Preview: NTPC; BILT; Andhra Bank; Canara Bank; Shree cement; Sun Pharma: Emkay 31 January, 2011

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Contents:

Preview: NTPC; BILT; Andhra Bank; Canara Bank; Shree cement; Sun Pharma

n        Research Views

NTPC Q3FY11E Result Estimates

Numbers to be weak yoy mainly due to (1) low PLFs (assuming low PAF also) at some of its plants due to coal shortage and outages and (2) grossing up at MAT vs full tax. Expect muted 0.4% YoY growth in gross generation to 54,726mn Units despite commercialization of 1980mw after September 30th 2009. Expect under-recovery of around Rs1.5bn due to low PAFs. Revenue growth of 9% YoY and 200bps YoY decline in EBITDA margins to drive APAT (Rs20.6bn) decline of 13% YoY. Key things to watch - (1) commentary on status & commissioning schedule of capacity addition, (2) progress in coal mining and coal mine acquisitions, (3) update on gas supplies, (4) update on NTPC-BHEL JV, (5) UI income and (6) guidance for FY11E tax rate.

BILT (Conso) Q2FY11 Results Expectations: Net Sales Rs 10.7 bn, PAT Rs 528 mn

Net revenues are expected to report a healthy increase of 21% yoy to Rs 10.7 bn. We estimate yoy increase of 6% and 16% in paper sale volumes and paper realisations respectively to 206,883 mt and Rs 46,000 / mt. As a result we expect paper segment revenues to increase by 3% yoy to Rs 9.5 bn. Sharp jump in RGP realisations by 28% yoy are expected to improve pulp EBIT margins from 13% to 28%. However high pulp prices are expected to keep paper segment margins under pressure at 12.4% vs 15.3% previous year. As a result overall EBITDA margins are expected to decline by 180 bps yoy to 20.8%. We estimate APAT of Rs 528 mn, +16% yoy and AEPS of Rs 0.8.

Andhra Bank Q3FY11 result estimates

Andhra Bank expected to report 36.9 % yoy growth in NII. We expect ALM mismatch and lower increase in PLR to result in 14bps contraction in NIMs. We expect the provisions for NPAs (driven by low base) and MTM losses to rise sharply resulting in modest 5.2% increase in PAT

Canara Bank Q3FY11 result estimates

The bank’s NII growth likely to be strong led by healthy growth in advances and stable NIM’s. However hefty trading gains and MTM gains in Q3FY10 to hurt PAT growth.

Shree cement Q3FY11 results expectation

Shree’s revenues for the quarter are estimated to grow by 2.3% yoy to Rs8.8bn. Cement revenues at Rs8.3bn are expected to remain flattish. Cement Volumes are expected to grow 3.1% to 2.35 mnt. However realizations at Rs3208/t are expected to decline 4.7%yoy. Cement EBITDA/t at Rs812/t is expected to decline by 32%. Revenues from Power segment are expected to register a decline of 66.2% yoy at Rs 0.54bn.Overall EBITDA margins are expected to shrink 1262bps to 26.1% with EBITDA of Rs2.3 bn, decline of 31.1% yoy. The net profit for the quarter is expected to decline by 65% yoy to Rs0.58bn. We are downgrading our FY11 earnings estimate by 14.5% and FY12 earnings by 14% (FY11 EPS to Rs96.9 & FY12 EPS to Rs143) on account of lower than expected power sales and rising petcoke prices.

Sun Pharma Q3FY11 Result Expectations

The company is expected to report 55% growth in sales at Rs15.8bn and EBIDTA margins are expected to decrease to 28% largely on account of Taro consolidation. PAT is expected to increase by 20% to Rs 3.9bn.

Taro: For Q3FY11, we have estimated revenues of Rs4.3bn, EBITDA of Rs896mn and PAT of Rs429mn.

Key Things to watch

n    Contribution from Taro

n    Update on domestic business

n    Growth in Emerging markets (ex-India)

n    Update on issues at Caraco

n    Outlook on margins