12 November 2012
HAVELLS INDIA:: Diwali Picks - November 2012 ::Anand Rathi Top 7 - Diwali Picks
Company Introduction: Havells India Ltd.(HIL) is one of the largest electrical and power distribution equipment manufacturers engaged in selling entire gamut of household, commercial and industrial electrical devices. Its products include industrial and domestic circuit protection devices, cables and wires, motors, fans, power capacitors, compact fluorescent lamps (CFLs), luminaries for domestic, commercial and industrial applications and modular switches.
Investment Arguments One of the key strengths of HIL is its wide product range from Switchgear, Switches, Cables & Wires, CFL, Luminaries, Fans, Water Heaters and Kitchen appliances. HIL is better placed as compared to competition as it can target the entire distribution channel with its product range, which almost covers the electrical equipment market. It holds a market share ranging from 10-25% and is among the top 5 players in most product categories.
Expected Value: 715 Sector: Capital Goods
HIL is emerging as retail consumer durable brand. Recently it has entered into home appliances space like mixer, iron, grinder, induction stove etc. However this market is crowded but India being a consumer driven market offers ample scope to grow. HIL also established a strong pan India distribution network, which it is looking to enhance further. It currently has more than 5300 dealers in India, which it is looking to increase by about 500 each year in order to expand its reach. Company has very strong relationship with dealers which can be leveraged for selling consumer appliances.
Valuation
We strongly believe over medium term (3-4 years) company valuation multiple will also improve. As of now co. is treated as player in capital good segment hence commands lower multiple. We expect the stock is ready for re-reating. We valued the company at 16x for FY 15 which gives our target price of Rs. 715.
H D F C:: Diwali Picks - November 2012 ::Anand Rathi Top 7 - Diwali Picks
Company Introduction: HDFC is engaged in providing loans for the purchase or construction of residential houses, commercial real estate and loans for certain other purposes in India. Its product range includes loans for purchase and construction of a residential unit, purchase of land, home improvement loans, home extension loans, non-residential premises loans for professionals and loan against property, while its flexible repayment options include Step Up Repayment Facility (SURF) and Flexible Loan Installment Plan (FLIP).
Investment Arguments: HDFC is the largest mortgage player in India. HDFC holds 24% in HDFC bank. The company also has two insurance subsidiaries where it holds 74% stake i.e. HDFC life and HDFC Ergo general insurance company. Increase in FDI limit in Insurance sector will help Indian promoters to unlock the value of their investment and improve capital adequacy.
Expected Value: 947 Sector: NBFC
Over the last decade HDFC has delivered a PAT CAGR of 22%. Impeccable asset quality, growth and profitability performance has led to market cap CAGR of 30%. HDFC has good distribution franchise owing to bank’s strong branch network. We believe this will help HDFC to maintain growth momentum going forward. As interest rates seem to have peaked out and expected to decline from FY 14. We believe this will boost profitability as well as ROE.
Valuation
At the current price of Rs. 793, the stock trades at a PBV of 3.4x for FY15e and 3.9x for FY14e. Our target price of Rs. 947 is based on target P/BV of 4.10 for FY 15 BV.( last 3 years Average.)
KARUR VYSYA BANK:: Diwali Picks - November 2012 ::Anand Rathi Top 7 - Diwali Picks
Company Introduction: Karur Vysya Bank(KVB) Limited provides banking and financial services in India. KVB was started in the year 1916 in Karur. KVB has made profits consistently for the past 95 years of its banking operations. It has also declared uninterrupted divided since its operation.
Investment Arguments: KVB is planning to introduce 100 new branches and 400 ATMs during the current fiscal across the country. It aims to reach 540 branches pan-India by March 2013, which will be in line with the long-term goal of achieving a total business of Rs 1, 25,000 crore by 2016. KVB continues to register higher business growth (25%) than the system. At 27.2%, advances grew faster than deposits (23.3%).We expect the bank to continue to register a healthy ~26% CAGR over FY12-15, led by SME and retail loans.
