Technopark Blog|Technopark Blog, Jobs, News, Events, Companies, People, Photos, Videos and Gossip

Today’s View: Positive bias Intermediate Trend Up Reversal Levels NIFTY Sell below 4850  SENSEX 16150

Expect a positive opening. . Two policy action meets this week -the Fed and the RBI. Expect a 25bps cut from the Fed.Maintain a positive bias
” Bharti Airtel’s 4QFY08 earnings grew 37% YoY and 7.6% QoQ to Rs18.5b (7% above our estimate of Rs17.3b). Earnings surprise was led by higher-than-est revenues, which grew 45% YoY and 12.3% QoQ to Rs78.2b (4.7% ahead of our est). EBITDA margin declined 100bp QoQ to 41.6% due to steep tariff decline and higher marketing costs.
Mobile ARPU remained flat QoQ at Rs357/month despite a steep 7% QoQ cut in tariffs as Minutes of use per subscriber jumped 7% QoQ to 507. This is the highest sequential MOU growth for Bharti in the past 11 quarters and is a positive surprise given muted expectations due to relatively flat MOU witnessed during 9MFY08.
Approximately 30,000 of the tower portfolio would be transferred to Indus towers in which Bharti’s passive infrastructure subsidiary Bharti Infratel would own 42% stake.
We are positively surprised by the MOU growth leading to 20%+ QoQ increase in mobile traffic volumes for Bharti. We believe that demand elasticity (experienced by both Bharti Airtel and Idea Cellular) is the key positive takeaway for the quarter and reflects likely lower pressure on forward ARPU in an industry scenario where RPM decline remains both a reality and key affordability driver of the mobile services.
We are upgrading our FY09 and FY10 ARPU estimates by ~5% to reflect higher MOU.
We now expect an ARPU decline of ~9% in FY09 to Rs329 and a further 8% decline to Rs296 in FY10.”
“ICICI Bank’s NII grew by 29% YoY in 4QFY08 (vs our est of 27% growth) as margins improved on the back of slower advances growth and higher CASA ratio. The impact of ~Rs20b of capital raising in July 07 and zero growth in term deposits YoY (entire deposit growth led by CASA) enabled the bank to improve NIM by 10bp QoQ to 2.4%. Fees grew 35% YoY and income from venture units remained strong for the fifth consecutive quarter. NPA trends continue to disappoint with Gross NPAs (adjusted for sell downs) rising 15% QoQ. PAT grew 39% YoY in 4QFY08 to Rs11.5b (vs our estimate of Rs9.1b) mainly on account of lower opex due to rationalisation of staff costs and lower bonuses during FY08 as well as lower taxes due to strong treasury profits.
We value the key subsidiaries of the bank at Rs270 per share post 20% holding company discount. Adjusted for the value of subs, ICICI trades at 1.7x FY09 BV, 1.5x FY10 BV (adjusted for investments in key ventures) and 15x FY09 EPS, 11x FY10 EPS. RoE from core lending business and based on net worth excluding investments in key ventures is expected to improve to 14% by FY10.
Maintain Buy with a price target of 1,140 (2x FY10 Book Value adjused for subs + 270 value of subs after 20% holding company discount),
an upside of 25%”
“In 4QFY08, Maruti’s volumes grew just 1.1% YoY, while realizations were 8.1% higher, enabling net sales growth of 9.2% YoY. EBITDA margin expanded 140bp YoY to 15.7% and adjusted PAT grew 14.6% YoY to Rs5.1b.
Net sales grew 9.2% YoY in 4QFY08, driven by 8.1% increase in realizations. We have adjusted the net sales figure for the Rs545m compensation paid by Maruti to its dealers for the reduction in small car prices following the excise duty cut to 12% in Budget 2008.
EBITDA margin expanded to 15.7%, while EBITDA increased 21.7% YoY to Rs7.9b on account of other operating income nearly doubling to Rs2.1b. We have adjusted other expenditure for the Rs505m provision for foreign currency derivatives.
Maruti has changed its depreciation policy to reduce the useful life of its plant and machinery. As a result, the company has taken a one-time hit of Rs2.1b during 4QFY08. Adjusting for this, Maruti registered 14.6% increase in its adjusted PAT to Rs5.1b - its reported PAT was Rs3b.
The stock trades at 10.6x FY09E EPS of Rs70.2 and 9.1x FY10E EPS of Rs81.9. Recommend Buy for investments.”