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Indotech Transformers Q2FY11E Result Estimates
Expect improvement qoq after 5 qtrs of disastrous performance. Expect volume growth of 100% led by pick up in order inflow and flat realizations to result in revenue growth of 100% YoY. Expect positive EBITDA margins of 8.2% and PAT of Rs21mn. Key things to watch - (1) commentary on GE PROLEC’s plans for ITL, (2) order inflows & realizations and (3) margins outlook.
McNally Bharat Engineering – Q2FY11E Result Estimates -Results expected on 13 November 2010
Post a subdued Q1FY11, expect MBE to deliver healthy operational performance in Q2FY11
n Revenue growth at 39% YoY to Rs4.3 bn
n Stable EBITDA margins at 7.0%. EBITDA growth at 39% YoY to Rs296 mn.
n But, APAT growth to be lower at 22% YoY to Rs107 mn – attributed to sharp jump in depreciation charges and high tax incidence.
Management outlook on BOP orders inflows and guidance for FY11E will be watched keenly.
Bharati Shipyard Q2FY11 Results – First Cut Analysis
Net profits below estimates
Bharati Shipyard Q2FY11 results were in line with expectations at the operational level. However, net profits were below estimates – attributed to high interest costs.
n Revenue growth was subdued at 9% yoy to Rs3434 mn, marginally below estimates – due to a declining unexecuted order backlog.
n Led by high employee costs, core EBITDA margins declined 40 bps yoy to 18.4%, while EBITDA growth was muted at 6% yoy to Rs631 mn - below estimates.
n However, the PBITDA (EBITDA + other income + subsidy) was in line with estimates at Rs1119 mn (+46% yoy) – attributed to sharp rise in subsidy income (up 185% yoy to Rs480 mn – above estimates).
n The sharp rise in subsidy income was negated by high interest costs (up 168% yoy to Rs634 mn). Consequently, net profits declined 11% yoy to Rs293 mn (Vs our expectation of 41% yoy growth).
n In the absence of fresh order inflows, the unexecuted order book continued to decline – down 18% qoq to Rs15.8 bn. This is equivalent to mere 1.25X FY10 revenues – lowest order book cover ever.
At CMP of Rs264, the stock is trading at 7.5X FY11E standalone earnings of Rs35.3 per share. We have a Reduce rating on the stock with a SOTP target price of Rs196.
HBL Power Systems Ltd - Q2FY11 First Cut Analysis
Results are way below…… Margin pressure inevitable
n Revenues declined by 14% yoy to Rs2.6bn in Q2FY11 – Below estimates (Rs2.7bn).
n EBITDA declined by 70% yoy to Rs204mn, way below our estimate of Rs411mn EBITDA margins at 7.9% (low than estimated 15% margins) led by both raw material and employee costs
n Net profit witnessed a decline of 92% yoy to Rs26mn – lower than our expectation of Rs180mn.
n EPS for the quarter stood at Rs0.1/Share.
n During H1FY11, HBL has reported earnings of Rs0.38/Share. Our FY11E & FY12E numbers will be downgraded.
n At CMP of Rs29, the stock is trading at 6.6xFY11E earnings (Rs4.4) & 1xFY11E Book Value. We currently have a BUY rating (under review) on the stock with a target price of Rs43/Share….We will be releasing a detailed note post concall with the management….
Great Offshore Q2FY11 Result Update; Results in Line- Upgrade to BUY; Target: Rs506
n APAT at Rs281 mn (-10.5% yoy) – in line estimates. Revenues at Rs1.99bn down 15.5% yoy) dragged by lower rates and absence of revenues from Rig Kedarnath
n Lower staff and maintenance costs boosts EBITDA margins by 1151bps to 52.6%. Overall EBITDA at Rs1.04bn, up 8.1%yoy – in line with estimates
n Cut FY11E/FY12E EPS by 9.6%/4.5% led by delayed ops of Rig Amarnath (mid Dec) and lower day rates for vessels. Remain bullish –deployment of Amarnath & rig V351 to drive earnings
n Valuation at 5.6X FY12E earnings ~ 33% discount to Aban offshore, remain compelling – Upgrade to BUY sighting multiple triggers for stock performance - target Rs506
Ranbaxy Labs Q3CY10 Result Update; In-line; Maintain Hold; Target: Rs520
n Ranbaxy’s Q3CY10 performance is in-line with a) Revenue at Rs19.3bn (est. of Rs18.7bn), b) AEBIDTA at Rs1.9bn (est. of Rs2bn) and PAT of Rs1.2bn (est. of Rs1.12bn)
n Management is confident of monetizing Aricept and Lipitor (site transfer to New Jersey) FTF opportunities
n About DoJ-FDA resolution, management has indicated that discussions are in positive direction but they can not ascertain the time lines for resolution of the issue
n DoJ-FDA settlement is critical to stock performance; revise EPS estimates from Rs27.1 to Rs31.7 in CY10E and from Rs29.3 to Rs27.7 in CY11E; Maintain Hold
Apollo Tyres Q2FY11 Conso Result Update; Margins yet to bottom out, Lower rating to HOLD; Target: Rs70
n Q2 cons. performance below est. Standalone results in line due to inventory increase (12.5% of sales), Europe disappoints on (sales and margins), South Africa reports loss due to strike
n Rubber prices (~Rs 200/kg) to have impact on performance in 2H. Price hike eminent across regions. Assumed sequential price increase of 5% in 2H
n Demand structurally strong, expect price hikes in India. Concerned with pricing action in Europe. Expect stock to underperform in the short term
n Lower our FY11/FY12 EPS to Rs 6.0/Rs 8.3. Lower our TP to Rs 70 and rating to HOLD. Key negative risk to our HOLD rating is lack of pricing action
Shree Cement Q2FY11 Result Update; Earnings disappoint. Valuations remain attractive; ACCUMULATE; Target Price: Rs 2,330
n Q2FY11 net profit at Rs106 mn (-96.3% yoy) below estimates EBITDA at Rs1.4 bn (est Rs1.99 bn) decline 65.6% yoy led by lower cement & power realisations and higher RM cost
n Revenues (Rs7.2 bn ) down 20.2% yoy, led by 20% decline in cement & 27.6% decline in power revs. Cement realizations declined 13.4% & power realisation dipped 38.7% yoy
n Cut earnings for FY11E/FY12E by 19.1%/6.4%. With recent cement prices hikes and pick up in volumes, expect the worst to be over for Shree
n Valuation at 5.2 EV/EBIDTA and EV/ton at USD 99 (ex value of power) remain attractive. Maintain ACCUMULATE. Upgrade target to Rs2330, by rolling over valuation to FY12
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