Mint Money's The Q Report

The Q RepoRTQuarterly Results Series I

mintmoney.livemint.com

COMPLIMENTARY TO THE READERS OF MINT

SEPTEMBER 2010 | 1

Mint Money Q1 reportmint money

Most people’s eyes glaze over when they look at rows and columns filled with data. But those who read the language of data find stories and stories in the long lines of numbers. The

basis of making money is either to be able to read data yourself or allow those who can—fund managers—to read it for you. But most successful stock investing needs this basic skill of data reading.

For those who can and want to read data, the next problem arises—where to get data in a form that is easy to read, easy to store and easy to carry around. I always thought that investors would find it easy to get this data off the Internet. The first time we fully understood the value of getting value-added data to our readers in a form and font that is useful was when we discontinued the mutual fund listings some months ago. The sheer reader upset got us to quickly fix our systems and get the data back again in the paper.

A similar request—for value-added data—has now come from read-ers for compiling and printing quarterly results of companies in a book. The more we thought about this input, the more we liked the idea. Yes, the data was available online and yes it can be downloaded, but the sheer utility of a book that holds the data together in one easy-to-use format beats 30 downloads any day. So dear reader, what you hold in your hand right now is the first of a four-part series called the Mint Money Q Report. The Q1 Report documents the first quarter results of the 30 Sensex com-panies and the Q2 Report will document the second quarter and so on.

I know it is a bit late in the day for Q1 results, but we will be prompt with the Q2 Report once all the results are in. We’ve sourced the data from Capitaline. The analysis of the result is partly in-house with Mint’s Mark to Market team writing and partly from analysts’ reports that are outsourced.

This is a first cut of a new idea. We’re very open to suggestions and ideas to make this better. Happy data reading!

EDITOR'S NOTEEDITORIAL TEAM

Editor, Mint MoneyMonika halan

Compiled byprashant Mukherjee

Mark to Market teamManas ChakravartyMobis philiposepallavi pengondaRavi AnanthanarayananVatsala Kamat

Data Ashwin Ramarathinam

AnalystsAngel SecuritiesAsit C. Mehtaedelweiss Securities India InfolineMotilal oswalprabhudas LilladherSharekhan

DeskNidhi SinhaSaurabh Kumar

DESIGN TEAMAbel RobinsonUttam Sharma

DATA SOURCE Capitaline

Cover illustrationUttam Sharma/Mint

MONIkA HALANEditor, Mint Money

SEPTEMBER 2010 | 3


ACC Ltd is one of the leading cement manufacturers of the country with operations in almost all parts of the country. The quarterly results of the company were in line with expectations of Edelweiss Securities with reali-

zation increasing by R3 per bag sequentially. However, volumes fell 5.2% leading to a 4% decline in sales. Increase in realizations by 1.5% was offset by 5% increase in the overall cost, leading to a 6% decline in earnings before interest, tax, depre-ciation and amortization per tonne to R1,049 on a sequential basis.

View of Edelweiss Securities

BSE CODE500410 NSE SyMBOLACC

NOTES

ACC LTDCeMeNT ANd CeMeNT pRodUCTS

PRICE AS ON 24 SEPTEMBER 2010

R1,012.30

Quarter ended June 2010 March 2010 December 2009 September 2009 June 2009

Gross sales 2,020.70 2,101.81 1,921.46 1,969.39 2,081.26

Excise duty 0.00 0.00 0.00 0.00 0.00

Net sales 2,020.70 2,101.81 1,921.46 1,969.39 2,081.26

Other operating income 41.46 34.47 62.42 36.07 38.60

Other income 18.26 26.43 20.04 14.78 17.73

Total income 2,080.42 2,162.71 2,003.92 2,020.24 2,137.59

Total expenditure 1,467.75 1,479.58 1,490.79 1,301.48 1,346.90

PBDIT 612.67 683.13 513.13 718.76 790.69

Interest 14.07 12.75 18.06 13.51 15.95

PBDT 598.60 670.38 495.07 705.25 774.74

Depreciation 96.16 93.53 105.19 79.58 78.40

Tax 143.51 171.72 109.17 190.04 210.72

Reported profit after tax 358.93 405.13 280.71 435.63 485.62

Extraordinary items - 0.00 0.00 0.00 0.00

Adjusted profit after extraordinary items 358.93 405.13 280.71 435.63 485.62

EPS (R) 19.12 21.58 14.93 23.21 25.87

Equity 187.94 187.94 187.94 187.91 187.89

Public Shareholding (no. of shares in million) 101.01 101.01 101.01 100.97 100.41

Public Shareholding (% in equity share capital) 53.80 53.80 53.80 53.79 53.50PBDIT: profit before depreciation, interest and tax; PBDT: profit before depreciation and tax; EPS: earnings per share Figures in R crore unless specified

4 | SEPTEMBER 2010

Mint Money Q1 report mint money

Bharti Airtel Ltd’s results were ahead of analysts’ estimates, just like its com-petitors Idea Cellular Ltd and Vodafone Essar Ltd. In a trend reversal, the core mobile services business in India and South Asia reported a 6.1%

increase in revenues and a 4.9% rise in earnings before interest, tax, depreciation and amortization. This reflects improvement in the domestic wireless business since competition from new entrants, such as Uninor, hasn’t been as intense as was expected. But concerns remain. According to a recent Citigroup report, there is renewed regulatory concern on the sector; erosion of fundamental profitability thanks to the overshooting of third-generation (3G) spectrum bids and the pos-sibility of sharp cuts in postpaid tariffs owing to operators’ fragmented 3G foot-print. Number portability, when implemented, could affect tariffs. The perform-ance of Zain is also critical.

Mobis Philipose

BSE CODE532454 NSE SyMBOLBhARTIARTL

NOTES

BHARTI AIRTEL LTDTeLeCoM SeRVICeS


R368.00

Quarter Ended June 2010 March 2010 December 2009 September 2009 June 2009

Gross sales 9,323.70 8,911.92 8,755.45 8,901.66 9,040.50

Excise duty 0.00 0.00 0.00 0.00 0.00

Net sales 9,323.70 8,911.92 8,755.45 8,901.66 9,040.50


Other income 50.00 32.40 16.11 25.44 15.70

Total income 9,373.70 8,944.32 8,771.56 8,927.10 9,056.20


PBDIT 3,416.70 3,248.69 3,321.20 3,561.11 3,602.60

Interest 144.60 -279.84 -225.66 80.02 -430.20

PBDT 3,272.10 3,528.53 3,546.86 3,481.09 4,032.80

Depreciation 1,066.70 1,002.86 990.18 944.00 953.00

Tax 312.70 246.87 221.13 188.65 286.10

Reported profit after tax 1,930.90 2,129.61 2,312.10 2,296.94 2,687.50

Extraordinary items 0.00 0.00 0.00 0.00 0.00

Adjusted profit after extraordinary items 1,930.90 2,129.61 2,312.10 2,296.94 2,687.50

EPS (R) 5.09 5.61 6.09 6.05 14.16

Equity 1,898.80 1,898.77 1,898.48 1,898.42 1,898.37

Public Shareholding (no. of shares in million) 1,220.15 1,221.74 1,221.16 1,226.59 618.73


SEPTEMBER 2010 | 5


Bharat Heavy Electricals Ltd (Bhel) has recently floated an expression of interest (EoI) to appoint a consultant to work on ideas to use its cash reserves and to explore the possibility of the formation of a separate

finance company in a joint venture with a strategic partner to finance power projects. As per the EoI, subsequently the proposed non-banking finance com-pany (NBFC) could also target the opportunities in the overseas markets, particu-larly in countries where Bhel has a sizeable presence. This NBFC venture could also play a major role in facilitating orders from customers requiring equipment as well as financing and necessary financial advisory services.

