Result Review 4QFY2013

Hindustan Unilever 

HUL delivered healthy set of numbers for 4QFY2013. The company’s top-line and bottom-line rose by 12.5% and 18.1% respectively. OPM stood at 13.7%, ahead of our estimates of 13.4%. The most positive aspect of the result is the 6% yoy volume growth posted by the company for the quarter. HUL managed to revive the volume growth by passing on some benefits of reduction in raw material costs to customers by way of price cuts and increased A&P expenditure. Soaps and Detergents segment grew by 12.6% yoy, led by key brands such as Dove, Lux, Lifebuoy, Rin and Surf. The high margin Personal Products segment rose by 12.1%. Beverages segment rose by 18.3% yoy. Source: Angel Broking

Bosch

Bosch (BOS) reported better-than-expected results for 1QCY2013 led by sequential expansion of 482bp in operating margins to 17.3% driven by a sharp 23.4% qoq decline in other expenditure. However, on a yoy basis the performance was impacted due to the ongoing slowdown in the automotive industry. For 1QCY2013, top-line posted a decline of 3.8% yoy to `2,207cr as medium and heavy commercial vehicle and tractor segments of the automotive industry, the key drivers of the company’s performance, witnessed a decline of 39% and 8.5% yoy respectively. As a result, the diesel systems segment of the company posted a decline of 13% yoy. While domestic sales declined 2.5% yoy, export sales posted a decline of 9.5% yoy during the quarter. On the operating front, EBITDA margin declined by a sharp 349bp yoy to 17.3% as employee and other expenditure as percentage of sales surged 210bp and 180bp yoy respectively. However, on a sequential basis, EBITDA margins improved 482bp led by lower other expenditure which benefitted from the cost reduction initiatives undertaken by the company. Hence, operating profit grew by a strong 43.5% qoq to `382cr, significantly higher than our estimates of `258cr. Led by a strong sequential operating performance, net profit posted a better-than-expected growth of 51% to `260cr. Nonetheless, it declined 22.6% yoy largely due to contraction in operating margins. While we are positive on the long term prospects of BOS due to its technological leadership and strong and diversified product portfolio, we expect the near-term environment to remain challenging given the continued slowdown in the domestic automotive industry. Nevertheless, current valuations of 20.5x CY2014E earnings, leaves limited room for any potential upside.Source: Angel Broking

Exide Industries 

For 4QFY2013, Exide Industries’ (EXID) operating performance was slightly ahead of our estimates led by expansion in EBITDA margins on account of the sustained momentum in the four-wheeler (4W) replacement battery segment. The top-line for the quarter grew broadly in-line with our estimates and stood at `1,541cr (6% yoy and 5.3% qoq) led by continued traction in the 4W replacement battery segment. However, sluggish demand in the 4W and 2W OEM battery segments restricted further growth in the top-line. The growth in the industrial battery segment too remained healthy led by pick-up in the home UPS battery segment. On the operating front, EBITDA margins improved sharply by ~200bp qoq to 13.3%, which was slightly ahead of our estimates of 12.5%. The margin expansion was carried out purely due to the decline in other expenditure (7% qoq). As a percentage of sales, other expenditure declined 190bp sequentially. The raw-material and staff cost as percentage of sales however remained stable on a sequential basis. consequently, net profit surged 40.7% qoq (2.8% yoy) to `146cr as against our estimates of `126cr. The net profit also benefitted from a sharp jump of 148.8% qoq (105.9% yoy) in other income to `30cr. We shall revise our estimates and release a detailed result note post our interaction with the management during the earnings conference call. At `135 the stock is trading at 15.2x FY2015 earnings.Source: Angel Broking

Bank of Maharashtra

Bank of Maharashtra reported stellar performance during the quarter, registering a bottom-line growth of 255.6% yoy, which was ahead of our expectation of 192.5% yoy growth. Strong NII growth (34.6% yoy, aided by similar growth in advance), robust non-interest income performance (more than double on a yoy basis) and flat provisioning expenses (on sequential improvement in asset quality and also due to high base), resulted in stellar earnings performance for the bank. Asset quality for the bank improved sequentially, as both Gross and net NPA levels declined by 11.4% and 19.3% qoq, respectively. At CMP, the stock trades at 0.6x FY2015x ABV. Post the recent surge in the stock, our target price has been achieved and hence our rating and recommendation on the stock is currently under review.Source: Angel Broking

