Antique Stock Broking Limited
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I N D I A R ES E A RC H R ESU LTS PR E V I E W 8 April 2011 4QFY11 Results Preview Straining for growth STRICTLY CONFIDENTIAL ANTIQUE STOCK BROKING LIMITED 8 APRIL 2011 4QFY11 RESULTS PREVIEW Results Overview Sectors Automobiles Cement Financials FMCG & Retail Industrials Information Technology Media Metals Oil & Gas Pharmaceuticals Real Estate Shipping & Logistics Sugar Utilities & Industrials Miscellaneous Results Preview Summary Valuation Guide ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 8 APRIL 2011 | 2 Results overview Straining for growth The financial year has drawn to an end and the numbers roll out begins and being the year end results, the earnings season is expected to be a bit longer than usual. The first three months of the calendar year have been akin to a roller coaster rise for the stock markets and the impending earnings are thus expected to have a huge bearing on its ensuing course. Expectations from the companies under our coverage (ex-financials) convey a YoY growth of 24% and a QoQ growth of 16%. The traction is one of the highest in recent times. If one excludes the metals sector, the growth is a bit better at 25% YoY and 17% QoQ, respectively, leading us to believe that the metals sector still ails from a degree of uncertainty and unpredictability. However, if instead of metals, one excludes the Oil & Gas sector, then these figures are 20% YoY and 14% on a QoQ basis, leading us to believe that oil and gas sector despite all the associated problems, is relatively better off than what it was a year ago. (INRm) 3QFY11 3QFY10 Chg YoY (%) Indices Net Sales PBIDT Net Profit Net Sales PBIDT Net Profit Net Sales PBIDT Net Profit Sensex 2,575,903 808,730 380,913 2,206,929 674,097 303,047 16.7 20.0 25.7 Nifty 3,435,022 994,533 459,403 2,928,713 843,040 381,363 17.3 18.0 20.5 BSE 100 5,590,574 1,394,778 594,313 4,686,644 1,145,338 481,343 19.3 21.8 23.5 BSE 200 6,781,605 1,834,588 728,971 5,718,659 1,517,681 602,275 18.6 20.9 21.0 BSE 500 8,213,861 2,130,854 832,048 6,921,438 1,766,744 695,603 18.7 20.6 19.6 BSE Midcap 1,960,385 512,053 144,795 1,656,347 421,227 122,460 18.4 21.6 18.2 BSE Smallcap 995,806 139,828 53,899 831,248 126,867 52,452 19.8 10.2 2.8 Source: Antique, AceEquity (INRm) 3QFY11 3QFY10 Chg YoY (%) Sectoral Indices Net Sales PBIDT Net Profit Net Sales PBIDT Net Profit Net Sales PBIDT Net Profit BSE Auto 428,091 53,839 33,077 333,928 53,386 30,707 28.2 0.8 7.7 BSE Capital Goods 378,104 52,939 33,212 303,920 45,385 27,195 24.4 16.6 22.1 BSE Consumer Durables136,442 11,406 5,144 113,787 9,060 3,910 19.9 25.9 31.5 BSE FMCG 176,040 38,409 27,530 147,989 34,240 24,150 19.0 12.2 14.0 BSE Healthcare 117,125 27,565 23,822 105,406 31,249 23,810 11.1 (11.8) 0.0 BSE IT 258,676 73,894 62,173 216,079 65,477 53,992 19.7 12.9 15.2 BSE Metal 494,086 130,659 86,599 421,473 116,318 74,103 17.2 12.3 16.9 BSE Oil 2,387,604 308,499 162,319 2,072,680 217,786 97,929 15.2 41.7 65.8 Power 440,155 113,722 61,633 373,730 107,333 62,566 17.8 6.0 (1.5) BSE Realty 29,344 15,132 9,917 32,164 13,584 10,055 (8.8) 11.4 (1.4) Source: Antique, AceEquity 3QFY11 3QFY10 Chg YoY (%) Net Interest Provisions & Net Profit Net Interest Provisions & Net Profit Net Interest Provisions & Net Profit Income Contingencies Income Contingencies Income Contingencies BSE Bankex 299,977 62,868 118,714 218,562 45,599 96,444 37.3 37.9 23.1 Source: Antique, AceEquity ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 8 APRIL 2011 | 3 Results overview The EBIDTA of companies under our coverage (ex financials) is expected to post a YoY and a QoQ growth of 12% and 15%, respectively. This clearly conveys that cost pressures in pivotal sectors are now beginning to nibble away at the operational metrics of India Inc. Excluding Oil & Gas, the growth is estimated to be markedly better at 17% (YoY)and 19% (QoQ) and underscores the fact that the oil and gas sector continues to drag the performance of corporate sector. The EBIDTA exhibits