View of Sharekhan

BSE CODE500103 NSE SyMBOLBheL

NOTES

BHARAT HEAvy ELECTRICALS LTDheAVy eLeCTRICAL eQUIpMeNT


R2,454.90


Gross sales 6,761.23 14,096.33 7,386.00 6,916.55 5,799.59

Excise duty 281.54 537.23 285.66 291.34 203.94

Net sales 6,479.69 13,559.10 7,100.34 6,625.21 5,595.65


Other income 163.45 207.98 193.29 195.50 227.09

Total income 6,764.49 14,152.63 7,422.51 6,923.02 5,898.51


PBDIT 1,128.47 3,080.79 1,754.98 1,427.34 819.05

Interest 3.83 17.80 6.90 4.52 4.28

PBDT 1,124.64 3,062.99 1,748.08 1,422.82 814.77

Depreciation 126.89 164.69 103.81 93.41 96.10

Tax 330.10 988.72 571.68 471.53 248.08

Reported profit after tax 667.65 1,909.58 1,072.59 857.88 470.59


Adjusted profit after extraordinary items 667.65 1,909.58 1,072.59 857.88 470.59

EPS (R) 13.64 39.01 21.91 17.53 9.61

Equity 489.52 489.52 489.52 489.52 489.52



6 | SEPTEMBER 2010



Gross sales 1,441.03 1,329.01 1,357.87 1,383.91 1,339.46

Excise duty 13.65 11.52 13.71 12.73 14.20

Net sales 1,427.38 1,317.49 1,344.16 1,371.18 1,325.26


Other income 16.75 140.08 17.84 12.82 11.97

Total income 1,496.51 1,514.77 1,456.34 1,455.70 1,385.92


PBDIT 367.35 398.07 397.72 393.66 353.49

Interest 0.11 0.46 4.37 8.36 10.47

PBDT 367.24 397.61 393.35 385.30 343.02

Depreciation 54.82 49.48 45.67 47.81 45.81

Tax 51.25 67.60 52.65 57.75 50.50




EPS (R) 3.21 3.43 3.60 3.55 3.11

Equity 160.58 160.58 160.58 160.58 155.46


Public Shareholding (% in equity share capital) 62.40 62.38 62.34 60.99 59.74

The management of Cipla Ltd believes that revenue for FY11 will cross R6,000 crore and aggressive capital expenditure will continue. This repre-sents growth of more than 7% over FY10. Cipla indicated it would invest

R1,000 crore in the near future to build manufacturing facilities and expand exist-ing ones to keep abreast of development and maintain its leading position in the pharmaceuticals space. Cipla is targeting profitability improvement through backward integration and focusing on more complex and low competition areas, such as biotechnology. The firm will invest $65 million in biotechnology ventures over three years and is likely to sell the products in India by early 2012.

View of Motilal Oswal

BSE CODE500087 NSE SyMBOLCIpLA

NOTES

CIPLA LTDphARMACeUTICALS


R316.90

PBDIT: profit before depreciation, interest and tax; PBDT: profit before depreciation and tax; EPS: earnings per share Figures in R crore unless specified

SEPTEMBER 2010 | 7


The first quarter results of DLF Ltd were largely in line with expectations with revenue being slightly better than our estimates. DLF reported a rev-enue growth of 23% year-on-year (y-o-y) and sequential growth of 1.7%.

The earnings before interest, tax, depreciation and amortization margins stood firm at 48.3%. The company’s profit after tax grew 3.7% y-o-y, but a sequential decline of 3.6%. DLF just soft launched one project this quarter. This is a city-centric project located in Chennai, where the company sold 0.23 million sq. ft.

View of Prabhudas Lilladher

BSE CODE532868 NSE SyMBOLdLF

NOTES

DLF LTDReALTy


R365.65


Gross sales 651.89 781.97 887.16 314.19 417.97

Excise duty 0.00 0.00 0.00 0.00 0.00

Net sales 651.89 781.97 887.16 314.19 417.97


Other income 162.63 415.01 130.30 117.19 147.86

Total income 814.52 1,196.98 1,017.46 431.38 565.83

Total expenditure 221.97 410.42 487.52 189.19 210.00

PBDIT 592.55 786.56 529.94 242.19 355.83

Interest 308.71 261.86 210.87 167.78 206.73

PBDT 283.84 524.70 319.07 74.41 149.10

Depreciation 32.08 31.76 32.26 31.29 30.74

Tax 46.66 81.93 74.00 2.21 17.12




EPS (R) 1.21 2.42 1.33 0.20 0.59

Equity 339.48 339.48 339.47 339.44 339.43



8 | SEPTEMBER 2010



Interest earned 4,420.15 4,053.11 4,034.81 3,991.89 4,093.10

Other income 939.88 903.55 853.01 1,007.40 1,043.65

Total income 5,360.03 4,956.66 4,887.82 4,999.29 5,136.75

Operating expenses 3,611.32 3,262.29 3,264.12 3,406.29 3,618.10

Operating profit before provisions 1,748.71 1,694.37 1,623.70 1,593.00 1,518.65

Provisions and contingencies 555.02 439.91 447.72 594.14 658.82

Depreciation 0.00 0.00 0.00 0.00 0.00

Provision for taxes 381.98 417.84 357.48 311.40 253.72

Interest earned 4,053.11 4,053.11 4,053.11 4,053.11 4,053.11

Net profit 811.71 836.62 818.50 687.46 606.11



EPS (R) 17.70 18.30 18.70 16.10 14.20

Equity 459.69 457.74 455.24 427.36 426.18

Public shareholding (no. of shares in million) 351.05 349.10 346.59 344.91 343.74

Public shareholding (% in equity share capital 76.40 76.30 76.10 80.70 80.70

Net interest margin (%) 0.00 4.40 4.30 4.20 0.00

Net non-performing assets 0.30 0.30 0.50 0.50 0.60

Total deposits 183,033.00 167,404.00 154,789.00 149,805.00 0.00

Total advances 147,620.00 127,262.00 121,051.00 115,104.00 0.00

HDFC Bank Ltd has justified its premium valuations once again. Its per-formance has been far better than the industry’s. Deposit growth was a good 25.6% year-on-year (y-o-y), although dwarfed by a growth of 40.2%

in gross advances—10% of the increase in advances was due to one-off short-term wholesale loans. Net interest margins rose a bit to 4.3% from 4.2% in the year ago period, but was down from the 4.4% during the March 2010 quarter. The profit is up 33.9% y-o-y compared with 32.6% y-o-y in the March quarter. Two factors helped the bank maintain its profit growth despite lower treasury income—one, lower provisions and two, higher core earnings.