Result Review 4QFY2013

ICICI Bank

ICICI bank delivered a healthy performance for 4QFY2013, with net profit growth of 21.2% yoy. On the operating front, the bank witnessed a healthy 22.5% yoy growth in its Net interest income, however disappointment on the non-interest income front with a flat yoy performance, limited the operating profit growth to 15.8% yoy. On the asset quality front, while the bank reported sequentially stable NPA ratios, however, incremental restructuring at around `1,200cr, came in on expected lines. Business growth moderate; NIMs improve sequentially by 26bp: During 4QFY2013, the bank’s advances grew by 14.4% yoy, aided by a strong 29.9% yoy growth in the domestic corporate book. The growth in the retail portfolio was moderate at 11.4% yoy. On the deposits front, the bank witnessed moderate growth of 14.3% yoy. CASA accretion remained moderate at 10.4% yoy, primarily aided by savings deposits, which increased by 12.6% yoy, even as current deposits declined by 10.4% yoy. CASA ratio was higher by 100bp qoq to 41.9%. The reported overall NIM improved by 26bp qoq to 3.33%, mainly on account of 23bp sequential improvement in the domestic NIM to 3.7%, while international NIM’s remained stable sequentially. The non-interest income (excluding treasury) de-grew by 9.9% yoy basis to `1,866cr, however the bank registered higher treasury gains of `342cr during the quarter (primarily bond gains) as against `158cr in 4QFY2012, which aided it to report flat performance on the overall non-interest income front. On the asset quality front, the bank reported stability, as Gross and Net NPA levels remained flat sequentially, on an absolute basis. Gross NPA ratio declined sequentially by 9bp to 3.2%, while net NPA ratio came in flat at 0.8%. During the quarter, the bank restructured loans worth `1,146cr (though higher, but was on expected lines), thereby taking its restructured book to `5,315cr.Outlook and valuation: The bank’s substantial branch expansion in the past three to four years is expected to sustain a far more favorable deposit mix going forward. Moreover, a lower risk balance sheet has driven down NPA provisioning costs, which we believe will drive a 15.7% CAGR in net profit over FY2013-15E and enable a RoE of 16.5% by FY2015E (with further upside from financial leverage). At the current market price, the bank’s core banking business (after adjusting `158/share towards value of the subsidiaries) is trading at 1.72x FY2015E ABV (including subsidiaries, the stock is trading at 1.66x FY2015E ABV). We value the bank’s subsidiaries at `158/share and the core bank at `1,149/share (2.0x FY2015E ABV). Source: AngelBroking

Maruti Suzuki

For 4QFY2013, Maruti Suzuki (MSIL) reported extremely strong results (pre SPIL merger), beating ours as well as consensus estimates by a significant margin. The top-line registered a healthy growth of 9.1% yoy (14.2% qoq) to `12,793cr which was broadly in-line with our estimates. The top-line performance was primarily driven by a strong 14.7% yoy (flat qoq) growth in net average realization led by better product-mix (higher share of Swift, Dzire and Ertiga), price hikes and lower levels of discounts (at `10,500/unit vs `12,100/unit in 3QFY2013). The volumes however, registered a decline of 4.6% yoy led by the weak demand for entry segment cars (down 13.7% yoy) and slowdown in exports (down 10.5% yoy). The export revenue for the quarter stood at `1,530cr (strong growth of 23% yoy and 15.9% qoq) driven by a robust net average realization growth of 37.4% yoy (8.2% qoq). Nevertheless, the bottom-line at `1,148cr (79.3% yoy) was substantially ahead of our expectations driven by strong expansion in EBITDA margins (up 306bp yoy and 243bp qoq to 10.4%), higher other income (up 120% qoq) and lower tax rate (17.1% vs. 25.8% in 3QFY2013). MSIL’s EBITDA margin registered a sharp expansion of 306bp yoy to 10.4%, which was significantly ahead of our estimates of 8.6%. The EBITDA margin expansion was led by better product-mix, price hikes, lower average discounts and favorable currency movement (+ve impact of ~120bp qoq). The raw-material cost as a percentage of sales declined 310bp yoy to 76.5%, led largely by superior product-mix (towards Swift, Dzire and Ertiga), positive impact of Yen depreciation and ongoing cost reduction initiatives. Due to the favorable movement in exchange rate, the royalty outgo during the quarter stood at 4.8% (down 30bp yoy and 80bp qoq). During the quarter, MSIL merged its engine manufacturing subsidiary Suzuki Power Train India (SPIL) with itself through a share swap ratio of 1:70 as announced earlier. Going ahead, the ongoing weakness in Yen (down ~10% yoy against INR in YTDCY2013) which partially benefited EBITDA margins in 4QFY2013 is expected to enhance profitability in FY2014 as the favorable currency impact on indirect exposure is expected to reflect completely in FY2014. We expect EBITDA margins to improve 150bp in FY2014 driven by favorable product-mix and currency movement, lower discounts, ongoing cost reduction initiatives and also on account of the SPIL merger. As a result, we expect MSIL to register strong earnings CAGR of ~25% over FY2013-15. At `1,673, MSIL is trading at 13.6x FY2015E earnings (including the impact of SPIL merger).Source: AngelBroking

