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1QFY2012 Results Reviews
Bharti Airtel
For 1QFY2012, Bharti Airtel (Bharti) reported a mixed performance. The company’s
consolidated revenue stood at `16,974cr, with 4.4% qoq growth. Revenue from mobile
services for India came in at `9,840cr, up 3.6% qoq (lower growth than estimated), due to
a 0.8% qoq decline each in MOU as well as ARPM to 445min and `0.43/min, respectively.
Also, share of non voice revenue in mobile India business revenue declined to 14.6% from
15.1% in 4QFY2011. Zain Africa’s contribution to revenue stood at `4,378cr, up 4.7%
qoq, on account of 5.2% qoq growth in MOU to 121min, whereas ARPM declined by 3.2%
qoq to 6.0US¢/min. At the operating front, EBITDA margin of mobile India as well as
Africa business increased by 86bp and 17bp qoq to 34.2% and 26.6%, respectively.
Consolidated EBITDA margin for Bharti stood at 33.6%, almost flat qoq. PAT came in
lower at `1,215cr due to higher interest expenses by `171cr qoq as well as increased tax
rates to 30% from 27.3% in 4QFY2011. The stock is currently under review.
Ceat
Ceat reported weak results for 1QFY2012. The company posted operating as well as
bottom-line losses on account of raw-material cost pressures and higher interest and
depreciation expense due to commissioning of new Halol plant. Net sales grew strongly by
38.7% yoy (7.7% qoq) on account of availability of additional capacity at Halol plant.
Top-line growth was driven by a ~20% yoy jump in volumes and a ~17% yoy increase in
average net realisation. However, led by a 40% yoy increase in natural rubber prices
leading to 969bp yoy growth in raw-material cost to 79% of sales, Ceat posted a loss of
`9cr at the operating level. Further, due to commissioning of the new plant at Halol,
depreciation and interest expense jumped by 95% (60.9% qoq) and 185% yoy (47.8%
qoq), respectively. Thus, the company reported net loss of `42cr on the bottom-line front.
We expect Ceat to report improvement in its operating performance going ahead,
as utilisation levels at the Halol plant improve and raw-material prices decline gradually.
Further, the complete impact of the ~10% price hike undertaken in 1QFY2012 will be
witnessed from 2QFY2012. At `97, the stock is trading at attractive valuations of 3.2x
FY2013E earnings. We maintain our Buy recommendation on Ceat; however, our target
price is under review.
Subros
Subros reported modest 7.8% yoy (down 16.9% qoq) growth in its net sales to `252cr for
1QFY2012. Top-line growth was driven by 7.3% yoy (3.2% qoq) growth in average net
realisation, as volumes remained flat. On a sequential basis, volumes declined by steep
19.5%, in-line with the volume decline in the passenger car industry. Operating margin
registered an 84bp yoy (99bp qoq) expansion on account of a 393bp yoy fall in
raw-material cost. However, other expenditure increased by 221bp yoy, restricting further
margin improvement. As a result, net profit grew by 12.5% yoy (down 26.9% qoq) to `8cr.
At `34, the stock is trading at 7.4x FY2012E and 6.8x FY2013E earnings. The stock rating
is currently under review.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
1QFY2012 Results Reviews
Bharti Airtel
For 1QFY2012, Bharti Airtel (Bharti) reported a mixed performance. The company’s
consolidated revenue stood at `16,974cr, with 4.4% qoq growth. Revenue from mobile
services for India came in at `9,840cr, up 3.6% qoq (lower growth than estimated), due to
a 0.8% qoq decline each in MOU as well as ARPM to 445min and `0.43/min, respectively.
Also, share of non voice revenue in mobile India business revenue declined to 14.6% from
15.1% in 4QFY2011. Zain Africa’s contribution to revenue stood at `4,378cr, up 4.7%
qoq, on account of 5.2% qoq growth in MOU to 121min, whereas ARPM declined by 3.2%
qoq to 6.0US¢/min. At the operating front, EBITDA margin of mobile India as well as
Africa business increased by 86bp and 17bp qoq to 34.2% and 26.6%, respectively.
Consolidated EBITDA margin for Bharti stood at 33.6%, almost flat qoq. PAT came in
lower at `1,215cr due to higher interest expenses by `171cr qoq as well as increased tax
rates to 30% from 27.3% in 4QFY2011. The stock is currently under review.
Ceat
Ceat reported weak results for 1QFY2012. The company posted operating as well as
bottom-line losses on account of raw-material cost pressures and higher interest and
depreciation expense due to commissioning of new Halol plant. Net sales grew strongly by
38.7% yoy (7.7% qoq) on account of availability of additional capacity at Halol plant.
Top-line growth was driven by a ~20% yoy jump in volumes and a ~17% yoy increase in
average net realisation. However, led by a 40% yoy increase in natural rubber prices
leading to 969bp yoy growth in raw-material cost to 79% of sales, Ceat posted a loss of
`9cr at the operating level. Further, due to commissioning of the new plant at Halol,
depreciation and interest expense jumped by 95% (60.9% qoq) and 185% yoy (47.8%
qoq), respectively. Thus, the company reported net loss of `42cr on the bottom-line front.
We expect Ceat to report improvement in its operating performance going ahead,
as utilisation levels at the Halol plant improve and raw-material prices decline gradually.
Further, the complete impact of the ~10% price hike undertaken in 1QFY2012 will be
witnessed from 2QFY2012. At `97, the stock is trading at attractive valuations of 3.2x
FY2013E earnings. We maintain our Buy recommendation on Ceat; however, our target
price is under review.
Subros
Subros reported modest 7.8% yoy (down 16.9% qoq) growth in its net sales to `252cr for
1QFY2012. Top-line growth was driven by 7.3% yoy (3.2% qoq) growth in average net
realisation, as volumes remained flat. On a sequential basis, volumes declined by steep
19.5%, in-line with the volume decline in the passenger car industry. Operating margin
registered an 84bp yoy (99bp qoq) expansion on account of a 393bp yoy fall in
raw-material cost. However, other expenditure increased by 221bp yoy, restricting further
margin improvement. As a result, net profit grew by 12.5% yoy (down 26.9% qoq) to `8cr.
At `34, the stock is trading at 7.4x FY2012E and 6.8x FY2013E earnings. The stock rating
is currently under review.
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