Manas Chakravarty

BSE CODE500180 NSE SyMBOLhdFCBANK

NOTES

HDFC BANk LTDBANK


R2,491.40


SEPTEMBER 2010 | 9


HDFC Ltd’s profit before tax (PBT) for the June quarter, at R966.59 crore, was higher by R186.67 crore or 24% over the PBT during the correspond-ing quarter last year. The single important reason for the rise in profits

was lower interest on bonds and debentures. This was R269 crore lower in the June 2010 quarter compared with the June 2009 quarter. HDFC’s June quarter results show a slight increase in loan growth. Including loans sold during the year, the year-on-year (y-o-y) growth in loan outstanding was 23% at end-June com-pared with 22% at the end of March 2010. While disbursements were up 25% y-o-y, loan approvals were up 30%, indicating strong lending growth ahead.

Manas Chakravarty

BSE CODE500010 NSE SyMBOLhdFC

NOTES

HOUSING DEvELOPMENT FINANCE CORP LTDhoUSING FINANCe


R731.95


Gross sales 2,797.13 2,892.30 2,756.95 2,844.83 2,844.20

Excise duty 0.00 0.00 0.00 0.00 0.00

Net sales 2,797.13 2,892.30 2,756.95 2,844.83 2,844.20


Other income 4.82 7.02 5.26 5.40 4.87

Total income 2,801.95 2,899.32 2,762.21 2,850.23 2,849.07

Total expenditure 111.76 68.62 96.24 96.32 102.38

PBDIT 2,690.19 2,830.70 2,665.97 2,753.91 2,746.69

Interest 1,719.59 1,559.54 1,704.23 1,836.51 1,962.80

PBDT 970.60 1,271.16 961.74 917.40 783.89

Depreciation 4.01 5.28 4.49 4.46 3.97

Tax 272.00 339.50 286.00 249.00 215.00




EPS (R) 24.02 32.24 23.47 23.27 19.82

Equity 290.95 287.11 285.86 284.90 284.56




10 | SEPTEMBER 2010


On the operating margin front, the company has seen a contraction of 298 basis points (bps) on the back of increase in raw material costs. Optimal operating leverage, however, supported the marginal decline in staff cost

and other expenditure. Other expenditure declined by 22 bps year-on-year (y-o-y) during the quarter due to relatively lower advertising expenditure, while staff cost declined by 25 bps y-o-y. The company reported 7.3% y-o-y decline in operating profit to R603 crore in the first quarter of FY11. On the operating front, the company reported 7.3% y-o-y fall in earnings before interest, tax, depreciation and amortization.

View of Angel Securities

BSE CODE500182 NSE SyMBOLheRohoNdA

NOTES

HERO HONDA MOTORS LTDAUToMoBILeS- 2/3 wheeLeRS


R1,865.15


Gross sales 4,590.22 4,373.04 4,047.73 4,300.49 4,059.36

Excise duty 325.61 280.43 233.31 260.39 248.31

Net sales 4,264.61 4,092.61 3,814.42 4,040.10 3,811.05


Other income 53.42 69.49 54.95 68.71 42.48

Total income 4,350.03 4,191.81 3,881.98 4,128.15 3,871.64


PBDIT 655.96 781.23 715.87 812.88 692.60

Interest -2.66 -4.47 -4.59 -6.10 -5.46

PBDT 658.62 785.70 720.46 818.98 698.06

Depreciation 48.28 48.66 46.89 50.34 45.58

Tax 118.65 138.23 137.80 171.50 152.37




EPS (R) 24.62 29.99 26.83 29.90 25.04

Equity 39.94 39.94 39.94 39.94 39.94




SEPTEMBER 2010 | 11



Gross sales 5,145.51 5,358.46 5,286.10 4,892.56 3,868.31

Excise duty 0.00 0.00 0.00 0.00 0.00

Net sales 5,145.51 5,358.46 5,286.10 4,892.56 3,868.31


Other income 68.92 77.66 49.58 57.29 75.32

Total income 5,247.17 5,482.06 5,364.86 4,974.40 3,972.22


PBDIT 901.38 913.03 797.17 666.45 833.12

Interest 59.33 70.54 72.94 66.29 68.23

PBDT 842.05 842.49 724.23 600.16 764.89

Depreciation 169.09 168.41 167.61 165.86 165.33

Tax 138.56 10.16 129.52 90.25 119.00




EPS (R) 2.79 3.47 2.41 2.02 2.83

Equity 191.37 191.37 191.36 170.05 170.05

Public Shareholding (no. of shares in million) 1,137.69 0.00 1,134.54 920.86 917.58


The aluminium business contributed 82% of stand-alone earnings before interest and tax (Ebit) and 36% of stand-alone revenues for Hindalco Industries Ltd. Higher volumes and better product mix drove revenue

growth in the last quarter, but the benefits were eroded partly by rupee apprecia-tion and higher energy cost. Revenue increased 31% year-on-year (y-o-y), while Ebit grew just 21% y-o-y. Production rate of base metals has increased substan-tially in recent months across the world. China’s domestic production was also strong in the last few months, leading to a decline in imports. However, produc-tion in China is unlikely to remain at the current levels.


BSE CODE500440 NSE SyMBOLhINdALCo

NOTES

HINDALCO INDUSTRIES LTDALUMINIUM


R190.90


12 | SEPTEMBER 2010


Hindustan Unilever Ltd’s (HUL) comeback plan appears to be working. Its performance slipped in fiscal 2010 and it has been battling to regain vol-ume growth and market share in the past few quarters. Its strategy

appears to be finally showing results. Volumes rose by 11% in the June quarter, a good performance even after adjusting for the low base of 2% growth in the year-ago period. HUL’s overall sales rose by 7% during the June quarter over the year-ago period, but material costs rose by only 6%. Profitability would have increased but for a sharp 34% jump in advertising costs, which caused a fall of 2 percentage points in its operating profit margin, though it was higher on a sequential basis. If this trend continues, a recovery may well be round the corner.

Ravi Ananthanarayanan

BSE CODE500696 NSE SyMBOLhINdUNILVR

NOTES

HINDUSTAN UNILEvER LTDpeRSoNAL pRodUCTS


R314.65


Gross sales 4,793.89 4,315.75 4,504.26 4,228.11 4,475.68

Excise duty 0.00 0.00 0.00 0.00 0.00

Net sales 4,793.89 4,315.75 4,504.26 4,228.11 4,475.68


Other income 65.03 230.44 90.60 78.12 42.49

Total income 4,941.24 4,610.68 4,663.83 4,347.35 4,545.12


PBDIT 741.57 819.39 870.86 564.06 755.10

Interest 0.08 0.14 0.19 1.48 5.17

PBDT 741.49 819.25 870.67 562.58 749.93

Depreciation 53.50 50.29 45.01 46.24 42.49

Tax 154.78 187.76 176.55 87.81 164.25


Extraordinary items 14.34 160.49 34.97 -112.19 5.89


EPS (R) 2.44 2.66 2.98 1.96 2.49

Equity 218.21 218.17 218.14 218.09 218.05

Public Shareholding (no. of shares in million) 1,047.23 1,046.84 1,046.59 1,046.05 1,045.69



SEPTEMBER 2010 | 13


At end-June, the bank’s outstanding advances were higher by a cautious 1.8% compared with end-March, but the retail loan book continued to shrink. Domestic corporate lending increased substantially, while vehicle

and personal loans came down. In the 12 months to end-June, the domestic cor-porate loan book has grown 43.5%, while the retail book has shrunk by 20.5%. Net profit at R1,026 crore was up 17% year-on-year (y-o-y) largely because of lower provisions. Net interest income was flat y-o-y with net interest margin up slightly and loan growth negative (both compared with the year-ago period). Fee income growth too was a tepid 7%, while trading profits were much lower y-o-y. The stock has underperformed the BSE Bankex.

