Balrampur Chini Mills Expects a structural change in sugar prices

Highlights of the concall

• During Q2 FY09 the net sales of the company grew 15% Y-o-Y to Rs 357.11 crore mainly on the back of higher sugar prices. The OPM for the quarter slipped from 43.2% to 36.7% on Y-o-Y, though was notable considering the past down cycle and performance of industry pees and PAT ended 1% higher at Rs 66.19 crore.

• The segmental revenue from sugar business surged up 19% at Rs 293.85 crore while that from distillery and cogeneration business dipped 8% and 19% to Rs 41.34 crore and Rs 75.84 crore respectively.

• Sugar production during the quarter was at 27.28 lakh quintals (56.87 lakh quintals in Q2 FY08 with average recovery of 9.35% (10.41% in Q2 FY08). The average sugar realization for the quarter was at Rs 20.3 per kg as compared to Rs 14.52 per quintal in Q2 FY08.

• The company has produced 44 lakh quintals (bags) of sugar during the season. The company had 31 lakh quintals of sugar at the beginning of the season with average cost @ 1405 per quintal which has almost been sold till end Mar’09.

• As on 1^st April 2009, the company has sugar inventory of 43 lakh quintals, the average cost of production for which would be Rs 2050 per quintal (including costs for whole year) pre-interest and pre-corporate overhead.

• The landed cost of cane to the company for the season stood at Rs 151 per quintal.

• The current RS and ENA prices are about Rs 30-31 per liter and the management expects it to surge up to Rs 35 per liter going forward due to demand supply mismatch. Current molasses prices are about Rs 5500 per tonne

• The company is expected to produce 5.68 crore liters of alcohol and ethanol in sugar year 2008-09 (so far has produced 3.20 crore liters of alcohol and ethanol in H1 FY09). The company has committed 21% of its capacity to supply to Oil Manufacturing Companies.

• The Uttar Pradesh government has bought power at Rs 4 for a special window for three months (i.e. March, April & May’09). The company expects its co-gen operations to conclude by May 2009 and will get benefit from higher prices from UP govt. The company expects to produce and export about 9-10 crore power units till May’09.

• The management expects the effective income tax rate to be about 20% for FY09 and going forward as well.

• The company has long term loans of Rs 1020 crore and working capital loan of Rs 290 crore. The average interest cost being at 9% and about Rs 105 crore debt repayment would be due for the year ended September 2009. The company expects the interest cost to be about Rs 95 crore for FY09.

• The management expects that the sugar production in next year would be about 18 million tonne. And company would be producing about 6 lakh tonne of sugar in next sugar season.

• Considering most of the countries including India are facing sugar deficit and this deficit is expected to continue atleast next 2 years, the management expects a structural change in sugar pricing and consumer behavior in India as well as in world as sugar contributes not very significantly to the consumer basket. The management expects the sugar prices may surge up quite significantly going forward.

Greaves Cotton Automotive engine sales picked up from Feb 2009

Key takeaways of the conference call

Sales for the quarter was lower by 23% to 262.26 crore and the net profit was lower by 53% to Rs 14.37 crore.

While the core engines business revenue for the quarter was lower by 5% (to Rs 223.78 crore) its PBIT was lower by just 2% (to Rs 30.74 crore) as its segment margin has expanded marginally by 40 bps to 13.7%. On the other hand the revenue of infrastructure equipment business was lower by 73% (to Rs 26.19 crore) and hit by sharp erosion in margin it turned red with its PBIT being a loss of Rs 4.88 crore compared to a profit of Rs 15.05 crore in the corresponding previous period.

The share of engines to total sales was about 85% for the nine month increasing from 71% in last fiscal. The increase in share of engines to total sales is largely on account of sharp fall in sales of infrastructure business which currently accounts for just 12-13% for nine months compared to 26% last fiscal. Of the total engines sales the automotive engines accounts for 66% of it and the agriculture engines accounts 20% and large engines for gensets etc accounts 15%.

The core automotive engines that contribute about 55% of the overall sales of the company currently is experiencing moderate pickup since Feb 2009 after a steep fall in November 2008-Jan 2009.

Sales volume of engines though dipped for nine month ended Mar 2009 the cost control/ efficiency methods are yielding fruits sustaining and improving margins in addition to lower material cost.

