Sunday, October 25, 2009

Results announced between Oct 23, 2009 to Oct 25, 2009

Results announced between Oct 23, 2009 to Oct 25, 2009 (details released/will be released separately)


BHEL results were significantly higher than our expectations due to lower raw material & employee costs. We will be revising our estimates upwards for FY10 & FY11.

Punj Llyod results were below expectations due to huge cost over runs in subsidiaries. Punj has been surprising negatively quite a few times in the past. We believe today the stock should react negatively to the reported numbers.  We have a reduce rating.

Dr Reddy reported numbers which were in line with our & ahead of consensus estimates. We maintain Buy on the stock.

Maruti reported number which were lower than our expectation but significantly better than previous corresponding period.

Greaves Cotton reported numbers ahead of expectation. Revenue at Rs.2.9bn, decline of 3%. Engines segment revenue increased by 8% while infrastructure reported 53% decline. EBITDA of Rs.443.9mn, growth of 10.5%. EBITDA margins expanded by 190bps to 14.9%. Expansion in margins driven by lower raw material cost and other expense (other expenses % of sales decline by 110 bps). Net profit of Rs.239mn, growth of 17.9%. EPS of Rs.4.9 in Q1FY10 as compared to Rs.4.2 in Q1FY09.

NTPC results were below expectations. We maintain our view that NTPC's valuations are expensive at 2.6xFY11E Book Value with ROE in the range of 14-15%. Assuming NTPC to be a risk free business, it should trade at 2.2x 1yr Fwd Book Value (10-yr Treasury bond yield of 7.4% currently). Maintain REDUCE rating.

TVS Motor's (TVS) operating performance was below expectation. While net sales at Rs 10.6 bn were in line with expectation, EBIDTA at Rs 619 mn was below our expectation by 16%. Net profit at Rs 245 mn (against expectation of Rs 260 mn) is due to higher other income and tax credit. We have upgraded our FY10 and FY11 EPS estimates by 12% and 7% to Rs 4.1 and Rs 4.5 per share respectively on account of better outlook on volumes and lower tax rate. At CMP of Rs 62, the stock trades at PER of 14.8x and 13.5x and EV/EBIDTA of 8x and 7x our FY10 and FY11 standalone estimates respectively. The valuations on the standalone basis appear to be reasonable. However, at consolidated level the valuations appear expensive, considering the loss in FY09, DE of 2.1x, P/BV of 2.7x (Book value Rs 23) based on FY09 consolidated numbers. While the business outlook is improving in Indonesia, we expect the same to continue to put pressure on overall performance in FY10. We maintain our REDUCE rating on the stock with a target price of Rs 54.

Important results today


Tata Motors, Idea Cellular, Ranbaxy Laboratories, Dabur India, Canara Bank, IDBI Bank, Lupin, Aban Offshore, Union Bank

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