Manas Chakravarty

BSE CODE532174 NSE SyMBOLICICIBANK

NOTES

ICICI BANk LTDBANK


R1,112.75


Interest earned 5,812.54 5,826.98 6,089.57 6,656.94 7,133.44

Other income 1,680.51 1,890.84 1,673.14 1,823.79 2,089.88

Total income 7,493.05 7,717.82 7,762.71 8,480.73 9,223.32



Provisions and contingencies 797.82 989.75 1,002.16 1,071.30 1,323.65

Depreciation 0.00 0.00 0.00 0.00 0.00

Provision for taxes 515.10 342.31 463.13 402.29 393.05

Interest earned 5,826.98 5,826.98 5,826.98 5,826.98 5,826.98

Net profit 1,025.98 1,005.57 1,101.06 1,040.13 878.22


Adjusted profit after extraordinary items 1,025.98 1,005.57 1,101.06 1,040.13 878.22

EPS (R) 9.20 9.02 9.89 9.34 7.89

Equity 1,115.50 1,114.89 1,114.17 1,113.60 1,113.36

Public shareholding (no. of shares in million) 1,115.46 1,114,84 1,114.13 1,113.56 1,113.32




Total deposits 200,913.00 202,017.00 197,653.00 197,832.00 210,236.00

Total advances 184,378.00 181,206.00 179,269.00 190,860.00 198,102.00


14 | SEPTEMBER 2010


Infosys Technologies Ltd results were a mixed bag. The company reported strong volume growth for the June quarter and its guidance suggests that growth would be strong for the entire year. But average billing rates of its off-

shore unit fell sharply that, coupled with its high wage increase in April, led to a sharper-than-expected decline in margins. With the company reporting a 2.4% decline in net profit year-on-year, it’s not surprising that its shares fell by about 3.5% after the results. Volumes grew by 7.6% in the information technology serv-ices business last year, the highest in the last 10 quarters, and the company’s dol-lar revenue guidance suggests that volumes could grow by 25% in FY11.

Mobis Philipose

BSE CODE500209 NSE SyMBOLINFoSySTCh

NOTES

INFOSyS TECHNOLOGIES LTDIT CoNSULTING ANd SoFTwARe


R3,040.65


Gross sales 5,758.00 5,500.00 5,335.00 5,201.00 5,104.00

Excise duty 0.00 0.00 0.00 0.00 0.00

Net sales 5,758.00 5,500.00 5,335.00 5,201.00 5,104.00


Other income 237.00 248.00 223.00 232.00 265.00

Total income 5,995.00 5,748.00 5,558.00 5,433.00 5,369.00


PBDIT 2,099.00 2,142.00 2,116.00 2,031.00 2,038.00

Interest 0.00 0.00 0.00 0.00 0.00

PBDT 2,099.00 2,142.00 2,116.00 2,031.00 2,038.00

Depreciation 180.00 194.00 205.00 207.00 201.00

Tax 488.00 345.00 440.00 386.00 373.00




EPS (R) 24.93 24.92 25.66 25.08 25.56

Equity 287.00 287.00 287.00 287.00 287.00



SEPTEMBER 2010 | 15


ITC Ltd’s FY10 balance sheet contains several nuggets of information. Its ciga-rette sales rose by 7% in volume terms, reversing the previous year’s 3% decline. It had attributed the decline to a lopsided taxation structure, but

launched new products to attract customers. ITC appears to have been selective about price increases. Either that or a change in its product mix saw a rise in per unit realizations match volume growth. The moderation in realizations is remark-able considering raw material prices shot up. In FY11, higher excise duty imposed by the Budget will burden ITC, but the new and lower excise slab for low-end cigarettes should help ITC get back some of its lost sales. ITC hiked cigarette prices in response to higher duties, ensuring its margins do not suffer.

Ravi Ananthanarayanan

BSE CODE500875 NSE SyMBOLITC

NOTES

ITC LTDCIGAReTTeS


R178.80


Gross sales 4,816.63 5,053.79 4,531.85 4,292.59 4,147.58

Excise duty 0.00 0.00 0.00 0.00 0.00

Net sales 4,816.63 5,053.79 4,531.85 4,292.59 4,147.58


Other income 98.48 59.20 159.12 68.44 87.57

Total income 4,945.82 5,190.81 4,739.27 4,413.72 4,285.39


PBDIT 1,735.57 1,677.16 1,866.76 1,658.56 1,474.90

Interest 5.80 18.51 10.87 18.14 5.84

PBDT 1,729.77 1,658.65 1,855.89 1,640.42 1,469.06

Depreciation 159.68 153.86 154.87 148.39 151.59

Tax 499.78 476.57 556.85 482.12 438.77

Reported profit after tax 1,070.31 1,028.22 1,144.17 1,009.91 878.70


Adjusted profit after extraordinary items 1,070.31 1,028.22 1,144.17 1,009.91 878.70

EPS (R) 2.80 2.71 3.02 2.67 2.33

Equity 381.82 381.82 379.53 378.02 377.44

Public Shareholding (no. of shares in million) 3,804.23 3,803.48 3,780.58 3,763.69 3,756.10


16 | SEPTEMBER 2010


In the next round of capacity additions, Jaiprakash Associates Ltd’s cement division, Jaypee Cement, is targeting production of 50 million tonnes (mt). The business has already witnessed significant ramp up in capacity from 7 mt

in FY08 to 22.8 mt in March 2010. We understand that a large part of planned cement capacity addition from 34 mt to 50 mt will be brown field, entailing com-petitive capital cost. Jaypee Group comprising Jaiprakash Associates, Jaypee Infratech and JPSK Sports has crossed cumulative real estate bookings (pre-sales) of R12,600 crore as on June 2010 (35.8 million sq. ft). This is commendable since a large part of the sales took place over the past two years.


