Report Card for 2011 Earnings – Part 2

April 22, 2011   ·   0 Comments

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

MUNDRA PORT

Mundra Port and Special Economic Zone (MPSEZ) was up strong in the trades. This was on the back of Press Release issued by the company, www.stockssavvy.comstating that its cargo volume at MPSEZ had crossed the crucial 50 million tonnes mark. Cargo volume at the port grew by a compounded annual rate of 34% in the past five years to over 50 million tonnes in FY11. The company expects to handle 80 million metric tonnes of cargo in FY 2012 and 100 million metric tonnes by FY 2013.

For 9MFY11, the company posted a net sales of Rs.1280 crore and net profit of Rs.651 crore and going by the numbers of FY10 – Rs.1392 crore and Rs.701 crore respectively, the company is sure to end FY11 with a big bang. The estimates are that its topline at the end of FY11 would be around Rs.1800 to 1900 crore and bottomline at around Rs.920 crore. With exports showing a surge of 50% on a YoY in Feb 2011, surely things seem to be looking up for MPSEZ.

 

BHEL

This PSU was on the rise yesterday, rising Rs.60 at Rs.2173, a long jump from the 52-week low it had touched on 17th March 2011 at Rs.1905. www.stockssavvy.comThe company presented its provisional numbers for FY11 yesterday and that is what led to the spike up. Its provisional turnover was up 27% at Rs.43,451 crore and net profit rose 40% at Rs.6,021 crore. The company’s order inflow rose 2.49% to Rs.60507 crore, which is a tad above its target of Rs.60,000 crore.

But what is pertinent to note is that changes in accounting policy on provision for warranty obligation for construction contracts pushed up the turnover by Rs.2456crore and PBT by Rs.414 crore. 70% of the company’s topline comes from power equipment but it is now trying to spread its risk by focusing on transmission and transportation equipment. Growing competition from China is a cause for worry. L&T might not be able to meet its yearly order target but BHEL, thanks to its PSU tag, continues to have orders galore. Its provisional EPS thus stands at Rs.123, discounting the current price by 18 times.

 

PRIME FOCUS

Prime Focus is India’s largest visual effects and post-production company, offering a full range of services to the feature film, ad film and www.stockssavvy.combroadcast markets. In February the company won the 2D and 3D conversion contract of ‘Harry Potter and the Deathly Hallows (7A)’ from Warner Brothers. And on Wednesday, it announced collaboration with US-based Lucasfilm to work on conversion of Star Wars: Episode I The Phantom Menace into 3D for theatrical release. Financial details, in both the cases were not disclosed. This is the same company which won the US$ 5million contract for contributing visual effects for Hollywood 3D sci-fi movie ‘Avataar’.

FY11 is sure to end on a high note for the company. For 9MFY11, its net sales was at Rs.426 crore v/s Rs.453 crore in FY10 and net profit was at Rs.66 crore v/s Rs.33 crore in FY10. Its reserves as at 31st March 2010 stood at Rs.180 crore. Its face value has been split from Rs.10 to Re.1. Annualised EPS of Rs.4.75 discounts the current price by less than 9 times.

 

DEWAN HOUSING

On 31st March 2010, the stock had hit a new 52-week low at Rs.201 and today, it remains firmly over Rs.250. Its monthly low of Rs.207 indicates www.stockssavvy.comthat this change in moods has happened only off late. This renewed interest has come in after it announced completion of acquisition of Deutsche Postabank Home Finance. The company has taken 67.56% stake in DPHF. Balance 32.44% has been acquired by Wadhawan Housing, Caledonia Investments Plc, UK and Amber 2010, which are again promoter entity of Dewan Housing. Acquisition was made for a total cash consideration of Rs.1,079 crore.

Financially, the company is doing well. Its 9MFY11 numbers have already surpassed that of 12MFY10, with a topline of Rs.1014 crore and net profit of Rs.206 crore. But sequentially, margins are showing pressure. OPM was down from 99% to 89% and NPM from 28% to 16%. The stock is on the rise more because the others in the same sector, LIC Housing and HDFC had gained attention while this was ignored.

 

ARVIND LTD

Arvind, the world’s largest producer of denim, supplying the likes of Levi’s, Pepe, Energie, Diesel and Tommy Hilfiger seems to be on a roll. After announcing an exclusive tie-up with Birla Cellulose, an Aditya Birla company, to make the world’s www.stockssavvy.comsoftest denim fabric the stock has been moving higher, with more buyers than sellers on its counter. Part of the euphoria could also be attributed to talks that Finance Minister could withdraw the excise duty on branded garments.

Financially the company is on a strong wicket. But what is worrying is the rising price of cotton which has more than doubled over the last 6 months. Also with Govt giving its nod to export another 50 million kg of cotton yarn, prices are not expected to come down in a hurry. Arvind is passing on the rising cost to its customers, looking at a 10-15% price hike. But it will not be able to pass on all rising costs at all times as that could hurt demand. 57% of its revenue growth in Q3 came from branded apparel and retail, 39% from denim and shirting/khaki by 22%. Its 9MFY11 net profit rose 104% at Rs.106 crore. But its high equity base of Rs.254 crore and interest outgo of around Rs.150 crore per annum limits EPS growth.

 

MAX INDIA

For Analjit Singh, founder of Max India it looks like good times have started flowing his way. Foreign brokerage houses have gone all out, www.stockssavvy.comre-rating the company and giving a strong ‘buy’. This is despite the fact that the company has a consistent track record of posting losses. Its net loss for 9MFY11 stood at Rs.29 crore. Yet, it has attracted a ‘buy’ from brokerage houses as they have started re-rating the insurance sector due to improved earnings  and cost cutting measures over the last few quarters. The focus is on Max India as it has shifted its eye from premium to cost cutting. With life insurance and health insurance expected to see a turnaround in FY12, broking houses expect Max India to outperform in FY12 and turn around with a robust performance.

Promoters hold 36.5% stake in the company while FIIs have a substantial 30.34% stake. Analjit Singh and his 13 board members are all driving down to Mohali to watch the India-Pakistan match today. And along with the match, he is sure to keep an eye and ear for the stock price, which is currently on a major spike.

 

GRAVITA INDIA

This company had gone public in November 2010 and had issued shares at Rs.125/share. It had got listed at Rs.201 and yesterday it made a new www.stockssavvy.comhigh at Rs.324, with more buyers than sellers on the counter. The company which makes lead by recycling and smelting process rose after Shanghai lead futures jumped 6.7% to 19570 yuan on 24th March.

For Q3FY11, the company posted net sales of Rs.54 crore and net profit of Rs.3 crore, showing a NPM of 5%. The company’s IPO was subscribed 42.88 times wherein QIB portion was subscribed 6.04 times, non-institutional by 182.52 times and retail by 37.34 times. And as at 31st Dec 2010, its shareholding pattern shows that promoters stake was at 73.52%, institutions hold 14.90%, non-institutions hold 19.03% and bodies corporate at 11.52%. The stock, at the moment seems more operator driven and at these levels, its best to exercise caution as a sell off can take it down to Rs.200 levels.

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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