Category: Breaking Corporate India Earnings News

Housing Development Finance Corporation (HDFC) has announced its financial results for the fourth quarter & year March 31, 2009.

The company has posted a net profit of Rs 733.37 crore in the fourth quarter against a net profit Rs 768.12 crore in the corresponding previous quarter, a dip of around 4.50%. The total income stood at Rs 3,152.44 crore against Rs 2,317.67 crore, registering a growth of 36% on YoY basis.

The company’s net profit for the entire fiscal stood at Rs 2,282.54 crore against Rs 2,436.25 crore in the previous fiscal, a dip of around 6%. The total income stood at Rs 10,992.43 crore against Rs 8,062.80 crore registering a growth of 36% on YoY basis.

The consolidated net profit for the entire fiscal stood at Rs 2,310.50 crore against Rs 2,713.00 crore in the year-ago period, a fall of around 15%. The total income stood at Rs 11,684.23 crore against Rs 8,679.21 crore registering a growth of 34% on YoY basis.

The board of the company has recommended the dividend of 300% i.e. Rs 30 per equity share of Rs 10 each for FY09.

Puravankara Projects 4QFY09 revenues declined 56% YoY while net profit declined 80% YoY largely on account of a sharp 18.2ppt decline in EBITDA margin to 17%. 4QFY09 EBITDA was adversely impacted by a write-down of Rs41.5m in the value of completed properties held for sale. EBITDA margin declined 350bps QoQ due to an increase in staff cost and SG&A expenses. For FY09, revenues and net profit declined 21% and 40% YoY respectively, while the EBITDA margin declined 700bps to 30.7%.

Area under construction is stagnant at 13.4m sq ft in 4QFY09, indicating that construction has not started on any new projects and that no existing projects were completed during the quarter.

During the quarter the company launched its first affordable housing project under the Provident Housing brand in Chennai at very attractive price points of Rs1720-1820/sf. It is offering apartments with ticket sizes in the range of Rs1.4m to 2.0m per unit, which has met with an encouraging response with its Phase-I of 518 apartments already sold out.

Reliance Capital has announced its audited results for the fourth quarter & year ended March 31, 2009.

The standalone results for the quarter shows net profit of Rs 331.44 crore against Rs 386.49 crore registering a dip of 14% on YoY basis, the total income stood at Rs 883.20 crore against Rs 799.29 crore registering a growth of around 10.50% on YoY basis.

The standalone results for the entire fiscal shows net profit of Rs 968.02 crore against Rs 1,025.45 crore registering a dip of 5.60% on YoY basis, the total income stood at Rs 3,017.29 crore against Rs 2,079.79 crore registering a growth of 45% on YoY basis.

The consolidated results for the quarter shows net profit of Rs 311.64 crore against Rs 365.57 crore registering a dip of 14.75% on YoY basis, the total income stood at Rs 1,579.00 crore against Rs 1,634.71 crore registering a minor dip of 3.40% on YoY basis.

The consolidated results for the entire fiscal shows net profit of Rs 1,015.67 crore Rs 1,009.06 crore registering a minor jump on YoY basis, the total income stood at Rs 6,019.43 crore against Rs 4,919.19 crore registering a growth of 22% on YoY basis.

The Board of Directors of the Company has recommended a dividend of Rs 6.50 on equity share of Rs 10 each for FY09.

Highlights of Conference Call:

• The Sales during the year ended March 2009 increased by 37% to Rs 4802 crore as compared to the previous year.
• The Profit before tax during the year increased by 19% to Rs 522 crore and the net profit increased by 25% to Rs 495 crore during the year under review.
• The domestic market revenue during the year ended March 2009 increased by 29% to Rs 1060 crore whereas the international market sales increased by 33% to Rs 3941 crore.
• North American market contributed 22% of the total consolidated business of the company during the year ended March 2009, whereas the Indian and the European market contributed 21% and 32% respectively. The rest of the world market contributed the remaining share.
• Of the total international sales, the sales from North American region during the year under review was Rs 1081 crore, which was 17% higher as compared to the previous year.
• The sales from Europe was Rs 1587 crore (38% higher compared to the year 2008) and the sales from the rest of the world was Rs 1273 crore during the year ended March 2009, which was 43% higher compared to the previous year.
• The domestic sales were Rs 1033 crore during the year under review increasing by 29% as compared to the previous fiscal.
• North American market contributed 22% of the total consolidated business of the company during the quarter ended March 2009, whereas the Indian and the European market contributed 14% and 42% respectively. The rest of the world market contributed the remaining share.
• Of the total international sales, the sales from North American region during the quarter under review was Rs 304 crore, which was 5% higher as compared to the previous year.
• The sales from Europe was Rs 585 crore (21% higher compared to the corresponding quarter of the previous fiscal) and the sales from the rest of the world was Rs 315 crore during the quarter ended March 2009, which was 20% higher compared to the previous year.
• The domestic sales during the 4^th quarter was Rs 196 crore thus increasing by 5% as compared to the corresponding quarter of the previous fiscal.
• The outstanding borrowing as at the end of fiscal 2009 was Rs 2073 crore, thus increasing by 806 crore as compared to the previous fiscal.
• The effective increase in borrowing was due to loan to Advanta to the tune of Rs 184 crore, reprising of forex loans to the tune of Rs 261 crore and the balance for the working and the capital expenditure requirement.
• The company expects volume growth of 10-15% in the current fiscal as pricing is seen correcting. Pricing is expected to correct in the fiscal as raw material prices fall besides competitive pressure on certain molecules and products.
• The demand across U.S. and Europe is expected to be strong. In Asian market also the demand is expected to be buoyant however Latin American market is expected to be weak.
• The company has been able to rein in working capital (from 119 days to 91 days currently) and expects to improve further. Additionally, it expects most of the incremental cash flow to fund incremental working capital needs, thus retaining net debt at current levels.
• The key raw materials prices have declined significantly (by 40-90%) from their peak levels. Thus after a 15% increase in pricing during FY09 the prices are expected to correct by 5% during FY 2010.
• The tax rate is expected to increase to 17-20% during the current fiscal.
• The capital expenditure for the current fiscal is maintained at Rs 150 –200 crore for product registrations and capacity expansion.
• The company completed the Cerexagri French restructuring, however the restructuring plans of Cerexagri plant in Spain is currently on hold.

ACC’s 1Q09 results were significantly above our estimates, as our numbers proved to be conservative in terms of cost savings and benefits from lower coal costs. ACC reported a record-high EBITDA/mt.

Is the worst behind us in the cement cycle?
The cement earnings upcycle started in FY05, driven by rising capacity utilisation (84% in FY04 rising to 94% in FY08) and strong demand (9.3% CAGR over FY05-08). While our demand outlook remains stable (7-8% growth through FY12F), we estimate the bunching of capacity addition between June 2009 and mid-2010 will reduce utilisation to 77-80%, which will probably put margins and prices under pressure.

In the past 3 years, ACC has achieved an EBITDA/mt of Rs900, vs Rs1,066 by Ambuja Cements and Rs1,087 by Ultratech Cement (Grasim’s 100% subsidiary). However, in 1Q09, ACC recorded an EBITDA/mt of Rs1,100, vs Rs1,017 by Ambuja Cements and Rs997 by Ultratech Cement.

Net interest income (NII) came largely in line with ours estimates led by above industry average loan growth and marginal improvement in margins. Other income surprised positively, led by robust fee income growth, treasury gains and recovery from written-off accounts. Low cost deposits grew by 20% yoy, but the ratio declined marginally as of March 2009. Reported asset quality largely appears stable and about Rs26.6bn (about 1.85%) loans were restructured in FY09. Another Rs16bn of loan (1.0%) applications for restructuring are pending approval.

Asset quality: Reported asset quality largely remained stable on a qoq basis. In FY09, about Rs10bn were additions to opening gross NPLs, while recovery and upgradation was Rs7.4bn and writeoffs were about Rs4bn. Gross NPLs were at 1.27% (Rs18.4bn) as of March 2009 (1.5% – Rs19.2bn in December 2008) and net NPLs are 0.31% as of March 2009 (0.37% in December 2008).

At the current price, the stock trades at 6.1x FY10F earnings and 1.0x FY10F adjusted book value