BSE CODE532532 NSE SyMBOLJpASSoCIAT

NOTES

JAIPRAkASH ASSOCIATES LTDCoNSTRUCTIoN ANd eNGINeeRING


R121.20


Gross sales 3,174.19 3,345.20 2,852.37 1,824.26 2,067.08

Excise duty 0.00 0.00 0.00 0.00 0.00

Net sales 3,174.19 3,345.20 2,852.37 1,824.26 2,067.08


Other income 516.47 10.99 4.83 965.42 374.72

Total income 3,730.94 3,357.49 2,968.66 2,854.27 2,491.58


PBDIT 1,198.17 865.25 678.13 1,485.56 864.58

Interest 327.94 298.92 276.23 258.75 221.89

PBDT 870.23 566.33 401.90 1,226.81 642.69

Depreciation 150.34 133.37 110.94 110.04 101.71

Tax 142.82 76.66 81.28 219.84 61.91




EPS (R) 2.43 1.14 0.49 6.21 3.50

Equity 424.93 424.93 424.37 280.41 280.36

Public Shareholding (no. of shares in million) 1,147.85 1,147.54 1,144.39 750.29 699.62


SEPTEMBER 2010 | 17


Jindal Steel and Power Ltd’s first quarter FY11 revenue declined 11.2% sequen-tially, but was higher than our expectation of R2,050 crore. The outperform-ance in revenue was led by higher-than-expected realizations, which offset

lower sales volume. Average steel realisations for the quarter stood at R44,935 per tonne against our expectation of R36,000 per tonne. This could be due to superior steel product mix and lower sales of metals. The positive impact of higher realiza-tions on revenue was lowered due to a 29.4% sequential decline in volumes. Sales volume during the quarter was 452,809 tonnes, much lower than our expectation of 570,000 tonnes.

View of India Infoline

BSE CODE500228 NSE SyMBOLJINdALSTeL

NOTES

JINDAL STEEL & POwER LTDIRoN ANd STeeL/INTeRM pRodUCTS


R692.70


Gross sales 2,118.86 2,388.84 1,757.57 1,596.53 1,587.64

Excise duty 0.00 0.00 0.00 0.00 0.00

Net sales 2,118.86 2,388.84 1,757.57 1,596.53 1,587.64


Other income 6.20 98.37 16.95 20.46 4.59

Total income 2,127.80 2,487.21 1,786.33 1,618.70 1,592.66


PBDIT 797.53 876.74 635.81 571.81 575.24

Interest 74.17 83.59 69.10 54.50 32.76

PBDT 723.36 793.15 566.71 517.31 542.48

Depreciation 147.47 131.27 130.96 127.03 122.89

Tax 140.20 112.88 110.13 85.27 119.53




EPS (R) 4.68 5.90 3.50 3.28 19.40

Equity 93.39 93.12 93.08 93.08 15.47




18 | SEPTEMBER 2010


Larsen and Toubro Ltd’s (L&T) expansion in operating profit margin (OPM) for the June quarter surprised the market—at 12.8% of sales, it was higher than 11.2% in the year-before period and the analysts’ average estimates of

10.8%. This was despite a disappointing 6% year-on-year (y-o-y) growth in reve-nues to R7,835 crore against expectations of a 15% growth. Margin expansion came from the engineering and construction (E&C) segment. Although the non-E&C segments account for merely 15% of revenues, they buoyed the overall rev-enue growth rate. Overall, L&T’s net profit for the quarter registered a 15% y-o-y growth to R666 crore, excluding the R1,020 crore “exceptional gain” from its stake sale in UltraTech Cement Ltd. The outlook for the current fiscal is robust.

Vatsala Kamat

BSE CODE500510 NSE SyMBOLLT

NOTES

LARSEN & TOUBRO LTDCoNSTRUCTIoN ANd eNGINeeRING


R2,016.35


Gross sales 7,912.95 13,489.52 8,139.30 7,936.26 7,430.85

Excise duty 77.85 114.63 67.93 70.08 68.14

Net sales 7,835.10 13,374.89 8,071.37 7,866.18 7,362.71


Other income 226.76 430.53 296.14 285.16 1,244.64

Total income 8,112.07 14,015.63 8,418.30 8,204.00 8,652.93


PBDIT 1,233.81 2,481.29 1,303.01 1,082.17 2,074.55

Interest 142.34 135.56 133.92 130.96 109.59

PBDT 1,091.47 2,345.73 1,169.09 951.21 1,964.96

Depreciation 114.15 116.22 104.52 100.13 93.73

Tax 311.05 804.56 302.16 272.62 264.91

Reported profit after tax 666.17 1,438.10 758.82 580.40 1,598.20


Adjusted profit after extraordinary items 666.17 1,337.52 696.27 561.79 727.13

EPS (R) 11.05 23.90 12.72 9.90 27.28

Equity 120.63 120.44 120.05 117.53 117.25



SEPTEMBER 2010 | 19


For Mahindra and Mahindra Ltd (M&M), the acquisition of South Korean automaker, Ssangyong Motor Co., will help access overseas markets and add sizeable production capacity. With the acquisition, M&M would have a

global presence in the sport utility vehicle (SUV) segment. In the past, M&M has successfully managed acquisitions like Punjab Tractors

Ltd, Kinetic Motor Co. and, more recently, Reva Electric Car Co. Tech Mahindra Ltd also resurrected the bankrupt Satyam Computer Services Ltd. In fact, the group’s core auto business is growing. Analysts estimate a 20% growth in revenues over the next two years. If managed well, Ssangyong acquisition could morph M&M from a domestic leader in SUV’s to a global entity.

Vatsala Kamat

BSE CODE500520 NSE SyMBOLM&M

NOTES

MAHINDRA & MAHINDRA LTDCARS ANd UTILITy VehICLeS


R690.20


Gross sales 5,607.10 5,762.79 4,877.52 4,930.67 4,675.05

Excise duty 482.93 483.93 398.82 465.67 445.59

Net sales 5,124.17 5,278.86 4,478.70 4,465.00 4,229.46


Other income 20.48 18.12 53.68 256.24 23.57

Total income 5,180.58 5,322.75 4,550.80 4,814.01 4,266.16


PBDIT 796.06 863.70 723.19 1,087.42 632.54

Interest -22.70 0.90 37.53 44.94 5.95

PBDT 818.76 862.80 685.66 1,042.48 626.59

Depreciation 97.62 94.74 98.36 89.19 88.49

Tax 158.75 197.80 173.60 250.35 137.25




EPS (R) 9.94 10.17 15.12 26.73 14.70

Equity 283.05 282.95 273.56 273.36 272.98



20 | SEPTEMBER 2010


BSE CODE532500 NSE SyMBOLMARUTI

NOTES

MARUTI SUzUkI INDIA LTDCARS ANd UTILITy VehICLeS


R1,481.05


Gross sales 9,020.20 9,118.87 8,085.33 7,762.61 6,980.87

Excise duty 929.81 838.05 712.68 681.94 616.16

Net sales 8,090.39 8,280.82 7,372.65 7,080.67 6,364.71


Other income 100.20 78.97 91.25 110.01 216.53

Total income 8,331.73 8,503.52 7,594.10 7,312.62 6,709.53


PBDIT 892.71 1,190.04 1,225.16 1,026.15 1,009.70

Interest 7.98 12.85 8.37 5.97 6.31

PBDT 884.73 1,177.19 1,216.79 1,020.18 1,003.39

Depreciation 241.70 223.04 202.78 203.11 196.09

Tax 177.67 297.60 326.48 247.07 223.76




EPS (R) 16.11 22.73 23.80 19.73 20.20

Equity 144.46 144.46 144.46 144.46 144.46



Increase in raw material costs coupled with an unexpected rise in royalty pay-ment to its parent, Suzuki Motor Corp., dragged down the Maruti Suzuki India Ltd’s June quarter profits. The reported net profit at R465.4 crore fell 20% on a

year-on-year (y-o-y) basis and 29% sequentially. Although exports registered a 38% y-o-y growth, the rupee appreciating against the euro over the last quarter hurt export realizations because the euro zone accounts for a significant part of the firm’s exports. So far, analysts had maintained that profitability could improve from the third quarter FY11 as commodity prices are expected to cool off. But the rise in royalty payment could trigger a downward revision of earnings estimates.

