq and 14% yoy. The lower resulting petrochem and LPG EBITDAs drove the poor operating performance for the quarter, significantly below our estimates, despite stable transmission EBITDA.

Jubilant Organosys: Jubilant’s 3QFY08 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 37% yoy (19% organic) & 540 bps expansion in EBIDTA margins led to an 81% increase in recurring PAT. Reported PAT was buoyed by forex translation gains (Rs133m). CRAMS was the key growth driver, up 98% yoy (53% organic), while the legacy industrial & performance products business benefited from lower molasses prices (down 20% YoY).

Research services business to gain traction in coming quarters; ii) Capacity expansion at Hollister-Stier to 120m vials/annum to come through in 1QFY09; iii) Total capex of Rs3bn in FY08 plus Rs2bn in subsidiaries including hospitals and SEZs

Sun Pharmaceuticals: Sun’s strong 3Q (sales up 47%; PAT up 60%) was primarily due to exclusivity sales of oxcarba in the US, reflected in the step jump QoQ in Caraco’s distributed sales. Sun launched generic Protonix as talks between Teva & Wyeth failed. We believe Sun may enjoy extended co-exclusivity (with Teva), as the only other P-IV filer (Kudco) will get approval only after its 30- month stay expires (Dec’08)

Sun indicated that it has an option to buy out the current promoter holding, which would take its stake in Taro to 40%. Sun has a “not to sue” covenant from Wyeth & could get approval in June’08E, albeit as a non AB rated product. Sun could generate sales of cUS$315m during exclusivity; however, we await approval & more clarity on distribution strategy.

Unitech:3QFY08 revenues increased 19% yoy to Rs11,421m. EBITDA margin at 64.3% was flat yoy, but a lower tax rate helped net profit grow 39% yoy to Rs5,258m. EBITDA margin increased to 64% in 3Q from 50% in the previous quarter because of higher proportion of commercial/retail asset sales.

Unitech has received LOI (Letter of Intent) for licenses in 22 circles and has paid ~Rs16.5bn as license fee – we await more details on spectrum allocation. UCP, the AIM fund, has widened its scope of investment to include retail/hotels assets – this could provide potential for Unitech to inject more assets into UCP.

Plans to transfer 40% stake in 3 IT Park/SEZ assets, which are partly owned by UCP, to a business trust to be listed in Singapore. UOT is expected to have an initial portfolio of ~10m sq ft.

Omaxe:3QFY08 revenues increased 18% YoY to Rs6,682m while net profit increased 50% YoY to Rs1,542 on the back of higher other income and 500bps YoY improvement in EBITDA margins to 31.2%.

The company has formed a consortium with GVK and Nagarjuna Construction to bid for infrastructure projects such as airports, roads, bridges, etc. The consortium has currently bid for redevelopment of Udaipur and Amritsar airports and development of Badarpur Highway.

Omaxe is planning to build hotels in Faridabad, Amritsar, Greater Noida and Patiala and is currently in talks with large hospitality chains to form a strategic alliance.