Results Previews – 2QFY2011 by Angel broking

Results Previews – 2QFY2011
Axis Bank
Axis Bank is slated to announce its 2QFY2011 results. We expect the bank to report
healthy NII growth of 37.9% yoy to `1,585cr. However, NIMs are likely to remain flattish
on a sequential basis. Non-interest income is expected to decline by 13.7% yoy. The bank
is expected to register MTM losses on account of sharper increase in the yield curve at the
shorter end and its relatively higher exposure in the AFS category at 32.7% as of
1QFY2011. The bank’s pre-provision profit is expected to register moderate growth of
6.2% yoy. However, net profit is expected to increase by 32.8% on a yoy basis to `706cr
on account of lower provisioning expenses.
At the CMP, the stock is trading at valuations of 2.9x FY2012E ABV, almost 24% discount
to HDFC Bank despite similar earnings quality, profitability and growth expectations over
FY2010–12E. We have an Accumulate rating on the stock with a Target Price of `1,703.
Infotech Enterprises
Infotech Enterprises is set to announce its 2QFY2011E results. We expect the company to
report revenue of US $60.9mn, up 9.9% qoq. We expect growth to be strong on the back
of continued growth momentum in the EMI vertical, effect of consolidation of Wellsco
acquisition leading to strong growth in the UTG vertical and cross-currency benefit of
1.7%. The company’s EBITDA margins are expected to expand by 150bp qoq with
absorption of wage hike given in the last quarter, cross-currency benefit and strong
utilisation in the EMI vertical. Also, PAT is expected to be strong at `36.4cr with 29.4%
growth. Currently, the stock is under review.
Rallis India
Rallis India is slated to announce its 2QFY2011 results. We expect total revenue to grow by
27% to `407cr, backed by strong monsoons. Total PAT for the quarter is likely to increase
by 30% to `59cr. We currently have a Neutral rating on the stock.