Engine realization has not improved during the quarter but the improved efficiency that is what has helped the company with marginally better margin.

There is definitely improvement in liquidity and the stimulus package has reduced the cost of the three wheelers. Moreover the price of fuel has come down bettering the cost of operation. The agriculture demand is least affected and this segment is showing healthy growth. All this augurs well for engine segment. However the steep fall in sales of infra equipment along with its high fixed costs has affected the profits of this business as well as overall performance of the company.

Interest is net of interest income on tax refund amounting Rs 4 crore. Total tax refund including interest on it amounts Rs 9 crore.

Both compactors and concrete machines were hit heavily on account of lower construction activity especially the slower road development for the former and slowdown in real estate for latter. The slow decision making as far as road infrastructure is hitting the compactor demand.

Introduced new series of engine (40-200 watts power) recently which is suitable for application in industrial, construction equipment etc.

Plant is fully flexible. More engines for single cylinder utilizing that capacity is not an issue. Secondly there is no debt related to that.

Capex incurred so far is around Rs 20 crore.

Reliance Infrastructure EPC order book position of Rs 20,625 crore

Reliance Infrastructure held a conference call to discuss quarterly and yearly results and future growth plans. Lalit Jalan, CEO & Whole Time Director addressed the conference call

Highlights of the Call

• As on March 31, 2009, the net worth of the Company stood at Rs 11,907 crore (US$ 2.4 billion). Book value per share increased to Rs 517 as on March 31, 09 from Rs 496 per share as on March 31, 2008.

• As on March 31, 2009, the net worth of the Company on consolidated basis stood at Rs 16,897 crore (US$ 3.3 billion). Book value per share on consolidated basis has increased to Rs 734 as on March 31, 09 from Rs 683 per share as on March 31, 2008

• The Company has bought-back 95.6 lakh equity shares for an aggregate amount of Rs 759 crore (US$ 149 million) during the year and all the shares bought-back were extinguished. Company has completed the bought-back programme by cumulatively buying 112.6 lakh equity shares for an aggregate amount of Rs 927 crores (US$ 183 million).

• The Company’s cash and cash equivalents have increased to over Rs 10,000 crore (US$ 1.98 billion) as on March 31, 2009 in spite of aggressive capex (including equity investments in SPVs), buybacks and un-recovered FAC aggregating over Rs 3,000 crore (US$ 631 million). Of the cash and cash equivalents, more than Rs 5,400 crore (US$ 1.06 billion) is in cash and debt mutual funds, without any exposure to equity markets.

• The Company’s total debt including the revaluation on account of changes in Forex is Rs 7,332 crore (US$ 1.45 billion). The Company thus remains debt free at the net level and enjoys the top end ratings of ‘AAA’ and ‘AA’ from CRISIL and FITCH respectively.

• For the FY’10 on a standalone basis the company has chalked out a routine capex plan of Rs 500 crore

• For the FY’10 and FY’11 the company targets a turnover in EPC division of Rs 3600 crore and Rs 6000 crore respectively.

• Post elections, the company plans to bid for distribution circles in Maharashtra, Bihar and Uttar Pradesh on franchisees.