Hero MotoCorp

Hero MotoCorp (HMCL) reported better-than-expected results for 4QFY2013 led by sequential improvement (up ~120bp) in operating margins to 13.8%. The margin improvement was largely due to the depreciation of Yen (vs. the INR) which led to significant savings on the raw-material front. While the top-line growth was largely in-line with our estimates; bottom-line came in 16.7% ahead of our estimates driven by strong operating performance. For 4QFY2013, HMCL’s top-line recorded a modest growth of 1.8% yoy (down 0.7% qoq) to `6,146cr driven primarily by 4.8% yoy (1.7% qoq) growth in net average realization. Volume performance however was subdued (down ~3% yoy and qoq) owing to slowdown in demand and increasing competition from Honda Motors and Scooters India. The operating performance witnessed a sharp improvement during the quarter as margins expanded ~120bp qoq to 13.8% led by 3.2% decline in raw-material cost. We believe this could possibly be on account of ongoing depreciation in Yen vs. the INR. Led by better-than-expected operating performance, bottom-line registered a robust growth of 17.7% qoq to `574cr, which was ahead of our expectations of `492cr. On a yoy basis though, net profit declined 4.9% following 150bp decline in operating margins. At the CMP of `1,597, the stock is trading at 11.8x FY2015E earnings. We shall release a detailed note post the conference call with the management which is scheduled on April 29, 2013. Source: AngelBroking

LIC Housing

LIC Housing Finance reported a healthy set of numbers for 4QFY2013, with net interest income growth of 20.3% yoy and earnings growth of 24.7% yoy. Key highlights from the results were sequentially improvement in NIMs (36bp) and stability witnessed on the asset quality front (Gross NPA ratio at 0.61% and Net NPA ratio at 0.36%). NIM improved qoq; Asset quality improved: LICHF’s loan book grew strongly by 23.3% yoy to `77,812cr during 4QFY2013. Loans to the individual segment grew by 25.5% yoy, while loans to the developer segment declined by 16.3% yoy. Hence, the share of developer loans declined from 3.9% in 3QFY2013 to 3.4% for 4QFY2013. The margins remained flat yoy at 2.45%, however, were higher by 36bp sequentially primarily due to the 27bp decline in cost of funds. During the quarter, the company witnessed improvement in asset quality, as gross and net NPA levels declined sequentially by 12.5% and 15.8%, respectively, on an absolute basis. Gross and Net NPA ratios, improved by 13bp and 9bp, respectively to 0.61% and 0.36%. Provision coverage ratio improved sequentially from 39.1% to 41.4%. Outlook and valuation: At the CMP, the stock is trading at a P/ABV multiple of 1.4x FY2015E ABV. The stock rating and target price is currently under review.Source: AngelBroking

Goodyear India 

For 1QCY2013, Goodyear reported a better-than-expected top-line of `337cr, marginally higher on a yoy basis from `331cr in 1QCY2012. A decline in raw material cost led to an expansion of the EBITDA margin by 302bp yoy from 6.0% in 1QCY2012 to 9.0% in 1QCY2013. This margin expansion coupled with higher

other income led to a stupendous growth in net profit of 90.6% yoy to `21cr from `11cr in 1QCY2012. Though a slowdown in auto industry is expected to keep revenue growth restrained, we believe lower rubber prices would help growth in net profit, going forward.Source: AngelBroking

