IVRCL Infrastructure & Projects Expects Rs 6500 crore sales in FY10
Key takeaways of the conference call
Revenue break-up for FY09 sales is – Share of water projects to sales is about Rs 2500 crore; that of Building is Rs 1000 crore; Power is Rs 600 crore and Transportation is Rs 600 crore.
Order book as end of March 31, 2009 was at 14500 crore and of which about 69-70% is accounted by water & irrigation projects. The company is placed as L1 for orders worth about Rs 1200 crore. The company expects to close the current fiscal with an order book of Rs 16-18000 crore.
Expects to conclude the current fiscal with a topline of Rs 6500 crore. The EBITDA margin will be around 10.2% given the current order book mix.
Capex for current fiscal is Rs 75-100 crore. The planned capex for current fiscal will vary depending on the project, if a project requires new equipments then it will go up or the projects inflow for the fiscal is of same type and could be executed with current fleet itself then it will be lower at the end of the fiscal.
IVR Prime, the subsidiary of the company is not to take up any commercial realty projects but expected to launch 3- 4 projects residential projects. The company expects to start work on building Sriperumpudur low cost housing. This project is expected to have a price tag of 2500-3500/ sft. Similarly the low cost housing project in Hyderabad also to be launched with same price tag. As far as Noida the company will reengineer the project where it has foundations in place. Nagpur, pune, noida, Hyderabad and Chennai will be the focus areas.
Current year margin came under pressure on account of project mix as well as provisioning towards bad debt amounting Rs 3-4 crore. In order to buildup Pre-qualifiaction criteria especially in some new verticals, the company was forced to bid aggressively for some projects compromising margins. The company bid for quite few power projects to muster PQ criteria and this contribution being higher in the fiscal the margin came under pressure. These projects were coming to an end and thus the margin could start pickup from 3rd quarter of current fiscal.
AP itself is going to come out with Rs 25000 crore of irrigation orders.
Dividend income is called as other income. Other operating income (clause 49) some of the projects and consists
As end of March 2009, the Debtors is Rs 1150 crore, Inventory is Rs 800-850 crore, Loans to Subsidiaries is Rs 370-380 crore
Debts /Loan fund were Rs 1400 crore as end of March 2009. Debt largely of working capital loans. Apart from WC loans that also includes outstanding FCCBs, NCD. The current interest cost is about 10 to 10.5%.
BOT projects – The Kumarapalayam Tollways that builds, the 47 Km stretch between Kumarapalayam and Chengapalli in TN has completed. The Salem Tollway’s road project will complete by Oct 2009. Jalandar-Amritsar road project will get completed by Sep 2009. The delay in BOT projects is largely on account of Right of Way (RoW).
On Power sector TL & substations is a big business. It has enough PQ capability for RE projects, Transmission Lines of 220 kv, 440 kv. The company has now bagged a 765 KV Transmission Line project on trial basis from PowerGrid. Generation side the company is bidding for BoP opportunities.
Since about 75% of the order book is in water & irrigation projects, roads the company had not made aggressive bid in these verticals and will also not do it as it has enough PQ capability in place. But in new verticals the company has to be aggressive to develop that business and that segments margin will be compromised. On overall basis with majority of order book is of high margin zone the overall margin will not suffer.
Nagarjuna Construcitons Expects sales turnover of Rs 4800 crore on standalone
Key takeaways of the call
Order book as end of March 31, 2009 is Rs 12197 crore. Of which the share of orders of Building is 21%, roads 8%, water and environment 20%, electrical contracts 5%, irrigation 5% , mining 3%, international orders 21%. The balance comprises of orders from power, metals, oil & gas and others.
Order intake in FY09 is Rs 6600 crore and during the fiscal (FY09) the cancellation of orders amounts Rs 1226 crore. Thus the net accretion to order book is around Rs 5400 crore.
The company expects a sales turnover of Rs 4800 crore on standalone basis for FY2010. On consolidated basis the company expects a turnover of Rs 5500 crore. EBITDA margin for FY10 could be around 9.5% compared to 9% last fiscal.
In the last four months there is slowdown in awarding orders due to elections. But the company expects an order intake of Rs 6500 crore in FY10.
NCC has clocked 12% drop in standalone revenue (to Rs 1098.05 crore) for the quarter ended March 2009. With operating margins contract by 110 basis points the degrowth in profitability at operating level were accentuated to 23% to Rs 83.77 crore. With lower other income and higher interest cost adding woes further resulting in 37% drop in profitability at PBT level. As lower tax incidence gave some comfort, the company has finally concluded the quarter with 27% drop in net profit to Rs 38.21 crore.