Vatsala Kamat


SEPTEMBER 2010 | 21


In its FY10 annual report, NTPC Ltd has outlined its vision to generate 128 giga watts by 2032 and has highlighted fuel diversification initiatives. A robust bal-ance sheet means NTPC is well capitalized to fund capacity additions.

Meanwhile, its operating capacity continues to be a cash cow, earning a core return on equity of around 27%. But escalation in debtor days from 32 to 51 in FY10 makes us cautious on the risk profile of the sector. Further, the annual report does not address the issue of slippages in capacity additions and the manage-ment’s strategy to reduce them.


BSE CODE532555 NSE SyMBOLNTpC

NOTES

NTPC LTDeLeCTRIC UTILITIeS


R208.10


Gross sales 12,944.49 12,353.39 11,183.73 10,782.79 12,002.68

Excise duty 0.00 0.00 0.00 0.00 0.00

Net sales 12,944.49 12,353.39 11,183.73 10,782.79 12,002.68


Other income 226.87 249.50 253.66 271.18 250.99

Total income 13,529.42 12,981.04 11,962.86 11,523.79 12,778.96


PBDIT 3,571.66 3,293.39 4,144.38 3,954.73 3,951.95

Interest 535.75 481.79 341.78 540.69 444.67

PBDT 3,035.91 2,811.60 3,802.60 3,414.04 3,507.28

Depreciation 682.72 732.16 661.36 643.75 612.79

Tax 421.17 -97.62 886.22 574.94 581.90




EPS (R) 2.23 2.45 2.87 2.61 2.66

Equity 8,245.46 8,245.46 8,245.46 8,245.46 8,245.46

Public Shareholding (no. of shares in million) 1,278.10 1,278.10 865.83 865.83 865.83


22 | SEPTEMBER 2010


Oil and Natural Gas Corp. Ltd’s (ONGC) performance in the June quarter was affected by higher subsidy burden of R5,515 crore compared with R429 crore last year. The government has asked upstream companies to

share one-third of the entire subsidy burden. Total operating revenues declined by 8.6% over the same period last year. While ONGC’s gross realizations were in line with street estimates, net realizations were below expectations. Operating profit margins declined to 59.27% from 64.47% last year. The September quarter is expected to be better for ONGC owing to the full effect of deregulation of petrol prices and increase in the prices of administered price mechanism gas.

Pallavi Pengonda

BSE CODE500312 NSE SyMBOLoNGC

NOTES

OIL & NATURAL GAS CORP LTDexpLoRATIoN ANd pRodUCTIoN


R1,437.35


Gross sales 13,710.43 14,777.71 15,372.57 15,134.04 14,921.83

Excise duty 44.83 64.45 58.08 53.45 42.56

Net sales 13,665.60 14,713.26 15,314.49 15,080.59 14,879.27

Other operating income 157.41 1,289.08 191.65 110.98 66.17

Other income 407.21 469.13 -30.13 1,139.31 978.64

Total income 14,230.22 16,471.47 15,476.01 16,330.88 15,924.08


PBDIT 8,600.42 9,887.16 9,304.55 9,973.79 10,545.78

Interest 2.76 56.08 2.93 3.54 6.10

PBDT 8,597.66 9,831.08 9,301.62 9,970.25 10,539.68

Depreciation 3,114.27 4,448.03 4,675.79 2,356.06 3,178.91

Tax 1,825.60 1,009.34 1,780.50 2,019.87 2,290.50




EPS (R) 17.12 17.66 14.28 23.80 22.67

Equity 2,138.89 2,138.89 2,138.87 2,138.87 2,138.87



SEPTEMBER 2010 | 23


BSE CODE532712 NSE SyMBOLRCoM

NOTES

RELIANCE COMMUNICATIONS LTDTeLeCoM SeRVICeS


R169.60


Gross sales 3,041.12 3,001.82 3,040.66 3,032.37 3,006.13

Excise duty 0.00 0.00 0.00 0.00 0.00

Net sales 3,041.12 3,001.82 3,040.66 3,032.37 3,006.13


Other income 8.34 45.47 1.20 3.11 165.43

Total income 3,185.91 3,110.56 3,109.66 3,061.00 3,197.07


PBDIT 126.37 257.73 21.39 378.12 415.09

Interest 211.15 -487.35 -342.77 342.97 -571.23

PBDT -84.78 745.08 364.16 35.15 986.32

Depreciation 406.03 349.70 392.19 213.03 556.32

Tax 0.00 130.86 9.68 -60.00 60.00

Reported profit after tax -490.81 264.52 -37.71 -117.88 370.00

Extraordinary items 0.00 0.00 -16.37 0.00 0.00

Adjusted profit after extraordinary items -490.81 264.52 -21.34 -117.88 370.00

EPS (R) 0.00 1.28 0.00 0.00 1.55

Equity 1,032.01 1,032.01 1,032.01 1,032.01 1,032.01



Reliance Communications Ltd (RCom) continues to lag its peers in the wire-less telecom industry. It reported a mere 1.5% sequential increase in the revenues of its wireless division in the June quarter, which compares

poorly with Bharti Airtel Ltd’s 6.1% growth and Idea Cellular Ltd’s growth of about 4.2%. The total number of minutes carried on RCom’s mobile network last quarter rose by just 1% sequentially, when Bharti and Idea reported double-digit growth. RCom’s long distance, data and enterprise services businesses saw revenues fall-ing by about 8% sequentially and profit declining by 5%. Interestingly, its overall earnings before interest, tax, depreciation and amortization rose by about 2%.

Mobis Philipose


24 | SEPTEMBER 2010


Reliance Industries Ltd’s year-on-year (y-o-y) growth numbers look very impressive due to the previous year’s low base. Revenue rose by 88% year-on-year (y-o-y), but were about 4% short of the mean estimate of seven

analysts compiled by Mint. Similarly, operating profit rose by 46% y-o-y, but was about 1% lower compared with the mean estimate. The reported net profit was about 1% higher and the results are unlikely to alter the company’s valuation in any significant way. The company’s recent acquisitions in the gas space and its entry into telecom is being seen positively, but it remains to be seen if these ven-tures will be value accretive.

