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NMDC
NMDC’s net sales grew by 24.5% yoy to `3,062cr (in-line with our estimate of
`2,917cr) mainly due to higher iron ore realization as well as sales volume.
EBITDA increased by 32.3% yoy to `2,435cr, as EBITDA margin expanded by
471bp yoy to 79.5%. Other income grew by 104.6% yoy to `503cr. Consequently,
net profit increased by 42.4% yoy to `1,963cr (above our estimate of `1,844cr) in
2QFY2012. The stock is under review currently.
Wipro
For 2QFY2012, Wipro reported better-than-expected results. The company’s IT
services revenue came in at US$1,472.5mn, up merely 4.6% qoq, primarily led by
volume growth of 6.0% qoq. However, pricing (on a reported basis) – onsite and
offshore – again declined by 0.4% and 4.1% qoq, respectively, due to closure of
few fixed price projects during the quarter. The revenue figures include US$46mn
from SAIC’s oil and gas business, which Wipro acquired in April 2011 and got
fully integrated in 2QFY2012. On an organic basis (excluding SAIC), revenue
growth stood at 2.9% qoq. Volume growth for the global IT business of the IT
services segment came in at 6.0% qoq, led by whopping 9.0% qoq growth in
onsite volumes; offshore volume growth was at 4.7% qoq. On an organic basis,
volume growth stood at 4.6% qoq. In INR terms, revenue of the IT services segment
came in at `6,829cr, up 6.6% qoq. The IT products segment reported a 6.4% yoy
decline in revenue to `1,001cr during the quarter. The consumer care and
lightening segment emerged as the primary growth driver for the company by
posting 20.3% yoy growth in revenue to `800cr. On a consolidated level, Wipro’s
revenue came in at `9,095cr, up 6.2% qoq.
EBIT margin for IT services declined by 200bp qoq to 20.0% due to 1) negative
impact of wage hikes given from June 1, 2011, and 2) lower operating margin of
SAIC. EBIT margin for the consumer care and lightening segment continued its
declining momentum and dropped off by 84bp qoq to 11.0%. However, EBIT
margin of the IT products business improved by 30bp qoq to 4.2%. On a
consolidated level, Wipro’s EBITDA and EBIT margins declined by 106bp and
110bp qoq to 19.1% and 16.4%, respectively. PAT came in at `1,301cr. During
2QFY2012, the company’s growth was modest on account of revenue from SAIC;
however, organically Wipro continues to lag its peers. We maintain our Neutral
rating on the stock.
HUL
HUL posted robust set of numbers for the quarter, marginally above our estimates.
The company’s top line grew by 18% yoy to `5,522cr (`4,681cr). At the operating
level, OPM expanded by 134bp yoy despite a 344bp yoy increase in gross margin,
primarily due to a 202bp yoy decrease in ad spends and a 273bp yoy decline in
other expenditure. Recurring earnings for the quarter grew by 22.6% yoy, above
our estimates, robust top-line growth and high other income. Other key highlights
of the results include – 1) 21.8% yoy revenue growth in the S&D segment, EBIT
margin contracted by 65bp yoy to 12.4%, 2) food business showed growth of
20.9% yoy and 3) personal products grew by 18.2% yoy, eighth consecutive
quarter of double-digit volume-led growth and 4) beverages grew by 14.6% yoy.
The stock rating is under review.
Bank of Baroda
For 2QFY2012, Bank of Baroda reported reasonable 14.4% yoy growth in its net profit
to `1,166cr, above our estimate of `1,088cr, primarily due to considerably better
operating income than built in by us, which was largely offset by higher
provisioning expenses. Sequential expansion in NIM coupled with persistence of
healthy asset-quality trends were the key positive takeaways from the results.
Sequential expansion in NIM coupled with healthy asset-quality trends: For
2QFY2012, the bank’s overall business momentum remained moderate, with
advances growing by 2.9% qoq (up 23.9% yoy) and deposits increasing by 5.2%
qoq (22.1% yoy). Global saving account deposits were relatively better at 15.5%
yoy. However, slower (5.7% yoy) growth in current account deposits led to a
~200bp yoy compression in calculated global CASA ratio to 27.4%. The sharp
91bp qoq expansion in yield on advances vis-à-vis a 43bp qoq rise in cost of
deposits led to a 28bp qoq expansion in reported domestic NIM to 3.7%.
