KIFS Result update of ITC-Havells-Engineers-Blue Star-Bajaj Electricals-Siemens-HEG-HCC-Jinal Steel-NMDC

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KIFS Result update of:

ITC Q1 FY12

OVERVIEW

ITC is a leading player in cigarette business, having approximate 80% market share. The company also have business interest in area of hotels, agri-business, packaging and paper boards.  ITC's wholly owned Information Technology subsidiary, ITC Infotech India Ltd, provides IT services and solutions to leading global customers. ITC Infotech has carved a niche for itself by addressing customer challenges through innovative IT solutions. The FMCG business has a retail network of over 2 mn retailers in the country, ranging from premium outlets in metros to small shops in the interiors of rural India.

Key highlights:

· Total income grew by 21% Y-o-Y to Rs. 5860 cr  v/s Rs. 4860 cr in June-10

· Operating Profit grew by 22% Y-o-Y to Rs. 2120 cr. v/s Rs. 1742 cr. in    Jun-10

· OPM grew by 33 bps   Y-o-Y to 36.18 % v/s 35.85 % in June-10

· Net profit grew by 25% Y-o-Y to Rs. 1333 cr.  v/s Rs. 1070 cr. in June-10

· NPM grew by 72 bps       Y-o-Y to 22.74 % v/s 22.02 % in June-10

HAVELLS INDIA

OVERVIEW

Havells India is engaged in manufacturing of electrical and power distribution equipments. It is among the largest and fastest growing electrical and power distribution equipment manufacturers in India.  Sylvania brand has been launched in India and placed in Premium Segment (Pricing products above Havells Brands); management expects decent growth in Sales from India. On annual basis also Sylvania’s performance was much better operationally largely due to higher sales in Latin America and better price realization, restructuring and operational efficiencies in Europe. Management expects sales to grow by 20% next year in Europe & Latin America and by 15% in US & Asian markets.

Key highlights:

· Total income grew by 16% Y-o-Y to Rs. 803 cr. v/s Rs. 689 cr in June-10

· Operating Profit grew by 10% Y-o-Y to Rs. 89 cr.  v/s Rs. 80 cr in June-10

· OPM fell by 61 bps Y-o-Y to 11.03%  v/s 11.64% in June-10

· Net profit grew by 8% Y-o-Y to Rs. 58 cr.  v/s Rs. 53 cr in June-10

· NPM fell by 57 bps Y-o-Y to 7.2%  v/s 7.7% in June-10

ENGINEERS INDIA

OVERVIEW

Engineers India (EIL), incorporated in 1965, is engaged in the business of providing engineering and related technical services for petroleum refineries and other industrial projects. The company has broadened its activities in other areas such as pipelines, petrochemicals, oil and gas processing, offshore structures and platforms, fertilizers, metallurgy and power. The company expects HPCL Mittal's Bathinda refinery to start processing crude in August, the company said on Wednesday. "The refinery will receive crude by Aug. 10 and then processing will start by the middle or third week.

Key highlights:

· Total income grew by 41% Y-o-Y to Rs. 854 cr. v/s Rs. 606 cr in June-10

· Operating Profit grew by 27% Y-o-Y to Rs. 222 cr.  v/s Rs. 174 cr in June-10

· OPM fell by 282 bps Y-o-Y to 25.95%  v/s 28.77% in June-10

· Net profit grew by 29% Y-o-Y to Rs. 148 cr.  v/s Rs. 115 cr in June-10

· NPM fell by 155 bps Y-o-Y to 17.4% v/s 18.9% in June-10

BLUE STAR

OVERVIEW

Blue Star has a wide range of cooling solutions for all types of customers. Its client list includes big names like Aditya Birla Group, Adlabs, Apollo Hospitals, Café Coffee Day, DLF, Future Group, HDFC Bank, ICICI Bank, Infosys,Kotak Group, Microsoft, Moser Baer, RMZ, Reliance, Vishal Retail , Vodafone,etc.  The contracting environment in the country is becoming increasingly challenging as labour, raw material input costs and general operating expenses increases continue unabated.

Key highlights:

· Total income  grew by 6% Y-o-Y to Rs. 705 cr. v/s Rs. 665 cr in June-10

· Operating Profit fell by 55% Y-o-Y to Rs. 28 cr.  v/s Rs. 61 cr in June-10

· OPM fell by 529 bps Y-o-Y to 3.9%  v/s 9.2% in June-10

· Net profit fell by 74% Y-o-Y to Rs. 10 cr.  v/s Rs. 37 cr in June-10

· NPM fell by 420 bps Y-o-Y to 1.4%  v/s 5.6% in June-10

BAJAJ ELECTRICALS

OVERVIEW

Bajaj Electricals (BEL) is engaged in business appliances, fans, lighting, luminaries and engineering and projects. In India, Bajaj Electricals has network of 600 distributors, 3000 authorised dealers, over 2,50,000 retail outlets and over 230 service franchises. Management has highlighted that the company has been taking several measures to contain the overhead costs and increase efficiency in the E&P business. For that, it has been looking to reduce the project sites from current 60 locations to 32 locations.

Key highlights:

· Total income grew by 12% Y-o-Y to Rs. 544 cr. v/s Rs. 484 cr in June-10

· Operating Profit fell by 27% Y-o-Y to Rs. 31 cr.  v/s Rs. 42 cr in June-10

· OPM fell by 303 bps Y-o-Y to 5.7%  v/s 8.7% in June-10

· Net profit fell by 51% Y-o-Y to Rs. 11 cr.  v/s Rs. 23 cr in June-10

· NPM fell by 261 bps Y-o-Y to 2.04%  v/s 4.65% in June-10

SIEMENS

OVERVIEW

Siemens’s business interest covers the areas of energy, industry, communications, information, transportation, healthcare, components and lighting. The company has inaugurated a state of the art bogie factory (undercarriage of a wagon) in Aurangabad, which will serve the Indian and Asian markets. To increase share of renewable energy, the company is exploring investment in solar power. The company plans to spend Rs 2.0 bn for expanding its Automation and Medium Voltage products capacity.

