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.
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.
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
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