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Transformers and Rectifiers Q2FY11E Result Estimates
Results to be muted yoy. Expect volume growth of 18% and realization increase of 5% to result in revenue growth of 24% YoY. Expect EBITDA margins to decline by 190 bps yoy to 14.6% (higher base) to result in lower EBITDA growth of 9% yoy to 157mn. PAT is expected to be flat YoY due to higher depreciation and interest. Key things to watch - (1) order inflows especially export orders and (2) realizations/margins in order inflow.
Ashok Leyland Limited (ALL) – Q2FY11 result expectation
Strong volume growth (72% YoY and 15% QoQ) coupled with improvement in average realizations (4.5% YoY and 5.1% QoQ) to result in EBIDTA margin expansion by 30 bps YoY, despite higher RM to sales YoY. QoQ margins to improve by 70 bps due to higher volumes. Key thing to watch (1) Demand outlook post Q2FY11 (2) emission norms cost pass on (3) RM price contracts.
n We expect net sales to grow by 79.7% YoY and 20.7% QoQ to Rs 28.3bn
n We expect EBIDTA to grow by 83.9% YoY and 29.4% QoQ to Rs 3.1bn
n EBIDTA margin are likely to expand by 30bps YoY and 70 QoQ to 10.8%.
n We expect APAT to grow by 100.2% YoY and 45.3% QoQ to Rs 1.8bn.
Yes Bank Q2FY11 result estimates
Robust advances growth to result in 80% yoy growth in NII for Yes Bank. We expect NIMs to remain relatively flat over last year. Revival in the capital market will help the bank to report stronger growth in fee income.
Canara Bank Q2FY11 result estimates
The bank’s net income will show a moderate growth, on account of hefty trading gains in the last quarter. Moreover higher provisioning will further put pressure on Net profit. Key things to watch out – movement in NPA’s and provision coverage ratio.
Gujarat Narmada Fertilisers (GNFC) Q2FY11 Results Expectations: Net Sales Rs 6.6 bn, APAT of Rs 568 mn
GNFC is expected to announce their Q2FY11 results today i.e. October 20th, 2010.
Net revenues are expected to decline by 15% YoY to Rs 6.6 bn due to lower fertiliser and trading volumes. Lower sale volumes are expected to result in 27% decline in fertiliser revenues to Rs 3.4 bn while chemical revenues are likely to show a marginal uptick of 5% to Rs 3.1 bn. Aggregate EBITDA margins are expected to decline by 60 bps YoY to 16.9% due to lower chemical margins this quarter resulting in 17% decline in EBITDA to Rs 1.1 bn. We estimate APAT at Rs 568 mn (-6.3% YoY) resulting in AEPS of Rs 3.7.
As company’s ammonia plant was disrupted in Q1FY11, half year results are likely to be lackluster. For H1FY11, we expect the company to report 24% decline in revenues to Rs 10.2 bn. We estimate a 680 bps YoY contraction in EBITDA margins to 9.2% in H1FY11E and AEPS at Rs 2.2 versus Rs 6.6 last year.
Gujarat State Fertilisers (GSFC) Q2FY11 Results Expectations: Net Sales Rs 10.6 bn, PAT Rs 1.13 bn
GSFC is expected to report their Q2FY11 results today i.e. October 20th, 2010.
Estimated 12% and 10% increase in fertiliser and chemical segment revenues to Rs 7.3 bn and Rs 3.3 bn respectively is likely to lead to 11% increase in overall revenues to Rs 10.6 bn. We expect an increase of 80bps and 410 bps in fertilisers and chemicals EBIT margins to 10% and 26% respectively. Overall EBITDA is likely to increase by 37% YoY to Rs 1.9 bn resulting in aggregate margins of 18.2%, +340bps YoY. We estimate APAT of Rs 1.1 bn (+46% YoY) and AEPS of Rs 14.1.
The company is likely to report a marginal 1.5% YoY increase in revenues to Rs 21.3 bn for the 1st half of FY11E. We expect a strong performance on operational levels by the company driven by strong performance of the fertiliser segment. We estimate 95% growth in EBITDA to Rs 3.8 bn and AEPS of Rs 27.8. For the full year FY11E we estimate an EPS of Rs 48.5.
