Result Review 4QFY2013

Dr Reddys Lab 

DRL posted numbers better than expected. The sales came in at `3,340cr is V/s `2,409cr, registering a growth of 26%yoy. The growth was mainly driven by PSAI segment, which grew by 44.6% yoy, while the generic segment grew by 18.2% yoy. While, all the regions grew at robust growth in PSAI, the generic segment growth was driven by the USA market, which grew by 30.7%. The company posted an OPM of 21.8% V/s 19.8% (expected), down from 24.1% in the last corresponding period. Higher than expected OPM’s during the period aided the net profit to come in at `571cr, V/s expectation of `313cr. Also the net profit was aided by higher income during the quarter, which came in `163cr, aided by the US $ 22.5mn as one time settlement done with Nordion Inc., towards the damages sustained by the Company due to the breach by Nordion of the then existing Laboratory services agreement for bioequivalence studies. Source: AngelBroking

United Bank

United Bank’s 4QFY2013 numbers disappointed on operating as well as on asset quality front. On back of 6.6% yoy increase in operating expense, operating profit for bank increased by 6.9% yoy to `511cr. NII de- grew 8.9% yoy to `564cr. On asset quality front, gross and net NPA’s increased by 2.1% and 39.1% respectively sequentially. Hence, higher provisioning by 174.4% yoy at `759cr and tax write back of `279cr, as against tax expense of `22cr in 4QFY13, led the bank to report PAT de-growth of 79.1% yoy at `31cr. Source: AngelBroking

Amara Raja Batteries

Amara Raja Batteries (AMRJ) registered weak results for 4QFY2013 on account of contraction in operating margins (down 209bp qoq) primarily due to raw-material cost pressures. Additionally, provisioning of `8cr towards impairment in asset value and an additional depreciation charge of `5cr due to revision in estimated useful life of certain assets also impacted the bottom-line. Top-line posted a robust growth of 19.4% yoy (5.7% qoq) to `804cr, broadly in-line with our estimates, led by strong volume growth in the four-wheeler and two-wheeler battery segments.The industrial battery segment too registered a strong revenue growth mainly driven by the replacement demand in the telecom battery segment. On the operating front, margins deteriorated by 209bp on a sequential basis and stood at 13.9% as against our expectations of 14.5%, largely due to a 272bp qoq increase in raw-material expenditure as a percentage of sales. Led by weak operating performance, an impairment charge of `8cr and an additional depreciation expense of `5cr, net profit declined 26.6% qoq to `59cr, which was lower than our estimates of `76cr. At `265 the stock is trading at 13x FY2015 earnings. Source: AngelBroking