ACC – Margin Under Pressure Q3-09 Review

ACC’s Q3CY09 results were in line with our expectations. The company’s topline rose 9% YoY to Rs 19.6bn, driven by a 6% YoY increase in realisations and a 3.1% growth in volumes.

ACC’s EBITDA margins expanded 963bps YoY to 33.9% on account of higher realisations and lower power and fuel costs. However, on QoQ basis, the company’s margins contracted 139bps. The company posted an EBITDA/tonne of Rs 1,333 during the quarter.

ACC’s capacity expansion at Bargarh is expected to add 1.1mn tonnes to its existing capacities. Moreover, the New Wadi expansion project is likely to be commissioned in phases from the third quarter until Q1FY10.

ACC’s EPS is expected to FALL in CY-2010.

GAIL – Subsidy burden dents bottomline

GAIL’s net sales grew 0.8% YoY to Rs 62.2bn, in line with our estimate of Rs 63.9bn. During the quarter the company witnessed higher natural gas and LPG transmission volumes, a better transmission tariff, and increased gas trading revenues. However, this was largely offset by a higher subsidy burden and lower petrochemical volumes. GAIL’s subsidy share stood at Rs 4.6bn as against Rs 4bn in Q2FY09. A key positive surprise, the gas transmission tariff rose 5% QoQ to Rs 806/mscm.

The company’s EBITDA margin contracted 719bps YoY to 16.7%, below our estimate of 22.2% due to a higher-than-expected subsidy burden. This coupled with lower petrochem prices offset the benefits of higher transmission margins due to incremental volumes. However, petrochem prices have shown some improvement sequentlially, rising to Rs 69.8/kg in Q2FY10 from Rs 67.4/kg in Q1FY10.

GAIL’s adjusted PAT declined 30.3% YoY to Rs 7.1bn, below our expectation of Rs 8.7bn. However, adjusting for the subsidy burden, PAT is 4.5% above our projection due to strong other income (up 145% QoQ to Rs 1.5bn).

Union Bank PAT rises 40% in September quarter

Union Bank of India (UBI) has announced its unaudited results for the quarter ended September 30, 2009.

The company reported a net profit of Rs 505.10 crore for the quarter under consideration against Rs 361.46 crore in the year ago period, a growth of 39.74%.

Total income of the bank has increased by 20.75% to Rs 3760.90 crore over Rs 3114.53 crore on a Year-on-Year (YoY) basis.

Citing lack of trained staff, Union Bank of India, which had charted major branch expansion plans, said it will go slow on the expansion.

Sep-09 Quarter Earnings Season

Aggregate earnings [SENSEX Companies Rssults Declared So Far] are up 13% YoY, a tad ahead of our analyst expectations of 12%. In terms of surprise breadth, three of these eight companies reported net profit that exceeded expectations by 5% or more, while two trailed our expectations by 5% or less. Four companies in the BSE Sensex have reported 20% growth in earnings. It is still early days to analyze the earnings at the sector level.

Broader Market Earnings Lead the Narrow Market – 212 companies have reported. Aggregate earnings for the broad market are up 24%. The sharp recovery in margins, up 5.8ppt YoY, is the key driver for the strong earnings growth. However, revenues for the sample are up 4% YoY.

Jaiprakash Associates Q2 + Bonus 1:2

Jaiprakash Associates has posted splendid results for the quarter ended September 2009. Net profit for the second quarter of the current fiscal soared a whopping 327.89% to Rs 870.19 crore, from Rs 230.37 crore in the previous corresponding period.

Total income for the quarter in review stood at Rs 1,912.51 crore a growth of 47.26% over Rs 1,298.76 crore in the year-ago period.

The company’s board, which met on October 21, 2009, declared an interim dividend of 27%, or Rs 0.54 per equity share of Rs 2 each, for the fiscal 2009-10.

The board also cleared the proposal to issue bonus shares in the ratio of one equity share for every two shares held in the company as on the Record Date to be fixed in due course.

Jaiprakash Associates is engaged in infrastructure construction, power projects, cement manufacturing and hospitality, among others.

Jindal SAW – Long-term visibility missing

Jindal Saw Q3 net sales declined 7.6% YoY to Rs13,729mn (vs our estimate of Rs14,316mn). PAT surged 46.3% to Rs1,464mn as interest outgo fell 33.2% to Rs366mn. Margin expanded 520bp at 18.3% due to the 21% increase in blended price realization and 16.8% decline in raw material costs.

During Q3, the company bagged orders for DI pipes worth $105mn, increasing its total order book to US$700mn to be executed by March 2010. However, it failed to bag new orders for seamless pipes as the demand outlook for crude still remains poor. So though there is medium-term visibility, long-term earnings visibility is
missing.

1 30 31 32 33 34 196