|Jan 23 2007||ABG Shipyard Ltd|
|Jan 23 2007||Adlabs Films Ltd|
|Jan 23 2007||Advanced Micronic Devices Ltd|
|Jan 23 2007||Alpha Hi-Tech Fuel Ltd|
|Jan 23 2007||Apeego Ltd|
|Jan 23 2007||Apollo Sindhoori Capital Investments Ltd|
|Jan 23 2007||Arvind Products Ltd|
|Jan 23 2007||Automotive Stampings & Assemblies Ltd|
|Jan 23 2007||Balmer Lawrie Vanleer Ltd|
|Jan 23 2007||Banswara Syntex Ltd|
|Jan 23 2007||Birla Ericsson Optical Ltd|
|Jan 23 2007||CCL Products (India) Ltd|
|Jan 23 2007||CEAT Ltd|
|Jan 23 2007||Ceekay Daikin Ltd|
|Jan 23 2007||Chettinad Cement Corporation Ltd|
|Jan 23 2007||Coromandel Fertilisers Ltd|
|Jan 23 2007||Cosmo Films Ltd|
|Jan 23 2007||D S Kulkarni Developers Ltd|
|Jan 23 2007||Dabur Pharma Ltd|
|Jan 23 2007||DCM Shriram Industries Ltd|
|Jan 23 2007||Educomp Solutions Ltd|
|Jan 23 2007||Everest Kanto Cylinder Ltd|
|Jan 23 2007||Fiem Industries Ltd|
|Jan 23 2007||Filmcity Media Ltd|
|Jan 23 2007||Gabriel India Ltd|
|Jan 23 2007||Gayatri Projects Ltd|
|Jan 23 2007||Glenmark Pharmaceuticals Ltd|
|Jan 23 2007||GMR Infrastructure Ltd|
|Jan 23 2007||Goa Carbon Ltd|
|Jan 23 2007||GRUH Finance Ltd|
|Jan 23 2007||Gujarat Reclaim & Rubber Products Ltd|
|Jan 23 2007||HB Portfolio Ltd|
|Jan 23 2007||Helios & Matheson Information Technology Ltd|
|Jan 23 2007||Hindustan Organic Chemicals Ltd|
|Jan 23 2007||India Infoline Ltd|
|Jan 23 2007||Indian Hotels Co Ltd|
|Jan 23 2007||Ipca Laboratories Ltd|
|Jan 23 2007||ITI Ltd|
|Jan 23 2007||Kesoram Industries Ltd|
|Jan 23 2007||Khandwala Securities Ltd|
|Jan 23 2007||Lifestyle Fabrics Ltd|
|Jan 23 2007||Maharashtra Polybutenes Ltd|
|Jan 23 2007||Mahindra Gesco Developers Ltd|
|Jan 23 2007||Mangalam Cement Ltd|
|Jan 23 2007||Mangalore Refinery And Petrochemicals Ltd|
|Jan 23 2007||Mediaone Global Entertainment Ltd|
|Jan 23 2007||Millennium Beer Industries Ltd|
|Jan 23 2007||Mold-Tek Technologies Ltd|
|Jan 23 2007||Munjal Showa Ltd|
|Jan 23 2007||Mysore Paper Mills Ltd|
|Jan 23 2007||National Organic Chemical Industries Ltd|
|Jan 23 2007||Nitco Tiles Ltd|
|Jan 23 2007||Noida Toll Bridge Company Ltd|
|Jan 23 2007||Onward Technologies Ltd|
|Jan 23 2007||Opto Circuits (India) Ltd|
|Jan 23 2007||Oxides & Specialities Ltd|
|Jan 23 2007||Premier Ltd|
|Jan 23 2007||Radha Madhav Corporation Ltd|
|Jan 23 2007||Real Strips Ltd|
|Jan 23 2007||Rollatainers Ltd|
|Jan 23 2007||Ruby Mills Ltd|
|Jan 23 2007||SB & T International Ltd|
|Jan 23 2007||Scana Color (India) Ltd|
|Jan 23 2007||Shalimar Paints Ltd|
|Jan 23 2007||Sharon Bio-Medicine Ltd|
|Jan 23 2007||Sumedha Fiscal Services Ltd|
|Jan 23 2007||Swaraj Engines Ltd|
|Jan 23 2007||Tata Motors Ltd|
|Jan 23 2007||Times Guaranty Ltd|
|Jan 23 2007||Transport Corporation of India Ltd|
|Jan 23 2007||United Breweries (Holdings) Ltd|
|Jan 23 2007||United Spirits Ltd|
|Jan 23 2007||Universal Cables Ltd|
