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Bharati Shipyard Q2FY11E Result Estimates
We expect BSL to report healthy performance in Q2FY11E
n Revenues growth at 16% YoY to Rs3682 mn
n EBITDA margins to improve by 260 bps YoY to 21.5% due to lower input costs
n Led by strong margin expansion, expect robust EBITDA growth at 33% YoY to Rs790 mn.
n Subsidy income to rise sharply by 46% YoY to Rs246 mn
n APAT growth at 41% YoY to Rs462 mn.
Outlook on core ship building, resumption of order inflows and growth strategy for Great Offshore would be watched keenly.
HBL Power Systems Q2FY11E Result Estimates
Performance expected to improve significantly qoq driven by higher volumes (revenue growth of 14% qoq) and operating leverage (EBITDA margins +390bps qoq). However, it would still be muted yoy due to very high base in Q2FY10. Expect revenue to fall by 8.8% YoY. Expect decline (771bps yoy) in EBITDA margins (very high base) to lead to EBITDA decline of 40% yoy. Consequently, PAT is expected to decline by 45% to Rs180mn. Key things to watch - (1) revenues traction in various segments esp. telecom segment, (2) impact of operating leverage, (3) overall margins and (4) status of defense order.
Apollo Tyres Ltd. (ATL) – Standalone Q2FY11 result expectation
We expect ATL to report disappointing operating performance, due to loss of production at Perambara as well as South Africa in Q2FY11 and higher rubber prices. Topline is expected to remain flat YoY but increase 10% QoQ due to higher avg. realizations. Expect EBIDTA margins to decline by 730bps YoY and 130bps QoQ. Key things to watch out for (1) Rubber price movement and (2) price hikes
n We expect net sales to increase by 1.6% YoY and 10.5% QoQ to Rs 12.4bn
n We expect EBIDTA to decline 43.9% YoY and 3.9% QoQ to Rs 1.1bn
n EBIDTA margin are likely to compress by 730 bps YoY and 130 bps QoQ to 9.1%
n We expect APAT to decline by 62.4% YoY and 5.4% QoQ to Rs 384mn
Tata Motors Q2FY11 Conso Result Update; JLR margins are sustainable, Raise TP to Rs1,550; BUY
n Conso performance above est. due to stellar performance by JLR (margins at 15.6%). However, standalone business disappoints significantly with margins at 9.5% (est. of 10.8%)
n JLR margins are sustainable at high level (around 14%) given the strong demand in most of the geographies, ample scope of cost reduction and higher share of new model launch
n Upgrade FY11E/FY12E EPS by 39%/22% to Rs 141.1/168.3 due to margin upgrade in JLR. Upgrade rating to BUY from ACUUMULATE
n Adverse currency swings is the biggest risk to JLR margins. Capex/R&D at ~10% of JLR FY11 sales continues to affect FCF generation
Sun Pharma Q2FY11 Result Update; Fairly Valued; Maintain Hold; Target: Rs2,300
n Sun Pharma’s higher than expected Q2FY11 performance is driven by residual revenue booking of Eloxatin, Taro’s consolidation and robust domestic formulation growth
n APAT at Rs5bn was higher than our est. of Rs3.1bn driven by a) 26% growth in revenue to Rs13.7bn (est. of Rs10.7bn) & b) 33% growth in EBIDTA to Rs4.7bn (est. of Rs3bn)
n Management’s revenue guidance revision from 20% to 35% on Taro’s consolidation looks conservative
n Caraco’s recovery will be gradual
n Raise estimates to incorporate Taro; upgrade TP to Rs2,300; maintain Hold
Garware Offshore Q2FY11 Result Update; Number in line-Maintain Hold; Target: Rs160
n Garware Offshore Services ltd (GOSL’s) Q2FY11 net profit at Rs43.1 mn (-32% yoy) is in line with estimates. Revenues decline 8.9% yoy on account of lower day rates
n 21.8% yoy increase in employee expenditure, drag down EBIDTA (Rs188 mn) by 17.3% yoy, (Est- Rs179 mn). EBIDTA margins at 38.1% declined 386bps yoy