Result Review 4QFY2013

Hindustan Zinc

Hindustan Zinc’s (HZL) reported better than expected 4QFY2013 results, both on top-line and profitability front. HZL’s net revenue increased by 24.5% yoy to `3,850cr (above our estimate of `3,091cr) mainly due to increased sales volumes of silver and higher rupee realizations. Zinc production volumes however declined 4.0% yoy to 182kt but silver production volumes grew 33.0% yoy to 117kt due to higher production from Sindesur Khurd mine and new Dariba lead and silver capacities. EBITDA margin contracted by 133bp yoy to 55.0% mainly on account of 8.0% yoy increase in cost of production to `44,901/tonne. Cost of production increased due to higher strip ratio at Rampura Agucha and lower acid credits, partially offset by lower power costs. Mining royalty as a percentage to sales declined to 6.3% compared to 7.4% in 4QFY2012 and other operating income also increased by 40.7% yoy to `58cr. Hence, EBITDA increased by 27.5% yoy to`2,116cr. Other income rose by 8.1% yoy to `412cr while the depreciation was down by 27.0% yoy to `122cr and tax rate was also much lower at 8.9% in 4QFY2013 (24.1% in 4QFY2012). There was an exceptional item of VRS scheme of `18cr and consequently, adjusted net profit grew by 53.6% yoy to `2,183cr (much above our estimate of `1,663cr). Source: AngelBroking

Idea 

For 4QFY2013, Idea Cellular (Idea) reported strong set of results, beating our as well as market expectations on all fronts. Idea’s consolidated revenue came in at `6,061cr, up 8.7% qoq. The mobility segment’s revenue increased strongly by 8.7% qoq to `5,953cr, on the back of 8.5% qoq growth in network traffic to 143bn min. MOU increased considerably by 5.7% qoq to 406min while ARPM remained almost flat at `0.412. While the challenges on voice ARPM continued, the company increased share of VAS revenues to 15.2% from 14.6% in 3QFY2013. Idea’s subscriber base increased by 6.8% qoq with the end of period (EoP) subscriber base standing at 122mn. Idea’s EBITDA margin increased by 119bp qoq to 27.6%. The EBITDA margin inch up was led by strong revenue growth along with qoq almost flat network operating charges. The PAT came in at `308cr, up 35% qoq, led by strong operational performance and qoq lower interest charges at `224 vs. `242cr in 3QFY2013. Source: AngelBroking

United Phosphorous

United Phosphorus, 4QFY2013 numbers came in robust. The top line grew by 30.8% to `2773cr. The top line growth was driven by both exports and domestic business which grew by 25.0% and 33.0% respectively. The exports growth came on back of the North America and Europe, which grew by 49% and 37% respectively. Latin America, also grew strongly by 34%, while Rest of the world grew by only 13% during the period. The top line growth was driven by 16% volumes, while price rise was around 4%. Exchange impact on sales growth was around 12%. The OPM came in at 17.6% almost same as 17.9%. This aided the Net Profit to grow by 37.9% yoy to end the period at `278cr, on back of top-line growth. Source: AngelBroking

Abbott India

For 1QCY2013, Abbott India reported 11.6% yoy growth in topline at `420cr, 3.2% lower than our estimate of `433cr. EBITDA margin expanded by 313bp yoy primarily due to lower raw material prices. However, the adjusted net profit increased by just 17.1% yoy to `32cr inspite of a 56.4% yoy growth in EBITDA during 1QCY2013 due to exceptional item of `10cr in 1QCY2012 from writeback of depreciation and provision for expired goods. We expect the revenue to grow at a modest 12.2% revenue CAGR over CY2012-14E, while EBITDA margin would stabilize in the range of 12.0-12.5% going forward. Net profit is expected to post a 10.4% CAGR over the same period. Source: AngelBroking