|Jan 23 2007||Vikram Thermo (India) Ltd|
|Jan 23 2007||Vindhya Telelinks Ltd|
|Jan 23 2007||Western India Shipyard Ltd|
|Jan 23 2007||Wheel & Axle Textiles Ltd|
|Jan 23 2007||Zandu Pharmaceutical Works Ltd|
Saturday, January 20, 2007
|Jan 22 2007||Aarti Drugs Ltd|
|Jan 22 2007||ANG Auto Ltd|
|Jan 22 2007||Apple Finance Ltd|
|Jan 22 2007||Asian Hotels Ltd|
|Jan 22 2007||AVT Natural Products Ltd|
|Jan 22 2007||Bell Ceramics Ltd|
|Jan 22 2007||Betala Global Securities Ltd|
|Jan 22 2007||Bhushan Steels & Strips Ltd|
|Jan 22 2007||Bijlee Textiles Ltd|
|Jan 22 2007||Cubex Tubings Ltd|
|Jan 22 2007||Daulat Securities Ltd|
|Jan 22 2007||DCM Shriram Consolidated Ltd|
|Jan 22 2007||Diamines & Chemicals Ltd|
|Jan 22 2007||Elder Pharmaceuticals Ltd|
|Jan 22 2007||Electrosteel Castings Ltd|
|Jan 22 2007||Emmessar Biotech & Nutrition Ltd|
|Jan 22 2007||Flawless Diamond (India) Ltd|
|Jan 22 2007||Greenply Industries Ltd|
|Jan 22 2007||GTL Infrastructure Ltd|
|Jan 22 2007||Harsh Polymers(India) Ltd|
|Jan 22 2007||Hi-Tech Gears Ltd|
|Jan 22 2007||Himachal Futuristic Communications Ltd|
|Jan 22 2007||Hind Rectifiers Ltd|
|Jan 22 2007||Honda Siel Power Products Ltd|
|Jan 22 2007||Indag Rubber Ltd|
|Jan 22 2007||India Cements Capital & Finance Ltd|
|Jan 22 2007||India Cements Ltd|
|Jan 22 2007||Indo Tech Transformers Ltd|
|Jan 22 2007||Industrial Investment Trust Ltd|
|Jan 22 2007||Jain Studios Ltd|
|Jan 22 2007||Jarigold Textiles Ltd|
|Jan 22 2007||JK Paper Ltd|
|Jan 22 2007||Jyoti Structures Ltd|
|Jan 22 2007||Kar Mobiles Ltd|
|Jan 22 2007||Kewal Kiran Clothing Ltd|
|Jan 22 2007||Khaitan Weaving Mills Ltd|
|Jan 22 2007||Kirloskar Ferrous Industries Ltd|
|Jan 22 2007||Kohinoor Foods Ltd|
|Jan 22 2007||Kriti Industries (India) Ltd|
|Jan 22 2007||Lakshmi Automatic Loom Works Ltd|
|Jan 22 2007||Lakshmi Mills Company Ltd|
|Jan 22 2007||Libord Infotech Ltd|
|Jan 22 2007||Libords Securities Ltd|
|Jan 22 2007||Lloyds Finance Ltd|
|Jan 22 2007||Madhav Marbles & Granities Ltd|
|Jan 22 2007||Maharaja Shree Umaid Mills Ltd|
|Jan 22 2007||Mazda Ltd|
|Jan 22 2007||MMTC Ltd|
|Jan 22 2007||Murudeshwar Ceramics Ltd|
|Jan 22 2007||Narmada Chematur Petrochemicals Ltd|
|Jan 22 2007||Navin Fluorine International Limited|
|Jan 22 2007||Nectar Lifescience Ltd|
|Jan 22 2007||Nettlinx Ltd|
|Jan 22 2007||New Bombay Printing & Dyeing Mills Ltd|
|Jan 22 2007||Nu-Tech Corporate Services Ltd|
|Jan 22 2007||Nucleus Software Exports Ltd|
|Jan 22 2007||Omax Autos Ltd|
|Jan 22 2007||ORG Informatics Ltd|
|Jan 22 2007||Padmalaya Telefilms Ltd|
|Jan 22 2007||Panoramic Universal Ltd|
|Jan 22 2007||Pitti Laminations Ltd|
|Jan 22 2007||Poddar Pigments Ltd|
|Jan 22 2007||Pratibha Industries Ltd|
|Jan 22 2007||Raj Packaging Industries Ltd|
|Jan 22 2007||Rasoya Proteins Ltd|
|Jan 22 2007||Rosekamal Textiles Ltd|
|Jan 22 2007||Saboo Sodium Chloro Ltd|
