Result Review 4QFY2013

GSK Pharmaceuticals 

GSK Pharmaceuticals, posted results lower than expectations on the sales front.The net sales, came in at `632cr during 1QCY2013, a growth of 1.5% yoy. This was against a expectations of `734cr. Consequently, the OPM’s came in at 25.5% V/s expectations of 30.4%, a contraction of 5.9%. On account of which the net profit came in at `170cr, a decline of 8.9% during the last corresponding period. Source: AngelBroking

Allahabad Bank

Allahabad Bank reported weak operating performance for the quarter, primarily marred by asset quality pressures. While NII declined by 18.0% yoy (as NIMs dipped sharply qoq, largely due to interest reversals on slippages and also due to base rate cuts effected by the bank), non-interest income grew by strong 47.7% yoy (possibly due to higher treasury income and better recoveries from written-off accounts). Consequently, the bank reported operating profit decline of 14.8% yoy. Higher provisioning (up by 37.0% yoy) following the steep deterioration in asset quality (gross and Net NPA levels higher by 45.5% and 66.6%, qoq respectively), resulted in earnings decline of 68.5% yoy. Sharp deterioration in asset quality was on account of higher slippages (at `2,500cr compared to around `1,000cr in last quarter), major portion of which were chunky in nature (9 accounts contributed around `1,600cr). The management has broadly guided for recovery/upgradations of two of these nine accounts (around `500cr) in coming few quarters. At CMP, the stock trades at 0.5x FY2015 ABV. Currently, the stock rating is under review.Source: AngelBroking

UCO Bank

UCO Bank posted weak set of numbers for the quarter, as their earnings declined by 80.4% yoy at `50cr for 4QFY13. NII & non-interest income grew at strong pace of 28.3% and 25.8% yoy, enabling bank to register Pre-provisioning operating profit growth of 41.8% yoy at `1,032cr. On the asset quality front, Gross and Net NPA increased by 6.2% and 3.6% sequentially, however provisioning expenses grew by 114.1% yoy leading to a PAT decline of 80.4% yoy to `50cr. At the CMP, the stock trades at 0.8x FY2015E ABV.Source: AngelBroking

ITNL 

For 4QFY2013, on a consolidated basis, IL&FS Transportation Networks (ITNL) posted a mixed set of numbers with decent performance on the top-line front; however bottom-line was ahead of our estimate mainly due to lower tax provision provided during the quarter. The company reported consolidated revenue of `1,931cr (`1,989cr) in 4QFY2013, registering a decline of 2.9% yoy, which was marginally above our estimate of `1,850cr. EBITDA margins decline sequentially by 106bp to 24.4% (23.0%) in 4QFY2013, against our estimate of 28.0%. This was mainly on account of higher revenue contribution from the relatively lowmargin E&C segment during the quarter. Interest cost grew by 30.9% yoy to `302cr in 4QFY2013 and was higher than our estimate of `284cr. On the earnings front, ITNL reported subdued growth of 2.1% yoy to `181cr (our estimate was `157cr) mainly on account of tax credit of `9cr in 4QFY2013 (against tax paid of `57cr in 4QFY2012).Source: AngelBroking

Ceat 

Ceat reported impressive performance for 4QFY2013 led by a strong sequential EBITDA margin expansion of 218bp on the back of the ~8% qoq decline in natural rubber prices. Consequently, net profit surged 98.6% qoq (47.1% yoy) to `61cr, which was significantly above our estimates of `35cr For 4QFY2013, standalone top-line reported a slightly better-than-expected growth of 7.1% yoy (8.8% qoq) to `1,311cr which was driven by a strong volume growth of 9.3% yoy (11.3% qoq). The total volumes in tonnage terms for the quarter stood at 59,000MT and were driven primarily by a strong 24.2% yoy (21% qoq) growth in the OEM segment led by new partnerships with Royal Enfield, Volvo-Eicher and Bajaj Auto. The replacement segment however, posted a muted growth of 1.2% as the demand in the segment remains weak. The sales-mix for 4QFY2013 in the replacement, OEM and export segments stood at 50%, 25% and 25% respectively as against 54%, 22% and 24% respectively in 4QFY2012. Ceat’s net average realization in 4QFY2013 registered a decline of 2.2% yoy (2.4% qoq) largely due to adverse product-mix (higher OEM share in total-mix). On the operating front, EBITDA margins jumped sharply by 218bp qoq to 10.6% against our expectations of 8.8%, as raw-material cost as a percentage of sales witnessed a significant decline of 206bp qoq led by ~8% decline in the natural rubber prices. On a yoy basis, EBITDA margins expanded marginally by 28bp as benefits of lower natural rubber prices (down ~16% yoy) were offset by increase in higher employee and other expenditure (due to increased marketing spends). Led by a strong operating performance, net profit on a sequential basis witnessed a significant growth of 98.6% to `61cr. On a yoy basis too, net profit posted a strong growth of 47.1% yoy aided by lower interest expense (due to reduction in debt levels) and lower tax outgo (tax-rate at 22.4% as against 30.9% in 4QFY2012). We retain our positive view on Ceat and believe that the company will continue to benefit from the softening of commodity prices. However a slowdown in demand remains a concern as the replacement demand has not picked up as anticipated. Nonetheless at `119, the stock is trading at attractive valuations of 2.6x FY2015E earnings. Source: AngelBroking