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Idea
Idea Cellular (Idea) reported its 1QFY2012 numbers, which were ahead of our
expectations on the revenue front; however, they were disappointing on the bottom-line
front. Revenue came in at `4,521cr, up 6.8% qoq, on the back of growth in ARPM (growth
came in after a continuous decline in ARPM since the last eight quarters) by 1.0% qoq to
`0.41/min and network traffic growth. However, MOUs and ARPU declined by 1.5% and
0.6% qoq to 391min and `160/month, respectively. Also, VAS share as a percentage of
revenue stood flat qoq at 12.1%, despite the launch of 3G in eight circles. EBITDA margin
grew by 124bp qoq to 26.6% on the back of lower subscriber acquisition costs. PAT came
in at `177cr, down 35.4% qoq, due to higher interest costs of `122.8cr and higher
depreciation and amortisation expenses of `65.6cr due to 3G and higher tax rates of 31%
vs. 17.5% in 4QFY2011. Idea has increased its tariff rates in six circles – A.P., M.P.,
Kerala, Maharashtra, U.P. (W) and Gujarat by 20%, which will lead to improvement in its
KPIs going forward. The stock is currently under review.
Motherson Sumi Systems
Motherson Sumi Systems (MSSL) registered an in-line 20.8% yoy increase (down 2.4% qoq)
in net sales to `2,300cr on a consolidated basis, driven by a 33.6% (down 15.7% qoq)
and 16.4% yoy (8.4% qoq) jump in domestic and overseas sales, respectively. Overseas
sales performance was led by strong 19.6% yoy (flat qoq) growth in SMR. On the
operating front, margin reported a 114bp yoy (318bp qoq) contraction to 8.6%, largely
due to input cost pressures and subdued operating performance at SMR (margins at 5.1%
against 7.2% in 1QFY2011) on account of start-up costs related to two new plants in
Hungary and Brazil. Raw-material costs during the quarter increased by 155bp yoy and
accounted for 64.1% of net sales. However, the decline in staff costs, other expenditure
and gains on the foreign exchange front arrested the further contraction in operating
margins. Net profit posted modest 9.6% yoy (down 53% qoq) growth to `65cr, significantly
lower than our estimates of `106cr. At `230, the stock is trading at 22.2x FY2012E and
16.3x FY2013E earnings. The stock rating is currently under review.
Bhushan Steel
Bhushan reported its 1QFY2012 results. Net sales grew by 62.6% yoy to `2,232cr mainly
on account of higher volumes of flat products. Flat products sales volume grew by 80.2%
yoy to 388,790 tonnes, while long product sales volume grew by 7.6% yoy to 100,664
tonnes in 1QFY2012. Long product average realisation increased by 18.2% yoy to
`42,915/tonne, while flat product average realisation decreased by 3.2% yoy to
`49,294/tonne. EBITDA increased by 62.1% yoy to `661cr, representing EBITDA margin of
29.6%. EBITDA/tonne increased to `13,505 in 1QFY2012 compared to `13,186 in
1QFY2011. Depreciation expense increased by 182.4% yoy to `151cr on account of
higher capacity, while interest expense increased by 173.8% yoy to `216cr due to
increased debt. A sharp increase in depreciation and interest costs resulted in net profit
growth of only 2.0% yoy to `210cr. We maintain our Neutral view on the stock.