|Jan 22 2007||Saksoft Ltd|
|Jan 22 2007||Salora International Ltd|
|Jan 22 2007||Saregama India Ltd|
|Jan 22 2007||Shanthi Gears Ltd|
|Jan 22 2007||Shaw Wallace & Company Ltd|
|Jan 22 2007||Spectrum Foods Ltd|
|Jan 22 2007||Sri Adhikari Brothers Television Network Ltd|
|Jan 22 2007||Sterling Spinners Ltd|
|Jan 22 2007||Stovec Industries Ltd|
|Jan 22 2007||Sukhjit Starch & Chemicals Ltd|
|Jan 22 2007||Sumeet Industries Ltd|
|Jan 22 2007||Sunflag Iron & Steel Company Ltd|
|Jan 22 2007||Supreme Holdings Ltd|
|Jan 22 2007||Supreme Yarns Ltd|
|Jan 22 2007||TECIL Chemicals & Hydro Power Ltd|
|Jan 22 2007||TRF Ltd|
|Jan 22 2007||Triton Corp. Ltd|
|Jan 22 2007||United Breweries Ltd|
|Jan 22 2007||Ventura Textiles Ltd|
|Jan 22 2007||Vinati Organics Ltd|
|Jan 22 2007||Visisth Merchantile Ltd|
|Jan 22 2007||VMF Soft Tech Ltd|
|Jan 22 2007||Voltas Ltd|
|Jan 22 2007||Wearology Ltd|
|Jan 22 2007||Yes Bank Ltd|
|Jan 22 2007||Zee Telefilms Ltd|
Cluster: Apple Green
Price target: Rs558
Current market price: Rs414
Operating margin lower than expected
- Ranbaxy Laboratories (Ranbaxy) reported an impressive 167% growth in its net profit to Rs183.3 crore in Q4CY2006, which is higher than our expectation of Rs174.1 crore. The improvement in the profitability was triggered by a forex gain of $8 million. The focused cost-control efforts and rationalisation of research and development (R&D) spending also contributed to the profit growth.
- The net sales were higher by 22% to Rs1,697.50 crore in Q4CY2006 which was 4% above our expectation. The revenue growth was supported by a stronger revenue inflow from the Simvastatin-80mg tablet (which was under exclusivity in the USA), integration of Terapia SA (which reported over 50% growth) and the jump of 45% in the business from Brazil, Russia, India, China and South Africa (BRICS) during the quarter.
- However, the revenue growth was moderated by the pricing concerns in Europe, particularly the UK, Germany and France, leading to a 6% fall in the sales to $52 million and a 16% sequential decline in the domestic revenues to $66 million.
- With the higher realisation from the products under exclusivity and cost-cutting efforts, the operating profit margin (OPM) expanded by 920 basis points to 15%; but the expansion was 240 basis points less than our expectation. Again the margins were inflated by a foreign exchange (forex) gain of $8 million (against a $2 million forex gain in Q4CY2005). So if we discount the impact of the forex gain and the other operating income, the OPM appears 620 basis points less than our expectation. There is another cause for concern as well: The OPM has declined by 180 basis points sequentially. The decline was caused partly by the tapering of the realisation from Simvastatin after the expiration of exclusivity in the fag end of Q4CY2006.
