Category: Breaking Corporate India Earnings News

Gayatri Projects revenue for Q2 /Sept-08 increased by 44% to Rs. 207 crs from Rs.144 crs in the corresponding quarter Sept-07. EBITDA margin for the company dipped 363 basis points to 11.86% in quarter ended Sept-08 whereas Net profit margin was down by 59 basis points to 4.13% in Q2 FY09 as compared to 4.72% in same quarter last year.

For the half-year ended 30th September 2008, the total revenues grew by 50% to Rs. 414.25 crores from Rs. 276.93 crores during the same period last year. Overall PAT increased by 45% standing at Rs. 19.82 crores, from Rs.13.74 crores during the same period last year.

Raw Material to sales has gone up to 85.21% during the quarter from 78.07% in the corresponding quarter last year. Whereas the employee cost and other expenses increased by 58.86% and 63.16% respectively during the current quarter Sept 08 due to which the EBIDTA margins reduced 11.86%. The EBIDTA increased by 10.04% to Rs. 24.55 crores and the net profit increased by 25.88% to Rs. 8.56 crs during the current quarter Sept 2009.

Simplex Projects net sales (standalone) was up by 31.80% to Rs. 72.28 crores in Q2FY09 over Q2FY08. This is due to timely execution of contracts. However, net sales (consolidated) was up by 25.45%. The Operating Margins (OPM) of the company stood at 10.75% for Q2FY09 in comparison to 12.75% in Q2FY08. The fall came from the rise in raw material cost and employee cost. Operating margins on a consolidated basis stood at 11.06% in Q2FY09.

Profit After Tax (standalone) for the company has increased by 8.65% to Rs. 4.90 crores in Q2FY09 over Q2FY08. The company has raised Rs.55.5 crores from IPO. This was raised for financing the long term working capital (Rs. 35.54 crores), acquiring plant and machinery (Rs. 13.88 crores) and investment in subsidiary company (Rs. 6 crores).

As the Real Estate House of Cards collapsed, Banks are busy taking situation of their exposure to troubled Asset –
Indian Real Estate which is decaying like Radio Active Material. Here is the list of banks with exposure to Indian Commercial Real Estate as a percentage of Networth.

The Top 5 banks in the list of heavy exposure to the troubled sectors are as follows,

• Indian Oversees Bank – 77.3% of its networth is in Real Estate
• Axis Bank – 67.4%
• Bank of India – 58.7%
• Indian Bank 58.1%
• Corporation Bank 56.5%

Here is the complete list as published by Kotak Sec Research.

Shree Renuka Sugars reported lower-than-expected Q4FY08 result with EBITDA margin of 9%, due to lower-than-average market price of sugar. Sugar segment sales grew 41.4% YoY with sugar volumes rising from 317,674 tonnes to 535,644 tonnes and average sugar prices falling from Rs15,940 per tonne to Rs12,962 per tonne.

The company took maximum advantage of the enormous opportunity in exports, due to which trading sales grew by a whopping 455% YoY. The expansion in distillery as well as power capacities coupled with increase in average realization (12.2% in ethanol per liter and 62.5% in power per unit) helped the company post healthy growth in its co-generation and ethanol businesses.

On an annual basis, sales rose 149.1% YoY. However, due to subdued performance in the last quarter, FY08 EBITDA margin fell 240bp YoY to 12.0% but net profit rose 36.9% YoY to Rs927bn. Although average sugar price in Q4FY08 hovered at Rs16,500 per tonne, the company had to sell it at about Rs15,000 per tonne. This resulted in the company registering a 799bp YoY fall in EBITDA margin during the quarter.

At Rs57, the stock trades at 6.8x earnings FY09E earnings expectations. In a related development, HDFC Sec has downgraded Bajaj Hindustan.

For the quarter ended 2QFY09 Neyveli Lignite reported an 8.19% fall in Net Sales to Rs 668.17 crore. This was mainly because of reduced power generation. Power generation declined from 4.37BU in Q2FY08 to 3.74BU in Q2FY09.

The Operating Profit Margin declined by 353 basis points to 32.03% due to 18.42% increase in employee cost from Rs. 188.92 crore in 1QFY08 to Rs. 223.72 crore in 2QFY09. Employee cost for the current quarter includes Rs. 61.17 crore (Rs. 37 crore for the corresponding previous quarter) towards provisional liability for pay revision. The subsequent Operating Profit for the quarter under review stood at Rs 213.99 crore which was 18% lower when compared with corresponding period last year.

Net profit went down 18.46% YoY to Rs. 188.39 crore from Rs. 231.04 crore in 2QFY08.

Goldman Sachs has revised India’s GDP growth numbers for FY09 to 6.7% from 7.5% and for FY10 to 5.8% from 7.0%. GS cited that the larger-than-expected shock to the financial sector over the past couple of months, and its knock-on effects on both domestic and external demand key factors that led to the downgrade.

Expect growth to trough at a quarterly pace of 5.0% in the April-June quarter of FY10, before recovering to 6.6% by end-FY10. Large monetary policy stimulus, prospects of a good agricultural crop supporting rural demand, lower commodity prices, and ongoing infrastructure spending which would limit further downside to growth.

As we move into FY10, political risks will begin to weigh-in and stronger measures required at the macro level will be hit.

Power Grid Corporation had a target to spend INR550b in the 11th five year plan. It spent only INR60b in FY08 versus the plan to spend INR110b. In FY09, the company plans to spend INR80.4b, while the plan estimate was INR112b.

Had Power Grid spent INR550b from FY08-12, translating into an earnings growth of 20% for the next four years. Based on actual spends for the first two years of the plan it would be difficult for Power Grid to achieve the targeted capex spend of INR550b. Therefore FY08-12 capex assumptions for Power Grid is cut by 30% to INR385b.

Can the Indo-US Nuclear deal accelerate the spending in FY10 through FY12 ? Maybe if the new Govt in India gives additional thrust to the Power sector.