Fee-based income rose reasonably by 13.2% yoy. Recoveries from written-off
accounts witnessed a robust 76.4% yoy rise to `122cr during 2QFY2012. On the
asset-quality front, the bank continued to surprise positively with annualized
slippage ratio in check at 1.0%. Absolute amount of gross NPAs declined on a qoq
basis, albeit marginally. Gross and net NPA ratios remained largely flat on a
sequential basis at 1.4% and 0.5%, respectively. Provisioning expenses were
considerably higher than expected as the bank chose to maintain its provision
coverage ratio (including technical write-offs) at elevated levels of 82.0%. At the
CMP, the stock is trading at 1.1x FY2013E ABV. We maintain our Accumulate
rating on the stock with a target price of `881.
Canara Bank
For 2QFY2012, Canara Bank registered a 15.4% yoy decline in its net profit,
in-line with our expectations. However, provisioning expenses were considerably
higher than expected, which were offset by stronger NII and healthy rise in other
income (driven by recoveries from written-off accounts and higher trading profits).
Higher slippages continued, with the bank completing the switchover to systembased
NPA recognition platform.
NIM improves in-line with peers; slippages remain elevated: For 2QFY2012, the
bank’s overall business momentum remained moderate, with advances increasing
marginally by 1.4% qoq (up 23.8% yoy) and deposits accretion rising by 4.1% qoq
(increased by 25.4% yoy). Saving account deposits growth was relatively healthy at
17.9% yoy; however, the 5.3% yoy decrease in current account balances pulled
down overall CASA deposits growth to 12.2% yoy. CASA ratio improved, albeit
marginally by 50bp, to 25.8% (down by ~300bp yoy). A relatively faster (22bp
qoq) rise in yield on advances vis-à-vis an 8bp qoq rise in cost of deposits led to a
22bp sequential improvement in reported NIM to 2.6%. Other income growth was
robust 65.8% yoy, driven by doubling of recoveries from written-off accounts and
substantially higher trading profits. On the asset-quality front, slippages continued
to remain at elevated levels as the bank completed the migration to system-based
NPA recognition platform. Annualized slippage ratio, though came off a bit from
2.6% witnessed in 1QFY2012, remained high at 2.3%. However, the rise in NPAs
was largely contained on the back of higher recoveries and aggressive write-offs.
Gross and net NPA ratios remained largely stable at 1.73% (1.67% in 1QFY2012)
and 1.43% (1.34% in 1QFY2012), respectively. At the CMP, the stock is trading at
0.9x FY2013E ABV. We maintain our Neutral stance on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
NMDC
NMDC’s net sales grew by 24.5% yoy to `3,062cr (in-line with our estimate of
`2,917cr) mainly due to higher iron ore realization as well as sales volume.
EBITDA increased by 32.3% yoy to `2,435cr, as EBITDA margin expanded by
471bp yoy to 79.5%. Other income grew by 104.6% yoy to `503cr. Consequently,
net profit increased by 42.4% yoy to `1,963cr (above our estimate of `1,844cr) in
2QFY2012. The stock is under review currently.
Wipro
For 2QFY2012, Wipro reported better-than-expected results. The company’s IT
services revenue came in at US$1,472.5mn, up merely 4.6% qoq, primarily led by
volume growth of 6.0% qoq. However, pricing (on a reported basis) – onsite and
offshore – again declined by 0.4% and 4.1% qoq, respectively, due to closure of
few fixed price projects during the quarter. The revenue figures include US$46mn
from SAIC’s oil and gas business, which Wipro acquired in April 2011 and got
fully integrated in 2QFY2012. On an organic basis (excluding SAIC), revenue
growth stood at 2.9% qoq. Volume growth for the global IT business of the IT
services segment came in at 6.0% qoq, led by whopping 9.0% qoq growth in
onsite volumes; offshore volume growth was at 4.7% qoq. On an organic basis,
volume growth stood at 4.6% qoq. In INR terms, revenue of the IT services segment
came in at `6,829cr, up 6.6% qoq. The IT products segment reported a 6.4% yoy
decline in revenue to `1,001cr during the quarter. The consumer care and
lightening segment emerged as the primary growth driver for the company by
posting 20.3% yoy growth in revenue to `800cr. On a consolidated level, Wipro’s
revenue came in at `9,095cr, up 6.2% qoq.
EBIT margin for IT services declined by 200bp qoq to 20.0% due to 1) negative
impact of wage hikes given from June 1, 2011, and 2) lower operating margin of
SAIC. EBIT margin for the consumer care and lightening segment continued its
declining momentum and dropped off by 84bp qoq to 11.0%. However, EBIT
margin of the IT products business improved by 30bp qoq to 4.2%. On a
consolidated level, Wipro’s EBITDA and EBIT margins declined by 106bp and
110bp qoq to 19.1% and 16.4%, respectively. PAT came in at `1,301cr. During
2QFY2012, the company’s growth was modest on account of revenue from SAIC;
however, organically Wipro continues to lag its peers. We maintain our Neutral
rating on the stock.