- For CY2006, the company reported an 18% growth in the top line to Rs6,021.6 crore and an 890-basis-point expansion in the OPM to 15.4%. This caused the net profit to double (ie a 97% rise) to Rs515.1 crore.
- The company has guided for a 15% top line growth (which is in line with our estimations) with an earnings before interest, tax, depreciation and amortisation (EBITDA) margin of 16% for CY2007. At the current market price, the stock trades at 19.9x CY2007E earnings of Rs20.8 per share. We maintain our Buy recommendation with a longer-term price target of Rs558.
Price target: Rs1,700
Current market price: Rs1,482
Another quarter of superlative performance
- The company achieved a net profit of Rs104 crore for Q3FY2007, in line with our expectations, translating into a year-on-year (y-o-y) growth of 165%.
- The net sales increased by 153% year on year (yoy) to Rs364.5 crore driven by a huge 80% jump in the volumes and a robust 40% y-o-y rise in the realisations; however, the sales were down sequetially by 2%.
- The operating expenditure increased by 128% yoy to Rs204.4 crore. The rise in the expenditure was in line with our expectations except for the freight cost, which was slightly more than expectations at Rs390 per tonne.
- The sequential dip in the realisations as well as the rise in the freight costs can be attributed to the exercise undertaken by the company to test new markets like Uttar Pradesh. This exercise was undertaken as the company will be commissioning a plant of 1.5 million metric tonne (MMT) capacity in March 2007.
- The operating profit rose by a whopping 194% yoy to Rs160 crore whereas the operating margins expanded by 620 basis points to 43.9%. The earnings before interest, tax, depreciation and amortisation (EBITDA) per tonne rose 1.5x yoy to stand at Rs1,222 per tonne, whereas the EBITDA witnessed a marginal dip of 4% sequentially.
- The interest cost stood much lower at Rs0.65 crore whereas the depreciation provision was also lower at Rs26 crore. Consequently, the net profit grew by 165.5 % yoy to Rs104 crore in line with our expectations.
- Looking at the stupendous performance by the company in the first nine months of the current fiscal year, we are upgrading our FY2007 estimates by 20% to Rs400 crore as against Rs332 crore as per current estimates.
- At the current market price of Rs1,500, the stock is trading at 13.1x its FY2007 earnings and 11.7x its FY2008 earnings. We maintain our Buy recommendation on the stock with a price target of Rs1,700.
Cluster: Apple Green
Price target: Rs320
Current market price: Rs262
Higher investment provisions are a surprise
- Canara Bank's net profit grew by only 1.9% to Rs363 crore, below our expectations of Rs394.7 crore. The operating performance was better than our expectations mainly due to the controlled expenses rather than the growth in the income, but higher provisions have been a surprise, which resulted in the reported profit after tax (PAT) being 8% lower than our estimates.
- During the quarter the bank's net interest income (NII) grew by 8.4% year on year (yoy) to Rs1,038.6 crore compared to our expectations of a 5.6% year-on-year (y-o-y) growth to Rs1,012.3 crore. The increase is primarily due to a sharp rise in the inteest on the RBI balances and the other interest component.
- The other income declined by 3.8% yoy due to a 1.4% decline in the fee and other income and a 20% decline in the trading income.
- The reported net interest margin (NIM) has declined by 16 basis points to 3.14% on a y-o-y basis but remained stable on a sequential basis. The NIM has been under pressure on a y-o-y basis because of a steep jump in the interest expended component, which has increased by 50% yoy mainly due to a 29% growth in the deposits and a 58-basis-point y-o-y increase in the cost of funds to 4.86%.
- The operating profit was better than our estimates of Rs648.7 crore and touched Rs701 crore, which remained stable on a y-o-y basis but improved by 13.9% on a sequential basis mainly due to a 6.2% quarter-on-quarter (q-o-q) decline in the operating expenses brought about by the lower staff expenses.
