Re: {LONGTERMINVESTORS} Result expectations : Discussion thread

[Rajesh Desai]

* ICICI Bank 3Q profit may rise to 20.8b rupees from 17.3b yr
    earlier, median of 42 analyst est. shows.
  * Punjab National Bank 3Q profit expected at 11.6b rupees vs
    11.5b rupees, according to median of 42 analyst est.




--
CA. Rajesh Desai

[Rajesh Desai]

RESULTS EXPECTATION:
AMBIT
Hindalco: (SELL, 3% downside)
Hindalco will announce its 3QFY13 results today. We expect standalone revenues of Rs69.6bn, up 5% YoY and 13% QoQ, which would be mainly driven by sequentially higher aluminium prices and normalisation of production (which was disrupted in the previous quarters). We expect EBITDA to increase by 24% QoQ to Rs6.4bn, because production normalisation is also likely to sequentially improve EBITDA margins. We build in EBITDA margin of 9.2% for the quarter vs 8.4% in 2QFY13. (Jatin Kotian, +91 22 3043 3261)

Cadila Healthcare: (BUY, 20% upside)
Cadila Healthcare will announce its 3QFY13 results today. We expect the company’s revenues to increase by 17% YoY to Rs16.1bn, in line with consensus estimates. Revenue growth is likely to be driven by 20% YoY growth in the exports formulations business. We expect the domestic formulations business to record a revenue growth of 15% YoY aided by sales from the acquired entity Biochem. Revenue from the US formulations business is likely to increase by 16% YoY mainly on the back of the INR depreciation. Whilst gross margins are likely to decline marginally, we expect Cadila to report EBITDA of Rs3.2bn (up 20% YoY and 4% below consensus). We do not expect any significant QoQ improvement in EBITDA margins, and our margin estimates remain about 80bps below consensus expectations. We expect Cadila to report PAT of Rs1.8bn (up 23% YoY and 2% below consensus). (Jatin Kotian, +91 22 3043 3261)  

Gujarat State Petronet Ltd: (BUY, 24% upside)
Gujarat State Petronet (GSPL) will declare its results today. We expect the company to deliver a PAT of Rs1,123mn, 6% lower than Bloomberg’s consensus of Rs1,197mn. We have assumed GSPL’s transmission volumes to decline ~5% QoQ to 27.5mmcmd in 3QFY13 due to the decline in RIL’s KG gas production in 3QFY13 (down 4.9mmcmd QoQ). We have assumed weighted average transmission tariff at Rs930/tcm, higher than the Rs860/tcm approved by the PNGRB, due to the incremental revenue from the ‘take-or-pay’ clause. (Dayanand Mittal, +91 22 3043 3202)

Indraprastha Gas: (SELL, 22% downside)
Indraprastha Gas (IGL) will declare its results on 9 February 2013. We expect the company to deliver a PAT of Rs927mn, broadly in line with Bloomberg consensus of Rs935mn. We expect IGL’s earnings to decline QoQ due to a rise in cost pressure from the jump in spot LNG price during 3QFY13. Note that the company did not increase prices during the quarter. The earnings decline would be partly offset by the positive impact of a 2% QoQ strength in the INR versus USD. We expect margins (EBITDA/scm) to decline QoQ, but still be robust at Rs5.7/scm, due to significant price increases taken during 1HFY13. We have assumed CNG volume of 262mmscm and PNG volume of 84mmscm, implying a QoQ volume growth of 1.5% in CNG and 5% in PNG.  (Dayanand Mittal, +91 22 3043 3202)

City Union Bank: (BUY, 2% upside)
CUBK, with its track record of consistent profitability, above-average loan book growth, superior efficiency ratios and high return ratios, remains a blue chip amongst smaller private sector banks. We continue to view CUBK as a medium-term multi-bagger amongst smaller banks. We opine that CUBK’s current business model (likely to remain stable until FY15E) will continue to consistently generate RoAs of ~1.5%. The stock is trading at 1.4x our FY14E ABVPS estimates of Rs45. Our numbers are subject to an upward bias as we adjust for the rights issue proceeds (the rights issue closed on 31 December 2012). (Krishnan ASV, +91 22 3043 3205)

BGR Energy: (SELL, 19% upside)
BGR Energy will announce its 3QFY13 results today. We expect revenues to decline by 17% YoY to Rs6.6bn. We also expect EBITDA margin to contract by 188bps YoY to 14.32%, resulting in a 27% decline in the EBITDA to Rs953mn. Consequently, we expect the PBT to decline by 32% YoY to Rs554mn and the PAT to decline by 31% YoY to Rs376mn. We retain our SELL stance. (Bhargav Buddhadev, +91 22 3043 3252)