CESC
During 1QFY2012, CESC reported 8.0% yoy growth in its standalone net sales to
`1,169cr, which was in-line with our estimates. Top-line growth was on account of better
realisation, as the volume of power sold fell by 2% yoy to 2,232MU. The company’s
operating profit rose by 4.3% yoy to `267cr. OPM came down by 80bp yoy to 22.6% on
account of higher power and fuel costs. Power and fuel costs rose by 16.1% yoy to `650cr,
despite a 2% fall in generation. International coal prices were higher by ~20% during the
quarter, resulting in higher power and fuel costs for the company. On the bottom-line
front, net profit remained flat at `111cr, impacted by higher depreciation and interest
costs. We maintain our Accumulate view on the stock with a target price of `380.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Idea
Idea Cellular (Idea) reported its 1QFY2012 numbers, which were ahead of our
expectations on the revenue front; however, they were disappointing on the bottom-line
front. Revenue came in at `4,521cr, up 6.8% qoq, on the back of growth in ARPM (growth
came in after a continuous decline in ARPM since the last eight quarters) by 1.0% qoq to
`0.41/min and network traffic growth. However, MOUs and ARPU declined by 1.5% and
0.6% qoq to 391min and `160/month, respectively. Also, VAS share as a percentage of
revenue stood flat qoq at 12.1%, despite the launch of 3G in eight circles. EBITDA margin
grew by 124bp qoq to 26.6% on the back of lower subscriber acquisition costs. PAT came
in at `177cr, down 35.4% qoq, due to higher interest costs of `122.8cr and higher
depreciation and amortisation expenses of `65.6cr due to 3G and higher tax rates of 31%
vs. 17.5% in 4QFY2011. Idea has increased its tariff rates in six circles – A.P., M.P.,
Kerala, Maharashtra, U.P. (W) and Gujarat by 20%, which will lead to improvement in its
KPIs going forward. The stock is currently under review.
Motherson Sumi Systems
Motherson Sumi Systems (MSSL) registered an in-line 20.8% yoy increase (down 2.4% qoq)
in net sales to `2,300cr on a consolidated basis, driven by a 33.6% (down 15.7% qoq)
and 16.4% yoy (8.4% qoq) jump in domestic and overseas sales, respectively. Overseas
sales performance was led by strong 19.6% yoy (flat qoq) growth in SMR. On the
operating front, margin reported a 114bp yoy (318bp qoq) contraction to 8.6%, largely
due to input cost pressures and subdued operating performance at SMR (margins at 5.1%
against 7.2% in 1QFY2011) on account of start-up costs related to two new plants in
Hungary and Brazil. Raw-material costs during the quarter increased by 155bp yoy and
accounted for 64.1% of net sales. However, the decline in staff costs, other expenditure
and gains on the foreign exchange front arrested the further contraction in operating
margins. Net profit posted modest 9.6% yoy (down 53% qoq) growth to `65cr, significantly
lower than our estimates of `106cr. At `230, the stock is trading at 22.2x FY2012E and
16.3x FY2013E earnings. The stock rating is currently under review.
Bhushan Steel
Bhushan reported its 1QFY2012 results. Net sales grew by 62.6% yoy to `2,232cr mainly
on account of higher volumes of flat products. Flat products sales volume grew by 80.2%
yoy to 388,790 tonnes, while long product sales volume grew by 7.6% yoy to 100,664
tonnes in 1QFY2012. Long product average realisation increased by 18.2% yoy to
`42,915/tonne, while flat product average realisation decreased by 3.2% yoy to
`49,294/tonne. EBITDA increased by 62.1% yoy to `661cr, representing EBITDA margin of
29.6%. EBITDA/tonne increased to `13,505 in 1QFY2012 compared to `13,186 in
1QFY2011. Depreciation expense increased by 182.4% yoy to `151cr on account of
higher capacity, while interest expense increased by 173.8% yoy to `216cr due to
increased debt. A sharp increase in depreciation and interest costs resulted in net profit
growth of only 2.0% yoy to `210cr. We maintain our Neutral view on the stock.
CESC
During 1QFY2012, CESC reported 8.0% yoy growth in its standalone net sales to
`1,169cr, which was in-line with our estimates. Top-line growth was on account of better
realisation, as the volume of power sold fell by 2% yoy to 2,232MU. The company’s
operating profit rose by 4.3% yoy to `267cr. OPM came down by 80bp yoy to 22.6% on
account of higher power and fuel costs. Power and fuel costs rose by 16.1% yoy to `650cr,
despite a 2% fall in generation. International coal prices were higher by ~20% during the
quarter, resulting in higher power and fuel costs for the company. On the bottom-line
front, net profit remained flat at `111cr, impacted by higher depreciation and interest
costs. We maintain our Accumulate view on the stock with a target price of `380.
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