- The provisions at Rs263 crore were up 7.4% yoy. However we expected the provisions to be lower on account of the lower marked-to-market provisions. Hence, despite the operating profits being higher than our expectations the PAT at Rs363 crore was below our expectations of Rs394.7 crore.
- The non-performing asset (NPA) provisions have been lower although the absolute NPA numbers are on the rise on a sequential basis. Hence we feel that going forward higher NPA provisions slightly above the regulatory requirement would be prudent.
Satyam Computer Services
Cluster: Apple Green
Price target: Rs550
Current market price: Rs488
Price target revised to Rs550
- Satyam Computer Services (Satyam) reported a revenue growth of 3.7% quarter on quarter (qoq) and of 31.3% year on year (yoy) to Rs1,661 crore during the third quarter. The revenue growth was not only below market expectations but also a tad below the company's guidance. The consolidated volume growth was decent at 8.2% qoq but the same was not reflected in the revenue growth due to the appreciation in the rupee and the shift in the revenue mix towards the offshore business.
- The operating profit margin (OPM) improved by 205 basis points to 24.7% on a sequential basis, in spite of the adverse impact of the rupee appreciation, an increase in the selling, general and administrative (SG&A) expenses as a percentage of sales and a decline in the profitability of its subsidiaries. On the ther hand, the shift towards high-margin offshore business, decline in provisions (related to leave encashment and gratuity) and other cost efficiencies (including pricing and productivity gains in foxed priced projects) had a positive impact (of over 400 basis points) on the margins. Consequently, the operating profit grew at a healthy rate of 13.1% sequentially to Rs410 crore.
- However, the earnings growth was limited by the steep decline of 64.2% in the other income component to Rs10.1 crore (due to the foreign exchange fluctuation loss of Rs35.5 crore) and the increase in the effective tax rate to 10.7% (up from 8.8% in the previous quarter). Consequently, the consolidated earnings grew by 5.4% qoq and 25% yoy to Rs337.2 crore, which is below the consensus estimate of around Rs340 crore.
- For Q4, the consolidated revenues and earnings are guided to grow by 4-4.5% and 5.4% respectively on a sequential basis. This implies a 0.3-0.5% downgrade in the annual revenue guidance to Rs6,434-6,442 crore (down from Rs6,452-6,476 crore guided earlier). But the annual guidance for the earnings including the stock compensation charges has increased marginally to Rs20.9 per share (up from Rs20.73-20.81 per share guided earlier). Moreover, the marginal upgrade in the revenue guidance in dollar terms to $1,443-1,445 million (up from $1,434-1,440 million guided earlier) suggests that the downgrade in the revenue guidance in rupee terms is largely due to the steep appreciation in the rupee.
- At the current price the stock trades at 23.3x FY2007 and 19.4x FY2008 estimated earnings (including the non-cash charges for the stock options). We maintain our Buy call on the stock with a revised price target of Rs550 (18x rolling four quarters one-year forward earnings).
Nicholas Piramal India
Cluster: Apple Green
Price target: Rs393
Current market price: Rs266
Results in line with expectations
- Nicholas Piramal (Nicholas) reported a 61.3% year-on-year (y-o-y) increase in its net sales to Rs649.5 crore in Q3FY2007. The growth was achieved on the back of a 13% increase in the domestic sales and a whopping 208.9% surge in the global revenues. The sales growth was ahead of expectations.
- The 13% rise in the domestic sales was driven mainly by a 12.6% growth in the branded formulation business and a staggering 53.1% rise in the pathology laboratory (pathlabs) business.
- The international sales benefitted largely from the incremental revenues flowing in from Pfizer's Morpeth facility in the UK and Avecia (now NPIL UK). Morpeth and NPIL UK together contributed Rs216 crore of revenues during the quarter, up 17% on a sequential basis.
- Nicholas' operating profit margin (OPM) expanded by 650 basis points to 14.9% in the quarter, driven by a sharp 970-basis-point reduction in the raw material cost and a 360-basis-point drop in the other expenses. The material cost improved because the company derived a higher amount of the high-margin CRAMS revenues during the quarter. Further, the enhanced capacity utilisation of the Morpeth facility also increased the operating leverage.
