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1QFY2012 Result Review
GAIL
GAIL’s 1QFY2012 results were slightly above our expectations. The company’s top line
grew by robust 25.0% yoy to `8,867cr, above our estimate of `8,500cr, mainly due to
strong growth in the natural gas trading segment. The natural gas trading segment’s gross
revenue grew by 32.2% yoy to `7,204cr. GAIL’s subsidy burden during the quarter stood
at `681cr (+53.0% yoy). EBITDA increased by 8.0% yoy to `1,556cr in 1QFY2012.
However, EBITDA margin contracted by 268bp yoy to 17.5%, mainly on account of higher
subsidy burden and subdued performance by the petrochemical segment. The
petrochemical segment’s EBIT declined by 14.5% yoy to `243cr, while the segment’s EBIT
margin stood at 38.2% in 1QFY2012 compared to 44.6% in 1QFY2011. GAIL’s PAT
increased by 11.0% yoy to `985cr, slightly above our estimate of `940cr. We maintain our
Buy recommendation on the stock, while we keep our target price under review.
HCL Tech – 4QFY2011
For 4QFY2011, HCL Tech reported a mixed performance. Dollar revenue came in at
US$952.9mn, up 5.3% qoq, on the back of modest 4.0% qoq volume growth. The
company’s revenue growth was led by modest volume growth of 3.0% in core software
services and strong USD revenue growth of 9.2% qoq in constant currency (CC) terms in
infrastructure services. In rupee terms, revenue came in at `4,299.5cr, up 3.9% qoq. EBIT
margin grew by 106bp qoq to 15.5%. PAT stood tall at `511cr, up 9.1% qoq, on the back
of stronger growth and fading of forex losses. The company remains one of our top picks
amongst tier-I IT companies. We remain positive on the stock and will be releasing a
detailed update shortly.
Bank of Baroda
For 1QFY2012, Bank of Baroda reported a decent set of results, with net profit growth of
20.2% yoy to `1,033cr, above our estimates of `1,003cr, primarily due to lower-thanestimated
provisioning expenses. Healthy traction in core fee income coupled with reduction
in annualised slippage ratio for the quarter to 1.0% was the key highlight of the results.
For 1QFY2012, the bank’s overall business momentum moderated in-line with peers.
However, business growth remained ahead of industry with advances growing by 25.2%
yoy (up 1.6% qoq) and deposits increasing by 22.9% yoy (2.5% qoq). With the widening
differential between FD and savings account interest rates, CASA deposit growth
moderated further to 16.6% yoy. Global CASA ratio came off by ~80bp qoq to 27.9%,
while domestic CASA ratio declined by 45bp qoq to 33.9%.
After adjusting for interest on income tax refund received in 4QFY2011, the bank’s
reported domestic NIM declined by ~30bp qoq to 3.4% due to a sharp 78bp qoq rise in
cost of funds as compared to a 58bp rise in yield on advances. Core fee income increased
by an impressive 36.3% yoy to `275cr in 1QFY2012. Asset quality of the bank was largely
stable during the quarter, with annualised slippage ratio declining to 1.0% from 1.5% each
in 4QFY2011 and 1QFY2011. Net NPAs, however, rose by a rather steep
29.5% yoy as the provision coverage ratio (including technical write-offs) came off by
~250bp qoq to 82.5%.
At the CMP, the stock is trading at 1.2x FY2013E ABV. We maintain Buy on the stock with
a target price of `1,017.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
1QFY2012 Result Review
GAIL
GAIL’s 1QFY2012 results were slightly above our expectations. The company’s top line
grew by robust 25.0% yoy to `8,867cr, above our estimate of `8,500cr, mainly due to
strong growth in the natural gas trading segment. The natural gas trading segment’s gross
revenue grew by 32.2% yoy to `7,204cr. GAIL’s subsidy burden during the quarter stood
at `681cr (+53.0% yoy). EBITDA increased by 8.0% yoy to `1,556cr in 1QFY2012.
However, EBITDA margin contracted by 268bp yoy to 17.5%, mainly on account of higher
subsidy burden and subdued performance by the petrochemical segment. The
petrochemical segment’s EBIT declined by 14.5% yoy to `243cr, while the segment’s EBIT
margin stood at 38.2% in 1QFY2012 compared to 44.6% in 1QFY2011. GAIL’s PAT
increased by 11.0% yoy to `985cr, slightly above our estimate of `940cr. We maintain our
Buy recommendation on the stock, while we keep our target price under review.
HCL Tech – 4QFY2011
For 4QFY2011, HCL Tech reported a mixed performance. Dollar revenue came in at
US$952.9mn, up 5.3% qoq, on the back of modest 4.0% qoq volume growth. The
company’s revenue growth was led by modest volume growth of 3.0% in core software
services and strong USD revenue growth of 9.2% qoq in constant currency (CC) terms in
infrastructure services. In rupee terms, revenue came in at `4,299.5cr, up 3.9% qoq. EBIT
margin grew by 106bp qoq to 15.5%. PAT stood tall at `511cr, up 9.1% qoq, on the back
of stronger growth and fading of forex losses. The company remains one of our top picks
amongst tier-I IT companies. We remain positive on the stock and will be releasing a
detailed update shortly.
Bank of Baroda
For 1QFY2012, Bank of Baroda reported a decent set of results, with net profit growth of
20.2% yoy to `1,033cr, above our estimates of `1,003cr, primarily due to lower-thanestimated
provisioning expenses. Healthy traction in core fee income coupled with reduction
in annualised slippage ratio for the quarter to 1.0% was the key highlight of the results.
For 1QFY2012, the bank’s overall business momentum moderated in-line with peers.
However, business growth remained ahead of industry with advances growing by 25.2%
yoy (up 1.6% qoq) and deposits increasing by 22.9% yoy (2.5% qoq). With the widening
differential between FD and savings account interest rates, CASA deposit growth
moderated further to 16.6% yoy. Global CASA ratio came off by ~80bp qoq to 27.9%,
while domestic CASA ratio declined by 45bp qoq to 33.9%.
After adjusting for interest on income tax refund received in 4QFY2011, the bank’s
reported domestic NIM declined by ~30bp qoq to 3.4% due to a sharp 78bp qoq rise in
cost of funds as compared to a 58bp rise in yield on advances. Core fee income increased
by an impressive 36.3% yoy to `275cr in 1QFY2012. Asset quality of the bank was largely
stable during the quarter, with annualised slippage ratio declining to 1.0% from 1.5% each
in 4QFY2011 and 1QFY2011. Net NPAs, however, rose by a rather steep
29.5% yoy as the provision coverage ratio (including technical write-offs) came off by
~250bp qoq to 82.5%.
At the CMP, the stock is trading at 1.2x FY2013E ABV. We maintain Buy on the stock with
a target price of `1,017.
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