Result Update summaries by Emkay

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Contents: 

Result Update: Bharti Airtel; Nava Bharat Ventures; Hero Honda; NTPC; Glenmark Pharma; Andhra Bank; BILT; Infinite Computer; Blue Sta; and Voltas

Voltas Q3FY11 result – First Cut

Below estimates

n    Revenue grew by 5% yoy to Rs10.4 bn Vs estimate of Rs11.4 bn

n     Low growth led by 3% yoy decline in EMP segment to Rs6.9 bn – Vs estimate of Rs8.2 bn

n     EPS and UCP division report healthy growth at 22% yoy to Rs1.4 bn and 28% yoy to Rs2.0 bn – marginally ahead estimates

n    EBITDA margins decline 140 bps yoy to 7.6% Vs estimate of 8.9% - led low revenue growth

n     Gross margins remain stable at 32.3%

n    EBITDA decline by 12% yoy to Rs793 mn – Vs estimate of Rs1.0 bn

n    APAT decline by 17% yoy to Rs551 mn – Vs estimate of Rs678 mn

n    Order Book at Rs47.0 bn (-6% qoq) with order inflows at Rs5.0 bn (up 57% yoy) – below estimates

We will downgrade earnings by about 5%

n        Research Update Included

NTPC Q3FY11 Concall Update; Significant postives to be discounted; upgrade to Accumulate; Target: Rs 204

n    APAT of Rs21.6bn is higher than est. of Rs20.6bn due to incentives led by higher (+2% yoy) availability (PAF) despite  lower PLF (-3.5% yoy - due to back down instructions)

n    As against our view of full tax rate, grossing up is at MAT rate but Co. has indicated possibility of full tax rate in Q4FY11E. If yes, 10% increase in FY11E EPS but no change in FY12E

n    Has signed cumulative cost plus PPAs of 1,00,000 MW with first charge on collections- to emerge as winner in a scenario of (1) falling power prices & (2) deteriorating SEB financials;

n    Valuations reasonable at 2.1xFY12E Book; core ROE of 25%; Upgrade to Accumulate on (1) higher defensiveness after huge PPAs executed & (2) 10% stock correction post Q2FY11 

Glenmark Pharma Q3FY11 Result Update; Results lag estimates; Maintain Accumulate; Target: Rs 371

n    Q3FY11 results were below estimates with a) Revenues at Rs7.6bn (est. Rs7.7bn) b) EBITDA at Rs1.7bn (est. Rs1.9bn) and c) APAT at Rs950mn (est. Rs1.1bn)

n    Revenue growth was driven by a) 25% growth in Speciality business (60% contribution to top-line ) and b) subdued 7% growth in Generics business (40% contribution to top-line)

n    Lower US sales were due to slower ramp-up in recently launched products and adverse impact of forex movement

n    Tweak earning est. downwards by 5%/3% for FY11/FY12E; However valuations reasonable at 16xFY12 EPS as stock corrected sharply over the last one month

Andhra Bank Q3FY11 Result Update; Results ahead of expectations; Buy; Target: Rs 165

n    Andhra Bank’s net profit at Rs3.3bn (up 20% yoy) ahead of expectation with net profit at Rs3.3bn led by better than expected NII at Rs8.4bn, up 44% yoy

n    The balance sheet growth remained healthy with advances growing by 27.7% yoy to Rs656bn driven by healthy growth across the segments

n    The credit cost increased to 0.23% of advances from 0.16% in Q2FY11 as slippage rate continue to remain higher at 0.3% (1.2% annualised)

n    Short maturity of deposits (1.1 years), rising slippages are overhang on the stock. Revise our TP to Rs165 (valuing at 1.3X FY12E and 6% lower ABV). Valuations still attractive at 1.3x/1.0x FY11E/12E ABV

Ballarpur Industries Q2FY11 Result Update; EBITDA margins disappoint; Buy; Target: Rs 42

n    Q2FY11 results, though in line with estimates with APAT of Rs 480 mn (+5% yoy), disappointed with EBITDA margins at 19.3% (-330 bps yoy / -120 bps qoq), lowest since FY07

n    RGP segment benefited from strong demand, EBIT / mt increased up to Rs 13,200 / mt (FY10 average at Rs 6,500 / mt). Benefit to continue up till Q4FY11

n    BILT is increasing pulp capacity with capex of Rs 13 bn to reduce dependency on imported pulp. Completion should help in improving EBITDA margins by ~500 bps to 25%

n    Downgrade FY11 / FY12 estimates by 35% / 6.5% to Rs 3.4 / Rs 5.1 however maintain BUY recommendation on attractive valuations and triggers from listing of subsidiary