Binani Cement Prices are expected to remain firm till monsoon

Highlights-

• The revenue during the quarter ended March 2009 increased by 46% to Rs 498.08 crore as compared to the same period last year. However the profitability was significantly impacted due to substantial increase in the power & fuel cost despite the coal prices stabilizing considerably.
• The PBT fell by 25% to Rs 54.32 crore whereas the net profit fell by 14% to Rs 20.07 crore.
• Revenue for the full year increased by 51% to Rs 1497.32 crore during the year ended March 2009. The significant increase in power & fuel cost significantly impacted the profitability during the year. The net profit of the company thus fell by 38% to Rs 108.66 crore during the year under review.
• The infrastructure spending by the government of India as well as housing spending in the tier 2 and 3 cities coupled with the pre election spending by the state government has kept the demand buoyant during the last quarter of the previous year. Besides the common wealth games that is to happen this year is expected to maintain the cement demand growth in the northern markets.
• Thus going ahead despite additional capacity coming on stream, the company feels that there is enough demand to absorb the additional capacities at least for the next 1 year.
• The coal prices were lower when the year started, however it increased considerably during the 2^nd & 3^rd quarter of the previous year before falling and stabilizing during the 4^th quarter.
• The company produced 4.17 million metric tonnes of clinker and 4.29 million metric tonnes of cement during the year ended March 2009.
• The cement sales during the year was 4.24 million metric tonnes whereas the company also sold 0.55 million metric tonnes of clinker during the year ended March 2009.
• During the previous quarter ended March 2009, the company produced 1.30 million metric tonnes of cement, whereas the sale of cement during the quarter was 1.32 million metric tonnes and that of clinker was 0.27 million metric tonnes.
• In spite of all the recession, real estate and infrastructure slowdown the company’s performance was rather satisfactory.
• Coal prices were at its peak from July till December 2008 when it was quoting at US$ 120 – US$ 125 per metric tonnes. The current coal price is around US$ 70- US$ 80 per metric tonnes.
• Through the company’s single location of 6.5 million metric tonne in Sirohi in the state of Rajasthan with a 75-megawatt power plant, the company is servicing almost all the Northern markets besides the Rajastan market.
• Historically the cement demand grows at 1.2 times the GDP growth rate of the nation. Thus for the current fiscal the cement demand is expected to grow by 8% as compared to the expected GDP growth of 6% during the fiscal.
• The prices has risen recently and it is expected to be sustainable till monsoon, till end June or first week of July because although the Mumbai monsoon comes by the first week of June, the monsoon in the northern parts, Uttar Pradesh, Haryana comes only in the second week of July.
• The company was able to produce roughly about 4.2 million metric tonne with an installed capacity of 6.5 million. During the current year the company plans to increase the production by an additional 1 million tonnes. Thus the total production of about 6 million metric tonnes is targeted during the current fiscal.
• The company has commissioned the second line of production in its 100% subsidiary in Dubai. Dubai subsidiary is a running unit with a capacity of 1.2 million metric tonnes and is being expanded to 2 million metric tonnes. The Dubai unit is operating profitably. The expanded capacity would be completed by June 2009.
• The company’s China plant with a capacity of 0.5 million metric tonnes is being expanded to 3 million metric tonnes by 2011.
• The company will start its new grinding unit in Mauritius this year with a capacity of one million metric tonnes. The company has got the letter of intent, after all the clearances like environment clearance, power, etc. The 1 million metric tonnes grinding unit with an investment of roughly USD 25 million will be ready by next September.
• The Mauritius unit will source clinker from Dubai and China plants and sell the cement in Dubai, Mauritius and nearby Madagascar and other countries in the Indian Ocean.
• The company has signed an MOU with the Government of Gujarat for facilitation of approvals, allocation of limestone mines etc. for the green-field project in Gujarat having 2.5 million tonnes Clinker/Cement production capacity, for which financial closure has already been done.
• The project is estimated to cost around Rs 700 crore with out the captive power plants and would be completed by end 2011.
• The company declared a dividend @ 21% (Rs 2.10 per Equity Share).
• By the year 2011 the company will have a total capacity of 14 million metric tonnes.
• The company development of 10 million tonnes reserves lignite mine at Nimbari Chandawatan, Rajasthan is moving as per planned. The plant would come up by March 2009 and after that lignite from the mine would be used for captive power plants.
• The gross debt of the company is around Rs 740 crore and the company has enough cash balance around Rs 96 crore.

Ranbaxy Laboratories Expects revenue of Rs 7000 crore

Ranbaxy Laboratories declared the results for the quarter ended March ’09 and held a tele conference call on 24^th April’09 to discuss the financial performance as well as future plans. The key takeaways from the meet are as follows:

• Consolidated net sales for the quarter declined by 4% to Rs 1558.4 crore due to poor monetary conditions, pricing pressures, an import alert on products in the USA, and the devaluation of several currencies in countries where the company has its operations.
• During the quarter, the Company received GMP approvals for Paonta Sahib Facility from MHRA-UK, TGA-Australia and WHO, Switzerland. The Batamandi facility at Paonta Sahib was approved by PMDA-Japan.
• The Company received 4 ANDA approvals from US FDA and 2 from TGA-Australia, during the quarter.
• In the quarter review, Ranbaxy launched first Daiichi Sankyo product Olvance (Olmesartan).
• The Company received a milestone payment from GlaxoSmithKline on successful initiation of Phase-I human clinical trials for a Respiratory Inflammation molecule.