n Downgrade earnings by 18.5% for FY11 led by lower day rates for vessels in Singapore subsidiary and delayed delivery of the new PSV
n GOSL expected to bag term contracts for 2 AHTs (currently operating in spot), improving revenue backlog by 30% to USD 62mn. Upgrade target to Rs160 – Maintain HOLD
Divis Lab Q2FY11 Result Update; Below expectations; Downgrade to Accumulate; Target: Rs756
n Divi’s Q211 performance was below expectations with a) Revenue at Rs2.6bn (est. of Rs2.9bn); b) EBIDTA at Rs878mn (est. of Rs1.2bn) & c) APAT at Rs719mn (est. of Rs976mn)
n Unfavorable product mix impacted operating performance; expect gradual recovery going forward
n Carotenoids is the next growth driver for the company; to drive earnings growth in FY12E
n Tweak earning estimates by 14%/10% for FY11E/FY12E; Cut target price to Rs756 and downgrade the rating from Buy to Accumulate
Panacea Biotec Q2FY11 Result Update; In-line; Raise target price and maintain hold; Target: Rs241
n Panacea Biotec’s Q2FY11 PAT was impacted by higher tax provisioning. Revenues at Rs2.56bn (est. of Rs2.47) and, b) EBITDA at Rs564mn (est. of Rs580mn) were in-line
n Revenues were driven by a) 61% growth in vaccines (Easyfive contributed revenue of Rs723mn) and b) 37% growth in pharma formulation business
n Higher tax provision (41% vs. est. of 24%) and higher interest cost (up 14% YoY) restricted PAT at Rs190mn vs. est. of Rs256mn
n Earning estimates revised upward by 6% to Rs18 and Rs24 for FY11E and FY12E respectably, owing to buy back of equity; Raise target price and maintain Hold rating
Bharat Petroleum Corp Q2FY11 Result Update; Times are getting better; Accumulate; Target: Rs 805
n BPCL reported results which were above our estimates at EBIDTA and PAT Level, primarily due to issuance of oil bonds/Cash receivables during the quarter
n EBIDTA at Rs.24.8bn, against EBIDTA loss of Rs0.9bn, mainly due to issuance of oil bonds/cash receivables from the government of India
n Average gross refining margin for 1H FY11 was at $3.19/bbl as compared to $3.53/bbl (decline of 10% YoY) below our expectation of $3.7/bbl
n Valuations look attractive at 1.4x FY12E ABV, mainly due to recent change in reforms, Accumulate rating with TP of Rs.805
Bharti Airtel Q2FY11 Result Update; Results miss estimate, Retain HOLD; Target: Rs345
n Q2FY11 PAT of Rs16.6bn misses estimate of Rs19.2bn on absence in domestic revenue growth owing to seasonality and margin pressure in African operations
n ARPU fall of 6.4% QoQ led by 5.4% drop in MOU as realization remains largely stable at Rs0.44/ minute.
n Cut EPS estimate by 8.5% /6.3% to Rs18.3 /21.6 for FY11E/12E due to African margin pressures and higher tax.
n Valuations at 15.2x EPS and 6.9x EBIDTA provide comfort. Retain HOLD rating with target price Rs345.
GIPCL Q2FY11 Result Update; Numbers impacted by capitalization at low PLFs; Accumulate; Target: Rs 135
n GIPCL results include the impact of new plant starting September, even though one unit continued to remain idle due to technical problems & 2nd unit ran at low PLF
n Depreciation & interest cost of new plant has impacted numbers; Stabilization of new plant still remains overhang; management guiding for Dec 2010
n But on the conservative side, we now assume normal functioning from FY12E; FY11E numbers to take significant hit on the fixed cost of new plant; FY12E maintained
n Still some value left in stock but depends on the stabilization; valuations at 1.3xFY12E Book; core ROE of 20%; downgrade to Accumulate on quantum of upside; Target Rs135
