Category: Equity Research

Voltas’ 2QFY10 Sales at Rs10bn Grew 9% YoY and 2QFY10 PAT at Rs807mn grew 36% YoY. The earnings beat was primarily due to higher than expected EBITDA margins of 10.6% (up 296bps YoY and 282bps ahead of estimates) as the company benefited from lower cost inventory in this quarter and continued cost reduction efforts.

The sales in 2QFY10 were affected by a sharp decline in revenue in the Engineering (more…)

DLF reported sales of Rs17.5bn, 6% growth qoq supported by 2m sq ft of sales in Delhi project. While the EBIDTA margin of 52% was higher than our expectation of 47%, net profit at Rs4.4bn was 9% below our estimate due to higher interest cost and taxes.

DLF plans to launch Value housing under a new brand to mark its entry into affordable housing. We think the move has been prompted by subdued demand for DLF’s mid income housing projects, while other developers have seen phenomenal demand for (more…)

Unitech Ltd’s Revenue fell of 48% and earnings decline of 50% YoY was well below our estimate; on a QoQ basis the performance was relatively better, with flat sales and earnings up 13% given that the company recognized the Gurgaon hotel sale (Rs700m) and earnings of Rs500m in the qtr.

Pre-sold ~10msf of the ~21msf launched; largely driven by its Unihome launches (~5msf). Execution however is still slow with ~35msf under construction (vs. ~33.5msf in 1Q); mgmt expects to ramp up significantly in 2H and is targeting to deliver 30msf over the next 3 yrs, which seems ambitious. (more…)

Sterlite Industries reported 2QFY10 net income of Rs9.6bn, which was 10% above our estimate for the quarter, and down 25% on a yoy basis (up 43% sequentially). Revenue at Rs60.8 bn was up 34% sequentially, mainly on account of higher realizations for zinc (+20% qoq) and lead (+15% qoq), and higher zinc volumes (+15% yoy). Sale of surplus power from BALCO also contributed to EBIT on a yoy basis, though aluminium and copper.

Zinc Division, which had reported results on Oct. 22 with Rs 10.5b EBITDA, constituted 78% of the consolidated EBITDA. (more…)

Tata Motors reported PAT of Rs7.3 bn versus our estimate of Rs5.1 bn, with the upside largely driven by a higher profit on sale of investments. At an operating level, results were in line with expectations with EBITDA of Rs10.5 bn compared to our expectation of Rs10.4 bn. Higher than expected realizations resulted in revenues of Rs79.8 bn beating our Rs78.2 bn estimate. 2QFY10 EBITDA margin at 13.2% grew 520 bps yoy largely on account of price increases, higher volumes (+12.3% yoy) and lower raw material costs led by a yoy decline in commodity prices. Adjusted PAT (excluding gains from investment income) of Rs3.7 bn marginally ahead of our expectation of Rs3.6 bn.

The LCV portfolio, comprising the Ace and its variants, is now one of its most (more…)

Dabur India reported Q2 PAT growth of 29% vs our estimates of 19% and consensus at 20%. The surprise was on account of higher gross margin expansion of 374 bps (our estimate 200 bps) as a result of benign commodity prices. Sales were up 22.7%, (volume growth of 14.2%) in line with street estimates. The company has invested substantially in supporting its brands, as a result of which ad spends are up 54%. EBITDA margin expanded 215 bps. (more…)