Report Card for 2011 Earnings – Part 1

April 21, 2011   ·   0 Comments

www.stockssavvy.comPart-1 contains Yearly results for Crisil,MRF,Power Finance Corp,Geojit BNP Paribas,Symphony Limited & Bafna Pharmaceuticals.
Part-2 will bring some more insight on the results of Big Guns as BHEL, Mundra Port & Max India.

CRISIL

Its main stay, the rating business does not seem to be earning it as much as the other divisions in its Q1CY11. For first quarter ended 31st March www.stockssavvy.com2011, topline showed a 50% growth at Rs.97.39 crore. Ratings business showed a topline growth of 11% but margins fell 6%. The research division did much better though advisory unit numbers disappointed. Its consolidated total income for the quarter was up 25% on a YoY and net profit was flat at Rs.45.98 crore. In previous Q1, net profit included a one time gain of Rs.18.34 crore from sale of office space.

Ratings business does remain its main contributor but research is also doing pretty well. As the company does not depend on broking business, it is more protected from the vagaries of the stock market. Ratings will be needed irrespective of the markets – for bonds, for IPOs and for listed companies seeking deposits. And this cushion from the uncertainties in the market is probably what makes Crisil a favourite amongst investors. EPs for Q1 is at Rs.65, annualized EPS of Rs.260 discounts the current price by around 25 times, indicating the investor fancy for the stock.

 

MRF

Given the surge in rubber prices, the fall in numbers for MFR for second quarter ended 31st March 2011 does not come as a surprise. Infact it has www.stockssavvy.comnot been as bad as one would have expected. YoY, there has been a 51% rise in its raw material prices while sequentially, it has been up 17%. The rise in raw material cost has been partially offset by rise in volume, net sales is up 10% QoQ and 34% on a YoY. The rise in volumes plus hike in selling price, helped limit the rising rubber price damage. Net profit was down, at Rs.90 crore, down 12% on QoQ and 6% on a YoY. So despite a 51% rise in raw material prices on YoY, the fall in net profit was limited at 6% only.

The company ends its year in September. Thus for half year ended 31st March 2011, its debt equity ratio stands at 0.66, debt service coverage ratio at 6.47 and interest service coverage ratio at 12.03. The company has a very healthy balance sheet and has been a high bonus candidate for the past few years. Its equity base is very small at Rs.4.24 crore and reserves as at 30th September 2010 stood at Rs.1686.44 crore. Those with a long term perspective can accumulate the stock on declines, with hopes that bonus will come some day or the other.

 

Power Finance Corp

Power Finance Corp, PSU money lender to power projects had a lackluster year. It ended FY11 with a topline rise of 26% at Rs.10128 crore but www.stockssavvy.combottomline rise was subdued, with a rise of just 11% at Rs.2619 crore. Its Q4FY11 performance was a downer, with very flat topline, up just 1.6% and net profit was down 8%.

In the current fiscal, the company plans to raise up to $1 billion in overseas borrowings, exceeding the limit of $500 million under automatic route. It plans to seek RBI’s permission to raise more funds from advanced economies to take advantage of low interest rates in these countries. This will be part of PFC’s total borrowing target of Rs. 30,000 crore in FY12. The company borrows funds at an average cost of 8.5%. It borrowed Rs. 27,700 crore in FY11. As at 31st March 2011, the Govt of India held 89.78% of the equity, FIIs held 3.62% and Domestic Institutions held 3.03%.

 

Geojit BNP Paribas

Geojit Bnp Paribas, the retail broking firm had a very disappointing Q4FY11. The volatile markets in the last two months of the fourth quarter, left www.stockssavvy.coma telling mark on the company’s bottomlines due to reduced retail participation. For Q4FY11, on a YoY, its consolidated revenue fell 6% at Rs.64 crore while net profit fell sharply further by 61%. For FY11, revenues were down 8% at Rs 256.3 crore and net profit by 38% at Rs 28.39 crore.

For a broking firm, fixed costs are pretty huge and that eats away the margins and this, coupled with slow business hit the margins of the company. Its operating profit for Q4 was down 70%. This decline was also on account of the JV for institutional broking of BNP Paribas with Saudi Arabian stock broking business, which posted a loss of Rs.4.6 crore in Q4FY11. 70% of its business comes from delivery business which lost out due to poor market conditions. The F&O segment also added to its loss on volumes and margins.

 

Symphony Limited

This market leader of air coolers has posted a bumper set of numbers  and riding on this, the company hit a new 52-week high on 13th April 2011 www.stockssavvy.comat Rs.1672. The company ends its year on 30th June and thus its Q4 is typically its best quarter, preceded by Q3. This fiscal too, third quarter ended 31st March was very good. OPM was at 32% and NPM at 21%. YoY, topline rose 84% while 47% on QoQ at Rs.98.55 crore, its highest for a quarter. Net profit almost doubled up at Rs.20.53 crore on YoY and 43% on a QoQ.

The company is planning to set up a SEZ in Gujarat for manufacture of air coolers at a capex of R.3.5 crore. The unit is expected to go on stream within the first half of current fiscal. It aims to hit a turnover of Rs.500 crore by FY14. EPS for nine months stands at Rs.47. Next quarter will be its best as it will cash in on the summer season.

 

BAFNA PHARMACEUTICALS

The stock has been on a roll for some time now. And there seem to be always more buyers than sellers on its counter. This sudden fancy for the stock came up after the company announced buying haemoglobin drug Raricap from Johnson & Johnson for Rs 21 crore. This Chennai based, small cap paracetemol making company is basically in a small margin tender business and with this takeover, the company is hoping get a small foothold in the high margin generic business.

Its average OPM for FY11 has been around 12.60% and NPM at around 6%. Though margins have improved from previous fiscal, compared to the valuations at which it is trading today, it does seem overstretched. The buying of Raricap has been funded with a mix of equity to the tune of Rs.9 crore and rest with debt. This is sure to spike up the interest outgo in FY12. Annualised EPS of Rs.3.52 discounts the current price by around 13 times.

Source: Premium Investments

Rajesh Singla

Rajesh is the founder & CEO of Stockssavvy, Stocks analyst,financial advisor by choice,software engineer by fate,biker,gamer,cricket lover n enthusiastic person. He believes in doing things not just to get by but to get Ahead...

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