Infinite Computer Solutions Q3FY11 Result Update; Inline show, retain BUY; Target: Rs 250

n    An inline quarter with revenues at US$ 49.2 mn (+4.3% QoQ, +42.4% YoY). Margins improved QoQ to 16.7% with profits at Rs 271 mn (+6% QoQ,+33% YoY)

n    Rev growth led by ramp ups in top 5-10 client a/c’s. Co added 3 new clients during the quarter with an increase in US$ 1 mn+ bucket to 15 ( V/s 13 in Sep’10 qtr)

n    Employee addition is in line with co adding ~300 people on a net basis, with qtrly annualized employee attrition moving up ( similar to the trend at peers) to 12.2% 

n    Retain US$ revenue estimates with currency resets (at Rs 45/$ V/s Rs 44/$ earlier) driving a 3.2/5.9/2.5% increase in FY11/12/13E EPS to Rs 24.5/30.2/37.2. BUY, TP Rs. 250

Hero Honda Motors Q3FY11 Result Update; Margins disappoint again, lower rating to REDUCE; Target: Rs 1,540

n    EBIDTA margin disappoints at 11.2% (est. of 14.2%) due to sharp increase in RM to sales (73.9% vs est. of 72.1%) and other exp. to sales (11.9% vs est. of 10.7%)

n    APAT at Rs 5.1bn was below our est of Rs 5.8bn. Presume that higher RM to sales has the impact of cess on sales from the Haridwar (tax free) plant

n    Maintain FY12E vol est. of 5.9mn units. Lower FY12E EPS by 11% to Rs 109.8. On 16/12/10, we upgraded rating to HOLD due to price correction and clarity on strategy post Honda

n    However, in light of sharp erosion in margins we again downgrade our rating to REDUCE with a TP of Rs 1540, valuing the company at 14x FY12E PER

Bharti Airtel Q3FY11 Result Update; One offs dents profitability, Retain HOLD; Target: Rs 345

n    Q3FY11 PAT of Rs13.0bn below estimate of Rs15.6bn due to forex losses coupled with higher interest cost and one time re-branding exp

n    KPI’s in line with expectation remained stable qoq, led by festive season. APRU at Rs198 down 1.6% qoq, Mou at 449 down 1.1% qoq. ARPM flat at Rs0.44

n    EBITDA margin (ex re-branding) at 33.8% in line with expt. while one time global re-branding cost of Rs3400mn led to compress margin to 31.6%

n    Cut EPS by 10.4% /5.9% for FY11E /12E. Valuations at 14.9x EPS and 6.9x EBIDTA. Retain HOLD rating with target price Rs345

Nava Bharat Ventures Q3FY11 Result Update; Concerns loom large but relatively better placed; Accumulate; Target: Rs 328

n    NBVL reported weak numbers mainly due to lower merchant realizations (Rs3.36/unit) vs our est. (Rs4.5/unit). Mgmt said- contracts have been signed at Rs3.8-4.3/unit in Q411/ Q112E- suggesting some pick up

n    Revenues (down 7% yoy) were inline but EBITDA margins (23.1%, down 3100bps yoy) and EBITDA took a hit. Ergo RPAT was lower at Rs493mn versus our estimate of Rs856mn.

n    Cut earnings by 5-20% - factoring in higher fuel cost, coal trading in Zambia from Q312E (Indonesia dropped from projections) and Rs4.3/unit merchant tariffs in FY12E

n    Implied long term merchant tariff of Rs3.3/unit, relatively lower. maintain accumulate on relatively cheaper valuations, natural hedge, fuel security with use of washery rejects

Blue Star Q3FY11 Result Update; Reaction Done; Upgrade to BUY; Target: Rs 455

n    Blue Star reports weakest performance of last 16 quarters  - net profits decline 33% yoy to Rs224 mn  – led by low revenue growth of 4% yoy to Rs6.1 bn

n    Gross margins improve 60 bps yoy – pointing at negative impact of operating leverage on Ebidta margins, resulting in 210 bps decline in Ebidta margins

n    Revise earning estimates by -9% - Revised earnings of Rs20.2/Share and Rs26.0/Share for FY11E and FY12E respectively

n    Post 20% price correction in past week, stock trades at 13X FY12E. Upgrade from ‘Accumulate’ to Buy’ with revised target price Rs455/Share