Expected Value: 574 Sector: Banking
Both in terms of ROA & ROE, KVB has been most consistent player in last 10 years which shows quality of management. In last 10 years we find that it is consistently generating ROA of above 1 & ROE of over 20% (Average). KVB 10 years average ROA is 1.64% which is higher than HDFC which is another best bank, consistently generating higher ROA (average 1.46%) over 10 years period. Gross NPAs decreased 14.4% qoq, with fresh slippages of `613m (1.0% of loans). NPA coverage remained stable at +75%. In 2QFY13, restructured book grew 9.2%qoq to `7.1bn (2.8% of loans). We expect the 75% NPA coverage to be sustained over FY13-15, led by likely stable asset quality and 28.2% CAGR in pre-provisioning profits over the same period.
Valuation
At the current price of Rs. 390, the stock trades at a PABV of 1.20 xs for FY15e and 1.42x for FY14e. Our target price of Rs. 574 is based on target P/ABV of 1.45 for FY 15 ABV.
BAJAJ CORP:: Diwali Picks - November 2012 ::Anand Rathi Top 7 - Diwali Picks
Company Introduction: Bajaj Corp. is part of Shishir Bajaj Group of companies. The Company's brands include Bajaj Kailash Parbat Thanda Tel, Bajaj Almond Drops Hair Oil, Bajaj Brahmi Amla Hair Oil, Bajaj Amla Shikakai Hair Oil and Bajaj Jasmine Hair Oil. The Company has five production facilities.
Investment Arguments Rs. 70bn Indian hair oils market emerged as one of the fastest growing segments in the Indian FMCG industry and amongst it, Light Hair Oils (LHO) lead the pack. We expect hair oil market to touch Rs100bn by FY15, indicating a 13% CAGR over the next three years. The LHO category has managed to grow at a CAGR of 28.3% over the past four years versus 21.3% growth in the total hair oils market. Bajaj Corp Ltd. (BCL), maker of ‘Bajaj Almond Drops’ emerged as the dominant player in the growing LHO category and enjoys market leadership with a share of 54%.
Expected Value: 247 Sector -FMCG
BCL’s net cash balance stood at Rs3.4bn in FY12 which placed BCL strongly to leverage on inorganic growth opportunities. Over the period, BCL has developed strong distribution networks which spread across India. The company enjoys deep distribution networks in both, the urban and rural India. Currently, BCL‘s products reach to over 2.16mn retail outlets across India. As on Sep, 2012, BCL has 6036 direct distributors and 11,258 wholesalers, both at the rural and urban markets.
Valuation
Most of the FMCG companies are quoting around 20-25x for FY 15 PE multiple. However Bajaj Cor. is attractively valued in-spite of its attractive growth. We valued the stock at 18x for FY15 earning 20% discount to sector median P/E. We value the stock at Rs. 247, at a target PE of 18x FY15e earnings.
G M D C:: Diwali Picks - November 2012 ::Anand Rathi Top 7 - Diwali Picks
Company Introduction: GMDC was established by the Government of Gujarat, in the year 1963, for developing important and major mineral resources of the State. Its product range includes energy minerals like Lignite, Bauxite, Fluorspar, Granite and Marble.
Investment Arguments The nearest coal mine is almost 700 Kms away from Gujarat Border makes it bit difficult for companies to transport coal from mines. Transportation cost is again major chunk in total cost of coal which is on upward move (Container corp. recently hike the freight cost by 20-25%). Imported coal is again costly because of rupees depreciation and difficult to accommodate in domestic boilers. Overall cost benefits analysis forced companies to buy the coal from GMDC.