Infotech Enterprises

For 4QFY2013, Infotech reported a weak set of results on the operating front. The dollar revenues came in at US$85.9mn, down 1.9% qoq, majorly impacted by ramp downs seen in a couple of customer accounts from America geography -one in the heavy engineering vertical and one in the hi-tech industry vertical. In INR terms, the revenue came in at `464cr, down 2.2% qoq. The EBITDA and EBIT margins declined by 151bp and 232bp qoq to 17.0% and 12.8%, respectively, due to muted volume growth and inch up in employee costs because of healthy gross addition of 783 employees into the system. PAT came in at `54cr, down 12.3% qoq, impacted by lower other income of `10cr as against `16cr in 3QFY2013. The Management sounded confident of FY2014 turning out to be a better year than FY2013. For FY2104, in the ENGG vertical, the Management indicated that the deal pipeline in the aerospace business segment is robust and is seeing strong signs of growth in the transportation business segment owing to recovery in this segment. The Management cited that they are seeing initial signs of recovery in the hi-tech business segment while heavy engineering is still looking soft. In the UT&C vertical, for FY2014, the Management indicated that a strong pipeline is being seen for the utilities business segment and expects business to remain stable in the telecom segment with growth lower than the average company’s growth rate. Source: AngelBroking

Vesuvius India 

For 1QCY2013, VIL reported a 4% yoy increase in topline to `145cr, inline with our estimate of `144cr. The EBITDA margin surprised positively reporting an expansion of 558bp yoy to 20.2% from 14.6% in 1QCY2012 primarily due to decline in raw material costs. As a result, net profit grew by a stupendous 52.6% yoy to `18cr in 1QCY2013 as compared to `12cr in same quarter last year. We believe the decline in commodity prices would facilitate higher margins for the rest of the year, inspite of 6.4% CAGR in revenue over CY2012-14E; thus leading to better profitability. Source: AngelBroking

Cera Sanitaryware

Cera Sanitaryware (CSL) reported a strong set of numbers for 4QFY2013. The top-line surged by 57.6% yoy to `158cr, 21.5% higher than our expectation of `130cr. The EBITDA grew by 30.1% yoy to `20.8cr, in line with our estimate of `20.7cr. The EBITDA margin dipped by 278bp yoy and came in at 13.1%. The dip is attributable mainly to the rise in raw material cost. Despite relatively low growth in EBITDA compared to the revenue growth, net profit grew by 50.7% yoy to `14cr on account of higher other income during the quarter. Top line for FY2013 grew by 52.1% and came in at `488cr, higher than our expectation of `460cr. EBITDA for the year grew by 40.9% to `75.3cr, in line with our estimate of `75.2cr, while EBITDA margins dip by 124 basis points to 15.4%, owing to high raw material cost. The company reported net profit of `46.2cr, vis-à-vis our estimate of `44cr, while net profit margins stood at 9.5% lower by 44 basis points last year. Source: AngelBroking

Result Review 4QFY2013

HDFC Bank 

HDFC Bank delivered yet another quarter of consistent performance on the bottom line front, with a growth of 30.1% yoy. On the operating front, while the growth in NII came in relatively lower at 20.6% (similar to last quarter), non-interest income grew only by moderate 10.7%, leading to growth of around 17% yoy in both operating income and pre-provisioning profits. On the asset quality front, the bank reported stability, as its Gross and Net NPA levels, on an absolute basis, came down sequentially by around 4% each, which aided it to report 27% yoy lower provisioning expenses and clock earnings growth of 30% yoy. The bank registered a robust growth in its balance sheet, with net advances and deposits growing at 22.7% and 20.1% yoy. On the deposits front, the current and saving deposits accretion was healthy, growing at 15.2% and 19.2% yoy, respectively. CASA ratio declined by around 100bp on a yoy basis to 47.4%. Within loan book, the bank manage to grow its retail loan book by 27.3% yoy and hence, share of retail advances to overall loan book increased by around 200bp yoy and 300bp qoq to 56.9%. NIMs for the bank came in at 4.5%, higher by 20bp qoq and 10bp yoy, primarily on higher retail lending. Non-interest income (excluding treasury) grew at subdued pace of 2.3% yoy, as fee income growth came in moderate at 10.8% and income from exchange transactions declined by 38.1% yoy. The bank reported treasury gains of `65cr for the quarter compared to a loss of `72cr in 4QFY2012. On asset quality front, the bank reported stability, as its Gross NPA ratio improved marginally by 5bp to 0.97%, while Net NPA ratio remained flat at 0.2%. PCR (excluding write-offs) for the bank remained stable sequentially at 79.9%. HDFC Bank is currently trading at one-year forward 3.8x P/ABV (3.3x FY2015E ABV), higher than its median of 3.5x (over FY2005-13). We believe the current valuations largely factor in the positives, leaving limited upside in the stock. Source: Angel Broking

