12 May 2012

Q4FY12 earnings review - Nothing much to cheer about:Edelweiss, PDF link

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Q4FY12 earnings, up 3.0% YoY (Edelweiss expectation: -4.0%), have neither been prolific nor despairing. However, what casts a shadow of disappointment is that a part of this earnings beat may have been driven by higher other income, implying a weakening core outlook. Even if the balance earnings season were to be on track, earnings growth for our coverage universe would be 3.0-3.5% YoY, implying yet another sub-10% quarter. Topline grew 17.4% YoY, ahead of our 15.0% expectation but was largely driven by few companies only. EBITDA margins, meanwhile, continues to remain depressed and have contracted ~320bps YoY. Worryingly, the Sensex earnings trajectory, which had shown signs of bottoming out, has been downgraded 1.1% since March.
Results surpass expectations, but on other income crutch
For companies within our coverage universe which have declared results so far, YoY earnings growth came in at 3.0% (Edelweiss expectation: -4.0%). The disappointment is on the core earnings front as some part of the earnings surge may have been driven by higher other income (e.g. PSU banks, RIL and Maruti Suzuki). For companies that have declared results so far, we estimate that other income as a proportion of sales is at 2.7%, which is a multi-quarter high. Meanwhile, revenues came in above expectation at 17.4% of 15.0%, YoY, but was largely driven by few companies only. Margins continued to disappoint, contracting 320bps YoY. Even if balance earnings were to come in line, earnings growth for our coverage universe would be 3.0-3.5% YoY, implying a fifth consecutive quarter of sub-10% earnings growth. Our Q4FY12 projection is for 0.8% YoY earnings growth.
Earnings for the Sensex companies have been flat on YoY basis (higher than expectations of 5.0% contraction) but have been helped to a large extent by private banks, excluding which earnings growth show a dip. Overall, as we had highlighted in our preview note, the majority of growth in Sensex earnings for Q4FY12 is expected to be driven by SBI alone. Thus, if SBI numbers come in line we do not see much risks to our FY12 Sensex earnings estimate per se.
PSUs, tech disappoint; private banks, consumers shine
The divergence between PSU banks and their private sector counterparts continued in Q4FY12 as well. PSU banks’ results were characterised by weak asset quality with slippages coming in higher by 150-200bps than average delinquencies in 9mFY12. Their PAT was higher than expected, but was driven by lower tax rate and investment write-back depreciation. Private banks, meanwhile, have shown little stress on asset quality. Tech sector results were mixed and a QoQ decline in the key BFSI vertical was seen for the top 4 players. Consumer sector continues to post robust volume growth although there was some slowdown in the foods category. Within the telecom sector, both Bharti Airtel and Idea reported healthy volume growth (5% QoQ and 9% QoQ) although the former’s Africa business disappointed.
Earnings outlook: Downgrades in FY13 earnings
Meanwhile, the FY13 earnings trajectory for Sensex, which had shown signs of bottoming out in March, is once again exhibiting some weakness. Since the results season began, there have been downgrades of 1.2% with heavyweights RIL, Infosys, Bharti Airtel and Wipro being downgraded 3-7%. As per consensus, Sensex EPS for FY13E stands at INR1,287 (Edelweiss: INR1,280).
       
       
       
       
Regards,

Angel Broking -HDFC - RU4QFY2012 - Result Updates

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Angel Broking - CEAT - RU4QFY2012 - Result Updates

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Angel Broking - Allahabad Bank - RU4QFY2012 - Result Updates

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Union Bank of India has announced its Q4FY12 along with FY12 result : Microsec Research

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Union Bank of India has announced its Q4FY12 along with FY12 result on 9th May 2012.

On the quarterly basis, the bank’s total income increased by 10.92% QoQ and 13.59% YoY to INR2631.98 crores mainly, because of 9.33% and 25.78% YoY growth in its Net Interest Income (NII) and other income respectively. Profit After Tax (PAT) increased by 292.48% QoQ and 29.39% YoY to INR773.19 crores mainly, because of 46.83% QoQ decline in Provision and Contingencies to INR517.15 crores. For the whole year of FY12, the bank’s total income increased by 11.77% YoY to INR9239.36 crores whereas, Profit After Tax (PAT) down by 15.13% YoY to INR1756.05 crores due to higher provisioning by 88.31% YoY to INR2541.42 crores.

The Bank has reported a growth in advances by 14.52% QoQ and 18.48% YoY to INR178882.08 crores and a growth in deposits by 8.55% QoQ and 10.08% YoY to INR222868.95 crores. On the assets front, the bank has improved its assets quality, NNPA and GNPA stood at 1.70% and 3.01%, decreased by 18 and 32bps sequentially. Moreover, Capital Adequacy Ratio (CAR) stood at 11.85%, which is 2.85% higher than the regulator’s stipulated norm of 9%. Provision Coverage Ratio (PCR) stood at 62.22%.

The Board of Directors have recommended a dividend of 80% i.e. Rs.8 per equity share of Rs.10 each for the year ended 31st March 2012.


                               Union Bank of India Q4FY12 Result-[INR-Crores]   
Consolidated
DESCRIPTION
Q4'12
Q3'12
Q4'11
QoQ%
YoY%
FY12
FY11
YoY%
Interest Earned
5743.41
5374.71
4615.26
6.86
24.44
21152.48
16460.94
28.50
Interest Expended
3866.81
3593.85
2898.74
7.60
33.40
14229.73
10234.31
39.04
NII
1876.60
1780.86
1716.52
5.38
9.33
6922.75
6226.63
11.18
Other Income
755.38
592.11
600.55
27.57
25.78
2316.61
2039.72
13.57
Total Income
2631.98
2372.97
2317.07
10.92
13.59
9239.36
8266.35
11.77
Operating Expenses
1033.19
1088.87
1447.53
-5.11
-28.62
4016.27
3974.28
1.06
Operating Profit before Prov.& Cont.
1598.79
1284.10
869.54
24.51
83.87
5223.09
4292.07
21.69
Provisions and Contingencies
517.15
972.67
153.26
-46.83
237.43
2541.42
1349.59
88.31
PBT
1081.64
311.43
716.28
247.31
51.01
2681.67
2942.48
-8.86
Tax
308.45
114.43
118.71
169.55
159.83
925.62
873.45
5.97
Profit After Tax
773.19
197.00
597.57
292.48
29.39
1756.05
2069.03
-15.13
Adj Calculated EPS
14.74
3.76
11.38
292.02
29.53
33.79
39.46
-14.37
Advances
178882.08
156202.00
150986.08
14.52
18.48
178882.08
150986.08
18.48
Deposits
222868.95
205317.00
202461.29
8.55
10.08
222868.95
202461.29
10.08

Q4'12
Q3'12
Q4'11
QoQ (bps)
YoY(bps)
FY12
FY11
YoY(bps)
Capital Adequacy Ratio Basel II
11.85%
11.72%
12.95%
13
-110
11.85%
12.95%
-110
% of Net NPAs
1.70%
1.88%
1.19%
-18
51
1.70%
1.19%
51
% of Gross NPAs
3.01%
3.33%
2.37%
-32
64
3.01%
2.37%
64
Provisions Coverage%
62.22%
63.14%
67.58%
-92
-536
62.22%
67.58%
-536
C/D ratio
80.26%
76.08%
74.58%
418
569
80.26%
74.58%
568
C/I Ratio
39.26%
45.89%
62.47%
-663
-2322
43.47%
48.08%
-461
OI/TI
60.74%
54.11%
37.53%
663
2322
56.53%
51.92%
461


Regards,

Team Microsec Research