The Telegraph
Since 1st March, 1999
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Result Analysis

Ranbaxy Laboratories

Ranbaxy’s fourth quarter performance has been exceptionally smart with a 39 per cent improvement in net sales at Rs 837 crore (Rs 604.30 crore). Sequentially, however, it was down 3 per cent over the September quarter sales of Rs 860.40 crore. Operating margins have improved substantially over the previous corresponding quarter but have remained flat sequentially. With a substantial push in the other income, the company has reported a net profit of Rs 212.70 crore (Rs 50.30 crore) for the quarter, which is up by a massive 323 per cent over the previous corresponding quarter and 33 per cent up from the September quarter profit of Rs 159.40 crore. The stock, currently trading at Rs 636, discounts its full year EPS of Rs 46.11 by 14 times. It remains a great value at every decline.


The Bhel stock is hot on expectations of the passage of a new Electricity Reforms Act but is it all pie in the sky' Income from operations at Rs 1,663.73 crore (Rs 1,461.39 crore) moved up 14 per cent over the year-ago period (up 29 per cent sequentially). Operational costs moved up 16 per cent on a year-on-year basis and 32 per cent sequentially to Rs 1,530.12 crore (Rs 1,321.08 core). OPM at 8 per cent was down 2 percentage points from both the corresponding quarter as-well-as sequentially. Other income continues to move up and at Rs 36.03 crore (Rs 28.78 crore) was 25 per cent above the year-ago period. Sequentially it was 36 per cent lower. Bhel is likely to end this year with a fall in profit over last year. For the first nine months the company has managed to earn only about Rs 141 crore in profit against the Rs 450 crore it earned during the preceding year. The stock has been steadily gaining ground since late January on hopes of electricity reforms. But this is unlikely to actually help Bhel in a major way because the states are almost bankrupt and lack the political will for actual reforms. At Rs 215, Bhel discounts the December quarter annualised EPS of Rs 13.29 by a princely 16 times — its highest valuation in many years.

Tata Iron & Steel

A nine-month long boom in steel prices has enabled Tisco to put up a solid performance for the third straight quarter. Rising product prices and rising global demand for steel has fuelled Tisco’s income from operations by 28 per cent over the previous corresponding period to Rs 2,140.93 crore (Rs 1,678.60 crore) (up 9 per cent sequentially). Operational cost at Rs 1,517.62 crore (Rs 1,365.74 crore) was up 11 per cent from the year-ago period and 4 per cent above the preceding quarter costs. The year-on-year rise in total costs was moderate. At Rs 623.31 crore (Rs 312.86 crore) operating profit was up by a huge 99 per cent over the previous corresponding quarter, while sequentially it went up 20 per cent over the September quarter profit of Rs 518.10 crore. OPM shot up to 29 per cent from 19 per cent during the year-ago period and is 3 percentage points above the 26 per cent it reported during the preceding quarter. Other income has been declining over the past two quarters and at Rs 11.76 crore (Rs 16.02 crore) the same was 27 per cent below the year-ago period and 18 per cent down from the September quarter income of Rs 14.39 crore. Improved profitability has seen the tax provision move up despite which it reported a net profit of Rs 345.56 crore (Rs 90.67 crore) up by a huge 281 per cent and 20 per cent above the September quarter profit of Rs 287.40 crore. During the quarter the company took a hit of Rs 65.33 crore (Rs 56.13 crore) on extraordinary items. Despite such a humungous rise in the profits, Tisco’s share price has moved up only marginally and still discounts its December quarter annualised EPS of Rs 37.56 by just about four times.

Exide Industries

For the third quarter ended December, Exide has reported a 9 per cent rise in total income at Rs 214.83 crore (Rs 196.34 crore). Total spending went up 8 per cent to Rs 202.11 crore (Rs 187.52 crore). Net profits grew 44 per cent over the year-ago period to Rs 12.72 crore (Rs 8.82 crore). Income from operations at Rs 214.52 crore (Rs 196.30 crore) was up 9 per cent over the previous corresponding quarter. Operational spending went up 7 per cent to Rs 176.27 crore (Rs 164.10 crore). OPM moved up to 18 per cent from 16 per cent during the same period last year. Other income at Rs 0.31 crore (Rs 0.04 crore) was up 675 per cent. The stock currently trading at Rs 86 discounts its annualised EPS of Rs 14.29 by six times. Comes cheap compared with its growth.

Company        Total Income       Net profit        Equity       O. Income       EPS*

Ranbaxy#       837.00       212.70       185.50       34.60       44.81 Bhel       1663.73       81.33       244.76       36.03       13.29 Tisco       2140.93       280.23       367.97       11.76       37.56 Exide       214.52       12.72       35.61       0.31       14.29

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

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