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Dear All,
Forwarding you the Weekly Review dated 29.04.2011. Kindly click on the following link to view the Report.
Dear All,
Forwarding you the Result Update on Ambuja Cements for1QCY2011 with a Neutral recommendation.
During 1QCY2011, Ambuja Cements (Ambuja) posted 10.9% yoy growth in its net sales to `2,207, aided by growth in volumes (up 6.8% yoy) and higher realisations (up 3.8% yoy). Realisations were higher during the quarter due to substantial price hikes in the northern and western region. At current levels,
we believe the stock is fairly priced, owing to which we maintain our Neutral view on the stock.
Bottom line down 11.8% yoy due to margin contraction and lower other income: For 1QCY2011, Ambuja posted 10.9% yoy growth in its net sales to `2,207cr. However, OPM for the quarter was lower by 144bp yoy to 28.2%, largely on account of a steep increase in power and fuel costs. On a positive note, raw-material costs declined by 44.9% yoy due to elimination of high-cost external clinker purchase. For 1QCY2011, Ambuja’s net profit fell by 11.8% yoy to `407cr on account of higher depreciation costs and lower other income.
Outlook and valuation: We expect cement prices to dip in the near term
due to the onset of monsoons. The production discipline adopted by cement manufacturers is expected to weaken with upcoming capacities. Further, the full impact of the price hike carried out by Coal India is expected to be felt from 2QCY2011. We expect Ambuja’s top line to register a 13.5% CAGR over
CY2010–12, with dispatches expected to record a 9.3% CAGR on the back of capacity addition. At current levels, the stock is trading at fair valuations of 9.3x EV/EBITDA and EV/tonne of US$163 on CY2012 estimates. Hence, we maintain our Neutral view on the stock.
Kindly clink on the following link to view the Report.
If you have any further queries, feel free to call us on 022 39357600, Extn: 6864 / 6865 or mail us at advisory@angelbroking.com
With best regards,
Fundamental Advisory Desk
Angel Broking
Akruti Star,6th Floor, Road No.7,MIDC, Andheri (E),Mumbai – 93.
Call : (91) (022) 39357600 Ext. 6864,6865
Website : www.angelbroking.com
Disclaimer: Ours is an advisory role. The final decision and consequences based on our information is solely yours. Moreover, in keeping with regulatory guidelines, we do not guarantee any returns on investments. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice.
| |||||||||||||||||
Dear All,
Forwarding you the Result Update on Consolidate Construction Consortium for 4QFY2011 with a Sell recommendation and a Target Price of `38 (12 months).
CCCL posted a disappointing set of numbers for the fourth consecutive quarter below our and street expectations. The top line came in flat mainly on account of slow-moving infrastructure orders. However, the blow in the company’s performance came from the big drop in the margin. CCCL’s bottom line was also disappointing, due to sedate top-line growth and a huge margin decline. We are revising our estimates downwards for FY2012 and FY2013 to reflect the same and are downgrading the target multiple to 9x from 10x. Going ahead, we expect margins to be under pressure and the stock to get de-rated on the bourses. Hence, we further downgrade the stock to Sell from Neutral.
Poor show on all fronts: CCCL’s top line grew by mere 1.1% yoy to `643.0cr (`636.3cr), which was marginally lower than our estimate of `675.0cr. However, the shocker came at the operating front, as the company posted abysmal EBITDA margin of 3.5% (11.4%), a drop of 790bp, against our expectations of a 150bp dip. On a sequential basis as well, margin saw a decline of 620bp. The main reason for the margin decline was the increase of 710bp and 170bp yoy in materials cost and subcontracting cost, respectively, as a percentage of sales. The company cited error in the estimation of material cost for fixed price contracts, which led to this disaster. This translated in the bottom line declining by 95.5% yoy during the quarter.
Outlook and valuation: CCCL has been consistently disappointing on the top-line front and posting erratic numbers on the bottom-line front for the last four quarters. The order inflow is showing signs of revival, but the critical execution leg is dragging the performance of the company. CCCL has always been commanding a premium over peers due to its superior return ratios, which are now headed southwards. Hence, we have revised our numbers downwards to factor in the same. We further downgrade the stock to Sell (Neutral) with a revised target price of `38.
Kindly click on the following link to view the Report.
If you have any further queries, feel free to call us on 022 39357600, Extn: 6864 / 6865 or mail us at advisory@angelbroking.com
With best regards,
Fundamental Advisory Desk
Angel Broking
Akruti Star,6th Floor, Road No.7,MIDC, Andheri (E),Mumbai – 93.
Call : (91) (022) 39357600 Ext. 6864,6865
Website : www.angelbroking.com
Disclaimer: Ours is an advisory role. The final decision and consequences based on our information is solely yours. Moreover, in keeping with regulatory guidelines, we do not guarantee any returns on investments. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice.
Dear All,
Forwarding you the Result Flash on Corporation Bank for 4QFY2011 with a Buy recommendation.
