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Contents
ICRA Q2FY11 result estimates
We expect ICRA to report a 28% growth in revenues led by rating, consulting and BPO business. The operating leverage and very low base will help ICRA expand OPM by 100bps yoy to 37%. Consequently, the net profit will grow by 36.7%yoy to Rs129mn in Q2FY11.
Tata Motors Ltd. (TML) – Standalone Q2FY11 result expectation
Despite 31% YoY/9% QoQ volume growth, we expect standalone margins to decline by 240 bps YoY/30 bps QoQ, due to higher RM cost. For JLR we expect 340 bps QoQ decline in margins to 11.6% due to currency swings. We do not rule out positive surprise from JLR. Key things to watch out for (1) M&HCV demand (2) metal price contracts – domestic and JLR and (3) sustainable margins for JLR
n We expect net sales to grow by 43.8% YoY and 10.1% QoQ to Rs 114.7bn.
n We expect EBITDA to increase by 17.7% YoY and 7.2% QoQ to Rs 12.4bn.
n EBIDTA margin is likely to decline by 240 bps YoY and 30 bps QoQ to 10.8%.
We expect APAT to increase by 44.8% YoY and 20.4% QoQ to Rs 5.3bn.
Emkaynomics; 22 October, 2010 ; Fortnightly round up of key banking and economic indicators
n The growth in the non food credit has moved up to 21.1% for the week ended Oct. 22, 2010 and deposit mobilisation improved to 17.4%
n The CD ratio has moved downwards to 71.3% for the week ended Oct. 22, 2010
n Money supply growth has increased to 17.7% and the money multiplier has grown to 5.17
n Call money rates as on Nov. 08, 2010 have shed 16bps from last fortnight to 6.6%, with a brief move to 7.67%
n The spread between call money and reverse repo rates has narrowed as on Nov. 08, 2010 and stands at 135 bps
n Excess liquidity is absent in the system and stood at `-111.4 bn. The repo balances stood at ~ `429.4 bn. and reverse repo at ~ `61.4 bn. for the week ended Oct. 22, 2010
n The spread between the long and short end OIS has eased and stand at 27bps as opposed to 30 bps last fortnight
State Bank of India Q2FY11 Result Update; Improving earnings; slippages remain high; REDUCE; Target: Rs3,000
n SBI’s net profit at Rs25.0bn, lower than our estimates driven by higher than expected provisions for the merger of State Bank of Indore (SBIndore)
n Operating performance strong with NII growth of 45% (Rs81bn), operating profit growth of 31.5%. Other highlights (1) CASA at 47% and (2) fee income growth of 22% qoq
n The slippages continue to remain high at Rs44.1bn for the quarter (Rs41.6bn excluding agri relief NPAs). Provision expenses to remain high at Rs18-19bn in coming quarters
n We are upgrading FY11E/FY12E estimates by 5.2%6.2% each. ABV estimates upgrade by -2%/+1.4%. Maintain REDUCE with TP of Rs3,000 (1.8x consolidated ABV + subsidiary value)
Aban Offshore Q2FY11 Result Update; EBIDTA above Estimates- Net profit disappoints; HOLD; Target: Rs875
n Aban’s Q2FY11 APAT (ex profit from assoc) at Rs1.19 bn (+8% qoq) above est. Reported profit of Rs 752 mn below expectations, impacted by losses in JV and higher tax rate
n Revenue at Rs8.28 bn, though down 1.7% qoq were above estimates. Lower other exp. boost EBIDTA margins to 67.2% driving better than expected EBITDA (Rs5.56 bn +6.9% qoq)
n Continued idle status of Deep venture and higher tax rate assumptions results in 12.1% downgrade in FY11 earnings
n Stock trades at 8.2X PER and 6.9X EV/EBIDTA. Though we see near term earnings traction, downward revision in rates for standalone fleet to drag down FY12 EPS. Maintain HOLD
n Technical Comments
Wave of profit booking
Profit booking stepped in on Monday, soon after the Diwali celebrations by the market. Nifty had held the 6,300 level last week but the index retraced from these level today because of profit taking in financial, technology, PSU power, telecom, capital goods and auto (barring Tata Motors) companies shares. Moreover, Nifty has formed an Evening Star candlestick pattern, which indicates that the current profit booking activity may continue in the coming session too. However, in range of 6246-6187, one should look for adding fresh longs for higher targets.
BSE Bankex:
BSE Bankex has formed a Bearish Engulfing candlestick pattern, due to which we may see a minor dip upto 14550-14350, which should be used as a fresh buying opportunity for upside targets of 15500-level.
n Results Today
Apollo Hospitals | B.L.Kashyap | Brigade Enterpr. | Divi's Lab. | Financial Tech. | Garware Offshore |
Geodesic | GMR Infra. | Hindalco Inds. | ICRA | Opto Circuits | Panacea Biotec |
Sundram Fasten. | Tata Motors |
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