Pallavi Pengonda

BSE CODE500325 NSE SyMBOLReLIANCe

NOTES

RELIANCE INDUSTRIES LTDINTeGRATed oIL ANd GAS


R1,001.65


Gross sales 61,007.00 60,267.00 58,848.00 48,843.00 32,441.00

Excise duty 2,779.00 2,697.00 1,992.00 1,995.00 1,254.00

Net sales 58,228.00 57,570.00 56,856.00 46,848.00 31,187.00


Other income 722.00 615.00 508.00 628.00 709.00

Total income 58,950.00 58,185.00 57,364.00 47,476.00 31,896.00


PBDIT 10,064.00 9,751.00 8,352.00 7,845.00 7,093.00

Interest 541.00 525.00 550.00 462.00 460.00

PBDT 9,523.00 9,226.00 7,802.00 7,383.00 6,633.00

Depreciation 3,485.00 3,392.00 2,795.00 2,432.00 1,878.00

Tax 987.00 821.00 699.00 800.00 791.00




EPS (R) 14.80 14.40 12.30 23.40 23.29

Equity 3,271.00 3,270.00 3,270.00 1,643.00 1,574.00

Public Shareholding (no. of shares in million) 1,806.80 1,806.49 1,747.29 881.69 802.20


SEPTEMBER 2010 | 25


The Maharashtra Electricity Regulatory Commission has lifted its stay order (imposed in June 2009) on Reliance Infrastructure Ltd’s (REL) Mumbai discom tariff plan as the regulatory audit found no irregularities in the

books. Hence, REL will earn the prescribed 16% return on equity and also recover R1,700 crore in unrecovered costs. Separately, REL will commence operations of the Delhi Metro shortly (in the third quarter of FY11), which should lay to rest concerns on the company’s execution abilities.


BSE CODE500390 NSE SyMBOLReLINFRA

NOTES

RELIANCE INFRASTRUCTURE LTDeLeCTRIC UTILITIeS


R1,074.85


Gross sales 2,135.38 2,553.12 2,235.14 2,571.88 2,407.22

Excise duty 0.00 0.00 0.00 0.00 0.00

Net sales 2,135.38 2,553.12 2,235.14 2,571.88 2,407.22


Other income 180.43 166.82 215.58 163.26 244.18

Total income 2,408.47 2,810.69 2,503.07 2,812.82 2,690.51


PBDIT 433.87 438.18 450.95 476.18 543.70

Interest 61.31 58.06 56.53 73.96 103.67

PBDT 372.56 380.12 394.42 402.22 440.03

Depreciation 76.86 90.67 83.02 73.96 72.20

Tax 49.45 38.36 48.77 25.48 51.26




EPS (R) 10.06 11.14 12.30 13.62 14.05

Equity 244.91 244.91 225.31 225.31 225.31



26 | SEPTEMBER 2010


Loan growth was never an issue with State Bank of India and net interest income (NII) was expected to be strong. Nevertheless, the 45% growth in NII has overshot expectations. That growth has been achieved by a 20.7%

year-on-year rise in gross advances and a rise in net interest margin (NIM). NIM has improved over the March quarter as the proportion of low-cost current and savings accounts increased to an excellent 47.5%, while it shed high-cost bulk deposits. The June quarter has shown that the bank has also been able to grow its profit by a handsome 25% despite continuing loan losses and higher provisions. Net non-performing assets declined slightly from 1.72% at end-March to 1.7%.

Manas Chakravarty

BSE CODE500112 NSE SyMBOLSBIN

NOTES

STATE BANk OF INDIABANK


R3,144.30



Interest earned 18,452.12 17,965.59 17,779.69 17,775.88 17,472.76

Other income 3,689.96 4,508.53 3,365.71 3,525.16 3,568.75

Total income 22,142.08 22,474.12 21,145.40 21,301.04 21,041.51



Provisions and contingencies 1,551.37 2,349.40 856.61 1,016.07 172.73

Depreciation 0.00 0.00 0.00 0.00 0.00

Provision for taxes 1,668.79 977.88 1,282.48 1,328.91 1,170.77

Interest earned 17,965.59 17,965.59 17,965.59 17,965.59 17,965.59

Net profit 2,914.20 1,866.60 2,479.05 2,490.04 2,330.37



EPS (R) 45.90 29.40 39.05 39.22 36.71

Equity 634.88 634.88 634.88 634.88 634.88

Public shareholding (no. of shares in million) 257.68 257.68 257.68 257.68 257.68




Total deposits 815,297.00 804,116.00 770,985.00 0.00 763,563.00

Total advances 663,828.00 631,914.00 607,154.00 0.00 549,793.00

SEPTEMBER 2010 | 27


Sterlite Industries India Ltd’s consolidated results missed street estimates for the quarter ending June. Net profit increased by 50% compared with the same period last fiscal to R1,008.43 crore. One reason for the high growth is

the result of Sterlite adopting a new accounting standard. The notes to accounts state that other income and profit after tax would have been lower by R164.96 crore and R103.87 crore, respectively, if it had not adopted Accounting Standard 30 for a certain transaction. The company performed well at the operating level with margins improving to 25.08% from 24.14% last year despite higher employee costs and other expenditure.

Pallavi Pengonda

BSE CODE500900 NSE SyMBOLSTeR

NOTES

STERLITE INDUSTRIES (INDIA) LTDCoppeR


R172.35


Gross sales 3,187.97 3,521.42 3,611.99 3,616.41 2,364.46

Excise duty 0.00 0.00 0.00 0.00 0.00

Net sales 3,187.97 3,521.42 3,611.99 3,616.41 2,364.46


Other income 549.19 433.24 270.78 221.03 183.99

Total income 3,750.15 3,961.00 3,883.08 3,838.74 2,550.72


PBDIT 729.89 662.08 133.74 323.17 245.12

Interest 116.18 85.05 74.90 43.14 62.59

PBDT 613.71 577.03 58.84 280.03 182.53

Depreciation 38.07 37.96 37.83 37.67 37.18

Tax 156.21 76.38 -25.58 32.85 32.65


Extraordinary items 0.00 0.00 -273.53 0.00 0.00


EPS (R) 1.25 5.51 0.55 2.58 1.59

Equity 336.12 168.08 168.08 168.08 141.70

Public Shareholding (no. of shares in million) 1,103.27 277.79 270.76 256.24 204.51


28 | SEPTEMBER 2010


Tata Consultancy Services Ltd’s consolidated revenue in the first quarter of FY11 increased 6.2% to R8,220 crore from R7,740 crore in the fourth quarter of FY10, led by volume growth of 8.1% sequentially. This is higher than our

expectations of around 7% sequential growth and Infosys Technologies Ltd’s vol-ume growth of 6.9% sequentially in the first quarter of FY11. The growth was broad-based in the first quarter of FY11, which indicates a secular growth trend in information technology spending in the future. The company expects that growth will be led by emerging markets, followed by the US, the UK and continen-tal Europe.

View of Asit C. Mehta

BSE CODE532540 NSE SyMBOLTCS

NOTES

TATA CONSULTANCy SERvICES LTDIT CoNSULTING ANd SoFTwARe


R931.45


Gross sales 6,410.95 5,807.06 5,883.39 5,744.40 5,609.60

Excise duty 0.00 0.00 0.00 0.00 0.00

Net sales 6,410.95 5,807.06 5,883.39 5,744.40 5,609.60


Other income 36.43 161.34 40.36 -25.36 1.26

Total income 6,447.38 5,968.40 5,923.75 5,719.04 5,610.86


PBDIT 1,897.78 1,758.03 1,888.73 1,647.02 1,555.49

Interest 1.94 4.17 2.51 1.42 1.44

PBDT 1,895.84 1,753.86 1,886.22 1,645.60 1,554.05

Depreciation 114.60 118.77 118.41 118.97 113.20

Tax 224.83 195.02 312.99 191.38 164.91




EPS (R) 7.93 7.36 7.93 6.87 6.51

Equity 195.72 195.72 195.72 195.72 195.72

Public Shareholding (no. of shares in million) NA 506.46 506.41 NA NA

Public Shareholding (% in equity share capital) NA 25.88 25.87 NA NAPBDIT: profit before depreciation, interest and tax; PBDT: profit before depreciation and tax; EPS: earnings per share Figures in R crore unless specified

SEPTEMBER 2010 | 29


Tata Motors Ltd’s consolidated operating performance in the first quarter of FY11 was significantly better than our expectation, with earnings before interest, tax, depreciation and amortization (Ebitda) margin expanding 300

basis points sequentially to 14.6% and recurring profit after tax growing about 38.7% sequentially to R2,020 crore. Consolidated net operating income grew 65% year-on-year (declined about 6.6% sequentially) to R27,050 crore.

