Asian Paints Q1FY10E - Result Estimates (25 July)
APL is expected to report 12.8% YoY revenue growth to Rs14.0 bn in Q1FY10E – led by 9% surge in volumes.
The operating profit is expected to increase 5.3% yoy to Rs1.8 bn. High raw material prices are likely to impact the operating performance during the quarter. Consequently, the operating margins are expected to decline 90 bps YoY to 12.9%.
Led by weak operating performance and decline in operating margins adjusted net profit is likely to increase 2.3% YoY to Rs1.1 bn.
Key things to observe – (1) management comments on pricing environment (2) extend of input cost drop and (3) outlook shared on volume growth especially in the rural market.
GCPL – Q1FY10E - Result expectation
Expect 11.5% YoY revenue growth to Rs4.0 bn in Q1FY10E aided by robust growth in soaps, hair color and International business.
The EBITDA is expected to increase 42.0% YoY to Rs704 mn. We expect 380 bps YoY improvement in EBITDA margin, attributed to (1) the fall in palm oil and other key commodity prices and (2) better operating efficiency.
Adjusted net Profit is expected to jump 54.4% YoY to Rs604 mn driven by better operating performance.
Key things to observe are - (1) management comments on pricing environment (2) extend of input cost drop and (3) outlook shared on volume growth especially in soaps and hair color segment.
Marico Q1FY10 Result – First Cut Analysis
Marico reported a robust 16.8% YoY growth in revenues to Rs7.0 bn led by a strong 14% growth in volumes –came in line with our expectation. 'Parachute' reported 14% volume growth while the 'Saffola' bounced back with strong 13% volume growth in Q1FY10. However, these volume growths are not adjusted for one off discounts given during the quarter.
The operating profit jumped 27.5% YoY to Rs964.7 mn in Q1FY10, ahead of our expectation. The increase in operating profit can be attributed to robust growth in revenues coupled with 350 bps yoy decline in raw material expenses as a percentage of revenues to 50.3%. Consequently, the operating margins jumped 130 bps to 13.9%.
Marico reported 20.9% yoy increase in net profit to Rs559.7 mn. The company's adjusted net profit excluding exceptional items jumped 29.7% yoy to Rs600.2 mn, in line with our estimates. Strong operating performance augmented the company's adjusted net profit during the quarter.
Emco Q1FY10E Result Estimates (Result on 24th July)
We expect net sales to increase 10% YoY to Rs2.0bn.
Expect Transformer Volume Growth of 15% YoY to 2432MVA.
Expect realizations per MVA to drop by 12.6% yoy to Rs0.49mn/MVA.
Expect 30% and 5% yoy revenue growth in projects and meters business.
We expect operating margins to be at 12.1% (drop of 90bps YoY) and operating profits to increase 2% YoY to Rs244mn.
We expect net profits to decline by 46% YoY to Rs54mn – driven by expected increase of 112% interest expense.
Key things to watch out in Q1FY10E - (1) order inflows, (2) transformer realizations and margins, (3) execution in the project business & (4) status of power project.
Update on Power Sector – CERC has withdrawn the pass through status of UI charges for overdrawal below 49.2 Hz
CERC's forum of regulators yesterday has withdrawn the pass through status of UI charges for overdrawals below 49.2Hz. Currently the monthly run rate of short term electricity transactions in india is around 4-5bn units (7-8% of total electricity generation). Out of this 40% is transacted through UI and balance 60% through Traders, exchanges and bilateral transactions.
We believe this is likely to improve the volumes in the merchant power market as utilities overdrawing through UI are likely to shift to merchant market because of cost pass through. We view this as a positive for merchant power producers.
Transformers & Rectifiers – Q1FY10 results - slightly above estimates (first cut analysis)
TRIL's adjusted net profit of Rs80mn (-13% yoy) is slightly above our estimates – primarily because of higher than expected EBITDA margins of 15.8%. The 1% yoy increase in realizations to Rs0.53mn/MVA versus 8% yoy decline in raw material cost to Rs0.44mn/MVA resulted in better operational performance. This is attributed to higher export order execution during the quarter to the tune of Rs365mn or 43% of revenues (versus 1% of revenues in Q1FY09). Revenue growth at 3% yoy to Rs848mn was in line with expectations. Though the management has shared optimistic outlook, guiding for FY10E EBITDA margins of 17-18%, but we remain cautious.
Our view is that overcapacity has started playing in the sector & we do not see any improvement in EBITDA margins on the back of (1) substantial drop of 36% (compared with FY09) in the incremental order realizations, (2) export orders reducing to 8% of order backlog versus 16% at the end of Q4FY09, (3) implied order backlog realizations of Rs0.46mn/MVA, 19% lower than the average FY09 realizations. We would like to wait for one more quarter before taking a call on management guidance. We maintain our earnings estimates of Rs27 for FY10E and introduce FY11E estimates of Rs41/Share. We maintain 'Sell' rating and our target price is under review. We would be coming out with a detailed note shortly.
Idea Cellular 1QFY10 results
Subdued revenue performance due to MTC cut, but cons. profits ahead of estimates
Standalone results
Idea Cellular reported standalone results with flat revenues, 4.5% growth in EBIDTA and 1.6% growth in PAT to Rs3092mn. EBIDTA margins increased by 90bps QoQ to 27.9% led by decline in access costs. The losses from new circles remained stable at Rs644mn despite launch of services in Tamil Nadu circle.
KPI's: ARPU falls 9% on MTC cut; new circle ARPU falls to normal
ARPU for the quarter fell by 9% QoQ to Rs232 led by reduction in mobile termination charge. While ARPU in existing 11 circles fell by 9% QoQ to Rs236, ARPU in new circles fell by sharp 20% QoQ Rs237 in Q1FY10, in line with that of existing circles. MOU during the quarter remained firm at 399 minutes (v/s 402 minutes in Q4FY09) while 8.3% RPM fall resulted in 9% QoQ decline in ARPU to Rs232. Mobile traffic grew by healthy 10.2% QoQ.
Consolidated results
Consolidated net sales increased by 1.7% QoQ to Rs29.7bn (v/s our estimate of Rs31.6bn), EBIDTA increased by 7.8% QoQ to Rs8,588mn (v/s our estimate of Rs8,523mn) and PAT grew by 8.3% QoQ to Rs2971mn (v/s our estimate of Rs2739mn). The cons. EBIDTA growth was mainly led by 69% growth in Indus EBIDTA to Rs605mn.
NLD business stabilizes
While NLD revenues fell by 14% QoQ to Rs2.2bn, the NLD EBIT grew by 17% QoQ with EBIT margins expansion of 850bps QoQ to 34%. It is difficult to understand EBIT growth in absence of revenue growth in NLD segment.
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