Category: Breaking Corporate India Earnings News

HDFC – India’s largst Housing Finance company reported net profit of Rs5.34bn (higher than our estimate), a ~32% yoy growth on a pre-exceptional basis (17% yoy de-growth including exceptionals). As anticipated, there is some moderation in disbursement growth to ~23% in Q2FY09 from ~26% in FY08 in the context of high interest rates, however approvals have continued to grow at ~26% yoy to ~Rs141.8bn.

Growth in the retail segment continues unabated with individual disbursements up 30%+ yoy. Despite sustained loan growth and elevated property prices & interest rates, HDFC has witnessed an improvement in asset quality in Q2FY09. Gross NPAs and Net NPAs have declined in absolute and percentage terms on a yoy and qoq basis.

Break-up of HDFC’s loan book:
Individuals – 54,726 crore
Corporate – 24,509 crore
Others – 1,959 crore
Financing for Realty Projects – 755 crore

Chambal Fertilisers and Chemicals’ (Chambal’s) adjusted PAT of Q2FY09 was better than expectation on the back of a sharp jump in the trading sales, resulting in an addition to the bottom-line. Chambal has shown a YoY growth of 130.2% in the adjusted PAT to Rs985.7m. The company has provided MTM losses of approx. Rs510m on trading creditor of US$170m, payable in July 2009. Hence, the reported PAT was Rs475.7m. Chambal’s Q2FY09 has declared a result which is standalone, while our annual estimates are consolidated.

Chambal has shown a YoY growth of 133.5% in sales to Rs17,451.3m, on the back of higher trading sales and fertilizer subsidy due to rising input costs. The company has added three ships in H1FY09 that resulted in a YoY growth of 45.4% in the shipping business to Rs1051.7m in Q2FY09. In Q2FY09, Chambal has charged the interest of capitalized new ships in the profit and loss account, instead of the cost of ships as done earlier. Hence, the interest cost jumped by 112.4% to Rs416.3m. Chambal has received entire outstanding fertiliser subsidies till August 2008.

The stock yields good dividend around 9% if bought sub Rs 40 levels. Investors looking for dividend yield can look at the stock.

In 2QFY09, Concor’s sales growth was a moderate 10% yoy due to a 9% improvement in realizations despite 1% volume growth. According to management, Exim volume grew only 3% due to a global slowdown, while domestic volume fell 8.8%. Domestic volume was hit by lower petrochemical volumes and ban on some commodity exports. The PAT for 1FH-Y09 was Rs 425.7 crore

Cost rationalization helped EBITDA grow 26.6% yoy, expanding margin by 383bps to 29.8%. Deployment of new equipment in ICDs and route rationalization helped Concor reduce costs.

Being zero debt and cash rich, Concor has maintained its capex plans despite the slowdown and liquidity crunch. According to management, this approach should help them once demand picks up.

Expect Concor to report an EPS in the range of Rs 67.50 to Rs 68.30 for full year FY09.

NDTV Ltd (NDTV) declared Q2FY09 standalone revenues of Rs 739mn (9% YoY), EBITDA loss of Rs 124mn (vs EBITDA profit of Rs 2mn in Q2FY08) & adjusted net loss of Rs 130mn (vs. loss of Rs 40mn in Q2FY08). Losses were due to higher selling & marketing expenses, primarily carriage fees. NDTV recorded consolidated revenues of Rs 1.2bn (68% YoY due to NDTV Imagine’s launch in Jan 08), EBITDA loss of Rs 1.1bn (loss of Rs 192mn in Q2FY08) and adjusted PAT loss of Rs 1.2bn (loss of Rs 243mn in Q2FY08).

NDTV De-merger:
NDTV’s Board has approved the de-merger of the news business into a separate company. The activities will be split into two groups of companies which will carry out 1) News & other businesses and 2) Entertainment & specified allied businesses.

For one share (face value: Rs 4) held in NDTV, the shareholders will receive one share (face value: Rs 4) of the entity that acquires the news business and continue to hold their current shares.

HCL Tech reported sub 20% YoY growth in U$ revenues to US$ 505 mn (+0.2% QoQ), Rs 23.7 bn (+9.2% QoQ, +38.6% YoY), lower than expectations despite inorganic revenue contribution of ~US$ 7 mn during the quarter.

Operating margins declined by 70 bps QoQ to 21.6%. Net profits (adjusted for ESOP charge) came in at Rs 3.3 bn (+186% QoQ, +18.1% YoY) driven by lower forex losses and higher other income. Revenues from top 5/top 10 clients declined by ~2% QoQ. Onsite Software revenue productivity was down by ~4.5% sequentially.

HCL Tech reported a muted 1% QoQ volume growth in Core S/w (marking the lowest sequential growth in volumes ever). Revenues in Core S/w declining by 0.7% QoQ despite ramp up in a recently awarded telecom deal. For FY09 the company is expected to report an EPS of Rs 21.20 to Rs 21.60.

Credit Suisse studied some 34 of the large CAPEX projects by various Indian companies and found that the projects are expected to be 19-months behind schedule with 30% cost esclation.

The time overrun is the highest for greenfield steel projects as they are stuck in land acquisition or mine allotment. Excluding them, the average delay is 18 months and cost overrun is 15%. These delays increase the investment getting shelved which in turn adversely affects new capex announcements. India’s project execution history in the last 12 years suggests that shelved investment was more than the completed investment and almost a sixth of the announced capex.

Reasons for delay of projects:

• 50% Land Acquisition
• 20% Input Shortage
• 13% Finance problems
• 11% Scope change
• 11% Implementation delays