Jaiprakash Associates – Weak Margins disappoint results

Jaiprakash Associates reported strong F1Q11 top-line performance. Total revenues grew 52% YoY to Rs31.7 bn. However, significant margin weakness across divisions (mainly cement and construction) meant that even though the high-profitability real estate segment stepped up in the quarter (revenue share rose from 5% in F1Q10 to 11% in F1Q11), EBITDA for the company as a whole grew only 15% YoY.

Net profit of Rs1,051 mn, post adjustment for exceptional income related to the profit booked on the sale of its 4.94% stake in Read more

ITC – Diversifying Profits from Cigarette into FMCG

India’s larges Cigarette manufacturer ITC saw a dip in volumes during the last quarter. This does not necessarily mean increasing health consciousness amongst Indians but their affluent lifestyle making them to hop on to Foreign Brands.

ITC’s recent pricing, coupled with mix improvements led to ~12% and ~16% YoY growth (90bps margin expansion) in cigarette revenues and profits respectively. PAT growth of ~22% YoY to Rs10.7bn was marginally ahead of our/consensus estimates of Rs10.6/10.4bn respectively. Moderate EBITDA margin expansion of ~110bps YoY to 33.4% was primarily on Read more

United Spirits – Margin Expansion Surprise

United Spirits Revenue growth of ~18% YoY
to Rs14.7bn reflects various changes in accounting bases (re-grouping of sales/A&SP expenses ex tie up units). Like to like, revenues rose ~11% YoY, comprising 6% YoY volumes and the rest due to mix/price increases. Mgmt noted that volume growth during the Q was adversely impacted by de-stocking in the state of Andhra Pradesh due to a fresh Read more

Petronet LNG + GAIL India – Bright Fortunes

Petronet LNG (PLNG) is the largest LNG re-gasifier in India. The company has a unique risk-free business model, generating revenues by charging re-gasification margins. Its supply and demand side risks are hedged through a long-term sourcing contract from Ras-Gas Qatar and off take contracts from three of its heavyweight promoters – GAIL, IOCL, and BPCL.

A massive impetus in US shale gas production recently has plugged the country’s demand-supply gap. With US LNG imports dipping Read more

HDFC + LIC Housing Finance Steal the Show

HDFC Robust growth of 62% in new residential loans led to a 17% loan book growth after sell-down of some part of the loan book. While new developer loans data were unavailable, we believe overall disbursements (new loans) grew 25-30% in 1QFY11. Home loan spreads, too, grew from last year to 2.34%. Fees and capital gains are typically lumpy and hence acted as a Read more

TCS Pips Infosys as Number One Software Company

Tata Consultancy Services (TCS) reported 8.1% sequential volume growth (highest in past 11 quarters), 6.4% USD revenue growth and EBITDA margins at 29.3% (decline of only 60bps) – all ahead of our and Street’s expectations. TCS’ Q1 results have clearly surpassed that of Infosys on multiple counts such as volume growth, large deal wins, pricing movement and operating margin performance.

EBITDA outperformance and lower foreign exchange loss led to net profits (INR 18.4bn) well ahead of our expectations of INR 17.1 Read more

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