Result Update: Kajaria Ceramics, HCL Technologies, Chambal Fertilisers & TCS :: Emkay

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Result Update

Kajaria Ceramics Reco: BUY CMP: Rs 109 Target Price: Rs 143 Topline growth continues; re-iterate BUY ·      Q3 FY12 results were in line with our est. Revenues grew by 38% yoy to Rs 3.5bn while EBITDA grew by 41% yoy to ·      Rs 561mn. Company reported PAT of Rs 211mn, 20% yoy ·      Despite intensifying cost pressures in the form of increase in gas & other input costs, rupee depreciation, Kajaria has been able to improve margins 40bps yoy/80bps qoq to 16.0% ·      Management expects to clock 25% topline growth over the next 2 years and has set target of Rs 20bn by FY14.  EBITDA margins are likely to remain around 15-16% ·      We expect inorganic growth to remain the thrust area for management supported by healthy balance sheet. Reiterate BUY keeping FY12E / FY13E est of Rs 11.1/14.3 intact HCL Technologies Reco: HOLD CMP: Rs 425 Target Price: Rs 430 Decent show, retain HOLD ·      HCLT reported in line op performance with revenues at US$ 1,022 mn (+2% QoQ, +3.7% in c.c terms) and margins improving by ~140 bps QoQ to 18.1% aided by weak currency  ·      Core IT Svcs see a 3.8% QoQ (+5% vol) growth while IMS saw an unexpected 3% seq decline. Op metrics performance decent with US/Europe growing by 7.4%/2.7% QoQ     ·      BFSI, Manufacturing grow by 2.8/3.7% QoQ. Co announces 18 deal wins with a TCV of US$ 1 bn+. Cash generation improves with CFO’s at US$ 132 mn (70% of op profits) ·      Tweak FY12/13E EPS marginally lower by 0.8%/0.5% to Rs 34/38.5 as we cut our US$ revenue estimates modestly. Retain HOLD with an unchanged TP of Rs 430 Chambal Fertilisers Reco: ACCUMULATE CMP: Rs 79 Target Price: Rs 98 Operating results – better than estimates ·      Results were above est with APAT of Rs 862mn (adjusted for deferred tax liability in shipping of Rs 929mn) -5% yoy, sales Rs 18 bn, +32% yoy. Reported PAT stood at loss of Rs 12mn ·      Shift from tonnage tax in shipping to normal tax regime to reduce tax rates under weak environment resulted in deferred tax liability of Rs 929mn in Q3FY12 ·      All segment results were encouraging while trading margins at 6% (EBIT Rs 482mn) was positive surprise. Lower losses in textile and shipping too contributed to higher profit ·      Change in tax policies may reduce effective tax rates by 4-5% depending on shipping business performance. Maintain FY12/FY13 est at Rs 9.0 / 8.9 and reiterate Accumulate Tata Consultancy Services Reco: HOLD CMP: Rs 1,105 Target Price: Rs 1,075 Op performance fails to enthuse, retain HOLD ·      Dec’11 results tad misses est with rev at US$ 2.6 bn (+2.4% QoQ, +4.5% in c.c terms), Mgns up by ~190 bps QoQ(V/s est +240 bps). Inline profits aided by lower forex losses/ taxes ·      Op metrics weak with vol growth at 3.2% ( Infy +3.1% QoQ). Top 5/10 clients flat sequentially while top client rev grow by ~2.3% QoQ. Headcount addition strong at ~12k during the qtr ·      We cut our rev est.( model in 14.2%/16% YoY US$ growth V/s 16/17% earlier) driving a 3.4/4.2% cut in our FY13/14E earnings to Rs 63.2/71 (V/s Rs 65.4/74 earlier)  ·      Dec’11 qtr marks the 2nd qtr of op performance convergence with Infy. We see risks to TCS’s premium valuation multiples. HOLD with TP cut to Rs 1,075 (V/s Rs 1,110 earlier)