• Ranbaxy received a tender for Rs. 73.90 crore for the supply of Anti Retroviral Drugs to the National AIDS Control Organisation, India. A major part of the order was serviced during the quarter.

• The Company received a letter from USFDA indicating that all pending and approved ANDAs from its Paonta Sahib facility have been added to a list maintained under its “Application Integrity Policy”.
• Capex for FY’09 would be around USD 100 million.
• R & D expenditure will be around USD 100 million for FY’09
• Company received Sumatriptan 100mg tablets from USFDA and launched the product in USA under an exclusivity arrangement of 180 days. Despite of exclusivity product the drug sales are less than the expectation.
• Due to site transferring, company may or may not launch generic block drug Valtrex in the current financial year. The company does not consider the sales of valtrex in its guidance.
• Company hedged an amount of USD 1.4 billion forward receivables in May’08 at around Rs 42-45 per dollar over eight years by entering into options.
• Expects min 3-4 months to get some clarity on US FDA issue.
• Expects remaining three quarters of the current financial year will breakeven.
• Except India and Russia markets, revenues from all other markets declined in the quarter under review.
• Company planning to restructure its European business and changed its strategy to bottomline approach rather than volumes.
• For CY’09, company gave a guidance to achieve a topline of Rs 7000 crore and loss of Rs 800 crore at PAT level. This estimate is based on the assumption that (i) exchange rate of USD: INR at Rs 50.5 and (ii) No further positive or negative impact from US FDA

LIC Housing Finance – Expects 25% growth in disbursements in FY10

LIC Housing Finance (LHF) held its conference call on 24^th April 2009 to discuss its Q4FY09 and FY09 results.

Highlights

• LHF reported 30% growth in Income from operations to Rs 790.48 crore. With higher rise in interest expenses, the gross profit recorded a restricted growth of 21% to Rs 218.59 crore. The Net profit for the quarter stood at Rs 157.56 crore, up by 33%.

• The Outstanding Mortgage Portfolio as on March 31, 2009 was Rs 27679 crore as against Rs 21936 crore on March 31, 2008, thus registering a growth of 26%.

• More than 96% of the total portfolio is floating.

• Sanctions grew by 22% to Rs 3539 crore and disbursements increasing by 21% to Rs 3139 crore for the quarter ended Mar’09. Out of the disbursements Rs 2474 crore is for individuals and Rs 665 core is for project loans.

• For the full year ended Mar’09 the sanctions recorded a growth of 26% at Rs 10898 crore and disbursements recorded growth of 24% to Rs 8762 crore. Out of which Rs 7355 crore are individual loans.

• Almost 58% of the disbursements come from 10 major tier I and II cities.

• 7-8% of the disbursements form part of switching loans from other borrowers.

• The Gross NPA as on 31.3.2009 stood at Rs 297 crore as against Rs 373 crore as on 31.3.2008, a reduction of 20%. The Gross NPA of the Company stood at 1.07% on 31.3.2009 as against 1.70% as on 31.3.2008. Net NPA were 0.21 % as against 0.64 % for the corresponding dates.

• The gross NPA for project loan came down to 0.1% compared to 0.23% last year.

• The provision cover on the NPA stood at 81% as on 31.3.2009.

• The total write offs for the year stood at Rs 5.04 crore compared to Rs 39 crore in FY08 and the same for the quarter ended Q4FY09 stood at Rs 4.95 crore compared to Rs 9.01 crore in Q4FY08.

• Company does not compromise on the quality of customer, hence has low NPA. Company is taking necessary steps to bring down the default rate. Credit rating application and close monitoring mechanism has been started. Company does not give balance sheet loans.

• The Net Interest Margins for the whole year stood at 2.95% compared to 2.80% a year ago.

• The spread for the whole year also improved from 1.57% to 2.05% for FY09.

• Borrowing as on Mar’09 stood at Rs 25405 crore of which 50% is floating and 50% is fixed.

• The cost of funds on an average has increased from 8.85% to 9.15% for FY09 and on incremental basis it stands at 10.04%. However with low rates prevailing now the company is able to get funds at much lower levels at 6.08%, so it expects the cost of funds going down in forthcoming quarters.

