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Result Reviews
ABB - 2QCY2011
ABB announced its 2QCY2011 results, which outperformed on the top-line front but
disappointed on the earnings front owing to weak margins. The company reported strong
growth of 17.8% yoy in its top line to `1,713cr (`1,463cr), which was higher by 1.8% from
our expectation of `1,683cr. Operating margin was disappointing; coming in at 5% vs.
our estimate of 8%. Margin pressures were exerted mainly by material costs, which
increased by 90bp yoy to 71.9% as a proportion to sales. On a yoy basis, margins slightly
expanded by 50bp. Interest cost rose by 55% to `7cr (`4cr), partly offset by higher other
income at `7cr (`5cr). Depreciation cost more than doubled during the quarter to `26cr
(`12cr). As a result, PAT was considerably impacted, posting flat growth of 1.1% yoy to
`39cr.
In the results conference call, management has cited various operational challenges,
including deteriorating macro climate, margin pressures and competitive landscape in the
T&D segment. We will release a detailed note with revised estimates after factoring in the
aforementioned elements. At the CMP of `806, the stock trades at rich valuations of 38.6x
and 27.8x its CY2011E and CY2012E earnings estimates. We maintain our Sell view on
the stock; our target price is under review.
GSPL
GSPL reported its 1QFY2012 results. Total operating revenue increased by 12.9% yoy to
`284cr mainly due to higher transmission volumes and better realisation. Transmission
tariff for 1QFY2012 grew by 6.7% yoy and to `0.81/scm mainly on account of a marginal
improvement in spot volumes. Transmission volumes grew by 1.2% yoy to 36.8mmscmd.
EBITDA grew by 10.0% yoy to `262cr. During the quarter, depreciation expenses declined
by 34.1% to `45cr mainly due to the decrease in depreciation rate. Interest expense grew
by 44.4% yoy to `32cr, while other income grew by 95.9% yoy to `11cr. Hence, PAT grew
by 30.7% yoy to `137cr. We maintain our Neutral view on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Result Reviews
ABB - 2QCY2011
ABB announced its 2QCY2011 results, which outperformed on the top-line front but
disappointed on the earnings front owing to weak margins. The company reported strong
growth of 17.8% yoy in its top line to `1,713cr (`1,463cr), which was higher by 1.8% from
our expectation of `1,683cr. Operating margin was disappointing; coming in at 5% vs.
our estimate of 8%. Margin pressures were exerted mainly by material costs, which
increased by 90bp yoy to 71.9% as a proportion to sales. On a yoy basis, margins slightly
expanded by 50bp. Interest cost rose by 55% to `7cr (`4cr), partly offset by higher other
income at `7cr (`5cr). Depreciation cost more than doubled during the quarter to `26cr
(`12cr). As a result, PAT was considerably impacted, posting flat growth of 1.1% yoy to
`39cr.
In the results conference call, management has cited various operational challenges,
including deteriorating macro climate, margin pressures and competitive landscape in the
T&D segment. We will release a detailed note with revised estimates after factoring in the
aforementioned elements. At the CMP of `806, the stock trades at rich valuations of 38.6x
and 27.8x its CY2011E and CY2012E earnings estimates. We maintain our Sell view on
the stock; our target price is under review.
GSPL
GSPL reported its 1QFY2012 results. Total operating revenue increased by 12.9% yoy to
`284cr mainly due to higher transmission volumes and better realisation. Transmission
tariff for 1QFY2012 grew by 6.7% yoy and to `0.81/scm mainly on account of a marginal
improvement in spot volumes. Transmission volumes grew by 1.2% yoy to 36.8mmscmd.
EBITDA grew by 10.0% yoy to `262cr. During the quarter, depreciation expenses declined
by 34.1% to `45cr mainly due to the decrease in depreciation rate. Interest expense grew
by 44.4% yoy to `32cr, while other income grew by 95.9% yoy to `11cr. Hence, PAT grew
by 30.7% yoy to `137cr. We maintain our Neutral view on the stock.
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