Expected Value: 264 Sector: Power & Mining
GMDC is continuously decreasing its dependency on lignite and putting effort to de-risk the business by entering into Bauxite, power; both thermal & Wind alongwith Manganese, Coal, Cement, Lead, Zinc, Copper production. Total Demand for Lignite in India is expected to grow at a CAGR 10% from 55.8 mn tonnes in 2011-12 to 87.8 mn tonnes in 2015-17. Power sector is major driver of growth. Company has thermal power plant of 250 MW which is running below its optimal capacity, GMDC has outsourced Korean company to enhance the PLF. We expect thermal power will start contribution in EBIDTA from FY 14 onwards.
Valuation In PE term stock is quoting at 8.5x FY15E EPS of Rs 24.7 and 9.5x FY14E EPS of Rs 22.1. We see the price target of Rs. 264 based on FY 15, EPS. (Value based on 5 years median PE multiple.)
BAJAJ CORP:: Diwali Picks - November 2012 ::Anand Rathi Top 7 - Diwali Picks
Company Introduction: Bajaj Corp. is part of Shishir Bajaj Group of companies. The Company's brands include Bajaj Kailash Parbat Thanda Tel, Bajaj Almond Drops Hair Oil, Bajaj Brahmi Amla Hair Oil, Bajaj Amla Shikakai Hair Oil and Bajaj Jasmine Hair Oil. The Company has five production facilities.
Investment Arguments Rs. 70bn Indian hair oils market emerged as one of the fastest growing segments in the Indian FMCG industry and amongst it, Light Hair Oils (LHO) lead the pack. We expect hair oil market to touch Rs100bn by FY15, indicating a 13% CAGR over the next three years. The LHO category has managed to grow at a CAGR of 28.3% over the past four years versus 21.3% growth in the total hair oils market. Bajaj Corp Ltd. (BCL), maker of ‘Bajaj Almond Drops’ emerged as the dominant player in the growing LHO category and enjoys market leadership with a share of 54%.
Expected Value: 247 Sector -FMCG
BCL’s net cash balance stood at Rs3.4bn in FY12 which placed BCL strongly to leverage on inorganic growth opportunities. Over the period, BCL has developed strong distribution networks which spread across India. The company enjoys deep distribution networks in both, the urban and rural India. Currently, BCL‘s products reach to over 2.16mn retail outlets across India. As on Sep, 2012, BCL has 6036 direct distributors and 11,258 wholesalers, both at the rural and urban markets.
Valuation
Most of the FMCG companies are quoting around 20-25x for FY 15 PE multiple. However Bajaj Cor. is attractively valued in-spite of its attractive growth. We valued the stock at 18x for FY15 earning 20% discount to sector median P/E. We value the stock at Rs. 247, at a target PE of 18x FY15e earnings.
BAYER CROPSCIENCE:: Diwali Picks - November 2012 ::Anand Rathi Top 7 - Diwali Picks
Company Introduction: Bayer CropScience is a leader in the areas of crop protection, pest control, seeds and plant biotechnology. The ‘Agri Care’ business which primarily includes manufacture, sale and distribution of insecticides, fungicides, weedicides and various other agrochemical products. Bayer Crop. is subsidiary of Bayer (Germany).
Investment Arguments Bayer CropScience is the largest player of pesticides in India with over 25% market share (organized). Bayer is the biggest beneficiary of increasing consumption of pesticides in India, which is we expect to grow at an 8-10% CAGR from the current consumption of a mere 0.6gms/Ha. Robust R&D backed by parent Bayer AG means the company is very well equipped to launch 3-4 new products every year. Strong R&D also helps the company to roll out new products to target pests that have developed resistance against older molecules.
Expected Value: 1402 Sector: Agri.
On the unlocking of value of the Thane plant (Around 1100 Crore) – the company has received the earnest amount of Rs. 260crs on March 2011 and an advance payment of Rs. 260crs on Dec 2011 for the exclusive arrangement. The remaining procedure should be completed at a future date and the receipt of the consideration will be received on or before 30th Nov 2012. High levels of cash coupled with strong balance sheet enables the company to chalk out big expansion (organic or inorganic).
