The Telegraph
Since 1st March, 1999
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Result Analysis


For its third quarter ended September 2002, Aventis sales increased by 5 per cent to Rs 159.20 crore (Rs 152.30 crore), while net profit went up by 9 per cent to Rs 16.60 crore (Rs 15.20 crore). Operational expenditure increased 6 per cent to Rs 132.80 crore (Rs 125.20 crore). While operating profit slid by 3 per cent to Rs 26.40 crore (Rs 27.10 crore), operating profit margin fell to 17 per cent from the previous corresponding quarter’s 18 per cent. Other income, which rose by 19 per cent to Rs 3.10 crore (Rs 2.60 crore) includes interest and dividend income amounting to Rs 1.8 crore. Tax burden went up by 33 per cent to Rs 8.50 crore (Rs 6.40 crore). During the last nine months, the stock has depreciated by 33 per cent after touching a high of Rs 441.40 in April 2002. Currently trading at Rs 295.45, the stock discounts its third quarter ended September 2002 annualised EPS of Rs 29.74 by nine times. No growth, so not as cheap as it looks.


This is a great turnaround story. For its second quarter ended September , Thermax sales have gone up 48 per cent to Rs 143 crore (Rs 96.67 crore) while net profit shot up 24 per cent to Rs 6.60 crore (Rs 5.34 crore). Operational expenditure increased 37 per cent to Rs 133.56 crore (Rs 97.59 crore). Operating profit in the current quarter stood at Rs 9.44 crore compared with a loss of Rs 0.92 crore in the previous corresponding quarter. OPM improved to 7 per cent from the previous corresponding quarter’s negative 1 per cent. Other income fell 60 per cent to Rs 4.86 crore (Rs 12.12 crore). Interest cost declined while depreciation too declined 21 per cent to Rs 2.27 crore (Rs 2.87 crore). Tax stood at Rs 3.83 crore for the current quarter. In the last ten months the stock has appreciated by almost 88 per cent from a low of Rs 75.15 in March 2002 to its current price of Rs 141.35 discounting its second quarter ended September annualised EPS of Rs 13.51 ten times.


For its second quarter ended September 2002, Tips sales have declined by 36 per cent to Rs 10.54 crore (Rs 16.35 crore), while net loss stood at Rs (5.06) crore compared with the previous corresponding quarter’s net loss of Rs (7.06) crore. Operational expenditure decreased by 40 per cent to Rs 9.38 crore (Rs 15.64 crore). Operating profit moved up 63 per cent to Rs 1.16 crore (Rs 0.71 crore) thus taking the OPM to 11 per cent from the previous corresponding quarter’s 4 per cent. From a peak of Rs 175.25 in February 2002, the scrip is currently quoted at Rs 52.30, a value loss of nearly 70 per cent.


Tata Power’s quarterly performance for the last two years has been erratic. Net profit, which grew at more than 100 per cent last year, fell 23 per cent during the current quarter. Tata Power’s income from operations for the quarter ended September 2002 was Rs 1,202.14 crore (Rs 1,099 crore) up 9 per cent from the year ago period and 16 per cent sequentially. At Rs 862.13 crore (Rs 810 crore) the operational costs were up 6 per cent over the previous corresponding period. Operating profit was up 18 per cent over the year-ago period to Rs 340.01 crore (Rs 289 crore). OPM at 28 per cent was one of the highest it reported during the past 10 quarters and was 2 percentage points above what it earned during the previous corresponding quarter. Tata Power has been funding the Tatas’ broadband expansion in telecom, which has meant falling investment and other income. At Rs 56.46 crore (Rs 104 crore) other income was 46 per cent below the year-ago period. Sequentially, however, it was 90 per cent above the Rs 29.74 crore it earned during the June quarter. Its interest cost was Rs 85.36 crore (Rs 89 crore) down 4 per cent from the previous corresponding quarter after having shot up 19 per cent during the preceding quarter. The tax provision went up considerably during the quarter at Rs 95.72 crore (Rs 58 crore) — up 65 per cent from the previous corresponding quarter and 139 per cent over the June quarter provisioning of Rs 40 crore. So, year-on-year net profit fell 23 per cent against the same period last year to Rs 134.95 crore (Rs 176 crore). The company had reported an extraordinary income of Rs 66 crore last year. The stock currently trading at Rs 105 discounts its September quarter annualised EPS of Rs 27.28 by four times. It may appear cheap but its huge investments in telecom infrastructure is affecting the market sentiment.

Company        Total Income       Net profit        Equity       O. Income       EPS*

Aventis#       159.20       16.60       23.00       3.10       29.74 Thermax       143.00       6.60       23.83       4.86       13.51 Tips       10.54       (5.06)       12.01       0.14       (16.85) Tata Power       1202.14       134.95       197.91       56.46       27.28

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

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