Standalone sales for the fiscal were up by 20% to Rs 4151.41 crore. With OPM contract by 140 bps to 9% the operating profit was limited to Rs 373.67 crore, up by just 4%. With lower other income and higher interest cost the PBT was lower by 7% to Rs 228.17 crore. With taxation lower by 11% to Rs 74.31 crore the company closed the fiscal with a net profit of Rs 153.86 crore, with fall in profitability limited to 5%.
Fall in revenue and reason for failing to achieve the stated sales guidance for FY09 (of about Rs 4500 crore on standalone and Rs 5000 crore on consolidated basis) is due to combination of factors: cancellation of one oil & gas order bagged in consortium resulting in reversal of revenue to the tune of Rs 120 crore, delay in payment from clients in some of the electrical orders (amounting Rs 50 crore) and revenue/business loss on account of cancellation of orders (amounting Rs 100 crore in relation to Rajivgandhi University of Health Sciences & Rs 50 crore on account of Maytas imbroglio) and slowdown in real estate sector amounting Rs 22-25 crore.
On profitability side, at EBITDA level the margins were hit as the company has incurred loss to the extent of 25-30 crore on account in some of the road projects. Fall in margin on account of road projects at EBITDA level is about 1-1.5%. At net level the company is not claiming 80 IA benefits and this hit the margin on yoy basis.
In FY09 the international subsidiaries clocked sales of Rs 550 crore and in current fiscal (FY10) the company expects a turnover of Rs 700 crore from its international subsidiaries. The EBITDA expected is around 10-12% with PAT at 6%.
Expects vertical such as Building, Water and Environment along with international projects are going to be the growth drivers for next 2 years for the company. The company even though has stepped into metals and mining sector projects, it will take at least 2 years to have a firm hold on these segment to really become a significant growth drivers. On the other hand the company is conservative on road projects. The power sector also looks bullish for the company.
Planned capex in FY10 in capability buildup is Rs 100 to 110 crore. The company has also has an equity infusion commitment of Rs 140 crore in its subsidiaries or SPVs in current fiscal.
Secured and unsecured loans is about Rs 1244 crore as end of March 31, 2009. Cash on hand is Rs 134 crore. The gross block is Rs 487 crore and investment in B/Sheet is Rs 740 crore as end of March 31, 2009.
Dubai order out of international orders is Rs 800 crore. These projects are on schedule. NCC Urban has a realty project NCC Urbane at the cost of 200 crore in Dubai and it was hit by slowdown. Tower one is already sold. Gone for design modification so as to tower 2 can be build latter.
The international orders includes the realty project contract amounting Rs 900 crore issued to the international subsidiary by NCC Urban and that sector going downturn the company is not expecting much of revenue from that.
Sales turnover of NCC Urban, the real estate subsidiary of the company was Rs 140 crore in FY09 and the PBT is Rs 9.92 crore.
In FY10, NCC Urban is expected to clock a turnover of Rs 150 crore. The debt on the books of NCC Urban is Rs 193 crore including the Rs 102 crore debts for the Ranchi project. The equity base of the company is RS 150 crore.
The company is looking at an EBITDA margin of 10-12% for its recent projects.
On the reversal of turnover of Rs 120 crore on account of O&G project bagged in consortium with Naptho Gas of Ukraine, the company has retained a profit of Rs 7 crore that being assured profit as per the JV agreement.
Irrigation projects – The Company has not bagged any irrigation orders in last one year. Though the incumbent government was voted back in AP the state is expected to focus more on the entire irrigation project already tendered out and awarded rather than taking up new projects. However the company expects significant irrigation order to flow in from states such as MP, Orissa, Gujarat and the irrigation orders from these states are actually picking up.
Ranch project Phase I is completed. The games will happen in current fiscal. Out of total 990 dwelling units the company has already sold about 200 odd dwelling units and the demand is picking up.
Interest cost is at 11.5%. The short-term loan rates have come down and the company has recently raised a short term loan with an interest rate of bout 9.5%.
Hindustan Unilever Volume is down by 4% for March quarter
Overall FMCG performance in general:
As per AC Neilson report, FMCG sector overall has performed very well for the March quarter in terms of pricing and volume both.
Rural and urban both continue to drive the growth.
There was good volume growth in laundry business and personal wash has seen a double digit growth.
FMCG sector has seen some down trading in some of the categories.
Closure and consolidation of the organized retail had its impact on the FMCG sector.
In March quarter, the company has taken appropriate pricing action to protect consumer and face up the competition.
For 12 months periods ending March, FMCG business grew by 18%, HPC business by 18.5% and Food business by 7%. Net sales were up by 15.5%. Advertisement and promotion cost increased by 11%. OPM increased by 40 bps to 14.5%.
The personal product portfolio especially oral care and food business has been affected due to pressure on modern trade business.
