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Showing posts with label Q4FY07. Show all posts
Showing posts with label Q4FY07. Show all posts
Wednesday, April 18, 2007
Citigroup - ABAN Offshore , ASK RJ - HCL Tech, Mutual Funds, Media Earnings, Eagle Eye
Citigroup - ABAN Offshore
ASK RJ - HCL Tech
Funds for volatile times: Sharekhan Mutual Funds Report dated April 18, 2007
Q4FY2007 Media earnings preview: Sharekhan Special dated April 18, 2007
Sharekhan Daring Derivatives for April 19, 2007
Sharekhan Eagle Eye (equities) & Derivatives Info Kit for April 19, 2007
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ABAN Offshore,
Ask RJ,
citigroup,
Daring Derivatives,
Eagle Eye,
HCL Tech,
Media Earnings,
Q4FY07,
Sharekhan
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Q4FY2007 Capital Goods earnings preview: Sharekhan Special dated April 17, 2007
Q4FY2007 Capital Goods earnings preview
The Working Group on Power for the 11th Five-Year Plan has envisaged an addition of around 69,000 megawatt (MW) of power generation capacity during the plan period (FY2007-12) and an additional capacity of 86,500MW during the 12th Five-Year Plan. Looking at the current status of the 10th Five-Year Plan's (FY2002-07) capacity addition programme, these targets looks quite aggressive since the government had planned a capacity addition of 41,110MW during the 10th Plan period whereas the actual achievement is likely to be around 25,000MW (only 61% of the target). Out of this about 17,995MW of capacity had already been commissioned till December 31, 2006. However the fact that a total of 31,345MW of capacity is already under construction gives the panel's plan a lot of credibility.
Looking at the huge power generation capacity addition programme of the government (totaling to around 155,000MW in the next ten years), the order flow momentum for the capital goods companies engaged in the power sector, such as Bharat Heavy Electricals Ltd (BHEL), Crompton Greaves, Bharat Bijlee, Indo Tech Transformers, KEI Industries and Genus Overseas, is expected to be robust. Going by the recently announced provisional results of BHEL, wherein its order flow for the full year ended March 2007 registered an increase of 88% to Rs35,633 crore and the order backlog stood at an all-time high of Rs55,000 crore, the time ahead for power ancillary companies appears even more promising.
Q4FY2007 Capital Goods earnings preview: Sharekhan Special dated April 17, 2007
Tuesday, April 17, 2007
Q4FY2007 Banking earnings preview: Sharekhan Special dated April 16, 2007
SHAREKHAN SPECIAL
Q4FY2007 Banking earnings preview
We expect the interest income on advances in the last quarter to show a strong growth on the back of above 28% year-on-year (y-o-y) credit growth and the full impact of the hike in the prime lending rates (PLRs) effected by the banks in the fag end of December 2006 or early January as well as in mid-February 2007.
However, the cost of funds may have an upward bias, thereby putting some pressure on the margins of the banks with lower current and savings deposit account (CASA) balances as the deposit costs, especially the bulk deposit rates, have moved up sharply. However, the one-time cash reserve ratio (CRR) income that banks are expected to get in this quarter with retrospective effect should help them to tide over the increased deposit costs.
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Q4FY2007 Pharma earnings preview: Sharekhan Special dated April 16, 2007
SHAREKHAN SPECIAL
Q4FY2007 Pharma earnings preview
Key points
- We remain positive on the Indian pharmaceutical sector on account of the continued domestic growth, steady contributions from exports and synergies arising out of integration of acquisitions. Further, the increased focus on drug discovery and collaborative research with the global players enhances the medium-term earnings visibility for the sector.
- In line with the business trend, the growth of the domestic market moderated to around 9% in Q4FY2007 from over 15% in the previous couple of quarters. But the ramp-up in the formulation export segment continues to be robust and the successful integration of acquisitions (viz Ranbaxy Laboratories' Terapia, Wockhardt's Pinewood and Nicholas Piramal's Morpeth) would drive the revenue growth for the sector. Further, Dr Reddy's Laboratories' 180-day exclusivity for Ondansetron would also boost the overall industry growth. We expect the pharmaceutical companies under our coverage to report a revenue growth of 20.3% in Q4FY2007.
- With a greater number of players entering the generic space in the USA and the European Union, pricing pressures are likely to continue. But thanks to the cost-cutting efforts, improvement in the product mix and larger thrust on branded formulation business by the local players, stable margins are likely to be ensured. The pharmaceutical companies under our coverage are expected to report a 420-basis-point expansion in the operating profit margin (OPM), leading to a 30% growth in their net profit in Q4FY2007.
- Research and development (R&D) was the highlight of the fourth quarter as Indian pharma space witnessed impressive developments on the R&D front. Sun Pharmaceuticals de-merged its R&D unit into a separate entity called Sun Pharma Advance Research Company and unveiled its new chemical entity (NCE)/novel drug delivery system (NDDS) pipeline (comprising four NCEs and four NDDS). Alongside, Ranbaxy Laboratories has expanded its collaborative research partnership with GlaxoSmithKline Plc (GSK), as per which the Indian company would identify the new chemical leads and take them up to Phase-II proof of concept study. The Ranbaxy Laboratories-GSK alliance would focus on therapies like anti-infectives, metabolic disorders, respiratory and oncology. As per the deal, Ranbaxy Laboratories could receive over $100 million in potential milestone payments for a single product. We expect further positive news flow on the innovative R&D front from Lupin, Dr Reddy's Laboratories and Glenmark Pharmaceuticals in the coming quarters, which would act as a strong growth trigger in the medium to long term.
