The Telegraph
Since 1st March, 1999
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Result Analysis


For its third quarter ended September, Ranbaxy’s sales have gone up 55 per cent to Rs 860.40 crore (Rs 553.50 crore), while net profit has grown by a huge 233 per cent to Rs 154.60 crore (Rs 46.40 crore). The investments it has made for years in its international operations are at last paying off. Operational expenditure increased by 43 per cent to Rs 656.80 crore (Rs 459.10crore) but operating profit has shot up far more — 116 per cent to Rs 203.60 crore (Rs 94.40 crore). Operating profit margin has improved to 24 per cent from the previous corresponding quarter’s 17 per cent, mainly due to the export of generics. Both, total income and total expenditure have risen, the former by 56 per cent to Rs 865.40 crore (Rs 554.20 crore), and the latter by 40 per cent to Rs 710.80 crore (Rs 507.80 crore). Other income went up by 614 per cent to Rs 5 crore (Rs 0.70 crore). Interest fell by 79 per cent to Rs 4.60 crore (Rs 21.60 crore), while depreciation stood at Rs 14.20 crore (Rs 13 crore), up by 9 per cent. Tax provision shot up by 150 per cent to Rs 35.20 crore (Rs 14.10 crore). The stock is currently trading at Rs 515, discounting its third quarter ended September annualised EPS of Rs 53.36 by 15 times. It is a great long-term buy between Rs 450 and Rs 500.


For its first quarter ended September, despite HCL sales moving up by 25 per cent to Rs 221.82 crore (Rs 178.04 crore), net profit has fallen by 15 per cent to Rs 92.23 crore (Rs 108.69 crore), indicating that software companies are still facing a lot of headwind. Operational expenditure increased by 41 per cent to Rs 131.03 crore (Rs 92.64 crore), while operating profit has gone up by 6 per cent to Rs 90.79 crore (Rs 85.40 crore). Operating profit margin has declined to 41 per cent from the previous corresponding quarter’s 48 per cent. Total income has gone up by 11 per cent to Rs 240.43 crore (Rs 216.79 crore), while total expenditure increased by 37 per cent to Rs 148.20 crore (Rs 108.10 crore). Other income dropped by 52 per cent to Rs 18.61 crore (Rs 38.75 crore). The scrip currently trading at 160 discounts its first quarter ended September annualised EPS of Rs 12.80 by 13 times. There will only be short-term speculative buying in this scrip now.


By most key internal parameters, HDFC Bank’s results for its second quarter ended September, were excellent. Total income was up 23 per cent to Rs 603.24 crore (Rs 489.68 crore); spread was at a historic high of 40 per cent; operating profit rose 38 per cent and net profit was up 29 per cent The spread improved considerably — a 33 per cent surge over the previous corresponding quarter and 1 per cent on a sequential quarter basis. Operating profit was up a healthy 31 per cent although sequentially it was down by 12 per cent. Still, OPM was sharply up at 35 per cent against 30 per cent during the previous corresponding quarter and 31 per cent during the preceding quarter. Net profit was up 29 per cent on a year-on-year basis and up 9 per cent sequentially. And the stock price movement' A few days before the results, the stock started cracking. After the excellent results, it continued to fall and is now discounted at just 15, at the bottom end of its historical P/E band of 14-25. Something fishy' Could it be that that the bank will be merged with HDFC at an unfavourable ratio and knowing that some large investors are exiting'


For the second quarter ended September, rating company Credit Rating Information Services of India Ltd’s (Crisil) revenues have gone up by 16 per cent to Rs 16.76 crore (Rs 14.42 crore), while net profit rose 53 per cent to Rs 4.15 crore (Rs 2.71 crore). Operational expenditure has gone up by 11 per cent to Rs 9.18 crore (Rs 8.23 crore). Operating profit has gone up by 22 per cent to Rs 7.58 crore while operating profit margin has gone up to an even healthier 45 per cent from 43 per cent. Total income moved up by 17 per cent to Rs 17.48 crore (Rs 14.91 crore) while total expenditure has gone up by just 9 per cent to Rs 13.33 crore (Rs 12.20 crore). Depreciation charges dropped by 17 per cent to Rs 1.80 crore (Rs 2.17 crore) and tax provision increased by 31 per cent to Rs 2.35 crore (Rs 1.80 crore) due to higher profits. The stock is currently trading at Rs 270, which is just 10 times its annualised earnings per share of Rs. 26.77. Crisil is generating steady profit despite poor economic activity and lesser need for debt ratings.

Company        Total Income       Net profit        Equity       O. Income       EPS*

Ranbaxy##       860.40       154.60       115.90       5.00       53.36 HCL Tech#       221.82       92.23       57.64       18.61       12.80 HDFC Bank       481.73       89.69       281.91       121.51       12.73 Crisil       16.76       4.15       6.20       0.72       26.77

n Figures in Rs crore; * annualised; # first quarter, ## third quarter results

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