Current Fitch Sovereign Rating of India
Here is what Fitch the international rating agency thinks of India. It said,
The Negative Outlook on the Local?Currency IDR reflects the agency’s judgement that the fiscal deterioration in the year to end?March 2009 (FY09) and FY10 has been partly structural in nature, and that India’s public finances are set to stress comparisons with ‘BBB’ peers beyond breaking point. The agency looks for meaningful fiscal consolidation measures to get India’s public finances onto a path consistent with the current ratings. Read more
Enterprise Wireline Tariffs to Come Down – Reliance Communication
In an analyst call, the management of Reliance Communications have said that Wireline / Landline Tariffs are under pressure as Wireless Tariffs have fallen significantly and the company si facing pressure especially from the Enterprise Segment.
Other highlights of the call are – Although RCOM’s RPM declined 4.6% in Q310, its EBITDA margin was down 156 bp; management mentioned this was due to continued investments in network and higher Read more
TVS Motor’s January sales up 34%
Chennai-based two-wheeler maker, TVS Motor Company has reported 34% jump in its January sales. The company sold total 125,578 two-wheelers during the month under review against 93,729 units in January 2009.
On domestic front, it has clocked 37% growth in January 2010 by registering sales of 109,504 units as compared to 79,729 units in the corresponding period of the previous year. Read more
Reliance Globalcom and Broadband revenues Declines
Rcom’s Q3FY10 results were below expectations on the revenue and EBITDA front on account of a steeper decline in Globalcom and Broadband revenues than anticipated.
The EBITDA margin declined sequentially by 128bps due to the drop in revenue and a 15.3% increase in access charges, which was only partly offset by a decline in network / SG&A cost.
PAT was ahead of our estimates with a growth of 56.6% QoQ on account of finance income of Rs 4bn as against a finance charge of Rs 6.5bn in the previous quarter. Rcom’s finance charge accounting remains a difficult area to comprehend.
The flat trend in wireless revenue was a positive sign, though the steep fall in Globalcom and Broadband revenues surprised negatively. Wireless revenue increased QoQ by 0.3% on the back of 8.6% subscriber growth and a 7.4% fall in ARPU. ARPU declined from Rs 161 to Rs 149 QoQ.
Crompton Greaves recommends Bonus + Interim Dividend
Crompton Greaves Ltd has informed us that the Board of Directors of the Company at its meeting held on January 28, 2010, inter alia, has approved the following:
1. The Board of Directors have declared an interim dividend of 70% i.e. Rs. 1.40 per share.
2. The Board of Directors have recommended issue of Bonus Shares in the proportion of 3 (Three) new Equity Shares for every 4 (Four) Equity Shares, of Rs. 2/- each. Read more
Harrisons Malayalam Infrastructure contract worth Rs 50.28 crore
Harrisons Malayalam has announced that it has signed a contract worth Rs 50.28 crore with KTDFC.
The contract involves construction of a central bus terminal for KSRTC at Trivandrum.
Harrisons Malayalam, part of the RPG Group, markets its tea products under ‘Harrison’s Gold’, ‘Mountain Mist’, ‘Surya’, and ‘Spencer’s’ brand names.
Punjab National + Union Bank Asset Quality Concerns Surface
PNB’s profits were up 0.5% yoy (+9% qoq, in-line with estimates) and were supported by its high NIMs (expands further), robust loan growth (well above industry), strong deposit franchise and some trading gains in 3Q. However, delinquencies increased substantially (mainly in the agricultural segment) and coverage levels dropped meaningfully – suggests caution given its large (16% of book) agri portfolio.
PNB’s margins expanded more than estimated to 384bps, driven by liability repricing. NPL uptick, lower coverage raises concerns on sustainability of earnings. Expect an EPS of Rs 108 and Rs 124.5 for FY10 and FY11 respectively. Read more
Sterlite Industries – Zinc + Power boost Q3 bottomline
Sterlite Industries consolidated PAT (adj) at Rs9.2bn in 3QFY10 rose 73% YoY (~7% below our estimates) gaining from an 83-87% jump in zinc-lead LME prices, better copper TC/RC margins and higher sales of power. Operating margin was 25% in 3QFY10 vs. 11% in 3QFY09 and 22% in 2QFY10.
Standalone (copper) PAT was Rs2.3bn. Operating profit rose 36% to Rs1.4bn and the operating margin was 3.8%. OPM was 61% vs. 26% last year due to 1) jump in zinc-lead prices; 2) 30% surge in lead volumes; 3) sale of 41,000t of zinc concentrate; 4) silver production up 44% YoY. Read more
Pantaloon Retail – Strong Operational Performance
Pantaloon Retail reported 25%, 29% and 51% yoy growth in revenues, operating profit and adjusted net profit, respectively, in Q2F2010. PRIL
continues to report parent only numbers with no disclosures on subsidiary performance. Lack of transparency for consolidated results remains our key concern.
Although the revenue growth reported by the company in the value and lifestyle segments is 14% and 25%, respectively, overall revenue growth reported by the company is 25%. We believe that a Read more
Godrej Consumer Products – Lower market share in winter
Godrej Consumer Products indicated that its lack of glycerine soap does not allow it to enjoy stronger market share in winter. Hence, it lost a 40-bp market-share qoq. Its recently launched moisturising soap is expected to drive growth in winter.
Though palm oil prices continue to trend upwards (and are now up 51% yoy), GCP pointed out that the forward cover would allow it to improve margins, and will not compel it to hike prices. It indicated it has
such cover till Apr 10. Read more
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