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Monday, April 16, 2007
Friday, April 13, 2007
Q4FY2007 FMCG earnings preview: Sharekhan Special dated April 12, 2007
Q4FY2007 FMCG earnings preview
Key points
- Backed by a pick-up in rural demand, the fast moving consumer goods (FMCG) sector has seen the volume growth getting better every quarter. The revenue growth for the current quarter is likely to be driven by volume growth as well as improved pricing power.
- Rising input prices is a concern for the industry. Palm oil prices have increased by around 20% in the last three months but LAB prices continue to remain steady. Price increases as well as cost savings would help the companies to maintain their margins.
- We expect the profit of Hindustan Lever Ltd (HLL), the market leader in the segment, to grow by 18.8% year on year (yoy) backed by a strong growth in the home and personal care (HPC) segment and price increases in key products. We expect the margin to improve from 11.8% in Q1CY2006 to 12.8% in Q1CY2007, which would be primarily due to the price hikes taken in many of its products as well as improved product mix.
- ITC's profits are expected to grow by a strong 24% yoy. We expect the growth to be broad-based with the magnitude of losses in the non-FMCG business coming down. The imposition of the value-added tax (VAT) is having a dampening effect but we believe any decline is a good opportunity to buy.
- The long-term potential of this sector appears favourable with higher disposable incomes and increased spending. We believe with strong free cash flows, high return on capital employed (RoCE) and sustainable growth the sector still looks attractive.
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Thursday, April 12, 2007
SSKI - Earnings preview (Q4FY07): 'Interest'ing times
Sensex earnings are estimated to register a 29.7% yoy increase in Q4FY07. Though lowest within FY07, we believe growth is still robust. Notably, an apparent slowdown in earnings growth of commodity stocks to 30.5% yoy in Q4FY07E – read oil & gas, due to lopsided subsidy sharing across quarters – has impacted reported earnings for both Sensex and the SSKI universe. While the reported earnings growth for the SSKI universe would be just 10.6% yoy, earnings ex-oil & gas would still grow at a healthy 29%. For non-commodity stocks, we expect earnings growth to stay largely on track (28.2% yoy), despite a slowdown for 2-wheeler stocks due to lower volumes. Our key result picks are Tata Steel, Maruti, Infosys, TCS, JP Associates, BHEL and KEC.
Over FY07-09, we expect 15.7% CAGR in Sensex earnings – significantly slower than in the past few years. While we continue to advocate a major slowdown in commodity stock earnings to 2.8% CAGR, we maintain a robust outlook for non-commodity earnings (23.2% CAGR). We maintain our Sensex target range at 14000-14600, which builds in a higher cost of capital. At 15x FY09E earnings, Sensex valuations still offer upside. We have revisited our model portfolio to reflect caution on "interest rate-sensitive stocks" as we believe the RBI would maintain its hawkish stance in the near term. While inflation and credit growth are likely to be reined in, the overhang of high core inflation and strong capital flows leading to liquidity beyond the RBI's tolerance level remains. However, there is significant valuation comfort in rate-sensitive stocks, primarily banks. We, therefore, have a Neutral stance on the sector with a preference for private banks. Our large cap top picks are BHEL, ONGC, Tata Motors, Infosys and Bharti.
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Q4FY2007 earnings preview: Sharekhan Special dated April 11, 2007
Q4FY2007 earnings preview
Key points
- The Sensex earnings are expected to grow by 37% year on year (yoy) for Q4FY2007. However, excluding oil the earnings are expected to grow by 34% driven by the earnings in the software, cement and banking sectors. These three sectors are expected to contribute 42% of the Q4FY2007 Sensex earnings excluding oil. On a quarter-on-quarter (q-o-q) basis the expected growth is only 1.2%, which indicates expectations of some slowdown in the earnings momentum.
- Strong earnings growth is expected in the pharma sector mainly due to a very low base. On the other hand information technology (IT) earnings will be affected due to the sharp appreciation in the rupee. Auto numbers are not expected to be great due to margin pressure and a slowdown in the volumes.
- Strong year-on-year (y-o-y) earnings growth is expected from Reliance Communications, Bharti Tele, Ranbaxy, Dr Reddy’s Laboratories, Grasim and Tata Steel.
- Two-wheeler majors Hero Honda and Bajaj Auto are expected to report a y-o-y decline in the profits.
- Some of the non-Sensex companies where high growth is expected are Dabur Pharma, Syndicate Bank, Polaris and India Cements.
- In the absence of any major surprises, the fourth quarter results of the Indian companies may not be a trigger for the market, but the market will keenly await the guidance on the FY2008 prospects of the corporate sectors, especially automobiles, banks and the other interest rate sensitive sectors.
Wednesday, April 11, 2007
Monday, April 09, 2007
Thursday, April 05, 2007
Q4FY2007 IT earnings preview: Sharekhan Special dated April 04, 2007
Q4FY2007 IT earnings preview
The street expectations have toned down considerably in terms of both Q4 performance and the annual guidance for FY2008, and the recent underperformance of the tech stocks indicates that the same has already been factored in the valuations. This essentially means that the negatives have been priced in, leaving limited scope for downside. But positive surprises, especially in terms of higher than expected annual guidance by Infosys, are not ruled out. However, the continued strengthening of the rupee and seasonal weakness in Q1 (due to wage hikes and additional visa related cost) would continue to influence sentiments on tech counters in the short run. We believe that any further weakness would be an opportunity to accumulate the front-line tech stocks and prefer Infosys and TCS.
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