Axis Bank

During 4QFY2013, Axis Bank reported a 21.8% yoy growth in its net profit, which was in-line with our estimates. Key highlights from the result were sequential improvement in NIMs, robust growth in fee income and stable NPA ratios. During 4QFY2013, the bank reported a healthy growth in business, with advances and deposits registering a growth of 16.0% and 14.8% yoy, respectively. Growth in the loan book was primarily on account of strong traction witnessed in the retail loan book, which grew by 43.6% yoy, while SME loans grew at a robust pace of 25.7% yoy. Within retail loan book, auto loan grew by 54.7% yoy and now constitute around 4% of total loan book. Growth in the large and mid-corporate segment remained moderate at 7.5% yoy. CASA deposits grew at a healthy pace of 22.6% yoy, aided by a robust growth of 23.4% and 21.6% yoy in savings deposits and current deposits, respectively. Overall, the reported NIM improved by 13bp qoq to 3.7%. The bank registered robust growth in its non-interest income excluding treasury, largely driven by a healthy growth in fee income from the Retail & SME segments. On the asset quality front, slippages came in lower sequentially at `398cr, compared to `541cr witnessed in 3QFY2013, however, slippages and fresh restructuring, taken together amounted to ~`1,200cr during the quarter, higher than the Management’s guidance of around `1,000cr. Going forward, the Management expects slippages and restructuring per quarter to remain at similar levels for the next few quarters. Along with sequentially lower slippages, the bank also reported sequentially higher recoveries and upgrades at `205cr, which helped it to contain the sequential increase in its gross and net NPA levels, on an absolute basis, to 5.2% and 3.7%, respectively. The gross and net NPA ratio remained stable sequentially at 1.06% and 0.32%, respectively. The bank’s PCR dipped by 200bp qoq to 79%. Of the total restructuring during the quarter (`791cr), nearly `500cr came from Engineering and Iron & Steel. Its total restructured book, as of 4QFY2013 stands at `4,368cr. Axis Bank is trading at 1.6x FY2015E ABV – more than 50% discount to HDFC Bank vs an average discount of around 38% over the past five years (which we believe over-discounts asset quality concerns). We remain positive on the bank, owing to its attractive CASA franchise, multiple sources of sustainable fee income and reasonable growth outlook. Source: Angel Broking

Result Review 4QFY2013

Cairn India

Cairn India 4QFY2013 results which were below our expectations on the profitability front whereas top line was in line with our expectations. The company’s top line increased 19.5% yoy to `4,363cr (in line with our expectation of `4,393cr) due to higher volumes and higher rupee realizations. The company’s gross production averaged 202,014boepd (+12.0% yoy) during the quarter. Although gross crude oil realization decreased by 9.1% yoy to US$100.6/bbl, INR depreciation against the USD offset this impact. EBITDA grew by 9.3% yoy to `3,258cr; however, EBITDA margin contracted by 698bp yoy to 74.7%. The company recorded an exceptional forex loss of `3cr on account of forex fluctuation during 4QFY2013. Excluding this exceptional loss, adjusted net profit grew by just 6.8% yoy to `2,566cr (below our estimate of `2,819cr). Reported net profit grew by 17.3% yoy to `2,564cr. Source: AngelBroking

Ultratech

Ultratech’s 4QFY2013 stand-alone topline was below estimates at `5,389cr on account of both lower than estimated volumes and realization. The company’s grey cement volumes (incl. clinker) remained flat yoy at 11.13mn tonnes. White cement volumes fell by 4.3% yoy to 0.16mn tonnes. Blended realizations for the quarter stood at `4,727/tonne, higher by 1% on a yoy basis. However, the company’s operating costs/tonne was below estimates resulting in a superior OPM of 23.4% vs. estimated 21.5%. Interest expenses too was lower by 18.4% yoy at `48cr. Net Profit fell by 16.3% yoy to `726cr and was in-line with estimates. Meanwhile there are media reports that Ultratrech is in final-stage talks to buy Jaypee Associates 4.8mtpa cement plants in Gujarat for `4,100cr. The news has not been confirmed by management of both the companies. Source: AngelBroking