- Consequently, the company's operating profit rose by 185.3% to Rs97 crore during the quarter.
- Even though the acquisitions led to a substantial increase in the interest and depreciation expenses during the quarter, the growth in the net profit was impressive at 400% to Rs48.4 crore. Adjusting for the income for the prior-period adjustments, the adjusted net profit stood at Rs55.6 crore, up 474% year on year (yoy). The net profit growth was aided by a relatively lower tax incidence during the quarter. The tax outgo was lower on account of the progressive shift of the manufacturing activities to the tax-exempt Baddi facility. The net profit was in line with our estimates.
- At the current market price of Rs266, the stock is quoting at 15.9x its estimated FY2008 earnings. In view of the strong revenue flows and the enhanced profitability picture for the coming years, we maintain our Buy recommendation on the stock with a price target of Rs393.
Price target: Rs1,530
Current market price: Rs1,380
Price target revised to Rs1,530
- Reliance Industries (RIL) has positively surprised in its Q3FY2007 results by reporting a whopping 57.6% year-on-year (y-o-y) growth in its earnings, way ahead of our and consensus estimates.
- The net revenues for the quarter grew by 45.7% driven by a strong 48.2% y-o-y growth in the revenues from the petrochemicals business and a 37.5% y-o-y growth in the revenues from the refining business.
- The profit before interest and tax (PBIT) in the petrochemicals business grew by only 32.2% on account of a 156-basis-point contraction in the margins. The PBIT of the refiing business grew by 124.9% on the back of a 358-basis-point expansion in the margins. As a result the PBIT grew by 38% yoy to Rs1,764 crore.
- The refining business again gave a positive surprise and the gross refining margins (GRMs) grew by 28.6% yoy and also 28.6% sequentially despite a 36.1% yoy and a 17.9% sequential decline in the Singapore benchmark GRMs. In fact this is the highest ever out-performance over the benchmark Singapore complex by RIL.
- With the better-than-expected performance of the refining division and the robust top line growth of the petrochemical business, the net profit grew by a massive 57.6% to Rs2,799 crore.
- We like the way RIL has been diversifying into new areas of growth like the upstream oil and gas activity, organised retailing and construction of special economic zones (SEZs). However, these areas of businesses would entail a lot of investment for RIL going forward and we expect them to generate tremendous value for the shareholders.
- We are revising our FY2007E earnings by 7.1% and the FY2008E earnings by 7.9%. Given the out-performance of our and street's expectations for the second consecutive quarter, more clarity on the exploration end of the business and definitive visions for the new ventures like retail, we are revising our price target to Rs1,530.
Cluster: Ugly Duckling
Price target: Rs1,365
Current market price: Rs1,130
- UltraTech Cement Limited (UTCL) has reported a whopping 790% year-on-year (y-o-y) jump in its net profit at Rs212.46 crore for Q3FY2007, marginally ahead of our expectations.
- The net sales increased by 61% year on year (yoy) from Rs782 crore to Rs1,260 crore boosted by a 14% increase in the volumes and a 41% jump in the realisations.
- The company's leverage to volumes resulted in the operating profit registering a growth of 244.5% yoy to Rs380 crore whereas the operating margins expanded by 1,600 basis points to 30% yoy.
- On the backdrop of a robust realisation growth and a muted increase in the operating expenditure, the earnings before interest, tax, depreciation and amortisation (EBITDA) per tonne stood at Rs879 clocking a y-o-y growth of 200% and a quarter-on-quarter (q-o-q) growth of 27%.
- Depreciation stood at Rs57 crore whereas the interest expenditure stood at Rs20 crore, marginally lower than expectations.
- Sweetened by a higher-than-expected other income of Rs16 crore, the net profit stood at Rs212.5 crore clocking a y-o-y growth of 790%.
- The company's capital expenditure (capex) plan of Rs2,700 crore is progressing well. This will provide the much needed volume growth going forward and result in higher profitability on account of the savings in power costs.
- Taking notice of the stellar third quarter performance and considering the buoyant scenario in the sector in the next one year, we are upgrading our FY2007 earnings estimates by 6% to Rs722 crore and FY2008 earnings by 28% to Rs1,132 crore.