The company is concentrating on strengthening its rural distribution business. 50% of the sales come from rural region.
In urban distribution model, the company has gone for zero inventory models with distributors, which has been successful in Mumbai and some of other cities and will launch in some of the other big cities.
Low commodity price and cut in excise duty has helped to go for cut in product prices.
The company has gone for an average price correction of 10% to 12%. Average price correction in soap and detergent from Dec’08 to March’09 is around 5%. Price correction has taken place in mass category, which is price sensitive, where the company has put on grammage on premium products. In right sizing, it has increased Wheel size from 275 gms to 325 gms.
Lifebouy in 90gm and 20gm seen price reduction of Re. 1. In SKU of Lifebouy of Rs 6, there was cut of Re. 1 to Rs 5. The company has re-launched and change the communication strategy of Lifebouy.
Breeze has been made more competitive and is now comparable in pricing term with regional and local players. The company has now also focused more on the communication of the Breeze brands to consumers.
In Lux, the company has gone for increase in grammage, from 100 gms to 125 gms and from 60 gms to 75 gms. The company is running multi pack schemes in Lux and Hamam in Delhi, Punjab and Haryana.
The company has become more aggressive on brands like Rexona and Liril.
The company has re-launched Lux, Vaseline and Ice Cream variants.
To make up poor performance of Pepsodent, the company has reduced price of SKUs of Rs 13 to Rs 10 and Rs 6 to Rs 5. This has received a good response from consumers.
For the quarter, A&P investment has grown by 3% with media spends up by 27%, offset by lower promotions.
As per AC Neilson report, the company is losing market share. Skin cleansing category has seen a loss in market share between Jan-Mar’09 period. The loss is more in mass segment where price is key point.
The capital employed has increased due to inflation. Capital employed in soap and detergent has increased in March quarter due to large receivables and lower oil creditors.
During low cost period, laundry business is more affected as inis mass segments large numbers of palyers are there. Along with it, tea businesses where loose tea and commodity players are there, got affected.
Future outlook
The management said “Trade off between the competitive growth and profitability growth, the company will go for competitive growth”.
The management has now 30 days and 50 days planning panel, which will take decision on the changing scenario and based on it will take appropriate action on the products. As such, it expects the June quarter and future quarters will see the transaction effects, which the company has under taken.
The launches & re-launches and right sizing will take place in coming months.
Mass category will be taken care. Access to distribution in rural and urban will be taken care. All this effect will be seen in H2FY10.
The company has large capital expenditure for FY09. But after 2010, capital expenditure will be around Rs 300 to Rs 400 crore.
A&P cost will not come down but might increase marginally in FY10.
JSW Steel Targets volume sales growth of 78%
Highlights
- The company posted standalone net revenue of Rs 3328.80 crore during the quarter ended March 2009, which was 7% lower compared to the corresponding quarter of the previous year. The standalone net profit during the quarter under review was Rs 49.20 crore as compared to a net profit of Rs 370.18 crore during the corresponding quarter of the previous year.
- The standalone net sales for the full year ended March 2009 increased by 23% to Rs 14,001 crore as compared to the previous fiscal. The standalone bottom-line for the full year stood at Rs 458.50 crore as compared to Rs 1728.19 crore during the previous fiscal.
- The standalone debt gearing was 1.24 during the year ended March 2009 as against 0.93 during the end of the previous fiscal. The standalone gross debt in the book is around Rs 10,047 crore and the average cost of debt during the year increased to 8.22% as compared to 7.34% during the previous fiscal.
- The consolidated turnover during the year ended March 2009 increased by 28% to Rs 16104.71 crore. The consolidated net profit fell to Rs 274.91 crore during the year ended March 2009 as compared to Rs 1640.04 crore during the previous fiscal. The poor performance of the consolidated entity was due to write down of inventory and demand contraction in USA and UK.
- The USA operation of the company is performing poorly whereas the company has deferred any further investment in Chile due to poor business environment.
- The consolidated debt in the book is around Rs 14,631 crore and the debt gearing was 1.79. The average cost of the consolidated debt is 7.17%.
- The company plans to lower the standalone debt gearing to 1.1 from the current level of 1.24, whereas it plans to reduce the consolidated debt gearing to 1.5 by the end of the current fiscal.
- The expansion project of increasing capacity to 7.8 million metric tonnes per annum at Vijayanagar works has commenced commercial production on April 10, 2009. The current expanded crude steel capacity is around 7.8 million metric tonnes.
- Production of Crude Steel during the quarter ended March 2009 stood at 9.66 lakh tonnes as compared to 9.93 lakh tonnes during the corresponding quarter last year indicating a negative growth of 3%. However the sale of saleable steel during the quarter increased 5% to 1.062 million metric tonnes.
