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Dabur
Dabur reported an impressive performance for 2QFY2012 on the top-line front,
above our estimates. Top-line growth was strong at 30%, marginally above our
estimates, driven by 10% volume growth to `1,262cr. Earnings grew by 8.4% yoy,
in-line with our estimates, despite margin contracting to `174cr. Operating margin
for the quarter declined by 213bp yoy and came in at 18.6%. Key highlights for
the quarter include: 1) the company merged the consumer healthcare division with
the consumer care division to synergize the distribution, 2) Dabur Lanka Pvt. Ltd., a
wholly owned subsidiary of Dabur International Ltd., was incorporated for setting
up the new fruit juice facility near Colombo – it has plans to invest `70cr over two
years and 3) the domestic business’s organic growth came in at 11% yoy and
international business excluding the recent acquisitions grew by 22.8% yoy. At the
CMP, the stock is trading at 22x FY2013E EPS. We maintain our Accumulate view
on the stock with a target price of `115.
Colgate
Colgate reported a weak performance for 2QFY2012. The company registered
top-line growth of 19% yoy to `657cr, driven by 13% yoy volume growth. Earnings
for the quarter registered a decline of 0.6% yoy to `100cr (`122cr), beating our
estimates by 7.3%, despite an 8.4% jump in other income. High ad spends on
account of new product launches dragged the company’s earnings. On the
operating front, the company delivered margin contraction of 321bp yoy to 17.1%
(26.3%), significantly below our estimates, largely on account of a sharp jump in
ad spends due to launch of premium products. We recommend Neutral on the
stock.
Indian Bank
For 2QFY2012, Indian Bank reported a healthy set of numbers with net profit
growing by 12.7% yoy to 469cr, above our estimates, mostly due to higher noninterest
income than estimated by us. Aided by a 33bp sequential rise in reported
NIM to 3.8%, net interest income registered healthy growth of 10.2% qoq (up
15.5% yoy) to `1,135cr. Non-interest income was also strong, registering growth
of 20.7% yoy (robust 37.3% qoq) to `342cr. The bank had already shifted to
system-based NPA recognition during FY2011 and, hence, did not see any
material rise in its NPA ratios. Gross NPA ratio as of 2QFY2012 stood at 1.2%
(1.0% in 1QFY2012), while net NPA ratio stood at 0.7% (0.5% in 1QFY2012).
Provisioning coverage ratio, however, witnessed a sequential decline of 479bp to
79.4%. Business momentum was strong during the quarter with advances growing
by 23.4% yoy and deposits growing by 18.6% yoy. At the CMP, the stock is trading
at 0.8x FY2013 ABV. We recommend a Neutral view on the stock.
Oriental Bank of Commerce
For 2QFY2012, Oriental Bank of Commerce reported a poor set of numbers, with
profit declining by 57.8% yoy and 52.7% qoq to `168cr. The results were
significantly below are estimates due to high provisioning expenses incurred by the
bank in 2QFY2012. Asset quality of the bank deteriorated sharply during
2QFY2012, with gross NPA ratio at 2.95% (2.1% in 1QFY2012) and net NPA ratio
at 1.9% (1.1% in 1QFY2012). Net interest income declined by 8.1% yoy, while
non-interest income registered strong growth of 29.6% yoy. NIM declined by 14bp
sequentially, a deviation from the overall trend in the industry. On the business
side, advances grew by 20.6% yoy and deposits grew by 18.9% yoy. At the CMP,
the stock is trading at 0.7x FY2013 ABV. We recommend an Accumulate
recommendation on the stock with a target price of `314.
Corporation Bank
For 2QFY2012, Corporation Bank registered 14.0% yoy net profit growth to
`401cr, above our estimate of `349cr, mainly on account of better-than-expected
operating income on the back of stronger other income and lower effective tax rate
than built in by us. However, the bank surprised negatively on the asset-quality
front, with absolute gross and net NPAs rising sharply by 27.3% qoq and 81.0%
qoq, respectively. Consequently, gross and net NPA ratios deteriorated to 1.3%
(from 1.1% in 1QFY2012) and 0.9% (from 0.5% in 1QFY2012), respectively.