Valuation
With new product is expected to be launched in FY 14-FY 15, we believe company is building strong platform for sustainable growth in future. Bayer Corp (Parent) is focusing on cost rationalization globally which will be reflected in Indian subsidiary too. We strongly believe stock price is much undervalued vis a vis growth potential. Our FY 14 target value of the stock is 1402 based on 9.5 EV/EBIDTA (median of last 7 years).
SWARAJ ENGINE:: Diwali Picks - November 2012 ::Anand Rathi Top 7 - Diwali Picks
SWARAJ
ENGINE
Company Introduction: Swaraj Engines Ltd is in the business of supplying engines to the swaraj division of Mahindra & Mahindra Ltd and supply of hi-tech engine components in India. Swaraj Engines (SWE), manufactures engines for 20 HP to 50 HP tractors and its growth has been directly proportional to India’s agriculture story. Investment Arguments Its manufacturing plant is located at Mohali (Punjab) where it plans to raise capacity to 75,000 engines (existing 60000) by Dec’12, for Rs. 58 crore. Management has indicated its intent to increase production to 100,000 engines at its present location when the need arises. SWE manufactures engines in the 20-50 HP range; of its sales, 10% are engines of lower than 30 HP, 45% of 30-40 HP and 45% of 40-50 HP. We expect its aggressive capex plans to aid growth, catering to further demand for Swaraj tractors.
Expected Value: 527 Sector: Auto
SWE’s growth has been directly proportional to India’s agriculture story. We expect tractors to do well in the long term, led by more scope for productivity, low penetration, need for mechanization, higher MSPs and policies (NREGA). The Company expects to cater to 90% requirement (now ~80%) of Swaraj brand tractors through its ongoing expansion. After this, we expect it to cater not only to the Swaraj brand but to supply engines for other Mahindra brands as well since it is one of the lowest-cost engines.
Valuation With additional capacity expected to be on-stream by Dec’12, and on expectations of a tractor-cycle recovery in FY14, Swaraj stands to benefit. It operates at a near negative working-capital cycle, is debt free, and would see good earnings growth in the next 2-3 years. Our price target of the stock is Rs. 527 based on 8.5x FY15e EPS of 62 (in line with the last five-year median).
FII & DII trading activity on NSE and BSE 12-11-2012
| Category | Buy | Sell | Net | |
| Value | Value | Value | ||
| FII | 1679.2 | 1883.44 | -204.24 | |
| DII | 642.76 | 796.78 | -154.02 | |
--
Angel Broking - Weekly Review - 10.11.2012
Forwarding you the Weekly Review dated 10.11.2012. Kindly click on the following link to view the Report.
FII DERIVATIVES STATISTICS FOR 12-Nov-2012
| FII DERIVATIVES STATISTICS FOR 12-Nov-2012 | |||||||
| BUY | SELL | OPEN INTEREST AT THE END OF THE DAY | |||||
| No. of contracts | Amt in Crores | No. of contracts | Amt in Crores | No. of contracts | Amt in Crores | ||
| INDEX FUTURES | 22760 | 629.01 | 38350 | 1052.55 | 422405 | 10636.55 | -423.54 |
| INDEX OPTIONS | 343032 | 9773.71 | 341429 | 9761.31 | 1857181 | 52812.21 | 12.40 |
| STOCK FUTURES | 52074 | 1767.41 | 42561 | 1196.26 | 1088422 | 29869.33 | 571.16 |
| STOCK OPTIONS | 59944 | 1644.93 | 61275 | 1685.01 | 93060 | 2573.51 | -40.08 |
| Total | 119.95 | ||||||
--
Kotak Sec: Meaningful Minutes: Bull Market Predictions
| |||||||||||||||||
Pidilite Industries: Valuation appears full:: Nomura research,
Valuation appears full, see limited upside
Moderating growth in the
consumer business, weakness
in the industrial business
2012 ShareKhan Diwali Muharat Picks
We list down our best Mahurat picks for Diwali 2012
Bluechip Stock Portfolio
1.