- Production of Crude Steel during the full year ended March 2009 increased 3% to 3.724 million metric tonnes whereas the sale of saleable steel during the year increased 1% to 3.428 million metric tonnes.
- The sale of Rolled: Long during the quarter ended March 2009 increased by 19% to 96000 metric tonnes whereas during the full year ended March 2009 it increased by only 1% to 293000 metric tonnes.
- Sales of Semis during the quarter ended March 2009 stood at 110000 metric tonnes as compared to 123000 metric tonnes during the corresponding quarter last year.
- During the end of the quarter-ended December 2008 the company had high cost steel inventory due to rise in cost of coal, which were completely moved during the previous quarter.
- The company is consciously making efforts to bring down the international sales and thus concentrating on domestic sales in order to increase its volume. Earlier the export/domestic sales ratio was 40:60. Now it plans to lower this ratio to 13:87 in favor of domestic sales.
- Also the company plans to focus in the rural and semi urban areas in order to increase sales through JSW Shoppe and Dealer networks. The company has more than 50 JSW Shoppe currently and it plans to increase it to around 600 outlets.
- The company plans to reduce operating costs by as much as 40% through increased use of captive coke, lower fuel consumption & fluxes usage in iron making units, improvement in LD gas recovery in steel making.
- The first phase of 5 million metric tonnes new hot strip mill will be completed by March 2010. The company would also install 30 MW power plant and railway siding in Wasind & Tarapur by this period.
- The expansion of total crude steel capacity to 10 million metric tonnes would be completed by March 2011. There would also be 300 MW of captive power plant installed by this period.
- The company plans to increase production by 72% to 6.40 million metric tonnes during the current fiscal. The total sale of saleable steel for the current fiscal is targeted at 6.10 million metric tonnes, thus growing by 78% as compared to the previous fiscal.
- The total capital expenditure for the current fiscal is expected to be Rs 2,900 crore, out of which Rs 900 crore would be financed through debt and the balance Rs 2000 crore is through internal cash accruals.
- The capex for the fiscal 2011 is expected to increase to Rs 7000 crore out of which the company has already tied-up debt worth Rs 4800 crore and the remaining Rs 2200 crore would be funded through internal accruals.
- The steel demand in the country is expected to grow by 6% going forward. However the price is not expected to move up as many of the global steel manufacturers are operating at 40-50% of there installed capacity. So as the demand increases additional supply would check the price increase.
- The domestic steel manufacturers face a huge threat of cheap steel being dumped into the country by the global players. In order to protect the domestic manufacturers the government is planning to impose 25% safeguard duty on imported steel, the discussion paper for which is already presented. The meeting on the decision is scheduled on 11th May 2009.
Elder Pharmaceuticals Expects to launch 14 products in domestic market
Key Highlights
- The net sales for the quarter posted muted growth of 1% to Rs 157.59 crore and net profit declined by 51% to Rs 10.07 crore. The break up of the revenues as per segment as follows:- Women’s Healthcare- Rs 38.98 crore (up by 2%), Pain Management- Rs 18.60 crore (up by 1%), Neutraceuticals – Rs 9.36 crore (down by 18%), Anti-infective- Rs 10.73 crore (down by 2%) and Cardiac – Rs 5.83 crore (up by 15%).
- For the year ended March’09, the net sales increased by 11% to Rs 608.80 crore and net profit declined by 19% to Rs 55.69 crore. The revenue break up as follows- Women’s Healthcare- Rs 147.43 crore (up by 20%), Pain Management- Rs 73.15 crore (up by 2%), Neutraceuticals – Rs 47.43 crore (up by 3%), Anti-infective- Rs 48.51 crore (up by 14%) and Cardiac – Rs 22.74 crore (up by 21%).
- The debt on the books as on 31st March’09 is Rs 380 crore with average interest cost of around 13-14%.
- During the year, company has entered into a strategic alliance with Germany’s Chemische Fabrik Dr Weigert GmbH, Germany for infection control related to operating theatres, diagnostics, patient hygiene, patient handling and wound care.
- Shelcal CT is a combination of 1250 mg of Calcium Carbonate derived from Oyster shell and Calcitrol. The product was launched in April 2008 and has generated Rs 10 crore. The growth in Women’s Healthcare business was due to launch of the product.
- Revenues from domestic market increased by 8% to Rs 166.37 crore and international revenues declined by 51% to Rs 3.55 crore in the quarter under
- Women’s Healthcare continues to remain the lead value creator with winning brands Shelcal and Carnitor.
- During the year, R & D centre in Nerul has earned recognition from the Department of Scientific & Industrial Research, Ministry of Science & Technology.
- Shelcal group drugs of Calcium Supplement segment sales grew by 25% to Rs 98.20 crore for the year. The market share of the drug is 33%.