VA Tech Wabag: (BUY, 42% upside)
VA Tech will report its 3QFY13 results today. We expect consolidated revenue to increase by 19% YoY on account of strong revenue growth in the international business and moderate revenue growth in the Indian business. We expect revenue growth of 7% YoY in the standalone business (on a higher revenue base in 3QFY12), and we expect 38% YoY revenue growth in the international business (on a lower revenue base in 3QFY12).  Strong revenue growth in the international business can lead to under-absorption of fixed overheads, and therefore, we model consolidated EBITDA margin of 9.5% in 3QFY13 (vs 7.1% in 3QFY12). We further expect that the improvement in revenue growth and EBITDA margin will lead to net profit of Rs183mn in 3QFY13 (vs Rs107mn in 3QFY12). (Nitin Bhasin, +91 22 3043 3241)

NCC: (SELL)
NCC will report its 3QFY13 results today. We expect revenues to increase by only 10% YoY, owing to low order booking in the past 12-18 months and slowdown in the pace of execution of most of the large projects. Whilst we expect EBITDA margin to increase to 8.4% in 3QFY13, we highlight that this is lower than the historical average EBITDA margin of 9.5-10%. Given that the debt:equity ratio as at end-September 2012 was at 1x and the outstanding debt levels are at Rs25bn, we expect interest cost to remain high; we model net interest cost of Rs805mn in 3QFY13 (which is in line with net interest expense of Rs819mn in 2QFY13). Moderate revenue growth and EBITDA margin improvement will lead to PAT of Rs109mn in 3QFY13 (as compared to a net loss of Rs94mn in 3QFY12). (Nitin Bhasin, +91 22 3043 3241)

--
CA. Rajesh Desai

[Rajesh Desai]

Results Today: MOTILAL

DLF

Net Sales              Rs. 20.58bn +1.2% YoY

EBIDTA                  Rs. 8.44bn +2.6% YoY

EBIDTA Margins  41% v/s 40.4% for 3QFY12

PAT                         Rs. 8.74bn +238.4% YoY

 

Dr. Reddy Labs

Net Sales              Rs. 26.82bn -3.1% YoY

EBIDTA                  Rs. 5.63bn -35% YoY

EBIDTA Margins  21% v/s 31.4% for 3QFY12

PAT                         Rs. 3.42bn +42.1% YoY

 

GAIL

Net Sales              Rs. 120.1bn +6.7% YoY

EBIDTA                  Rs. 17.88bn +1.6% YoY

EBIDTA Margins  14.9% v/s 15.6% for 3QFY12

PAT                         Rs. 10.36bn +6.9% YoY

 

HDIL

Net Sales              Rs. 3.43bn -19.4% YoY

EBIDTA                  Rs. 2.06bn +27.6% YoY

EBIDTA Margins  60% v/s 37.9% for 3QFY12

PAT                         Rs. 1.46bn -6.1% YoY

 

India Cement

Net Sales              Rs. 9.85bn +4.6% YoY

EBIDTA                  Rs. 1.52bn -21.8% YoY

EBIDTA Margins  15.4% v/s 20.7% for 3QFY12

PAT                         Rs. 130mn -76.9% YoY

 

LIC Housing Fin

NII                           Rs. 3.81bn +17% YoY

Oper. Profit            Rs. 3.67bn +12.5% YoY

PAT                         Rs. 2.51bn +11.6% YoY

 

SBI

NII                           Rs. 115.21bn at par

Oper. Profit            Rs. 79.62bn +9.7% YoY

PAT                         Rs. 34.92bn +7% YoY

NIMs                       3.5% v/s 3.3% QoQ

 

Tata Motors

Net Sales              Rs. 473.51bn +4.6% YoY

EBIDTA                  Rs. 56.82bn -16.8% YoY

EBIDTA Margins  12% v/s 15.1% for 3QFY12

PAT                         Rs. 22.15bn -37.3% YoY

 

--
CA. Rajesh Desai

[Rajesh Desai]

Results Today: MOSL

GlaxoSmithKline Consumer Healthcare  

Net Sales              Rs. 6.68bn +11% YoY

EBIDTA                  Rs. 819mn +32.8% YoY

EBIDTA Margins  12.2% v/s 10.2% for 4QCY12

PAT                         Rs. 799mn +23.7% YoY

--
CA. Rajesh Desai

[Rajesh Desai]

  Results to be announced - N Bang

PAT (Rs in cr)	Dec-11	Sept-12	Dec-12 Exp
ABB	64.1	21.4	77.6
Gujarat Gas	24.7	99.5	81.4
Gujarat Pipavav	27.0	8.2	21.8
SKF India	40.4	45.3	50.9

--
CA. Rajesh Desai

[Rajesh Desai]

Results Today: MOSL

Pantaloon Retail

Sales                     Rs. 31.82bn +10% YoY

EBIDTA                  Rs. 2.93bn +12.1% YoY

EBIDTA Margin     9.2% v/s 9% 2QFY12

PAT                         Rs. 108mn -20% YoY

 

