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1QFY2012 Result Preview
Reliance Industries
Reliance Industries (RIL) is scheduled to announce its results. We expect the company’s top
line to increase by 18.2% yoy to `68,849cr during the quarter, largely on account of
higher refining and petchem product prices. OPM is expected to contract by around 73bp
yoy to 15.3% mainly on account of lower gas production. PAT is expected to increase by
15.7% yoy to `5,615cr. On the refining side, we expect the company to report GRM of
US$11/bbl for the quarter vs. US$9/bbl in 4QFY2011. The anticipated spurt in GRMs
could be attributed to higher demand for heating oil and shutdown of refineries in
Japan consequent to the earthquake, resulting in a spurt in petro cracks in the Asian
benchmark indices.
On July 22, 2011, the Cabinet Committee on Economic Affairs (CCEA) approved RIL’s
proposal to sell 30% stake in 21 oil and gas blocks to BP. However, CCEA has withheld
permission for two blocks for the time being. RIL will retain operatorship of all the blocks.
The deal was announced by RIL on February 21, 2011, that BP would pay US$7.2bn to RIL
for the deal. We maintain our positive outlook on the stock and maintain our Buy
recommendation with a target price of `1,189.
NTPC
NTPC is expected to announce its 1QFY2012 results. We expect the company to record a
16.6% yoy increase in its top line to `15,094cr, aided by volume growth due to the
commencement of new plants. Operating profit is expected to increase by 15.1% yoy to
`3,849cr. Net profit is expected to increase by 13.5% yoy to `2,091cr. We maintain an
Accumulate rating on the stock with a target price of `202.
Sterlite
Sterlite is slated to announce its 1QFY2012 results. The top-line is expected to grow by
72.2% yoy to `10,200cr mainly due to higher sales volume and realisations for its zinc
business. On the operating front, EBITDA margin is expected to improve by 350bp to
28.0%. The bottom line is expected to grow by 68.6% yoy to `1,700cr. We maintain Buy
on the stock with a target price of `216.
Bank of India
Bank of India is scheduled to announce its 1QFY2012 results. We expect the bank to
report healthy NII growth of 24.2% yoy to `2,161cr. Non-interest income growth is
expected to be rather moderate at 11.0% yoy. Overall operating income growth is
expected to come in at 20.8% yoy, however a faster 29.5% yoy rise in operating expenses
is expected to lead to rise in cost-to-income ratio above 42%. Higher provisions are
expected to ease off net profit growth to 6.7% yoy to `773cr. At the CMP, the stock is
trading at attractive valuations, in our view, of 1.1x FY2013E ABV. We maintain our Buy
view on the stock with the target price of `498.
Oriental Bank of Commerce
Oriental Bank of Commerce is scheduled to announce its 1QFY2012 results. The bank’s
NII is expected to grow by muted 4.4% qoq (flat yoy) to `1,058cr. Other income is
expected to increase by 13.2% yoy (decline 19.0% qoq). Operating expenses are expected
to decline by 1.1% yoy and 5.4% qoq, while pre-provision profit is expected to increase by
modest 4.1% yoy. We expect the bank’s net profit growth to decline by 4.1% yoy
(sequential increase of 4.4%) to `348cr. At the CMP, the stock is trading at 0.8x FY2013E
P/ABV. We recommend an Accumulate rating on the stock with a target price of `392.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
1QFY2012 Result Preview
Reliance Industries
Reliance Industries (RIL) is scheduled to announce its results. We expect the company’s top
line to increase by 18.2% yoy to `68,849cr during the quarter, largely on account of
higher refining and petchem product prices. OPM is expected to contract by around 73bp
yoy to 15.3% mainly on account of lower gas production. PAT is expected to increase by
15.7% yoy to `5,615cr. On the refining side, we expect the company to report GRM of
US$11/bbl for the quarter vs. US$9/bbl in 4QFY2011. The anticipated spurt in GRMs
could be attributed to higher demand for heating oil and shutdown of refineries in
Japan consequent to the earthquake, resulting in a spurt in petro cracks in the Asian
benchmark indices.
On July 22, 2011, the Cabinet Committee on Economic Affairs (CCEA) approved RIL’s
proposal to sell 30% stake in 21 oil and gas blocks to BP. However, CCEA has withheld
permission for two blocks for the time being. RIL will retain operatorship of all the blocks.
The deal was announced by RIL on February 21, 2011, that BP would pay US$7.2bn to RIL
for the deal. We maintain our positive outlook on the stock and maintain our Buy
recommendation with a target price of `1,189.
NTPC
NTPC is expected to announce its 1QFY2012 results. We expect the company to record a
16.6% yoy increase in its top line to `15,094cr, aided by volume growth due to the
commencement of new plants. Operating profit is expected to increase by 15.1% yoy to
`3,849cr. Net profit is expected to increase by 13.5% yoy to `2,091cr. We maintain an
Accumulate rating on the stock with a target price of `202.
Sterlite
Sterlite is slated to announce its 1QFY2012 results. The top-line is expected to grow by
72.2% yoy to `10,200cr mainly due to higher sales volume and realisations for its zinc
business. On the operating front, EBITDA margin is expected to improve by 350bp to
28.0%. The bottom line is expected to grow by 68.6% yoy to `1,700cr. We maintain Buy
on the stock with a target price of `216.
Bank of India
Bank of India is scheduled to announce its 1QFY2012 results. We expect the bank to
report healthy NII growth of 24.2% yoy to `2,161cr. Non-interest income growth is
expected to be rather moderate at 11.0% yoy. Overall operating income growth is
expected to come in at 20.8% yoy, however a faster 29.5% yoy rise in operating expenses
is expected to lead to rise in cost-to-income ratio above 42%. Higher provisions are
expected to ease off net profit growth to 6.7% yoy to `773cr. At the CMP, the stock is
trading at attractive valuations, in our view, of 1.1x FY2013E ABV. We maintain our Buy
view on the stock with the target price of `498.
Oriental Bank of Commerce
Oriental Bank of Commerce is scheduled to announce its 1QFY2012 results. The bank’s
NII is expected to grow by muted 4.4% qoq (flat yoy) to `1,058cr. Other income is
expected to increase by 13.2% yoy (decline 19.0% qoq). Operating expenses are expected
to decline by 1.1% yoy and 5.4% qoq, while pre-provision profit is expected to increase by
modest 4.1% yoy. We expect the bank’s net profit growth to decline by 4.1% yoy
(sequential increase of 4.4%) to `348cr. At the CMP, the stock is trading at 0.8x FY2013E
P/ABV. We recommend an Accumulate rating on the stock with a target price of `392.
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