- Chymoral sales in the Pain Management stood at Rs 30.60 crore, an increase of 4% on yoy basis. The market share of the drug 86.1%.
- Other own formulation with more than Rs 10 crore sales are Carnitor, Formic and Eldervit.
- In-licensed products sales with more than Rs 10 crore are Carnitor, Somazine and Tiger Products.
- The Langa Road facility is expected to commission by end of September 2009.
- The Patalganga plant in Maharashtra has been upgraded in order to WHO guidelines.
- Company is expanding its production capacity at Selaqui unit which is currently running at 75% load following which, the plant will be in a position to address growing product demand for solid dosage in developing markets.
- The company’s Bulgarian operation’s were completed and expects revenues flow from this geography by Q1FY10.
- To concentrate on rural market, the company has formed new marketing team Elvista during the quarter. Around 240 sales force were added during the quarter under review. Current sales force stood at 2300.
- Effective tax rate for FY’10 would around 13%.
- Expects to launch 14 products in domestic market during FY’10 and earn Rs 15-20 crore on those new launches.
- Capex for FY’10 is Rs 40 crore.
Jubilant Organosys Expects revenues to grow 15% for FY’10
Highlights
- For the year ended March’09, the net sales increased by 41% to Rs 3517.98 crore and net profit declined by 5% to Rs 283.18 crore.
- Pharma and Life Science Products & Services segment revenues went up by 30% to Rs 601.01 crore for the quarter and 52% to Rs 2323.70 crore for year.
- Industrial and performance products business grew by 5% to Rs 240.87 crore for quarter and 24% to Rs 1197.51 crore for year.
- The company has exercised the option of AS 11 as per the notification issued by Ministry of Corporate Affairs on March 31, 2009. Accordingly, the unrealized foreign currency gain of Rs 103 crore in FY’2008 and the unrealized loss of Rs 491.70 crore in FY’2009 on restatement of foreign currency borrowing including FCCBs were taken to the Balance Sheet.
- Total international revenues grew by 31% to Rs 580 crore quarter and 56% to Rs 2177 crore for FY’09.
- EO item of Rs 36.90 crore for Q4 FY’09 comprises of gain of Rs 59.10 crore on buyback of FCCBs of USD 60.90 million, Un realized loss of Rs 101.30 crore due to mark to market of forward covers taken on future exports and Profit of Rs 5.3 crore on sale of Fixed assets.
- During the year company has also written off intangible assets of worth Rs 11 crore.
- Total debt on books as on 31st March’09 is Rs 3878 crore. Of which FCCB debt is Rs 975 crore and normal debt is Rs 2903 crore.
- Cash & Cash equivalents on books as on 31st March’2009 is around Rs 620 crore (Deposits with banks Rs 382 crore and investment in mutual funds of Rs 238 crore)
- Debt to Equity as on 31st March’09 is 2.6
- Average interest rate of the debt is less than 5%.
- Company has increased debt Rs 1770 crore in the year under review due to acquisition of Draxis.
- Draxis revenues for the year (only 10months) stood at Rs 315 crore and net profit clocked at Rs 68 crore. Expects to grow by 20% in FY’10
- Interest expenses for FY’10 would be around Rs 160 crore.
- Holiester topline grew by 31% to Rs 378 crore for FY’09 and EBIDTA margins are at 27%.
- Jubilant need to repay Rs 330 crore in FY’10.
- Company has incurred Capex of Rs 544 crore in FY’09 and expects to incur Rs 250 crore for FY’10.
- Company has filed 10 DMFs in FY’09 and expects to file 8-10 DMFs in FY’10.
- Company filed 7 ANDAs and 8 dossiers during the FY’09.
- Expect to file 8-10 ANDA/Dossiers FY’10
- Company received to final approval for Sestamibi (generic version of Cardiolite) from Canada and expects to get approval from US FDA in a weak time.
- CRAMS business grew by 25% to Rs 501crore for the quarter and 50% to 1963 crore for year.
- Order book backlog position in CRAMS and DDDS as of March 31st 2009 is USD 750 million.
- In Exclusive synthesis, 22 molecules are in different stages of development: Pre-clinical-2, Phase I-6, Phase-II – 7, Phase III-7 products and launched 2.
- In CMO segment 11 molecules are in different stages of development: Phase I-4, Phase-II – 3 and Phase III-4 and launched 15.
- Tax rate for FY’10 would be around 16% on consolidated basis and 18% on standalone basis.
- Company has hedged USD 250 million net exposures at Rs 47.80 per dollar.
- Expects PLSPS to grow by 17% and IPP to up by 11% for FY’10
- Expects revenues to grow by 15% for FY’10.