ICICI Bank
2.Sun Pharmaceutical
3.Aditya Birla Nuvo
4.CMC
5.Cairn India
High Beta Stock
1.
Raymond
2.Mcleod Russel
3.JP Associates
4.IndusInd Bank
5.TV 18 Broadcasting
Diwali •Muhurat Picks - 2012 :: ICICI Direct
Raise debt from family to settle high-cost loans:: Business Line
I am 40 years old and run a clearing and forwarding business. My wife, 36, is a home maker. I have a son aged 11 and a daughter who is 7 years old. My business was flourishing till a few years back. When I expanded operations in the initial period, it was going well, but in the last one year I have accumulated a huge amount of debt. My cost of borrowing in some cases was as high as 48 per cent a year.
I have taken personal loans with a few banks to the tune of Rs 12 lakh and gold loans with a few banks and NBFCs to the tune of Rs 6 lakh. Besides these, I borrowed Rs 5 lakh. Because of the high debt, I am borrowing every month to pay the interest.
I have a flat worth Rs 32 lakh and a plot worth Rs 5 lakh. I have a share of Rs 30 lakh in family property and another Rs 10 lakh from my wife’s side.
I let out the flat to an influential person. Now he is not vacating and is asking me to sell the flat at discount to market price. I have issues in land sale also. How do I repay this debt and save for my children’s education, their marriage and my retirement?
— Adhikesavan (name changed on request)
Union Bank of India, Q2FY13 Result Update:: Centrum
Sustainability is the key
UBI’s Q2FY13 core as well as bottomline performance was in line with our
expectations. Asset quality surprised positively with %GNPA improving by
10bps QoQ helped by lower slippage rate (1.8%) and healthy recoveries.
Importantly, the sustainability of asset quality improvement is questionable
on account of the chunky nature of recoveries and persistent risk of slippages
over next few quarters. We rate UBI Neutral led by limited upside (3%).
Asset quality improves, but sustainability required: Unlike most peers, UBI
reported an improvement in its asset quality matrix during the quarter with
GNPA improving by 10bps QoQ to 3.7%. Dissecting further, the improvement
in GNPA was led by lower slippages (1.8% vs 3.6% in previous quarter) as well
as uptick in recoveries. It should be noted that the recoveries are chunky in
nature and hence sustainability is questionable. Incremental restructuring was
contained at Rs8.4bn with cumulative pool now at 8.3% (5.8% on net o/s
basis). While the asset quality matrix improved during the quarter,
sustainability of the trend going forward is crucial.
NIM stable on QoQ basis: Reported NIM was largely stable at 3.0% as the
18bps QoQ contraction in blended yields was offset by similar decrease in cost
of funds. With this, the H1FY13 NIM stood at 3.0% - flattish compared with
FY12 NIM.
IGL, Q2FY13 Result Update:: Centrum
Sequential volume growth, CNG price hike elevate
profitability
IGL reported once again a stupendous performance in Q2 backed by healthy
volume growth and strong realisations. The company reported the highest
ever quarterly profits at Rs992mn up 28.5% YoY and 16.7% QoQ. Average
CNG realisations jumped by 8.0% QoQ at Rs37.9/kg (current price at
Rs38.4/kg) due to Rs2.9/kg price hike on 7 July. The company will report good
performance in Q3 despite no price hikes due to the softening of spot LNG
prices and likely rupee appreciation. IGL-PNGRB court case is scheduled for
next hearing on 21 November. We believe this event should keep the stock
price at bay for the time being. We currently maintain ‘Neutral’ rating on the stock.