The management expects raw material cost pressure to reflect from the second quarter of FY11. However, it is focusing on diluting the effect of higher raw mate-rial cost through cost savings and operating leverage.


BSE CODE500570 NSE SyMBOLTATAMoToRS

NOTES

TATA MOTORS LTDCoMMeRCIAL VehICLeS


R1,070.35


Gross sales 11,232.41 13,152.14 9,577.48 8,538.60 6,876.00

Excise duty 880.54 982.43 647.68 614.53 526.41

Net sales 10,351.87 12,169.71 8,929.80 7,924.07 6,349.59


Other income 69.30 1,112.95 0.21 420.93 319.36

Total income 10,485.56 13,342.65 8,980.11 8,399.75 6,723.38


PBDIT 1,159.03 1,375.46 1,105.29 1,455.89 1,030.61

Interest 314.01 278.61 286.14 285.64 253.45

PBDT 845.02 1,096.85 819.15 1,170.25 777.16

Depreciation 307.37 277.24 264.11 263.40 229.12

Tax 141.93 222.57 154.90 177.71 34.28


Extraordinary items -47.14 0.00 -17.33 285.14 293.80


EPS (R) 6.88 10.46 7.36 14.12 9.93

Equity 570.60 570.60 543.96 514.05 514.05



30 | SEPTEMBER 2010


Over FY10-12, we expect Tata Power Co. Ltd’s consolidated earnings to increase from R1,480 crore in FY10 to R2,510 crore in FY12. But a very meaningful part of the increase will be driven by commodity earnings

given that Tata Power is net long on coal. The contribution of commodity earn-ings to consolidated profitability rose from 9% in FY08 to 44% in FY10 and we expect this to increase in FY12. Given the competitive tariff bid and increased imported coal prices over the past three years, we expect the Mundra ultra-mega power project to post meaningful losses. The initial unit is expected to be com-missioned in September 2011 and the entire 4 gigawatt capacity by early FY14.


BSE CODE500400 NSE SyMBOLTATApoweR

NOTES

TATA POwER CO LTDeLeCTRIC UTILITIeS


R1,327.25


Gross sales 1,802.45 1,717.80 1,527.80 1,672.28 1,975.59

Excise duty 0.00 0.00 0.00 0.00 0.00

Net sales 1,802.45 1,717.80 1,527.80 1,672.28 1,975.59


Other income 127.54 53.32 45.17 75.51 107.58

Total income 1,995.44 1,848.37 1,611.68 1,796.60 2,123.20


PBDIT 578.43 502.39 409.25 492.30 739.90

Interest 79.58 94.98 92.19 101.82 117.65

PBDT 498.85 407.41 317.06 390.48 622.25

Depreciation 126.70 126.95 120.79 118.37 111.83

Tax 103.17 49.86 48.38 88.92 133.34




EPS (R) 11.07 9.71 5.96 7.82 17.89

Equity 237.33 237.33 237.21 237.11 222.03



SEPTEMBER 2010 | 31


Tata Steel Ltd’s stand-alone net revenue grew by 16.5% year-on-year (y-o-y) to R6,471 crore but was down 13.3% sequentially in the first quarter of FY11. Production was lower on a sequential basis due to maintenance

shutdown and power failure at the Jamshedpur plant. Sales volumes were flat on a yearly basis, declining 17.7% sequentially. Tata Steel is in the process of develop-ing a coking coal mine in Mozambique and an iron ore mine in Canada to increase the integration levels of Tata Steel Europe (TSE). We expect the compa-ny’s backward integration projects in Mozambique and Canada to translate into significant earnings improvement for TSE.


BSE CODE500470 NSE SyMBOLTATASTeeL

NOTES

TATA STEEL LTDIRoN ANd STeeL/INTeRM pRodUCTS


R629.50


Gross sales 6,471.27 7,225.47 6,307.48 5,629.85 5,554.02

Excise duty 0.00 0.00 0.00 0.00 0.00

Net sales 6,471.27 7,225.47 6,307.48 5,629.85 5,554.02


Other income 48.43 467.84 263.56 76.05 46.34

Total income 6,599.91 7,807.28 6,638.44 5,768.16 5,661.89


PBDIT 2,964.88 3,598.58 2,420.46 1,998.28 1,788.56

Interest 327.68 358.52 415.72 392.00 342.16

PBDT 2,637.20 3,240.06 2,004.74 1,606.28 1,446.40

Depreciation 280.20 311.46 262.18 256.37 253.17

Tax 777.61 766.32 550.81 446.97 403.40

Reported profit after tax 1,579.39 2,162.28 1,191.75 902.94 789.83


Adjusted profit after extraordinary items 1,579.39 2,162.28 1,191.75 902.94 789.83

EPS (R) 17.80 24.36 13.43 10.89 10.37

Equity 887.41 887.41 887.41 887.41 730.79



32 | SEPTEMBER 2010


The strong growth witnessed in Wipro Ltd’s package implementation service revenues during the first quarter of FY11 reflects pick-up in discretionary spends of clients. Significant spend is currently happening in social cus-

tomer relationship management that would certainly assure strong revenue and better profitability for the company. Further, the consumer package goods, retail and transportation, energy and utilities and the healthcare verticals are witness-ing a strong demand pipeline and are expected to grow strongly. We expect Wipro to record 18.2% compounded annual growth rate (CAGR) in revenue, while profit is expected to clock 14.5% CAGR over FY10-12.


BSE CODE507685 NSE SyMBOLwIpRo

NOTES

wIPRO LTDIT CoNSULTING ANd SoFTwARe


R446.05


Gross sales 5,982.20 6,141.00 5,892.90 5,857.80 5,287.90

Excise duty 0.00 0.00 0.00 0.00 0.00

Net sales 5,982.20 6,141.00 5,892.90 5,857.80 5,287.90


Other income 128.80 126.40 85.70 121.40 95.50

Total income 6,111.00 6,267.40 5,978.60 5,979.20 5,383.40


PBDIT 1,519.50 1,587.70 1,563.50 1,588.70 1,448.40

Interest 75.50 -62.10 -16.90 43.00 -44.20

PBDT 1,444.00 1,649.80 1,580.40 1,545.70 1,492.60

Depreciation 136.10 140.30 145.10 158.00 136.40

Tax 197.90 272.80 204.10 155.60 158.30




EPS (R) 4.56 8.48 8.45 8.46 8.23

Equity 489.90 293.60 293.50 293.30 293.10



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