Tech Mahindra + Satyam – Uncertainity for one more Quarter
Highlights of the call
- Satyam Computer has seen 30-35% client erosion. Both the Companies: Satyam Computer and Tech Mahindra would be working separately and merger would happen only after 2 years. There would be changes in the Satyam management soon. The funding of Satyam Computer has been done thru debt and cash. The Company has raised debt of Rs 2000 crore with average interest cost of 11%. The debt has been raised in Tech Mahindra and SPV. The debt is a combination of long-term debt and bridge loan.
- The management believes that the environment is challenging. The performance of the Company was impacted by GBP depreciation against US dollar with about 50-55% of the revenues comes from GBP. The Company is seeing some positive signs of recovery but the real picture will be seen only after 6 months.
- The management is cautious but the deal flow is good. The large deals are up but number of deals is down.
- The volume dip for the quarter was 2% and pricing dip was 2.5%.
- OPM was down 110bps at 27% on the back of lower volumes, lower realizations and higher SG&A expenses. OPM was benefited by Rs 25 crore on the back of re-alignment of employee benefits. Excluding the benefit OPM would have been at 24.7%.
- The billing in GBP for the quarter was US$ 58 million down from GBP 60 million in the sequential quarter. The Barcelona deal (BTGS) had billing of US$ 19 million (US$ 27 million) against GBP 22 million (US$ 34.9 million). For FY09, Barcelona has contributed GBP 87 million. The management believes that the bottom for traditional BT business has not been reached. It expects uncertainty to continue for one more quarter. For the Barcelona deal, the management expects run-rate of US$ 18-20 million to continue for a while. Revenues from the GBP 350 million deal would begin from Q1FY10.
- There has been huge transformation going on at BTGS leading to projects suspension leading to slowdown in operations.
- The Company has increased the variable portion of pay as a cost control measure.
- The Company is working with 2 large clients in Germany and 1 large client in Netherlands. This is furthering the Company’s focus into Continental Europe.
- The company is working with a large North American customer which forma a significant part of North American business. The last 2 quarters have been flat for this customer.
- Utilization is one of the key drivers for margin expansion. For the quarter, utilization including trainees has improved 300bps at 70%.
- Other Income for the quarter stood at Rs 7.80 crore against loss of Rs 39.70 crore in the sequential quarter. Forex loss was US$ 1 million against US$ 9 million in the sequential quarter, provision write back of Rs 6 crore, refund of service tax of Rs 2 crore and interest/dividend income of Rs 5 crore.
- At the end of March 2009, Tech Mahindra has forward hedges of close to US$ 700 million at Rs 43.63/US$ and GBP 270 million at US$ 1.88/GBP against US$ 720 million and GBP 265 million at the end of sequential quarter.
- The salary costs was down 7% at Rs 449.6 crore on the back of hike of variable pay percentage, dip in headcount, lower number of contract workers and realignment of employee benefits.
- Cash & Cash equivalents stood at Rs 1000 crore.
- The Company has stopped campus hiring. It has made campus offers for 1500 for FY10, the joining of whom has been deferred. There would be offers pending for FY09 as well.
- The number of active clients at the end of the quarter decreased to 108 against 110 at the end of sequential quarter. Out of total clients, 2 clients have contributed more than $ 50 million with 4 clients (4 in sequential quarter) contributing more than US$ 25 million. The contribution of the top client BT has decreased 15.3% contributing 52% (57% in sequential quarter) for the quarter. The top 5 clients contribution decreased 8.3% with contribution down at 78% from 79% and top 10 clients decreased 10% at 83% from 87% in the sequential quarter.
- The Net reduction of manpower during the quarter was at 457 (294 additions in sequential quarter) employees totaling to 24972 employees as on March 31, 2009. There was reduction in headcount in software of 719 and addition of 242 employees in BPO and 20 added in support staff. The onsite-offshore mix as far as revenue generation is concerned was at 39:61 against 40:60 in the sequential quarter. Utilization including trainees improved 300bps at 70%.
- The contribution of BT to revenues was down at 52% against 57% in the sequential quarter, in absolute terms it was down 15.3%. Top 2-5 clients contribution was up at 26% from 22% in sequential quarter and in absolute terms it increased 9.7% and that of top 6-10 clients was down at 6% from 8%.
Sterlite Industries least cost producer of Aluminium
Highlights of the concall
- For Q4 FY09, the consolidated revenue of the company dipped 36% Y-o-Y to Rs 4356.98 crore with OPM declining to 18.1% from 32.8% in Q4 FY08. The net attributable profit at the end stood at 598.25 crore, 55% lower on Y-o-Y.
Copper Business
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- The decrease in revenues from copper business was primarily on account of steep fall in LME prices of copper and fall in by-product realisation. The profitability in copper segment was also adversely impacted by steep fall in by-products realization and lower Tc/Rc.
