Dalal Street

Thermax:Thermax reported Q308 consolidated PAT of Rs797mn, up 51% YoY, ahead of our estimate of Rs703mn. This was driven by strong revenue growth of 57% YoY, higher than expected other income and lower-than-expected taxes.

Thermax reported Q3 consolidated revenues of Rs9.3bn, up 57% YoY and ahead of our estimates of Rs9bn. Energy segment revenues grew 62% YoY and environment business revenues grew 30% YoY. Thermax Q3 EBITDA margin of 11.7% was down 69bps YoY and below our estimate of 12.2% primarily on account of higher than expected material costs.

Thermax’s Q308 order backlog is Rs29.2bn, lower than the Rs32bn order backlog at the end of H108.

Suzlon Energy:
Suzlon had a disappointing quarter in our view with 3QFY08 PAT at Rs1.5bn down 13% YoY, which was 39% below CIR expectations of Rs2.5bn on the back of poor operating margins especially on the WTG side, higher depreciation and exceptionally high tax.

Suzlon took a hite of Rs 960 mn in Q3 FY08. However, an order backlog of Rs177bn, up 122% YoY, comprising Rs147bn of international orders. In MW terms Suzlon has a robust order backlog of 3,358MW comprising 2,917MW of international orders.

Deccan Chronicle Holdings: DCHL’s 3Q FY08 net profit was up 112%, driven by 48% sales growth and a 1,700bp margin expansion. Advertising revenues grew 46%, while circulation revenues grew 5%. The EBITDA margin of 65% was the strongest ever as DCHL continues to benefit from low raw material prices and an appreciating rupee.

DCHL has won the bid for the IPL’s 10-year Hyderabad franchise for US$107m. Management has indicated breakeven or a modest profit in FY08 for IPL, but our base-case estimates for sponsorship revenues call for a loss of Rs80m in FY08 and FY09.

Jagran Prakashan: Advertising revenue growth of 29% in 3QFY08 was driven by an increase in the advertising space on the back of new edition launches (I-Next and CityPlus) as well as ad-rates hikes undertaken last year.

Newly launched bilingual newspaper format I-Next, which now operates through 6 editions, has gained the number two position in the cities of Kanpur and Varanasi. Jagran’s 50:50 JV with Network18 is set to launch India’s first Hindi language business daily, which will be followed by other language business dailies.

Reserve Bank of India (RBI) today left key rates – repo, reverse repo, Bank Rate and CRR – unchanged in its third quarter review of annual statement on monetary policy for the year 2007-08. While Bank Rate has been left unchanged at 6%, reverse repo and repo rates have been held steady at 6% and 7.75%, respectively. Cash Reserve Ratio (CRR) has been left unchanged at 7.5%. The market was expecting the Reserve Bank of India to lower the short-term lending rate viz. the repo rate by 25 basis points, after a hefty US rate cut last week.

BSE Bankex slumped 3.27% to 11,144.79. BSE Auto index declined 1.53% to 4,850.77 and BSE Realty index down 1.01% to 10,580.98. Banking stocks plunged. ICICI Bank (down 3.35% to Rs 1,231), HDFC Bank (down 2.65% to Rs 1,535) and State Bank of India (down 1.7% to Rs 2,267) edged lower.

L&T had a solid 3QFY08 with PAT at Rs4.8bn up 40% YoY (8% above consensus estimates of Rs4.5bn and 7% below CIR estimates of Rs5.1bn). This was well supported by net sales growth of 55% YoY and a 48bps YoY margin expansion.

L&T booked Rs130bn of orders in 3QFY08, up 37% YoY, led by the Rs55bn Mumbai Airport and the Rs13bn Cairn Energy orders. L&T ended 3QFY08 with an order backlog of Rs496bn up 39% YoY. Further the company has already booked Rs65bn of orders in the first month of 4QFY08.

Shipbuilding Ready to Roll at Ennore. The BTG (boiler-turbines-generator) facility is likely to be developed in Hazira and L&T is keen to get the clearance and land from the Gujarat government now that elections are over in the state.

Bharti Shipyard:
Bharati Shipyard’s 3Q net income of Rs267m was up 51% yoy but below our expectations primarily due to: 1. lower-than-expected revenue recognition during the quarter, 2. lower subsidy recognition, and 3. operating loss in the windmill division.

EBITDA margins (ex-subsidy), the most important parameter to gauge performance in our view, remained robust at 20%, primarily driven by better utilization at the existing facilities. Subsidies came in a tad lower than expected. However, since Bharati accounts for subsidy on orders only on 70% completion, lower subsidy accounting during 3Q is purely a timing difference, likely to be corrected over the subsequent
quarters.