• The average yield on advances has increased from 10.42% in FY08 to 11.20% in FY09. The incremental yield stands at 12.01%.

• The yield for builders for full year stands at 14.5%.

• The capital adequacy ratio increased from 13.34% in FY08 to 15.79% as on FY09 (well above regulatory measure of 12%).

• The Board of Directors have recommended dividend of 130 %.

• The Book value per share improved over a period of year from Rs 215 per share in FY08 to Rs 265 per share in FY09.

• LIC housing has introduced special scheme at rate of 8.75% in Feb’09. This scheme being linked to the PLR which will be revised every quarter will not have so much effect on the profitability of the company.

• Slippages in loan down from Rs 373 crore in FY08 to Rs 279 crore in FY09.

• Investments stood at Rs 88.62 crore as on FY09.

• The secured loan stands at Rs 25000 crore as on FY09. Source of funds- Bank term loan (28%), NHB (9%), NCD (53%), others (3%), and LIC term loan (7%).

• 113 marketing office now and the company is planning to open 26 more new offices by FY10.

• LIC Housing Finance expects 25% minimum growth in disbursements and loan portfolio for FY10. Also it expects to maintain its NIM to be at current levels. Expecting similar profit growth during current year.

• The company is confident that the next one or two quarters will be good for them given improved demand owing to soft interest rates and falling property prices.

GlaxoSmithkline Consumer Healthcare – Margin will be around 18%

Highlights of the call

• The company’s sales for the quarter ended March 09 has increased by 31% to Rs 539.37 crore, supported by volume growth in Horlick by 21% and Boost by 8%. There was a overall volume growth of 20%. There was a price growth of around 7% for the quarter. A 3% excise reduction has also impacted on overall volume growth.

• All regions have recorded good growth with all brands registering a double-digit growth.

• The export business has grown by 45% for March quarter and expects to maintain this growth for rest of the year also. Export business is 6% of the total sales and will increase to 7%

• The net profit of the company grew by 48% to Rs 83.89 crore due to improved revenue and margin.

• The operating profit margin (OPM) of the company has increased by 230 basis points to 22% due to decrease in advertising and sales promotion (ASP) cost, other expenditure and raw material cost. However, the company said that it expects its margin to be around 18% for calendar year (CY) 2009 due to increase in ASP cost, as company will launch new products throughout year and increase spending for the new 3 products launched this year. Also, food inflation will also rise, expected to be around 10% to 11% during the year.

• The margin may go below 18%, a fall of 100 basis points, may be registered after CY09, due to new product launches and increase on spend on this products.

• ASP cost decreased during the quarter (12% of the adjusted sales) due to tightening of the spend and preserving money for Q2 and Q3 quarter. The ASP cost will go up to 13% to 14% of total sales by the year-end.

• The company earns margin of around 20% from export business.

• The company earns a margin of around 25% from third party sales and around 20% of manufacturing cost from inter-company sales.

• Other income of the company has inclined by 38% to Rs 25.64 crore, which comprise of auxiliary business Rs 11 crore, dividend Rs 9 crore and miscellaneous sales around Rs 2 crore.

• The company had 15% revenue from rural market.

• The company’s market share remains intact in health food drink (HFD) despite entry of two new players in this market last year, Dabur and Hindustan Unilever.

• Milk powder price for Q1 was Rs 133 kg and expected to remain around Rs 130 – 135 kg for the CY09. Malt and barley prices has seen a 10% to 12% rise during Q1 and may come down during the year. Wheat prices have gone up by 2% during Q1 and do not see much uplift during year. However, prices of wheat will depend upon MSP for the year. There may be rise of 5% on runaway inflation. Sugar prices have moved up by 40% while milk prices has gone up by 15% to 20% in Q1 and expects to rise future. Sugar prices expected to move up future in coming months.

• 50% of the product produced is from excise free zone.

• Excise has come down from 9% to 6.5% for Q1.

• The company has launched new product in April, which is ready to drink products named Horlick Chill Dood, which has market size of around Rs 250 crore.

• Going forward, the company will bring out global products and leverage Horlicks brand for its top line growth.

• The company has cash of around 517 crore at present.