Sanofi India (ENP Rs 377mn up 4.5% YoY)

Sales                     Rs. 3.93bn +16.4% YoY

EBIDTA                  Rs. 472mn +19.8% YoY

EBIDTA Margin     12% v/s 11.7% 2QCY12

PAT                         Rs. 377mn +4.5% YoY

 


--
CA. Rajesh Desai

[Rajesh Desai]

  Results Expected - N BANG

PAT (Rs Cr)	Dec’11	Sept’12	Dec’12 Exp	NBIE Exp
Bata India	45.1	32.0	51.3	52.5
Ranbaxy	428.5	387.1	253.5	NA
Vesuvius India	13.3	13.9	13.1	NA

--
CA. Rajesh Desai

[Rajesh Desai]

Jan – Mar ’13 - IT Preview; Hoping for direction – Pratik Gandhi (Pratik...@idbicapital.com, +91-22-4322 1367)
§  We expect this result season to give some clarity on demand environment and in turn direction for IT sector post contrary signals received in past few months. We expect modest improvement in organic volume growth (1-4.2%) and marginal decline in EBITDA margin (36-80bps) except for Wipro (+30bps) during Q4. Infosys guidance (if continued), will be watched very closely. We expect Infosys’ US$ revenue guidance likely to be 12% and EPS Rs175 for FY14. We expect Infosys (4.1%) and TCS (3.2%) to lead revenue growth (in US$) in the tier-I IT companies followed by HCL Technologies (HCLT) and Wipro.

• Anticipate Q4 result season to give direction to IT Sector: We anticipate Q4 result season to give more clarity on demand environment and in turn give direction for IT sector as data points in past few months had been a mixed bag. While better growth estimates by Nasscom (12-14% v/s 10% in FY13), successive quarters of double digit growth in Outsourcing biz and record high Consulting booking by ACN give positive vibes, CTSH guidance of at least 16% organic growth for 2013 (20% in 2012) and lower than expected results by ACN and Oracle give different picture.  
• Q4: Volume growth to see modest improvement; Net profit to remain flat: Volume growth in Q4 is likely to be soft, albeit, a tad better than Q3 as client’s focus on finalisation/allocation of the IT budget for FY14. Organic volume growth (1% to 4.2%) for Tier-I companies are expected to be better than (-1% to 1.5%) in Q3. Adverse cross currency movement to reduce revenue by 4 to 40bps for Tier-I IT companies. We expect marginal decline in EBITDA margin (36-80bps) except for Wipro (+30bps) for Tier-I IT companies largely due to onsite wage hike (for Infosys), settlement of long pending court case (for TCS). Subsequently, net profit is expected to growth sequentially -1.4% to 2.7% for Tier-I IT companies in Q4.
• Key monitorables: Infosys FY14 guidance, Commentary on discretionary spend, Margin outlook: Improvement in recent data points (Semiconductor index, Retail sales, US unemployment rate, US GDP number) indicate stability in macro environment, which augurs well for Indian IT companies for FY14. Some of the key monitorables during Q4 will be 1) Infosys guidance on FY14 (we believe Infosys to guide US$ revenue growth of 12% and EPS of Rs175), 2) Commentary on discretionary spend, 3) Update on re-bid market & large deal wins, 4) Colour on pricing in view of increased competition, 5) Margin outlook, 6) Campus offers, trend in attrition rate and wage hike for FY14.

Outlook and valuation: Stock prices to take breather due to sharp run-up in last 3 months
§  Tier-I Indian IT companies (ex-Wipro), TCS (+23%), Infosys (+28%) and HCLT (+27%) have handsomely outperformed Sensex (-3%) in past 3 months, thanks to relative weakness in other sectors which had brought back preference towards “defensive” sectors such IT, Pharma and FMCG (refer table 9). This sharp run-up in stock price has led to multiple expansion for Tier-I IT companies from 12-15x to 15-18x in last 3 months. Hence, at current levels valuations leave very little room for error for these companies.
§  We believe current valuations are inching to near peak. That said, key triggers for further re-rating could be 1) 20%+ US$ top-line growth (company specific) and 2) supported by rupee depreciation (macro dependent). While key risks are 1) deceleration in decision making owning to global meltdown and 2) rupee appreciation. Amongst our coverage universe, HCLT (BUY, TP Rs810) remains our top pick while TCS (TP Rs1,540), Infosys (TP Rs2,950) and Wipro (TP Rs410) remain HOLD.



--
CA. Rajesh Desai

[Rajesh Desai]

• Result Expected - NB
  

12-Apr	Dec'12	Mar'12	Expectation
DCB	26.9	17.3	26.5
Gruh Finance	28.9	55.6	NA
RS Software	8.5	9.6	NA

--
CA. Rajesh Desai