Q2FY13 Results: How ICICI, Axis and HDFC Bank numbers stack up

Riken Mehta & Saikat Das
Moneycontrol.com

As expected, India’s top three private sector lenders continued to be in favour with investors post second quarter earnings. Even as fear of bad loans looming large, these lenders managed to retain their asset quality and recorded better-than-expected non-performing assets.

Both Axis Bank  and ICICI Bank  have made provisions for their exposure in debt-ridden Deccan Chronicle wherein they loaned around Rs 400 crore and Rs 500 crore respectively. Going forward, the lenders ruled out any major pressure on credit quality. However, HDFC Bank  remained insulated from such big loan restructuring cases and maintained its momentum in growing net profit over 30% for so many quarters with good asset quality. It gives mostly short term working capital loans to corporate clients unlike the other two banks, which participate in extending long term project loans too.

For loan book growth, all banks have surpassed the projected industry credit growth of 16% by wide margin even in the so-called slack season (April-September).

Particulars	ICICI Bank	Axis Bank	HDFC Bank
NII Growth
YoY	34.5%	15.9%	26.7%
QoQ	5.6%	6.7%	7.1%
PAT Growth
YoY	30.1%	22.1%	30.1%
QoQ	7.8%	-2.6%	10.1%
Loan Book Growth
YoY	17.6%	22.9%	22.9%
QoQ	2.5%	0.6%	8.6%
Deposit Growth
YoY	14.80%	21.2%	18.7%
QoQ	5.10%	5.8%	6.4%
Net Interest Margins	3.00%	3.46%	4.20%
Gross NPA	3.54%	1.10%	0.91%
YoY	UNCH	Up 2 bps	Down 9 bps
QoQ	Down 60 bps	Up 4 bps	Down 6 bps
Net NPA	0.78%	0.30%	0.20%
YoY	Down 15 bps	Down 1 bp	UNCH
QoQ	Up 7 bps	Up 2 bps	UNCH
Provisions QoQ	9.01%	96.80%	-39.90%
CASA	40.70%	40.50%	45.90%
Capital Adequacy Ratio	18.28%	13.00%	17.00%

Q2FY13 Results: Bajaj Auto distinctly ahead of Hero Motocorp

Riken Mehta
Moneycontrol.com

Hero MotoCorp may be India’s largest two-wheeler maker by sales but it has been trailing number two player Bajaj Auto on most other parameters. Its net sales decline, for instance, was far higher than Bajaj in the second quarter. And while its profits declined, Bajaj Auto saw a marginal increase and operating margins too continued to lag Bajaj almost 600 bps.

The only positive one can pick from the Hero Moto numbers was the realisations which rose on the back of improved product mix and higher spare part sales.

Hero Moto also scaled down its guidance from 10% to 5-6% growth in FY13 in line with SIAM's industry guidance.

The market share of Bajaj Auto in domestic motorcycle segment jumped from 23% in April to 25.7% in September 2012. Hero Moto’s market share slumped from 56.4% to 50% in the same period. 

Hero still has a big lead over Bajaj when it comes to market share and units sold, but Hero is definitely feeling the heat amid the market-wide slowdown and increased competition.

Particulars	Bajaj Auto	Hero Moto
Net Sales Growth
YoY	-4.1%	-11.0%
QoQ	1.9%	-17.0%
PAT Growth
YoY	2.0%	-27.0%
QoQ	3.1%	-28.4%
Material Cost
YoY	-5.1%	-10.7%
QoQ	1.7%	-18.1%
Vehicles Sold
YoY	-9.9%	-13.7%
QoQ	-2.8%	-18.8%
Total Income/Vehicle	48128	38916
YoY Growth	6.4%	3.2%
Net Profit/Vehicle	7059	3,305
YoY Growth	0.1%	-15.40%
Operating Margins	19.7%	13.9%
Market Share	25.7%	50.0%

Chart of the day: L&T's order book size vs stock performance

Riken Mehta
Moneycontrol.com

Shares of Larsen & Toubro rose over 2% immediately after the company announced a 42% jump in its net profit on one time exceptional gains yesterday.

The heavy engineering and construction major surprised analysts’ community by recording a 30% growth in its order book during the quarter.

How did L&T’s order book grow 30% against an expectation of 15-20%?

Analysts had earlier pointed out that bigger projects are hard to come by as there are no roads or any major infra project coming up as there is a general industrial slowdown. Hence, what L&T did is—it shifted its focus to smaller projects, which may have had thinner margins, but helped it improve its order book.

The company got orders worth over Rs 15,000 crore from infra, hydrocarbons, buildings and factories and remaining Rs 5000 crore worth of orders from electrical and electronics and MIP segments.

The company which had estimated its order book to grow 15-12%,YoY to Rs 80,000-84,00 crore in FY13 has already accomplished 50% of its target till now but yet prefers to remain conservative on the order outlook.

What next?

