Category: Breaking Corporate India Earnings News

The board of directors of Borax Morarji has decided to issue of rights equity shares in the ratio of 1 (one) equity share of Rs 10 each at a premium of Rs 10 per share for every existing share held as on record date together with 1 (one) Detachable Warrant for every 2 (two) right shares allotted which will entitle the holder of the Detachable Warrant, upon conversion, 1 (one) equity shares of Rs 10 at a premium of Rs 10 per share.

DLF 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.

Kotak 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.

Ashok 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.

While 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.

Showing 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.