• The company will have its normal capital expenditure of Rs 50 to 60 crore for CY09 along with a Rs 180 crore capacity expansion plans at its existing factories for existing products. This will begin from Q4 CY09 and will be there till half of CY10.

• The company doesn’t expect this kind of growth for the rest of the year. The company maintains its 8% to 9% of the volume growth expectation, which is a sustainable growth if the present situation remains

Piramal Healthcare – Expects a revenue growth of 16-17% for FY’10

Piramal Healthcare posted 9% growth in net sales to Rs 850.91 crore for the quarter ended March 2009. Operating Profit margins crashed by 650 bps to 21.0% on the back of R & D expenses of Rs 20.18 crore as against R & D income of Rs 40.48 crore in the corresponding pervious period. Resulting operating profit declined by 17% to Rs 178.44 crore. Other income stood at Rs 7.21 crore as against Rs 0.03 crore in the corresponding pervious quarter. Finally, net profit has decline by 13% to Rs 114.90 crore.

Other Highlights

• Domestic formulation business posted a growth of 28% to Rs 394.90 crore for the quarter.
• Custom Manufacturing division declined by 2% to Rs 302.13 crore and contributed 35.5% to total sales.
• During the quarter, company completed the acquisition of Minrad international and RxElite. After Minrad acquisition, company separated Global Critical care business as another segment.
• PHL has consolidated its Huddersfield operation and started other cost saving initiatives at Morpeth facility in the quarter under review. It expects an improvement of 6-8% in CMO EBIDTA margins for FY’10.
• The company raised around Rs 623 crore in the FY’09 for acquisition of Minrad and RxElite. Debt on the books as on 31^st March’09 is around Rs 13408 crore. Out of this, Rs 660 crore in the Rupee denominated debt and Rs 680 crore is foreign currency denominated debt.
• In the concall conducted on 22^nd January 2009, company gave a guidance for Pharma solution sales from Indian assets as Rs 370 crore and revenue growth of 16%. In the case of Pharma solution sales from Indian assets touched Rs 390 crore and revenue grow by 14%.
• Company incurred regular capex of Rs 190 crore and additional capex of Rs 710 crore for acquisitions for FY’09.
• The sales force of Domestic formulation division is 4000.
• Company has launched 42 new products in Indian market during the year. Top 10 brands contributed 24.3% of FY’09 sales and Lifestyle products contribute 31.4% of FY’09 sales. New products launched during the last 24 months contributed 7.9% of sales.
• The tax rate for FY’10 would be around 11%-12%.
• Cash on the books as on 31^st March’ 2009 is around Rs 90-100 crore.
• The 25% of total supply contracts with Pfizer are completed, and company has successfully extended completed contracts. It also started negotiations with Pfizer for remaining contracts will in advance.
• During the company has commissioned new early phase formulation development facility at Ahmedabad.
• In Pharma solution business (CMO) currently, 14 products are in Pre-clinical stages, 57 in Phase I, 81 in Phase II and 19 are in Phase III stage.
• Baxter sued Minrad in January 2009 on Desflurane ANDA with Para IV change filed to US FDA. So company unable to launch Desflurane in FY’2010. Due to that company has cut down its guidance & EBIDTA margins for FY’10 of Minrad to USD 55-60 millions and 20-22% from USD 65 millions and 25%.
• Debt to Equity ratio as on 31^st March’09 is 1. The company expects to bring it down to 0.7 by 31 ^st March’10.
• The company has no plans for further acquisition in the current financial year.
• Company expects CMO business will perform well in the second half of the current financial year.
• Expects Capex for FY’10 would be around Rs 175 crore.
• Expects pharma solutions to be around Rs 1000 crore.
• EBIDTA margins to be 21-22%.
• Expects a revenue growth of 16-17% for FY’10

YES bank Targets 250 branches by December 2010

YES bank held its conference call on 23^rd April 2009 to discuss on the company’s performance for the quarter and full year ended Mar’09.

Highlights

• Yes Bank for the quarter ended Mar’09 reported 45% growth in Net interest income at Rs 155.22 crore and 24% growth in Net profit at Rs 80.11 crore.