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- The Gross Cost of Production for copper has reduced considerably from 16.94 c/lb in Q3 to 12.79 c/lb in Q4 FY09, mainly due to reduction in global commodity and crude prices.
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- After a good first half, the acid business saw a sharp decline in prices, mainly on account of cheaper fertilizer imports and low sulphur costs. The market showed signs of recovery at the end of the year.
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- Though fall in LME prices resulted in closure and cutbacks of several mines, global concentrate Tc/Rcs have been settled around 75/7.5 ($ 75 a tonne and 7.5 cents a pound) from this calendar year onwards. Spot market remains tight due to increased Chinese off take.
Aluminium Business
- The company has shut down a part of the BALCO Plant I smelter in Q4 2009 due to higher operational costs and sold surplus power in commercial market, to maximize returns.
- The decrease in revenue and profitability in aluminium division was primarily on account of reduction in LME. During Q4, LME prices of aluminium fell by about 50% to US$ 1360/tonne against US$ 2729/tonne in Q4 FY08.
- The cost control measures undertaken by the Company along with the drop in input prices started yielding positive impact on the unit cost of production (CoP) at BALCO, which reduced to US$ 1385 per tonne in Q4 FY09 compared with US$ 1642 per tonne in Q3 FY09. Unit CoP in March 2009 was US$ 1177 per tonne. Going forward, the management expects the trend of reduction in costs to continue.
- The first phase of the 500,000 tpa Jharsuguda I aluminium smelter is progressing well. Till date 257 pots have been brought in line, supported by 5 units of captive power plant. The remaining 76 pots in the first phase are ready for commissioning, awaiting power stabilisation. With this, the first 250,000 tpa phase is expected to be fully operational by Q1 FY10, six months ahead of the original schedule.
- The first stream of the alumina refinery at Lanjigarh is fully operational and produced 171,000 tonne in Q4 FY09, close to its rated capacity. The second stream of the alumina refinery has also recently commenced operations. The company expects to start progressive feeding of the Lanjigarh alumina refinery with its own Niyamgiri bauxite by mid FY10.
Zinc Business
- During Q4 FY09, HZL produced 175,438 tonne of mined metal and 150,544 tonne of saleable metal, an increase of 27% and 11% Y-o-Y respectively. The increase in mined metal production was primarily on account of the successful commissioning and ramp-up of the stream III concentrator at the Rampura Agucha mine while that in refined metal production was primarily on account of the additional production from the ramped-up 88,000 tonne de-bottlenecked capacity.
- During Q4, refined lead production was lower at 15,691 tonne compared with Q4 FY08, primarily on account of an unplanned shutdown of the Ausmelt smelter in January 2009.
- During Q4 FY09 and FY09 HZL achieved a record saleable silver production of 35,176 kilograms and 105,055 kilograms, an increase of 48% and 31% respectively Y-o-Y.
- During Q4 FY09, cost of production, before royalty, was lower at US$ 621/tonne compared with the US$ 698/tonne in Q3 FY09.
Biocon – Capex for FY’10 would be around Rs 100 crore
Biocon came out with the financial results for the quarter ended March’09 and held a tele conference call on 28th April’09 to discuss the performance as well as future course of actions. The following are the key takeaways from the meet are as follows.
- The consolidated net sales for the quarter ended March’09 posted a growth of 75% to Rs 466.26 crore. Excluding the revenues from the Axicrop, the net sales for the quarter increased only by 10% to Rs 292.10 crore. Net profit with including Axicrop declined by 62% to Rs 24.88 crore and without Axicrop declined by 69% to Rs 20.30 crore.
- For the year ending March’09, the net sales on consolidated basis registered growth of 53% to Rs 1616.51 crore and net profit decline by 80% to Rs 93.12 crore. Excluding the sales from Axicrop and sales from sold Enzumes business, the net sales grew by 13% to Rs 1139.30 crore and profits declined by 81% to Rs 86.60 crore
- Axicrop contributed 37% to total sales for the quarter and 29% to year.
- Axicrop wins German AOK tender for Metformin with order worth of Rs 100 crore for next two year which would be expected to start supply by June’09.
- Profit of the company hit by Mark to Market losses of Rs 147.19 crore for the year and Rs 41.43 for the quarter.
- Minority interest loss of Rs 8.57 crore is due to loss in one of its subsidiary.
- R & D expenditure for the year increased by 27% to Rs 60 crore.
- Average realization per dollar is at Rs 45.
- Total India’s insulin Market size is Rs 450 crore per year. Of which plan insulin would be around Rs 300 crore and Analog is around Rs 150 crore.
- Oral Insulin IN105 enters into Phase III clinical trials.
