Category: Economy, Markets and Macro Views

Kansai Nerolac Paints’ Q4FY08 results were subdued due to lower demand for industrial paints [Automobiles]. Top-line grew 8.1% y-o-y to Rs 308.4 crore from Rs 285.2 crore. Bottom-line grew by a meagre 2.8% to Rs 24 crore from Rs 23.3 crore. Increase in realizations (2% in decorative segment) boosted EBITDA margin to 13.1% from 12.7% in Q4FY07. During the quarter, the company’s decorative business posted positive results as the housing segment continued to do well. (more…)

The Oil has scaled to a record high and Indian Oil Marketing companies [HPCL, BPCL, Indian Oil Corp] are losing $12 million everyday for selling subsidized Petrol / Diesel / LPG. With stream of elections across India and no political party willing to risk their fortunes by raising oil prices, the Government’s subsidy bill is simply out of control now. All the noises about 30% plus growth in Tax collection will now be utilized for Oil Bonds and Government subsidies. (more…)

We will never recommend to Invest in PSU Refinery / Oil Marketing Stocks until the Government supports FREE pricing mechanism, of course control cartelisation like the Steel companies in India are currently resorting to. However, if you are holding Bongaigaon Refinery & Petrochemicals Ltd, which will be merged with Indian Oil Corporation, here is an arbitrage opportunity. (more…)

Morgan Stanley in a report continues to be OVERWEIGHT on Amtek Auto.

F3Q08 numbers in line with estimates. Consolidated revenues came in at Rs13.2bn, 1.6% above our Rs13.0bn estimate while EBITDA came in at Rs2.3bn, 12.2% below our Rs2.6bn estimate. This excludes one-time Rs297.1m profit on sale of shares booked by Amtek Siccardi (one of the subsidiaries) in F3Q08. Adjusted EBITDA margin came in at 17.2%, 270 bps below 19.9% estimate and 280 bps below last year’s 20%, primarily driven by higher raw material costs. (more…)

Citigroup has reiterated OVERWEIGHT on Cadila Healthcare and Glenmark Pharmaceuticals with a BUY recommendation.

Cadila Healthcare:
Cadila continues to make progress in its effort to consolidate its position across key markets of US, Brazil, France & India. The adverse impact of generic competition for Protonix in the US on its JV with Nycomed is reflected in financials & valuations. Excluding a mark to market forex loss of Rs47m incurred in 4Q, FY08 results were in-line with expectations. Sales growth of 26%, EBIDTA margin expansion of 53bps & recurring (more…)

JP Morgan has reiterated Overweight rating on Allied Digital Services [ALDS] because of its focus on the booming IT Services market within India. For Q4FY08, Revenues grew 3% Q/Q with strong 40%+ Q/Q growth in the services segment offset by a ~10% decline in the solutions segment. EBITDA margins expanded 4% Q/Q with higher services contribution. However, lower other income and higher taxes led to net profit growth of just 2% Q/Q, still ahead of expectations. (more…)