The company’s CEO and MD. K Venkataramanan while addressing media persons said that the outlook is grim for the sector generally. Hence L&T is consistently fine-tuning business strategies. He also did not rule out that he would be looking at newer geographies globally to tap growth at a time when the domestic environment is lull.

Q2FY13 Results: How do Infosys, TCS, HCL Tech's numbers stack up?

Riken Mehta
Moneycontrol.com

As the second quarter earnings season plays out, it is becoming increasingly evident that  Infosys  has a lot of work to do before it can regain its position as bellwether of the IT services sector. Infy's September quarter numbers met market expectations, but the company lowered full year guidance as efforts to revamp the business model is taking time to show results. 

 As if rubbing salt in its wounds, TCS  has come up with yet another set of strong quarterly numbers, which makes it the clear favourite for investors looking to buy frontline IT shares. But TCS can't rest easy either; there is competition from HCL Tech which has been steadily improving its performance over the last few quarters.

HCL Tech's September quarter numbers beat analyst estimates by a comfortable margin. The catalysts for this healthy performance were several deal wins and business growth across its key geographies of US and Europe. 

Here is a look at the key operating numbers of the three companies during the quarter gone by.

The change in the outlook also reflected in the posture of the management of these companies. 
 
Infosys management painted a dull picture by slashing its earnings forecast. On the flip side, TCS management remained optimistic and signalled return of discretionary spending healthy for IT industry. HCL Tech, the fourth largest IT player beats street expectations by topping industry average growth. Vineet Nayar sees significant opportunities in next 6 months. Wipro, third largest IT player is yet to announce its results.

On the operational front, it is crystal clear now that TCS holds the numero uno position with HCL Tech on the second spot. Infosys has slipped to third spot on the podium.

Particulars	TCS	Infosys	HCL Tech
Revenue Growth (USD)
YoY	13.00%	2.90%	11.10%
QoQ	4.60%	2.60%	3.20%
Revenue Growth (INR)
YoY	34.30%	21.70%	31.00%
QoQ	5.10%	2.50%	2.90%
PAT Growth (INR)
YoY	44.00%	24.30%	78.10%
QoQ	7.10%	3.50%	3.60%
Operating margins	26.80%	26.34%	22.20%
Active Clients	1032	715	536
Client addition in Q2FY13	41	39	38
Growth in key business verticals (QoQ)
BFSI	4.70%	0.60%	3.60%
Telecom	5.20%	4.10%
Retail	7.00%	3.90%	10.20%
Employee addition	18654	10420
Attrition rate	10.20%	15%	14%
Currency Average Rate	54.76	54.85	54.69

GVK or GMR: Who will weather the 'no ADF' storm better?

Riken Mehta, Shaheen Mansuri, Sagar Salvi
Moneycontrol.com

Shares of GMR Infrastructure and GVK Power & Infrastructure , operators of the Delhi and Mumbai international airports, have lost over 4% in the last three trading days after the aviation ministry decided to scrap the airport development fee (ADF).

ADF, collected from passengers as part of traveling expense, was being used to fund upgradation cost, expansion or development of airports. Both these infra majors have a cost over-run of at least 22% on either bureaucracy-related issues, ever-increasing raw material prices, and specifically case of Mumbai airport, which is still not complete, land acquisition related issues.

ADF charges have always been a major bone of contention between airport authorities and passengers, who were asked to pay as high Rs 600 on domestic and Rs 1300 on international travel.

But it is not only the operators who will lose out. The Airports Authority of India (AAI), which has 26% stake in both these airports, has made around Rs 5,000 crore via ADF. According to ministry, the authority will infuse additional equity, as per the agreement, through other means such as infra bonds.

The jury is still out on whether AAI can really help the heavily debt laden companies. GMR has around Rs 10,000 crore debt (airport segment), while GVK has approximately Rs 2,000 crore to repay to lenders with high cost of borrowing.

GMR and GVK, who need a gap funding of Rs 1,175 crore and Rs 4,200 crore, have been assured by the airport regulator that rates will be revised after assessing the financial impact and their ability to infuse more equity.

Perhaps, this could be the reason why both company stocks recovered today after a steep fall yesterday.

All in all, GMR looks much better placed than GVK in the medium-term in terms of airport business. GMR, which has already completed the Delhi airport modernisation, has started collecting user development fee (UDF). But GVK is still struggling with relocation of the huge slum alongside the airport. As a result, it is missing out on raising money via UDF, which can be collected only after the project is complete to ensure fair returns on the investment made in airport services.

Parameters	GMR	GVK
Airport	Delhi	Mumbai
Traffic (mn PAX)	35.9	30.74
Cargo Tonnage (mtpa)	0.5	0.65
ATM (Air Traffic Movements)	317280	251512
Concession Period	30+30 yrs	30+30 yrs
Debt (Rs in Cr)	10000	2000
Revenue FY12	3574.29	597
PAT	-557.5	106.39
Stake in Airports	54%	74%
Price Change Since IPO	9%	-28%
Exposure to KFA	80 Cr	60 Cr