Business growth trends for the bank remained moderate, with advances rising by
17.0% yoy and deposits increasing by 24.5% yoy. Calculated NIM for the quarter
improved by ~12bp qoq. Consequent to the rise in NPAs, provisioning expenses
came in well ahead of our expectations, which were partially offset by a lower
effective tax rate. At the CMP, we believe the stock is trading at attractive valuations
of 0.7x FY2013E ABV. Hence, we recommend an Accumulate on the stock with a
target price of `483.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Dabur
Dabur reported an impressive performance for 2QFY2012 on the top-line front,
above our estimates. Top-line growth was strong at 30%, marginally above our
estimates, driven by 10% volume growth to `1,262cr. Earnings grew by 8.4% yoy,
in-line with our estimates, despite margin contracting to `174cr. Operating margin
for the quarter declined by 213bp yoy and came in at 18.6%. Key highlights for
the quarter include: 1) the company merged the consumer healthcare division with
the consumer care division to synergize the distribution, 2) Dabur Lanka Pvt. Ltd., a
wholly owned subsidiary of Dabur International Ltd., was incorporated for setting
up the new fruit juice facility near Colombo – it has plans to invest `70cr over two
years and 3) the domestic business’s organic growth came in at 11% yoy and
international business excluding the recent acquisitions grew by 22.8% yoy. At the
CMP, the stock is trading at 22x FY2013E EPS. We maintain our Accumulate view
on the stock with a target price of `115.
Colgate
Colgate reported a weak performance for 2QFY2012. The company registered
top-line growth of 19% yoy to `657cr, driven by 13% yoy volume growth. Earnings
for the quarter registered a decline of 0.6% yoy to `100cr (`122cr), beating our
estimates by 7.3%, despite an 8.4% jump in other income. High ad spends on
account of new product launches dragged the company’s earnings. On the
operating front, the company delivered margin contraction of 321bp yoy to 17.1%
(26.3%), significantly below our estimates, largely on account of a sharp jump in
ad spends due to launch of premium products. We recommend Neutral on the
stock.
Indian Bank
For 2QFY2012, Indian Bank reported a healthy set of numbers with net profit
growing by 12.7% yoy to 469cr, above our estimates, mostly due to higher noninterest
income than estimated by us. Aided by a 33bp sequential rise in reported
NIM to 3.8%, net interest income registered healthy growth of 10.2% qoq (up
15.5% yoy) to `1,135cr. Non-interest income was also strong, registering growth
of 20.7% yoy (robust 37.3% qoq) to `342cr. The bank had already shifted to
system-based NPA recognition during FY2011 and, hence, did not see any
material rise in its NPA ratios. Gross NPA ratio as of 2QFY2012 stood at 1.2%
(1.0% in 1QFY2012), while net NPA ratio stood at 0.7% (0.5% in 1QFY2012).
Provisioning coverage ratio, however, witnessed a sequential decline of 479bp to
79.4%. Business momentum was strong during the quarter with advances growing
by 23.4% yoy and deposits growing by 18.6% yoy. At the CMP, the stock is trading
at 0.8x FY2013 ABV. We recommend a Neutral view on the stock.
Oriental Bank of Commerce
For 2QFY2012, Oriental Bank of Commerce reported a poor set of numbers, with
profit declining by 57.8% yoy and 52.7% qoq to `168cr. The results were
significantly below are estimates due to high provisioning expenses incurred by the
bank in 2QFY2012. Asset quality of the bank deteriorated sharply during
2QFY2012, with gross NPA ratio at 2.95% (2.1% in 1QFY2012) and net NPA ratio
at 1.9% (1.1% in 1QFY2012). Net interest income declined by 8.1% yoy, while
non-interest income registered strong growth of 29.6% yoy. NIM declined by 14bp
sequentially, a deviation from the overall trend in the industry. On the business
side, advances grew by 20.6% yoy and deposits grew by 18.9% yoy. At the CMP,
the stock is trading at 0.7x FY2013 ABV. We recommend an Accumulate
recommendation on the stock with a target price of `314.
Corporation Bank
For 2QFY2012, Corporation Bank registered 14.0% yoy net profit growth to
`401cr, above our estimate of `349cr, mainly on account of better-than-expected
operating income on the back of stronger other income and lower effective tax rate
than built in by us. However, the bank surprised negatively on the asset-quality
front, with absolute gross and net NPAs rising sharply by 27.3% qoq and 81.0%
qoq, respectively. Consequently, gross and net NPA ratios deteriorated to 1.3%
(from 1.1% in 1QFY2012) and 0.9% (from 0.5% in 1QFY2012), respectively.
Business growth trends for the bank remained moderate, with advances rising by
17.0% yoy and deposits increasing by 24.5% yoy. Calculated NIM for the quarter
improved by ~12bp qoq. Consequent to the rise in NPAs, provisioning expenses
came in well ahead of our expectations, which were partially offset by a lower
effective tax rate. At the CMP, we believe the stock is trading at attractive valuations
of 0.7x FY2013E ABV. Hence, we recommend an Accumulate on the stock with a
target price of `483.
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