Coromandel International Q2FY11 Results – Ahead of estimates, maintain BUY
(Note : Q2FY11 results have been adjusted for a one time subsidy income of Rs1.97 bn, pertaining to last year)
Q2FY11 results for Coromandel International were ahead of estimates. Revenues at Rs 25.8 bn (adjusted for subsidy of Rs 1.97 bn related to previous year) increased by 68% YoY and were ahead of estimates by ~8%. A good monsoon supported overall volumes for the company’s own manufactured DAP / complex fertiliser business and its non-subsidy based (agrochem and speciality fertiliser business). Higher trading done by the company this quarter further supported revenue growth.
EBITDA for Q2FY11 grew by 89% YoY to Rs 3.3 bn (we estimated Rs 2.4 bn). EBITDA margins for the quarter were ahead of estimates by 300 bps at 13%. Current quarter results include subsidies of Rs 1.97 bn related to previous year. Post tax adjustment of Rs 0.7 bn on the same, APAT for the quarter works out to Rs 2.2 bn, +96% yoy. It is to note the company’s previous year results also included Rs 1.6 bn as subsidy related to previous year period. AEPS for the quarter stood at Rs 15.9 as against Rs 8.1 previous year.
Company reported a PAT of Rs 3.5 bn, +88% yoy and EPS of Rs 25.2. For H1FY11 the company has reported revenues of Rs 41.3 bn, EBITDA of Rs 5.2 bn and APAT of Rs 3.4 bn. AEPS for H1FY11 stood at Rs 24.6.
On account of strong H1FY11 results we are likely to upgrade our FY11 estimates by 12-15% from current Rs 38.2.
Bajaj Auto Ltd Q2FY11 Result First Cut – Number above expectation
n Net Sales stood at Rs 43.4 bn against expectation of Rs 41.3bn. Difference is mainly on account of higher avg. realizations per vehicle and other operating income.
n EBIDTA stood at Rs. 9.0bn against expectation of Rs 8.7bn.
n EBIDTA margins stood at 20.7% against expectation of 21.2%. Margins are marginally below expectation mainly due to higher other expenses.
n PAT stood at Rs 6.8 bn against expectation of Rs 6.5 bn
Mindtree: Does a sommersault on product business, margin woes continue( CMP Rs 535, Mkt Cap Rs 21 bn)
n Mindtree reported Q2FY11 revenues of US$ 82.4 mn(+7% QoQ,+26% YoY). Co’s growth was once again led by IT services business with co growing it’s impressive show in the IT Services business growing revenues by ~13% sequentially while R&D services growth continued to be soft. However co management noted that it expected to see growth pick up in H2FY11 for R&D svcs as well
n EBITDA margins slipped by ~90 bps QoQ to 11.7%, the lowest in co’s reported history. Ex Product business, operating margins improved by ~130 bps QoQ to 15.4%. Coo has effected wage increments for the balance 25% staff in Q2FY11.
n Profits at Rs 234 mn (+48% QoQ,-51% YoY) were helped by higher other income and lower taxes despite flat operating profits.