HUL
HUL posted robust set of numbers for the quarter, marginally above our estimates.
The company’s top line grew by 18% yoy to `5,522cr (`4,681cr). At the operating
level, OPM expanded by 134bp yoy despite a 344bp yoy increase in gross margin,
primarily due to a 202bp yoy decrease in ad spends and a 273bp yoy decline in
other expenditure. Recurring earnings for the quarter grew by 22.6% yoy, above
our estimates, robust top-line growth and high other income. Other key highlights
of the results include – 1) 21.8% yoy revenue growth in the S&D segment, EBIT
margin contracted by 65bp yoy to 12.4%, 2) food business showed growth of
20.9% yoy and 3) personal products grew by 18.2% yoy, eighth consecutive
quarter of double-digit volume-led growth and 4) beverages grew by 14.6% yoy.
The stock rating is under review.
Bank of Baroda
For 2QFY2012, Bank of Baroda reported reasonable 14.4% yoy growth in its net profit
to `1,166cr, above our estimate of `1,088cr, primarily due to considerably better
operating income than built in by us, which was largely offset by higher
provisioning expenses. Sequential expansion in NIM coupled with persistence of
healthy asset-quality trends were the key positive takeaways from the results.
Sequential expansion in NIM coupled with healthy asset-quality trends: For
2QFY2012, the bank’s overall business momentum remained moderate, with
advances growing by 2.9% qoq (up 23.9% yoy) and deposits increasing by 5.2%
qoq (22.1% yoy). Global saving account deposits were relatively better at 15.5%
yoy. However, slower (5.7% yoy) growth in current account deposits led to a
~200bp yoy compression in calculated global CASA ratio to 27.4%. The sharp
91bp qoq expansion in yield on advances vis-à-vis a 43bp qoq rise in cost of
deposits led to a 28bp qoq expansion in reported domestic NIM to 3.7%.
Fee-based income rose reasonably by 13.2% yoy. Recoveries from written-off
accounts witnessed a robust 76.4% yoy rise to `122cr during 2QFY2012. On the
asset-quality front, the bank continued to surprise positively with annualized
slippage ratio in check at 1.0%. Absolute amount of gross NPAs declined on a qoq
basis, albeit marginally. Gross and net NPA ratios remained largely flat on a
sequential basis at 1.4% and 0.5%, respectively. Provisioning expenses were
considerably higher than expected as the bank chose to maintain its provision
coverage ratio (including technical write-offs) at elevated levels of 82.0%. At the
CMP, the stock is trading at 1.1x FY2013E ABV. We maintain our Accumulate
rating on the stock with a target price of `881.
Canara Bank
For 2QFY2012, Canara Bank registered a 15.4% yoy decline in its net profit,
in-line with our expectations. However, provisioning expenses were considerably
higher than expected, which were offset by stronger NII and healthy rise in other
income (driven by recoveries from written-off accounts and higher trading profits).
Higher slippages continued, with the bank completing the switchover to systembased
NPA recognition platform.
NIM improves in-line with peers; slippages remain elevated: For 2QFY2012, the
bank’s overall business momentum remained moderate, with advances increasing
marginally by 1.4% qoq (up 23.8% yoy) and deposits accretion rising by 4.1% qoq
(increased by 25.4% yoy). Saving account deposits growth was relatively healthy at
17.9% yoy; however, the 5.3% yoy decrease in current account balances pulled
down overall CASA deposits growth to 12.2% yoy. CASA ratio improved, albeit
marginally by 50bp, to 25.8% (down by ~300bp yoy). A relatively faster (22bp
qoq) rise in yield on advances vis-à-vis an 8bp qoq rise in cost of deposits led to a
22bp sequential improvement in reported NIM to 2.6%. Other income growth was
robust 65.8% yoy, driven by doubling of recoveries from written-off accounts and
substantially higher trading profits. On the asset-quality front, slippages continued
to remain at elevated levels as the bank completed the migration to system-based
NPA recognition platform. Annualized slippage ratio, though came off a bit from
2.6% witnessed in 1QFY2012, remained high at 2.3%. However, the rise in NPAs
was largely contained on the back of higher recoveries and aggressive write-offs.
Gross and net NPA ratios remained largely stable at 1.73% (1.67% in 1QFY2012)
and 1.43% (1.34% in 1QFY2012), respectively. At the CMP, the stock is trading at
0.9x FY2013E ABV. We maintain our Neutral stance on the stock.
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