MLIFE 

For 4QFY2013, Mahindra Lifespaces Developers (MLIFE) reported a weak set of numbers both on revenue and profitability front. MLIFE’s standalone revenue for the quarter came in at `102cr, i.e a decline of 27% yoy which was below consensus estimate of `120cr. Standalone EBITDA decreased by 46.1% yoy to `17cr, owing to lower-than-expected revenue recognition. PAT for the quarter decreased by 27.7% yoy to `23cr. On a consolidated level, MLIFE reported a revenue of `368r and PAT of `82cr, suggesting a profit for its subsidiaries at net level. During the quarter, the company has acquired two land parcels one each in Bangalore and Mumbai region. Both the land parcel put together has a development potential of 1 mn sqft. Source: AngelBroking

Tata Sponge Iron

For 4QFY2013, TSIL reported a topline of `211cr, 7.1% higher than our estimate of `197cr. However, the results were disappointing on the EBITDA margin front which contracted by 502bp yoy to 8.8% as compared to 13.9% during 4QFY2012. Contraction in EBITDA margin was primarily due to higher raw material cost and employee expenses during the quarter. Consequently, net profit declined by 36% yoy during the quarter to `9cr. For the full year FY2013, revenue grew by 25.5% yoy to `796 on account of better realization of sponge iron and resumption volumes of sponge iron sales which were impacted during FY2012 due to iron ore supply issues; while increased raw material cost and employee expenses led to contraction of EBITDA margin by 273bp for FY2013. Net profit for FY2013 stood at `85cr as compared to `76cr in FY2012. Source: AngelBroking

Infosys 4QFY2013

For 4QFY2013, Infosys reported yet another disappointing quarterly result. The dollar revenues grew by just 1.4% qoq (Estimate: ~4% qoq) to US$1,938mn, much lower than our as well as street expectations. Excluding Lodestone, the USD revenue grew by just 0.8% qoq. Overall volume growth came in at 1.8% qoq (4.8% onsite volume growth and 0.5% offshore volume growth). Overall pricing declined by 0.7% qoq, impacted by lower billing days qoq and revenue mix shift towards lower bill rate services. In INR terms, revenue came in at `10,454cr, up merely 0.3% qoq. The company’s EBITDA and EBIT margin declined by 199bp and 213bp qoq to 26.5% and 23.6%, respectively, due to negative impact of onsite wage hikes given during the quarter. Pricing pressure witnessed by the company also weighed on margins during the quarter by ~2%. The PAT was held up at `2,394cr, aided by other income of `674cr vs. `503cr in 3QFY2013. The most disappointing thing was FY2014 USD revenue growth guidance of 6-10% which is way below street expectations of 12-13%. The range of the guidance is wide which indicates the volatility foreseen by the management. Also, the company has not put out any EPS guidance for FY2014 which could signify that there is risk towards the operating margin profile going ahead. Management commentary indicates that the environment remains challenging and the company continues to see delays in decision making from clients’ ends. Management indicated that pricing pressure is seen for typical IT operations kind of services which are mostly non-discretionary in nature. Over FY2012-14E, we expect USD and INR revenue CAGR of 8.7% and 8.2%, respectively. The company is now highly focused on growth and that many lead to sacrifice in terms of margins in the near term. At the CMP of `2,297, the stock is trading at 13.6x and 12.6x its FY2014E and F2015E EPS, respectively, which appears to be attractive compared its historical valuation. However, huge volatility in quarterly performance is unlikely to fetch Infosys a higher multiple in the near term. Source: AngelBroking

Hindustan Zinc reports 4QFY2013 production numbers

Hindustan Zinc (HZL) reported its production numbers for 4QFY2013. Its mined metal production grew by 16% yoy to 223kt. Its integrated lead production grew by 2% yoy to 32kt. Its integrated zinc production declined by 4% yoy to 181kt and it sold 61kt of zinc concentrates. Source: AngelBroking