- Sales revenue from Research Services grew by 28% to Rs 225 crore in FY’09.
- Syngene and Clinigene’s EBIDTA grew by 21% to Rs 70 crore but MTM hit the performance and posted losses of Rs 18 crore for the year.
- Syngene and Bristol Myers Squibb Company opened a fully dedicated research and development facility for Bristol Myers Squibb in Biocon Park, Bangalore.
- Tax rate for FY’10 would be around 10%.
- Indian branded formulation business (Retail business) for the year grew by 40% to Rs 100 crore.
- Licensing income for the quarter was stood at Rs 6.4 crore and for the year Rs 12.30 crore.
- Company received final approval for Glargine from DCGI to market in India.
- Balance sheet position as 31st March’09: Cash and bank balance – Rs 11.9 crore, Sundry debtors- Rs 367.10 crore, Inventories- Rs 319.20 crore and loans and advances- Rs 101.50 crore.
- Capex for FY’10 would be around Rs 100 crore.
- US President Obama requested US FDA to approve safe biogeneric and UH MHRA already gave product guide line for each bio-generic product. For capitalizing this opportunity, the company has expanded its research base. Expected to incur R & D expenditure of Rs 80-100 crore for FY’10.
- Company has hedged 25% future revenues with zero cost call option where downside is protected at around Rs 46 to a dollar or the upside is capped at around Rs 55 per dollar. It also hedged 75% of its revenues with put option with banks by paying some premium (which is undisclosed) where downside is protected at around Rs 50 and upside is not capped
- Expects to maintain same growth in revenues for FY’10.
Triveni Engineering sugar inventory of 3,42,000 tonne
Highlights of the concall
- The net sales for the quarter increased 25% Y-o-Y to Rs 457.58 crore. The OPM for the quarter improved 60 bps to 23.3% on the back of significantly higher sugar prices on Y-o-Y while PAT at the end stood 10% higher at Rs 37.77 crore.
- Sugar operation achieved turnaround during the quarter with 60% growth in sugar revenue to Rs 320.08 crore and registering a strong PBIT of Rs 50.37 crore (Rs 1.13 crore in Q2 FY08).
- Engineering businesses registered a dip of 9% in revenue on account of the overall market conditions. There have been some deferments of deliveries to the customers due to their financial condition and availability of funds to make the final payment. However the turnover during Q2 FY09 is higher by 40% when compared with Q1 FY09 indicating improved sentiments.
- During the current sugar season the company has produced 335,300 tonne of sugar, 42% lower Y-o-Y with average recovery of 8.98% (9.89% in FY08).
- The sugar dispatches during the quarter were at 124,200 tonne with average realization of Rs 19600 per tonne.
- The company has sugar inventory of 342,000 tonne of sugar at the end of March 2009. The company will get benefited from firm sugar prices on this inventory.
- The average cost of production for sugar during the season stood at Rs 2000 per quintal. The average landed cane cost was at Rs 154 per quintal.
- The company exported 725.64 lakh units of power during the quarter at average realization of Rs 3.37 per unit. The company is not expected to sell any significant amount of power in coming two quarters.
- During the quarter the company produced 100.50 lakh liters of alcohol and sold 73.76 lakh liters of alcohol at average realization of Rs 25.66 per liter. The company has 70 lakh liter alcohol inventory at the end of March 2009 and expects to produce about 150 lakh liters of alcohol in next 2 quarters of this sugar year. The management expects the alcohol realization to improve in coming quarters.
- The company has total order book of Rs 768.10 crore as on 31st March 2009 in its engineering division. Out of which Rs 517 crore stood at steam turbine business for 715 MW, Rs 63.1 crore from speed gears and gearboxes business and Rs 188 crore from water and waste-water treatment business.
- The management expects that the India will import about 2.5 million tonne of sugar (including raw and white sugar) and would export 3.5-4 million tonne of raw sugar in next sugar season. The management expects that the duty free raw sugar import scheme will be extended to the next year as well.
- The management expects that the sugar prices, which have softened recently, may rise again post election but up to the maximum of highest price touched recently.
- The management further expects that the sugar prices may depress in Q4 FY09 and Q1 FY10 when the sugar selling pressure will come from Brazil.
- The company has contracted to import 40,000 tonne of raw sugar from Brazil. The arrival of the sugar may take couple of months. The company has contracted the sugar at favourable price and the total cost (landed cost + processing cost) would be quite lower than the current sugar realization. The company will process this sugar in next sugar season only.
- The company has Rs 1390 crore debt as on 31st March 2009 at average cost of debt being 9.4% consisting of Rs 575 crore working capital loan (debt cost @ 10%) and Rs 815 crore term loan (debt cost @ 9%).