a much stronger improvement of 23% YoY and 15% QoQ, if one were to exclude two sectors i.e Metals and Oil & Gas. Thus buoyant commodity prices are now beginning to weight heavy on many sectors. On the net profits front, results of companies under our coverage (ex financials) are expected to be flat on a YoY basis and register a 13% growth QoQ. Once again, if one were to exclude the Oil & Gas and Metals sector, the growth is 21% and 15% on a YoY and QoQ basis respectively. The lower degree of growth in net profits vis a vis EBIDTA can also be attributed to increase in capital costs. (INRm) 3QFY11 2QFY11 Chg QoQ (%) Indices Net Sales PBIDT Net Profit Net Sales PBIDT Net Profit Net Sales PBIDT Net Profit Sensex 2,575,903 808,730 380,913 2,439,370 744,190 350,533 5.6 8.7 8.7 Nifty 3,435,022 994,533 459,403 3,254,310 933,056 439,415 5.6 6.6 4.5 BSE 100 5,590,574 1,394,778 594,313 5,243,372 1,366,498 622,888 6.6 2.1 (4.6) BSE 200 6,781,605 1,834,588 728,971 6,358,765 1,776,158 874,951 6.6 3.3 (16.7) BSE 500 8,213,861 2,130,854 832,048 7,735,098 2,052,581 979,744 6.2 3.8 (15.1) BSE Midcap 1,960,385 512,053 144,795 1,852,032 462,620 137,640 5.9 10.7 5.2 BSE Smallcap 995,806 139,828 53,899 978,278 131,025 54,886 1.8 6.7 (1.8) Source: Antique, AceEquity (INRm) 3QFY11 2QFY11 Chg QoQ (%) Sectoral Indices Net Sales PBIDT Net Profit Net Sales PBIDT Net Profit Net Sales PBIDT Net Profit BSE Auto 428,091 53,839 33,077 415,834 56,344 36,850 2.9 (4.4) (10.2) BSE Capital Goods 378,104 52,939 33,212 335,740 43,257 27,341 12.6 22.4 21.5 BSE Consumer Durables136,442 11,406 5,144 128,956 10,976 5,245 5.8 3.9 (1.9) BSE FMCG 176,040 38,409 27,530 159,463 36,009 25,210 10.4 6.7 9.2 BSE Healthcare 117,125 27,565 23,822 115,214 27,762 148,790 1.7 (0.7) (84.0) BSE IT 258,676 73,894 62,173 253,831 70,138 57,054 1.9 5.4 9.0 BSE Metal 494,086 130,659 86,599 451,740 113,941 82,292 9.4 14.7 5.2 BSE Oil 2,387,604 308,499 162,319 2,246,700 356,806 217,322 6.3 (13.5) (25.3) Power 440,155 113,722 61,633 430,550 112,615 63,738 2.2 1.0 (3.3) BSE Realty 29,344 15,132 9,917 24,962 13,126 9,661 17.6 15.3 2.6 Source: Antique, AceEquity 3QFY11 2QFY11 Chg QoQ (%) Net Interest Provisions & Net Profit Net Interest Provisions & Net Profit Net Interest Provisions & Net Profit Income Contingencies Income Contingencies Income Contingencies BSE Bankex 299,977 62,868 118,714 275837.9 68129.6 104804.3 8.8 (7.7) 13.3 Source: Antique, AceEquity ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 8 APRIL 2011 | 4 Expectations for 4QFY11 performance Sales - change YoY (%) Sales - change QoQ (%) Sugar Sugar Shipping and Logistics Pharma Real Estate Real Estate Industrials & Infrastructure Media Metals FMCG & Retail Utilities Financials Pharma Information Technology FMCG & Retail Shipping and Logistics Automobiles Metals Information Technology Automobiles Oil & Gas Cement Financials Oil & Gas Cement Utilities Media Industrials & Infrastructure (10)- 1020304050 (40) (20) - 20 40 60 Source: Antique EBITDA - change YoY (%) EBITDA - change QoQ (%) Shipping and Logistics Media Sugar FMCG & Retail Metals Financials Oil & Gas Real Estate Cement Pharma Financials Shipping and Logistics FMCG & Retail Utilities Utilities Oil & Gas Pharma Information Technology Automobiles Automobiles Media Sugar Real Estate Metals Information Technology Cement Industrials & Infrastructure Industrials & Infrastructure (10)- 10203040 (20) - 20 40 60 80 100 120 Source: Antique Net profits - change YoY (%) Net profits - change QoQ (%) Sugar Media Shipping and Logistics FMCG & Retail Oil & Gas Real Estate Metals Oil & Gas Cement Information Technology Utilities Utilities Pharma Financials Information Technology Shipping and Logistics Media Automobiles FMCG & Retail Pharma Real Estate Cement Financials Sugar Automobiles Metals Industrials & Infrastructure Industrials & Infrastructure (60) (40) (20) - 20 40 60 (50) - 50 100 150 Source: Antique Note: In case of financials net interest income, pre-provision profits and net income are considered instead of net sales, EBIDTA and net profit.