Category: Breaking Corporate India Earnings News

TCI’s Net sales rose by 12.7% YoY to Rs3.3bn. However, sales are not comparable YoY due to the hive off of fuel pump stations. Excluding the revenues generated from the fuel pumps, sales rose by 17.8%
YoY.

EBITDA grew by 9.9% YoY to Rs 229 mn. EBITDA margins were stable YoY but improved substantially by 188bps QoQ to 7.0% due to improved performance from the TCI Seaways division. depreciation. Interest cost grew by 38.5% YoY to Rs 43 mn due to higher borrowings. Depreciation fell by 104.5% YoY to (Rs 2.5 mn) due to a change in the depreciation policy.

TCI’s supply chain division has added new customers like ITC foods division, Ceat Tyres, P&G, Spinach, etc. TCI also added ~8.0 lac sq ft of warehouse space during FY08. XPS, the Courier division of TCI recorded a 20% growth.

Despite the ongoing sluggishness in American corporate profits (BFSI segment), overall US IT spending remained robust in 1Q08. Most Indian IT services companies have acknowledged delays/slowdown in ramps especially for Financial Services customers in 1H08, but expect a recovery in 2H08.

Indian IT players continued their market share gains in the global arena with 35% YoY revenue growth in Q1-2008. Offshoring is likely to be the mega-trend for IT Services and expect Indian IT players to continue to gain market share.

Technology spending as a percentage of profits peaked in Q1-2000 and has constantly declined since then and is currently holding at 25-30% levels.

Yesterday we reported about the hike in petroleum products and excise duties. Post-hike, the Wholesale Price Index is expected to rise by 55 bps only on account of the hike in these 3 products.

The hikes also meant increase in consumer’s burden by Rs211 bn (US$4.9 bn or 0.39% of GDP) and the government will bear tax losses amounting to Rs226.6 bn (US$5.3bn or 0.42% of GDP) in F2009 (12 months ended March 2009).

The combined central plus state deficit including the off-budget expenditure items is expected to be about 8.9% of GDP in F2009 (from 9.3% earlier).

TRF’s Q4FY2008 results were mixed bag – (1) revenue below estimates at Rs1.7 bn and 20% yoy growth and (2) net profit in line with estimates at Rs154 mn and 54% yoy growth. For FY2008, TRF reported net profit growth at 59% yoy to Rs322 mn and earnings of Rs58.4/Share, ahead of estimates. TRF is comfortably placed with Rs10 bn order backlog executable in next 24-30 Months. But, the quality of above order backlog is worrisome with presence of fixed price contracts.

Despite a below expected revenue growth, EBIDTA growth at 47% yoy to Rs228 mn was in line with estimates. We attribute this to 150 bps expansion in EBIDTA margins to 13.5% in the current quarter. This is largely driven by change in revenue mix with high margin Products Division contributing 25% of revenues in Q4FY2008 against 20% in Q4FY2007.

TRF has outstanding order backlog of Rs10 bn as on 31st March 2008.

VIP Industries declared its FY2007-08 numbers. Sales and PAT are 12% and 8% below consensus estimate. EBITDA margin stood at 9.9% as compared to estimates of 10.2%.

Total standalone sales for Q4FY08 stood at Rs1.1bn, while consolidated sales for FY08 were at Rs5.7bn an growth of 9% YoY. EBITDA margin for the quarter were at 8.3% compared to 10.3% on standalone level. Consolidated EBITDA margin were at 9.9% Vs 8.5% meaning that integration of Aristocrat Luggage has started yielding results. Consolidated PAT before extra-ordinary item (VRS Account a drag here) stood at Rs 285mn(18% YoY), while post extra-ordinary item it was at Rs216mn (48% YoY).

We estimate VIP to report an earnings of Rs 7.45 for FY2009. VIP Industries retail venture planned to add 100 exclusive outlets and the company commanded ~50% market share in organized retailing of luggage merchandise.

Sun Pharma reported Q4FY09 sales Rs12.5 bn (up 131% YoY), PAT Rs7.2bn (up 241%YoY). Results were dominated by the higher-than-expected Protonix shipments. EBITDA margin expanded to 58.9% in Q4FY08 from 28.4% in Q4FY07. The India formulations business grew 25%YoY in FY08 to Rs14.7bn while the ROW formulations business grew 30%YoY in FY08 to Rs2.6bn. The US business grew 164% YoY to Rs13.9bn driven by Trileptal exclusivity and the Protonix launch.

The management guidance is 18%-20% YoY growth for FY09 for the non-US business and expects 25% growth in the US business.Management reiterated that it is confident of getting the Effexor XR approval later this year but did not give any specific timeline.

EPS estimates for FY09 is between Rs 80 to Rs 82.50.