Key highlights:

· Total income grew by 25% Y-o-Y to Rs. 2797 cr. v/s Rs. 2246 cr in June-10

· Operating Profit grew by 3% Y-o-Y to Rs. 269 cr.  v/s Rs. 260 cr in June-10

· OPM fell by 196 bps Y-o-Y to 9.6%  v/s 11.6% in June-10

· Net profit fell by 1% Y-o-Y to Rs. 155 cr.  v/s Rs. 156 cr in June-10

· NPM fell by 142 bps Y-o-Y to 5.5%  v/s 6.95% in June-10

HEG

OVERVIEW

HEG is amongst the leading graphite electrode manufacturer in India. The company owns one of the largest integrated graphite electrode plants in South-East Asia that processes sophisticated UHP (Ultra High Power) Electrodes. The management continues to maintain that the phase- II of the final capacity addition (66 ktpa to 80 ktpa) has been progressing well and is expected to be fully commissioned by Q3. Due to optimization of borrowing arrangements, the company was able to lower its finance costs from 9.1 crore in Q1FY11 to 7.9 crore in Q1FY12. The recent price hikes announced by global majors might start having positive effect from late Q4FY12.

Key highlights:

· Total income grew by 26% Y-o-Y to Rs. 279 cr. v/s Rs. 222 cr in June-10

· Operating Profit fell by 21% Y-o-Y to Rs. 47 cr.  v/s Rs. 59 cr in June-10

· OPM fell by 990 bps Y-o-Y to 16.7%  v/s 26.6% in June-10

· Net profit fell by 26% Y-o-Y to Rs. 20 cr.  v/s Rs. 27 cr in June-10

· NPM fell by 488 bps Y-o-Y to 7.1% v/s 12% in June-10

HCC

OVERVIEW

HCC, as an industry leader in engineering construction, currently nurtures projects that span across such diverse segments as transportation, power, marine projects, oil and gas pipeline constructions, irrigation and water supply, utilities and urban infrastructure, all of which impact the nation of India, and the progress of its people. The gross debt for the quarter rose by Rs 300 crore on sequential basis to Rs 3712 crore. Higher debt, increased working capital and rise in cost of debt from 8% to over 10% resulted into substantial rise in interest expenses. At the end of the quarter HCC had an order backlog of Rs 17000 cr and targets to add Rs 6000 cr of new order in FY12E.

Key highlights:

· Total income  grew by 6% Y-o-Y to Rs. 1058 cr. v/s Rs. 995 cr in June-10

· Operating Profit grew by 8% Y-o-Y to Rs. 139 cr.  v/s Rs. 129 cr in June-10

· OPM grew by 16 bps Y-o-Y to 13.1%  v/s 12.94% in June-10

· Net profit fell by 90% Y-o-Y to Rs. 3 cr.  v/s Rs. 28 cr in June-10

· NPM fell by 257 bps Y-o-Y to 0.3%  v/s 2.8% in June-10

JINDAL STEEL AND POWER

OVERVIEW

Jindal Steel & Power (JSPL) is a leading player in Steel, Power, Mining, Oil & Gas and Infrastructure. The company produces economical and efficient steel and power through backward integration from its own captive coal and iron-ore mines and passes on the benefits to its customers. The company is augmenting its 3mtpa capacity, with three modules of 1.6mtpa, using the coal gasification sponge iron route at Angul and Raigarh, and 1mtpa at Shadeed. Only 1/3rd of the 12mtpa steel capacity will be exposed to coking coal imports.

Key highlights:

· Total income  grew by 19% Y-o-Y to Rs. 2527 cr. v/s Rs. 2122 cr in June-10

· Operating Profit grew by 23% Y-o-Y to Rs. 980 cr.  v/s Rs. 798 cr in June-10

· OPM grew by 120 bps Y-o-Y to 38.8%  v/s 37.6% in June-10

· Net profit grew by 8% Y-o-Y to Rs. 470 cr.  v/s Rs. 436 cr in June-10

· NPM fell by 193 bps Y-o-Y to 18.6%  v/s 20.5% in June-10

NMDC

OVERVIEW

NMDC is involved in the exploration of a wide range of minerals including iron ore, copper, rock phosphate, lime stone, dolomite, gypsum, bentonite, magnesite, diamond, tin, tungsten, graphite, beach sands, etc. NMDC is India's single largest iron ore producer and exporter, presently producing about 30 million tonnes of iron ore. NMDC has signed a non-binding memorandum of understanding with Mine makers Ltd. to develop the Wonarah phosphate deposit in Australia. NMDC will buy a 50% stake in the project once the project feasibility is established.

Key highlights:

· Total income  grew by 11% Y-o-Y to Rs. 2783 cr. v/s Rs. 2518 cr in June-10

· Operating Profit grew by 19% Y-o-Y to Rs. 2696 cr.  v/s Rs. 2273 cr in June-10

· OPM grew by 663 bps Y-o-Y to 96.9%  v/s 90.3% in June-10

· Net profit grew by 20% Y-o-Y to Rs. 1801 cr.  v/s Rs. 1504 cr in June-10

· NPM grew by 500 bps Y-o-Y to 64.7%  v/s 59.7% in June-10

Thanks and Regards,

KIFS Research