Volumes and realisations rise in Q2: IGL raised CNG price by Rs2.9/kg from 7
July to Rs38.4/kg thus taking the average CNG realisations to Rs37.9/kg in Q2,
up 8.0% sequentially. Also, CNG and PNG volumes jumped by 5.8% and 1.8%
QoQ respectively thus benefitting the performance. Realisations growth along
with volume growth led to 43.1% YoY and 12.4% QoQ jump in revenues at
Rs8.6bn.
EBITDA/scm expands to Rs6.2/scm: ~8% QoQ CNG price hike led to
substantial expansion in IGL’s EBITDA/scm at Rs6.2/scm, higher both on YoY
(Rs5.1/scm) and QoQ (Rs5.6/scm) basis. In contrast, higher spot LNG sourcing
for incremental volume growth along with rupee depreciation (~2% QoQ) led
to 6.4% QoQ jump in gas sourcing cost at Rs16.3/scm. Overall, EBITDA margins
rose by 60bps QoQ and operating profits jumped 14.9% at Rs2.1bn.
Time to pay advance tax:: Business Line
You would have heard about companies paying advance tax at periodic intervals. This tax is not for corporate entities alone, but is equally applicable to individuals like you.
For a majority of us, our employer will deduct tax at source. You may have made declarations on investments in tax saving instruments to your employer, who would then deduct TDS accordingly.
But you may also have other sources of income such as capital gains from trading in shares or mutual funds, rentals, which you may not have disclosed to your employer. When such income is added to your salary, your tax outflow is likely to be higher than what your employer would have deducted.
Now, the principle of paying taxes works on a pay-as-you-earn basis.
If your tax liability, net of TDS is likely to exceed Rs 10,000, then you would be better off paying advance tax.
From the current financial year, the advance tax clause does not apply to senior citizens, who have income from pensions or interest from deposits and other sources, but no business income.
PENALTY
Generally, advance tax payment must be done by the 15{+t}{+h} of September, December and March every year. The proportion is 30 per cent of the total tax for the year, 60 per cent and 100 per cent respectively. If advance tax paid in the first two instalments is less than specified, simple interest at 1 per cent per month is charged on the deficit amount for a period of 3 months.
A penalty is payable in case of failure to pay advance tax. Under section 234B, if the tax already paid, along with any advance payments, is less than 90 per cent of your total liability as at the end of the financial year, interest is charged at 1 per cent a month till the time of payment of such a shortfall. If you pay it only when you file your returns in July, then the interest could be payable for four months. An example will make this clear.
Let us assume that your total tax liability is Rs 75,000 for 2012-13. If the tax deducted by your employer and the banks on fixed deposits is say Rs 60,000, then your remaining liability is Rs 15,000. Also, let us say you have paid advance tax of Rs 2,500. Since the total tax that you paid is less than 90 per cent of your liability, there will be a penalty. At the time of filing returns in July, your penalty under section 234B would be 1 per cent interest on Rs 12,500 for four months (April-July 2013). So the penalty would be Rs 500 (1 per cent of Rs 12,500 multiplied by four). But if no advance tax is paid despite higher liability, then under section 234C, interest at the rate of 1 per cent a month on the shortfall for three months in the first two instalments (September and December) and for one month in the last instalment is payable.
Under 234C, the penalty would be Rs 555, with the calculation being a little bit more involved.
So you will have to pay Rs ,1055 along with the Rs 15,000 at the time of filing returns.
One possible way of avoiding this penalty is to disclose all sources of income to your employer and have the company tax your full income according to your slab.
Alternately, ensure that you make advance tax payments by anticipating your likely income so that the total liability at the time of filing remains less than Rs 10,000.
Oil India, Q2FY13 Result Update:: Centrum
Operational performance improves QoQ
Although OIL’s subsidy burden increased sequentially, better
operational performance and higher other income led to 2.6% QoQ
jump in bottom-line at Rs9.5bn. Crude and natural gas production
jumped by 1.5% and 10.4% QoQ respectively. Subsidy sharing
however increased by 3.1% QoQ at Rs20.8bn. Higher cash balance on
the balance sheet led to 6.7% QoQ rise in other income at Rs4.0bn.