- At the current market price of Rs1,130, the stock is discounting its FY2007 revised earnings by 18.4x and its FY2008 revised estimates by 12.4x whereas on an enterprise value (EV) per tonne basis, the stock is trading at USD171 per tonne. Maintaining our positive view on the stock, we are upgrading our price target to Rs1,365.
Cluster: Apple Green
Price target: Rs1,730
Current market price: Rs1,435
Price target revised to Rs1,730
- Bharat Bijlee Ltd's (BBL) Q3FY2007 results are slightly ahead of our expectations.
- The revenue for the quarter grew by 28.5% to Rs120 crore on the back of a strong order book of Rs270 crore at the beginning of the quarter.
- The operating profit for the quarter grew by 41.5% to Rs22.2 crore, as the operating profit margin (OPM) for the quarter improved by 180 basis points to 20.2% against 18.4% in Q3FY2006. This is a significant improvement and the company has been able to reverse the declining margin trend as depicted in H1FY2007 (H1FY2007 OPM stood at 11.9% as against 12.4%). The H1FY2007 performance was marred by the low margin 100MVA transformer business, which was the entry order for BBL in the high range market.
- The interest for the quarter increased by 53% while the depreciation increased by 25%.
- Consequently the net profit for the quarter grew by an impressive 43% to Rs13.37 crore.
- <ONT face="Trebuchet MS" size=2>The order backlog for the quarter jumped by almost 100%. The order inflows also showed a very strong growth of about 140% year on year (yoy).
Genus Overseas Electronics
Cluster: Ugly Duckling
Price target: Rs345
Current market price: Rs256
Price target revised to Rs345
- The Q3FY2007 results of Genus Overseas Electronics (Genus) are in line with our expectations.
- The revenues for the quarter grew by 266% to Rs89.5 crore mainly on the back of the faster execution of the Surat meter supply contract.
- The operating profit for the quarter grew by 182% to Rs12.6 crore and the operating profit margin (OPM) for the quarter stood at 14.1% as against 18.3% in Q3FY2006. However, the Q3FY2007 and Q3FY2006 OPMs are not comparable. That's because the company had abnormal operations in Q3FY2006 due to a fire incident because of which the other expenses were on the lower side in Q3FY2006. Going forward, we expect the company to maintain its OPM in the range of 14.5-15%.
- The interest expense for the quarter rose by 108%, as the company has availed of large working capital loans to execute its project orders.
- Consequently, the net profit for the quarter grew by 273% to Rs6.2 crore.
- The order book of the company stood at Rs470 crore at the end of December 2006.
New Delhi Television
Cluster: Emerging Star
Price target: Rs348
Current market price: Rs309
Price target revised to Rs348
- NDTV witnessed a muted revenue growth of 15.8% year on year (yoy) to Rs79.1 crore owing to higher competition.
- The operating profit margin (OPM) was down by 360 basis points yoy to 24.2% as the company is spending for new businesses. The operating profit was flat yoy at Rs19.1 crore as per expectations; however, it improved substantially compared to an operating loss in Q2FY2007.
- The marketing and distribution cost, the primary reason forthe increased cost, was up 59.8% yoy at Rs10.7 crore, but as a percentage of sales it declined to 13.5% as compared to 14.1% and 18% in Q1FY2007 and Q2FY2007 respectively.
- The incubation costs of the planned new ventures seem to have inflated the cost structure and segregation of these costs this quarter onwards will lead to the improved profitability picture for the news business.
- The profit after tax (adjusted for extraordinary items) was down at Rs10.0 crore as against Rs14.1 crore in Q3FY2006 as expected.
- We have lowered our earnings estimates for FY2007 and FY2008 as NDTV continues to be in an investment mode whereby we expect the short-term profitability to remain muted. At the same time we remain bullish on its exciting broadcasting properties, diversification in other genres of broadcasting such as general entertainment and lifestyle, its foray in the media consulting segment and media process outsourcing thus leveraging on its expertise in the business. The above makes it a good integrated media play.