n Mindtree has seen a jump in attrition (with quarterly annualized attrition jumping to ~35% V/s 28% in June’10 quarter). We see no respite to Mindtree’s margin woes despite strong revenue growth driven by sharp appreciation in currency and wage headwinds going ahead
CRISIL Q3CY10 Result Update; Results ahead of expectations; ACCUMULATE; Target: Rs7,000
n CRISIL’s Q3CY10 operating revenue grew by strong 5.2% qoq. A strong 12.5% qoq growth in research surprised positively. Stable currency means FTEs have grown strong
n Despite yoy appreciation in INR, the research revenues have grown by 20% yoy. Rating business grew strong at 32% yoy
n QOQ expansion in operating margins and one time gain on sale of shares in Gas strategies Group Ltd. & NCDEX and sale of office space boost earnings growth
n Upgrade to ACCUMULATE with TP of Rs7000 with +14% EPS change for Pipal Research in CY11E and rolling over the multiple to avg CY11/12E EPS (CY12E introduced now)
Larsen & Toubro Q2FY11 Result Update; Results meet expectations; Retain Accumulate; Target: Rs2129
n Q2FY11 performance was in line with expectations – (1) Revenue up 18% yoy to Rs93.3 bn (2) EBITDA margins at 11.4% and (3) APAT up 13% yoy to Rs6.2 bn
n E&C and M&IP segment witnessed strong growth at 17% yoy and 37% yoy respectively; but E&E segment disappointed with 5% decline in revenues
n Order inflows grew 10% yoy to Rs205 bn – YTD secured 51% of FY11E target order flows. Order book at Rs1154 bn – equivalent to 3.1X standalone FY10 revenues
n Reiterate our view that ‘All Is Well’. Retain Accumulate rating with SOTP based price target of Rs2129/Share
HDFC Bank Q2FY11 Result Update; Extraordinary performance; REDUCE; Target: Rs2,100
n A strong 7.7% qoq growth in core operating profit without diluting asset quality was highlight of Q2FY11 results. The net profit grew by 32.7% yoy despite trading losses
n The NII has grown by strong 5.2% qoq driven by 7.4% qoq growth in advances and stable NIMs
n Other positive highlights were (1) CASA maintained at 50.6% and (2) stable NPAs and (3) 30bps improvement in tier I CAR despite strong growth in advances
n Valuations unattractive at 4.5x/3.7x FY11E/12E ABV. Peak valuations in CY07 were at 5.5x 1-yr f/w ABV. Downgrade to REDUCE. But still better pick amongst private sector banks
n Dealer Comments
The markets started the day’s session on a positive note with almost 120 odd point’s upward gap on the back of decent set of positive cues from the global markets. The initial gains were very short lived as markets gave away all the gains and entered the negative zone. Thereafter markets oscillated between the dotted lines for most part of the day. The markets seem to have entered a phase of short term correction as even the premium of Nifty futures keeps on oscillating with today almost going into discount at the closing bell indicating mostly intraday trades in the markets. The sell off in technology, oil & gas, realty, capital goods and select metal and financial stocks dragged the markets lower on profit booking in last our of trade. The overall traded volumes were slightly higher compared to the earlier day by almost 6% and were at Rs 1700 bn. While delivery based volumes were quite lower compared to the earlier day at 38.2% of the total traded turnover. Among the Fund activities FII’s were net buyers to the tune of Rs 3.81 bn while Domestic Funds were net sellers to the tune of Rs 10.49 bn respectively on 18th October 2010. While on 19th October 2010, FII’s bought shares worth Rs. 1.07 bn in cash segment (provisional) while in the F&O segment they were net buyers to the tune of Rs 3.30bn whereas Domestic Funds also bought shares worth Rs. 2.41 bn (provisional).
n Technical Comments
Below 20-daily simple moving average
The market started the session on a strong note but could not sustain that for long and immediately turned volatile, which continued till the afternoon trade. Suddenly in last one hour of trade, both benchmarks slipped sharply, due to profit booking. Moreover, the hourly trend of Nifty has also reversed with a lower low formation, hinting toward a short term correction upto 5800. Also Nifty is trading below the key hourly moving average as well as it closed below 20-daily simple moving average. Hence, on the whole a short term correction is on the cards.
BSE FMCG:
BSE FMCG is forming a bullish Flag at the support of 50-DSMA, hence if this index starts trading above 3700, then one can look for going long in this particular index.
n Results Today
Ashok Leyland | BASF India | BombayDyeing | Canara Bank | G N F C | G S F C |
HCL Technologies | Hind.Zinc | Indbull.RealEst. | Indiabulls Power | Jubilant Organ. | Kotak Mah. Bank |
Mahindra Life. | Motil.Oswal.Fin. | Pidilite Inds. | Power Grid Corpn | S B T | Tanla Solutions |
TRIL | V I P Inds. | Yes Bank |
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