In a day of political drama, characterized by various allegations/suitcase politics, the incumbent UPA govt won the trust vote yesterday by a bigger than expected margin of 19 votes. Besides going ahead with the nuclear deal, tackling the high inflation (especially in the context of a not so good monsoon) needs to be priority #1 task for the Government. (more…)
Month: July 2008
United Spirits – White & Mackay getting stronger
United Spirits reported June stand-alone profit grew 34% to Rs1.1bn. Domestic sales grew ~25-26% led by vol. gr of 19% and balance thru price and mix. Volume growth was higher than trend growth rate of 11-12%. Key premium brands grew 17%, again higher than trend. Mgmt expects key premium brands to grow 12-13% in FY09 but tactical moves to tap the low price brands may lead to stronger volume growth.
June EBITDA grew 27% & margins declined 90bp led by 55% jump in advertising (IPL expenses). The company is expected to report an EPS of Rs 46.55 for FY09. Whyte & Mackay sales grew 40% and EBITDA grew 70% led by new business opportunity of own labels and tactical sales of younger scotch. W&M constitute 21% of United Spirits’ sales.
United Spirits is India’s largest spirits player. In FY08 it sold 74mn cases which gives it a volume share of 52%.
Chennai Petroleum – Banking on Gross Refining Margins
Chennai Petroleum reported an extremely strong set of numbers for 1Q, with net income of Rs7.03bn. The performance was led by strong GRMs, which at US$15.9/bbl were well ahead of Singapore (US$8.2/bbl) and 4Q (US$9.6/bbl).
CHPC reported a stronger-than-historical US$2.2/bbl premium (ex-inventory gains) over 1Q Singapore GRMs of US$8.2/bbl. Headline GRMs of US$15.9/bbl were further boosted by inventory gains of Rs4.5bn, which amounts to US$5.5/bbl.
Chennai Petroleum has a High dividend yield of 6%. The company is expected to report a fully diluted EPS of Rs 75.06 for FY09.
We don’t understand the Government of India’s logic to let Oil Marketing Companies like HPCL / BPCL and IOC run under a loss as they have to SELL fuel below their cost of acquisition and live at the mercy of the Government for subsidies while ONGC, Chennai Petroleum, Bongaigaon Refinery etc continue to make hefty profits on the back of rising oil prices and GRMs. Still worse governance by Dr. Manmohan Singh is letting private refiners like Reliance, Essar etc to export when India is starving for fuel.
IDFC – Good Quarter but Challenges on the Road Ahead
IDFC’s 1Q09 profits were up 20%.The quarter itself was strong – characterized by high loan growth, expanding margins, strong asset quality and supported by growing AUMs and gains on equity investments.
Loan growth at 42% was strong and complemented by equally strong asset quality (no delinquencies in the quarter). NIMs expanded slightly (+10bps QoQ) – ahead of expectations in a difficult quarter.
Management, however, warned of macro headwinds and a rise in risk aversion that would significantly impact the trajectory of loan growth going forward. Management clearly indicated a shift in focus from growth to capital preservation, containing asset risks and maintaining spreads. Cost control will also be a key focus area.
IDFC is expected to report a full year EPS of Rs 6.16.
Historical BSE Sensex Returns – From 1985 to 2008 YoY
We present one of the best data sets to our readers. We are probably the first one to publish BSE Sensex Historical P/E Graph from 1990 to 2008.
In continued quest to educate the Indian investor, a table containing historical returns of BSE Sensex between 1985 to 2008 is being presented. The dataset contains returns of BSE Sensex in the first and second half of respective year followed by full year returns. (more…)
UltraTech Cement – No Slowdown yet
UltraTech Cement reported a Net sales at Rs15.0bn for Q1FY09 and a PAT of Rs Rs2.65bn. UltraTech’s average 1Q09 realizations increased 15% y-o-y and 5% q-o-q to Rs3,503 per ton. Aggregate volume in 1Q09 declined 4% y-o-y and 11% q-o-q to 4.27m ton.
EBITDA per ton came in at Rs1,044 compared to Rs982 in 1Q08 and Rs1,016 in 4Q08. Power and fuel cost per ton rose to Rs891, up 31% y-o-y and 16% q-o-q, reflecting the rise in international coal prices.
The split grinding capacity in Karnataka will be commissioned in 2Q09, raising its capacity to 23.1m tons. Being India’s largest cement exporter, its performance was impacted by the six-week export ban.