• Other income fell by 17% to Rs 89.76 crore due to fall in income from financial markets and financial advisory. Out of the total other income, Rs 33.21 crore constitutes income from financial market, Rs 20.64 crore from advisory business, Rs 25.13 crore from transaction business and Rs 10.78 crore from others.

• Its Balance sheet grew by 35% to Rs 22901 crore as on 31^st Mar’09 from Rs 16982 crore as on 31^st Mar’08.

• Total Advances grew by 32% to Rs 12403 crore from Rs 9430 crore a year ago. Wholesale Banking advances constitute 63.5%, Commercial Banking 29.2%, Business Banking (SME) 6.2% and Retail advances (including Small Business Loans) constitute 1.1% of the Bank’s total Non-PSL advances excluding Priority Sector Lending (PSL) as at Mar 31, 2009.

• Sector wise break up: 22-25% food and agri, 13% telecom and IT, 16% engineering, 15% infrastructure, 7% life science and 27% others.

• The bank has no credit cards, debit cards, mortgage and auto loans in its retail books and also has no plans to get into these business in FY10.

• Total Deposits grew by 21.8% to Rs 16169 crore from Rs 13273 crore a year ago. Current and Savings Account deposits grew by 25.1% while Term Deposits grew by 21.5% y-o-y.

• The average maturity for advances is around 15-16 months and for liability its 18-19 months.

• Yield on advances for Q4FY09 stood at 10.41% while for FY09 it was at 12.8% and the cost of funds were at 8.80% for Q4FY09 and 9% for the full year FY09. Moving forward, the cost of funds is expected to go down with the resetting of bulk deposits.

• The investments increased by 40% to Rs 7117 crore. The yield on investments stood at 9% for the quarter and 8% for FY09. The total SLR books (G sec) stood at Rs 4500 crore and Rs 2400 crore in AAA rated corporate bonds.

• Borrowings stood at Rs 2100 crore for FY09 well above tier II capital.

• CASA stands at 8.7% as on Mar’09 with the absolute value at Rs 1400 crore. The CASA has actually shrunk marginally from 9.3% as on Dec’08 to 8.7% in Mar’09.

• Cost to Income ratio stood at 37.2% for Q4FY09 and 44.2% for the full year ended FY09. The bank is expecting to maintain its cost to income ratio in the range below 46-47% in forthcoming years.

• Gross NPA as a proportion of Gross Advances stood at 0.68% as at 31 Mar’09. Net NPA as a proportion of Net Advances as at 31 Mar’09 stood at 0.33%. On absolute value the Gross NPA increased by 704% to Rs 84.93 crore and the Net NPA increased by 387% to Rs 41.46 crore during the period.

• Additions made to gross NPA stood at Rs 40 crore for Q4FY09 and Rs 80 crore for full year FY09.

• Bank’s total loan loss coverage ratio stood at 144.7% while specific provisioning cover stood at 51.5% as at 31 Mar’09.

• Net Interest Margin at 3% for Q4FY09 against 3.1% for Q4FY08 and 2.8% for Q3FY09. The NIM for the full year FY09 stood at 2.9% as against 2.7% in FY08.

• Loans restructured and not classified as NPA is around Rs 70- 80 crore and pending applications is in one account which is worth of Rs 20 crore.

• It is expected that in next 6 months almost 30-40% of assets will come for reprising.

• Amongst the highest RoE (20.7%) and RoA (1.52%) in the banking industry during FY09 signifying sustained and profitable revenue growth during a difficult year.

• Basel-II Tier I Capital at 9.50% and total capital adequacy of 16.63% as at Mar 31, 2009 provides significant headroom for growth. Also the bank is not planning to raise equity for next 12 months.

• During the fiscal year, Bank mobilized capital funds in excess of Rs. 1000 crore (the highest since inception in the most challenging environment) including Rs. 154 crore of Tier 1 – Perpetual Capital Bonds, the first by any Indian private sector Bank in FY09 and Rs 200 crore of Tier II capital in Sep’09. (Total capital funds of Rs. 3065 crore as at Mar 31, 2009 as against Rs. 2072 crore as at Mar 31, 2008).

• The bank had 3 legal cases and all the cases have been fully resolved.

• Book value per share of Rs 54.69 per share compared to Rs 44.60 per share a year ago.

• The bank has not announced any dividend for the year and has decided to add back the dividend to its capital in order to fund future growth.

