Month: April 2008

Central Bank’s profits declined 15% yoy (6% below estimates) due to a sharp drop in margins, higher loan loss provisions and taxes. Operationally the quarter was weak; cost control the only positive. We believe, given its large corporate loan book; it will be structurally difficult for CBI to co-manage high growth and profitability.

Central Bank’s NIMs dropped over 140bps yoy to 219bps for 4Q08. The drop in margins was significantly more than estimated with aggressive loan growth (+26% qoq) and decline in CASA ratio necessitating a rollover of high cost funds. With its top-line focus and large corporate loan portfolio, we believe margins will remain under pressure.

Costs have remained under check with a 4% decline yoy. After adjusting for pension arrears, CBI’s Tier1 capital has fallen to 5.4% (10.4% overall) as against the required 6% under Basle II (effective Mar09 for CBI);.

Expect CBI to report an EPS of Rs 15.24 for FY2009.

IVR Prime Urban Developers has entered into joint development agreement for construction of high rise residential apartments. The 9.6 acre gated community project at Kukatpally, comprises a built up area of 1.325 million Sft and a parking area for 1200 cars. The Rs 386 crore project consists of a 2 bed room apartments of 1250 Sft, 3 bedroom apartments of 1500 Sft and 4 bedroom apartment of 1800 Sft each.

The company is also set to foray into the city of Visakhapatnam with its real estate development at Vedurvada, located near the Vizag Steel Plant. The project is named Misty Woods and is spread in the area of 130 acres. The location is surrounded by the 6000 acre Naval and Air Force Academy and upcoming SEZ of Achutapuram. Companies like Brandixs Apparel Park, HPCL, Pokarna granites, St.Gobain etc are a part of this SEZ.

Sanwaria Agro Oils – SAOL exceeded sales estimates by a wide margin & PAT estimates marginally for FY08. It achieved a turnover & PAT of Rs. 9386 mn & Rs. 543 mn respectively against an estimated turnover and PAT of Rs. 8234 mn & Rs. 501 mn respectively. EPS for FY08 stood at Rs. 6.2 [FY07: Rs. 1.4] vs. estimated EPS of Rs. 5.8. The net sales & PAT increased by 110.7% & 344% respectively over FY07. EBITDA margins improved from 5.2% in FY07 to 8.3% in FY08. PAT margins increased from 2.7% in FY07 to 5.8% in FY08. Improved realisations, better capacity utilisation & economies of scale contributed largely to the sales & profitability growth.

SAOL has expanded the existing daily crushing capacities at Mandideep & Itarsi from a total of 1,000 TPD to 2,000 TPD & refining capacity from a total of 150 TPD to 300 TPD. The commercial production of the same has commenced from January 15 2008. The full impact of this expansion is expected in FY09.