Thus, higher production and consequent higher sales of oil and gas
coupled with higher other income led to a sequential jump in bottomline.
Although, the stock looks attractive on current valuations, the
lack of any triggers is likely to keep valuations suppressed. Hence, we
downgrade the stock to ‘Neutral’ from Buy.
Revenue growth led by higher volumes; rupee depreciation helps
too: OIL reported 3.3% QoQ jump in revenues led by higher volumes and
~2% rupee depreciation. Net realisation for the quarter stood at
US$52.5/bbl against US$53.9/bbl in Q1. On a YoY basis however, the
performance was muted as the company earned US$86.3/bbl net
realisation in Q2FY12.
Higher crude and natural gas production: Crude and natural gas
production jumped by 1.5% to 0.96mmt and 10.4% to 0.69bcm QoQ
respectively. Crude production which was affected due to labour issues in
Q1 normalized in Q2 and startup of Numaligarh refinery and demand
from customers led to higher natural gas production.
SGX Nifty 5,715.00 -4.50 ; Markets to open down today
SGX Nifty 5,715.00 -4.50 ;
Singapore Exchange
Markets to open down today
9 AM India time
12 Nov 2012
Singapore Exchange
Markets to open down today
9 AM India time
12 Nov 2012
Redington India:: In-line Q2, strong growth outlook for H2:: Nomura
Redington’s Q2 results were broadly in line with our estimates at the
EBITDA level, but the key positive that emerged from the conference call
was a solid outlook of “12-15%” growth at the consolidated level for
FY13 (we are building in 11.9% for FY13F currently). Management’s
guidance, implies significant growth in the ~35-40% range in H2FY12F
for the India business, driven mainly by: 1) iPhone sign up with Apple,
where it expects to do ~INR11,000mn in the second half; 2) a pickup in
government orders (has a UID-Aadhar project in Q3 which will get
executed over the next 2-3 quarters) in the IT business; and 3) a pickup
in the Blackberry business, boosted by the launch of Blackberry 10 in
January 2013.
GAIL: Gas transmission exit rate for FY13E pegged at 115mmscmd :; Centrum
Gas transmission exit rate for FY13E pegged at
115mmscmd
GAIL reported weak performance during Q2 marred by lower gas
transmission volumes, provisioning for change in LPG transmission tariffs,
lower petchem sales and higher subsidy burden. Lower KG D6 volumes,
coupled with lower off take from power producers, led to 3.5% QoQ decline in
gas transmission volumes at 106.0mmscmd from 109.8mmscmd in Q1.
Subsidy burden jumped by 38.7% YoY and 12.2% QoQ at Rs7.9bn. Higher
other income somewhat supported profitability and hence GAIL reported
10.0% YoY and 13.1% QoQ drop in bottom line at Rs9.9bn. The management
indicated an exit rate for gas transmission volumes for FY13E at 115mmscmd
which would support performance going ahead.
Rupee depreciation, higher petchem realisations lead to higher
revenues: GAIL’s revenues jumped by 17.1% YoY and 2.5% QoQ at Rs113.9bn
owing to rupee depreciation and higher petchem realisations.
Provisioning for revision in LPG transmission tariffs impacts
performance: Revision in LPG transmission tariffs by the PNGRB regulator led
to provisioning of Rs1.2bn thus leading to dismal performance. Even natural
gas transmission volumes suffered due to the decline in KG D6 volumes and
lower off take from power producers. Nonetheless, average transmission
tariffs were better at Rs936/’000scm compared to Rs857/’000scm in Q1.
Petchem realisations and sales supported the performance which improved
sequentially by 1.6% at Rs86,634/ton from Rs85,303/ton in Q1 and
101,000tons from 66,000tons in Q1 respectively.
Subscribe to:
Posts (Atom)