Corporation Bank announced its 4QFY2011 results today, registering a moderate net profit growth of 10.6% yoy (decline of 9.7% qoq) to Rs345cr, in line with our estimates. However other income growth was stronger than estimated which was offset by higher provisioning expenses.
Key highlights:
· Business growth momentum was strong with advances and deposits growth of 20.7% qoq and 18.5% qoq, respectively. On a yoy basis, advances and deposits grew by 37.4% and 25.9%, respectively.
· NII grew by 19.1% yoy to Rs762cr. However on a sequential basis, NII de-grew by 9.6% due to a sequential decline in reported NIMs of 21bp to 2.5%. Non-interest income growth was strong, registering a growth of 85.4% qoq.
· Operating expenses increased by 37.6% yoy driven by a 47.8% yoy jump in employee expenses. During FY2011, the bank made provision of Rs111cr towards liability arising out of second pension option for serving employees. The bank took a hit of ~Rs74cr for retired employee pension expenses during 4QFY2011. As a result the cost-to-income ratio of the bank increased to 40.4% from 33.4% in 3QFY2011. The total outstanding pension for the bank at the end of 4QFY2011 stands at Rs442cr.
· The asset quality of the bank improved during 4QFY2011 with the absolute Gross NPAs declining by 13.5% qoq and Net NPAs declining by 3.8% qoq. Gross NPA ratio declined sequentially by 35bps to 0.91%, while net NPA ratio declined sequentially by 12bps to 0.46%. The provision coverage ratio stood at 74.7% (72.8% in 3QFY2011) including technical write-offs. Provisioning expenses were substantially higher, rising by 63.2% yoy to Rs269cr.
At the CMP, the stock is trading at 1.0x FY2013E ABV. We maintain our Buy recommendation on the stock. We may revise our estimates post interaction with the management.
| Exhibit 1: 4QFY2011 Actual vs. Estimates | |||
| (Rs cr) | Actual | Estimates | Var (%) |
| Net interest income | 762 | 823 | (7.4) |
| Non-interest income | 490 | 287 | 70.9 |
| Operating income | 1,252 | 1,110 | 12.9 |
| Operating expenses | 506 | 374 | 35.2 |
| Pre-prov. profit | 747 | 735 | 1.5 |
| Provisions & contingencies | 269 | 184 | 46.7 |
| PBT | 477 | 552 | (13.5) |
| Prov. for taxes | 132 | 214 | (38.4) |
| PAT | 345 | 338 | 2.2 |
Source: Company, Angel Research
Exhibit 2: 4QFY2011 Performance summary
| (Rs cr) | 4QFY2011 | 3QFY2011 | % chg (qoq) | 4QFY2010 | % chg (yoy) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest earned | 2,555 | 2,471 | 3.4 | 1,922 | 32.9 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expenses | 1,794 | 1,629 | 10.1 | 1,282 | 39.9 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net interest income | 762 | 842 | (9.6) | 640 | 19.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-interest income | 490 | 264 | 85.4 | 273 | 79.9 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating income | 1,252 | 1,107 | 13.1 | 912 | 37.2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating expenses | 506 | 370 | 36.7 | 367 | 37.6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pre-prov. profit | 747 | 737 | 1.3 | 545 | 37.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Provisions & contingencies | 269 | 250 | 7.8 | 165 | 63.2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PBT | 477 | 487 | (2.0) | 380 | 25.6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Prov. for taxes | 132 | 105 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Exhibit 1: 4QFY2011 Actual vs. Estimates | |||
| (Rs cr) | Actual | Estimates | Var (%) |
| Net interest income | 844 | 1,054 | (19.9) |
| Non-interest income | 292 | 244 | 19.9 |
| Operating income | 1,136 | 1,298 | (12.4) |
| Operating expenses | 556 | 522 | 6.7 |
| Pre-prov. profit | 580 | 776 | (25.3) |
| Provisions & contingencies | 341 | 387 | (11.9) |
| PBT | 239 | 389 | (38.5) |
| Prov. for taxes | 13 | 30 | (55.8) |
| PAT | 226 | 359 | (37.1) |
Source: Company, Angel Research
Exhibit 2: 4QFY2011 Performance summary
| (Rs cr) | 4QFY2011 | 3QFY2011 | % chg (qoq) | 4QFY2010 | % chg (yoy) |
| Interest earned | 3,068 | 2,894 | 6.0 | 2,436 | 26.0 |
| Interest expenses | 2,224 | 1,832 | 21.4 | 1,692 | 31.5 |
| Net interest income | 844 | 1,062 | (20.5) | 744 | 13.5 |
| Non-interest income | 292 | 214 | 36.4 | 254 | 14.9 |
| Operating income | 1,136 | 1,276 | (11.0) | 998 | 13.9 |
| Operating expenses | 556 | 511 | 8.9 | 432 | 28.7 |
| Pre-prov. profit | 580 | 765 | (24.2) | 566 | 2.5 |
| Provisions & contingencies | 341 | 456 | (25.2) | 177 | 92.7 |
| PBT | 239 | 310 | (22.8) | 389 | (38.5) |
| Prov. for taxes | 13 | 8 | 58.7 |