• Yes Bank has 117 operational branches across 92 locations nationally, 93 offsite ATM’s in Mumbai, NCR and Pune along with 2 National Processing Centres at Mumbai and Gurgaon as at Mar 31, 2009. The head count remains at 2671 employees.

• The bank is planning to open 250 more branches by December 2010 for which it has to apply for licence with RBI. Currently it has 20 un-deployed licences.

• The bank targets 25-30% growth on advances and deposits for FY10. It plans to grow its CASA by 3-5% every year. With regard to the NIMs, the bank is quite confident that it will see progressive improvement of NIMs from here as it has low share of CASA and almost 91% of its books is still available for reprising.

Idea Cellular Transfer of towers to Indus results in 2.2% contraction in EBIDTA

Highlights of the concall

• The company has recorded Rs 2936.49 crore consolidated revenue for Q4 FY09, 8% up Q-o-Q. The consolidated EBIDTA margins for Q4 FY09 improved 210 bps sequentially to 27.6%. At EBIDTA level, Spice and Indus have contributed Rs 69.4 crore for Q4 FY09. The consolidated PAT for the quarter stood at Rs 274.20 crore, up 25% Q-o-Q (which is depressed by Rs 29 crore on account of the Spice and Indus consolidation).

• The revenue of company from Mumbai and Bihar circles (relatively new circles) surged by 104% sequentially to Rs 98.5 crore while loss at EBIDTA level from these two circles has reduced sequentially to Rs 65.4 crore against Rs 76.5 crore in Q3 FY09.

• Idea, including service areas of Spice (Punjab and Karnataka), added 5.03 million subscribers during the quarter with total subscriber base reaching at 43.02 million at the end of 31^st March 2009, reflecting a national market share of 11% (Flat on Q-o-Q).

• On Q-o-Q basis Idea’s standalone ARPU dipped by 4.5% to Rs 254 from Rs 266 and the average realized rate (ARR) per minute marginally slipped from Rs 0.64 in Q3 FY09 to Rs 0.63 in Q4 FY09. The average minutes of use per user has declined from 416 minutes in Q3 FY09 to 402 minutes in Q4 FY09.

• The ARPU of 2 circles of Spice has dipped from Rs 279 to Rs 267 sequentially while the average minutes of usage slipped from 494 minutes to 467 minutes sequentially. However, the average realized rate improved marginally from Rs 0.56 to 0.57 sequentially.

• As on 31^st March 2009, Idea has about 44,230 cell sites (39,289 at the end of Dec’08) and 5630 cell sites (4848 at the end of Dec’08) on Spice’s network. Out of 44,230 cell sites the company has 7477 owned sites and 36,753 rented sites (21459 at end Dec’08). In case of Spice, out of 5630 sites, 5448 are rented sites and 182 owned sites.

• This increase of 15,294 cell sites includes 11,094 cell sites on Idea towers, transferred to Indus, through the IRU effective 1st January 2009. As of March’09, out of the 36,573 rented cell sites, 25,150 cell sites are on Indus Towers.

• The transfer of cell sites to Indus led to an increase in the network operating cost, and the rental income that Idea was deriving from guest sites also ceased w.e.f. 1st January 2009 – which resulted in EBITDA contraction by about 3.4% for the quarter. However, until the merger into Indus is consummated, Idea also received rental income for the transferred towers, equivalent to about 1.2% of the EBITDA. Therefore, the net negative EBITDA impact for the quarter was about 2.2%. This does not include Idea’s pro-rata share of Indus’ profit/loss.

• The merger of these towers with Indus will negatively impact IDEA on standalone basis by about 2.2% at EBIDTA and EBIT level.

• The company expects the benefits of Spice acquisition to kick in Q1 FY10 onwards as till now it was aligning the Spice’s operations with that of Idea.

• The company has launched its operations recently in Orissa circles in April 2009, thus increasing its presence to 16 circles (including 2 of Spice).

• The company is expected to launch services in Tamilnadu in Q1 FY10 and intends to have pan India operations by calendar year 2009.

• The total capex for FY09 was about Rs 5450 crore. For FY10 the company reiterated capex guidance of Rs 6000 crore (including capex for new circles but excluding for 3G licenses and roll out).

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